Bonds, Bullion, Black Gold, & ‘Babki’ Jump As Stocks Dump

Perhaps the most notable move in markets today was from the Ruble (the term old woman, babki – бабки, overshadowed other slang names for the Russian currency), which saw its biggest daily gain since Dec 2014 today on the back of Putin’s call for all gas payments to be made in Rubles…

Source: Bloomberg

The desperate attempt to ignite momentum after the US cash market open succeeded but could not survive the European close, after which US stocks went south fast…

Equities gave back all of yesterday’s desperation bid and then some with The Dow and Small Caps now lower on the week and S&P unch (post-OpEx)…

Energy stocks best on the week so far as banks were battered into the red…

Source: Bloomberg

At least GME was up 14% today!!

And bond yields plunged (but remain up on the week) with the long-end (30Y -10bps today) significantly outperforming today…

Source: Bloomberg

With the yield curve flattening once again as 3s10s dropped back into inversion…

Source: Bloomberg

As Goldman’s Chris Hussey notes, “The vacillation we are seeing in markets this week may simply be a reflection of the search for the right price amidst a new and changing regime, one characterized by higher inflation and higher rates amidst reopening impulses coupled with accelerating deglobalization trends.”

The S&P’s drop stalled at its 200DMA (where it bounced) and The Dow fell to its 50DMA…

Stocks attempted to ignite momentum again with a short-squeeze… but it appears they have run out of ammo…

Source: Bloomberg

Bank stocks were ugly today…

But have more pain to go is they are to catch down to the yield curve’s reality…

Source: Bloomberg

As the fears of stagflation grow, traders have to decide which will win – super-inflation or de-growth? – the 10Y Yield is right at the top-end of its 40-year downtrend-channel…

Source: Bloomberg

The Dollar ended marginally higher on the day with yet another pump and dump intraday…

Source: Bloomberg

Cryptos trended modestly lower on the day with ETH back below $3000 and BTC holding just above $42,000…

Source: Bloomberg

Gold rallied back up to $1940 as Biden headed to ‘fix’ things among his European allies…

A 6.7 million barrel plunge in U.S. crude stockpiles (including the Strategic Petroleum Reserve) helped extend oil price gains today as traders positioned ahead of high-level meetings that may result in fresh sanctions on Russia, and as a vital Black Sea terminal may be disrupted for weeks following storm damage…

Finally, things could be about to go to ’11’ for Europe’s economy as diesel futures backwardation is screaming ‘shortage’ and with no diesel, truckers ain’t delivering anything…

Source: Bloomberg

As Bloomberg’s Javier Blas notes: “The backwardation in the European diesel market is monstrously large. And getting worse… All points to an extremely tight market.”

And all thanks to Biden’s sanctions…

“Western countries may be forced to limit or introduce rationing of motor fuel consumption,” Russian Deputy Prime Minister Alexander Novak told Russian lawmakers Wednesday.

“European politicians should already explain to their citizens today what their further short-sighted decisions may lead to.“

Bear in mind that, including SPR, the US has averaged over 1mm b/d inventory draw… and that’s before the impact of Russian sanctions filter through to supply constraints.

This is far from over – even if US equities seemed to be telling a different tale in recent days.