China wasn’t pretty overnight, and then domestically, ugly jobless claims and cooler than expected producer price inflation offered some dovish hope (inflation weaker and growth weaker = less need for Fed tightening) but PacWest pissed in the punchbowl by admitting that 10% of their deposits left the building last week following the FRC take-down and the news about them seeking strategic options.
And regional banks are a wreck…
The latter news dominated the former (which should also have been dovish – increasing the odds of the ’emergency’ cut scenario priced into Fed Funds) but it smashed stocks and bond yields lower (but the dollar higher? which hammered gold).
So dovish, dovish, and dovish… and rate-CUT odds are soaring…
Meanwhile, the debt-ceiling overhang remains with the front-end of the Bill curve utterly insanely dislocated…
Never mind all that… Nasdaq clung on to gains on the day as The Dow and Small Caps lagged…
Alphabet dragged the tech indices higher…
The Mouse-House was a bloodbath…
Before we leave equity land, VVIX is decoupling (to the upside) vs VIX and that didn’t end well the last two times…
Source: Bloomberg
Treasury yields were all lower on the day with the long-end outperforming on the day (2Y -1bps, 30Y -6bps). Yields are all lower on the week with the belly outperforming…
Source: Bloomberg
Despite the dovish headlines, the dollar rallied to one-week highs…
Source: Bloomberg
The South African Rand plunged to record lows after the US accused them of selling weapons to Russia…
Source: Bloomberg
Bitcoin was dumped lower again, falling back below $27,000…
Source: Bloomberg
Gold spiked early then was puked again…because nothing says dump gold like a debt ceiling crisis, banking crisis, and dovish implications for The Fed…
Oil slipped again as China rebound and US jobs data dented demand hopes, sending WTI back to a $70 handle…
Finally, 2023 is starting to look a lot like 2011… can they hold out til August for the X-Date hammer to hit?
For the S&P…
Source: Bloomberg
And VIX…
Source: Bloomberg
And judging by USA CDS, it’s different (and worse) this time…
Source: Bloomberg
But hey, keep buying that dip!
Tyler Durden
Thu, 05/11/2023 – 16:00
