• n ev

The Market Doesn’t Like No YCC

So far, it has certainly been a buy the rumour sell the fact after FOMC yesterday with all equities down heavily on the day. Powell said the same support would be there- but didn't over-promise & left yield curve control as a distant option.

Elsewhere, Copper fully reversed the break upward from yesterday and in FX, commodity currencies completed the strong risk off environment, falling heavily.

Trump tried to blame the Fed (he seems to be giving China a break for the time being) & the White House voiced the idea that the next stimulus package could be out in July.

That's the one issue with a disorderly selloff; it puts pressure on the US government to approve stimulus quicker than planned & that could cut the drop short, at least for a strong intermediate rally.

However, overall, the tide has turned.

VIX wakes up

Going some way to confirm the force of the sell off, the Vix jumped to levels not seen since early May & currently looks to be closing near the highs.

If the selloff continues in the next sessions, it is highly likely that there will be some retracement early next week in a similar pattern to the first selloff this year.

This should provide another opportunity to short so we wouldn't look to be aggressively short into the weekend unless there is a retracement early tomorrow.

#curve #Copper #YCC #vix #yields


Recent Posts

See All

Morning Brief

The overall USD performance across G10 currency pairs ended last week mixed, with the pound gaining but the likes of the Aussie dollar dropping. The US Treasuries are keeping the US dollar from collap

Morning Brief

Data from the overnight session shows that Japan’s National CPI reading is still deflationary but did come in better than expectations. Whereas the Australian Flash PMI data was mixed, printing better

Morning Brief

Last night’s FOMC meeting passed as expected with no material change to the Federal Reserve’s monetary policy. The news media outlets are trying to make a big deal of comments by a few members of the