Currency Carnage And The Rush To Safe Havens
Somebody knows something…
Dollar pukefest, Swiss Franc panic-bid, bond yields plunge-gasm, gold surge-plosion, Crypto spike-a-thon… and stocks UNCH.
Source: ZeroHedge
Looking at stocks today you could be forgiven for thinking that today was a typical ‘meh’ mid-week between Xmas and NYE day with all the US majors hovering around unchanged (until the last second idiocy from algos)…
Source: ZeroHedge
BUT, It was far from it in every other asset class as the dollar dumped while gold, bonds, swiss franc, and crypto all ripped higher as Magnificent 7 stocks were liquidated shortly after 10amET.
Source: ZeroHedge
Notably, 0-DTE call-covering was very heavy as the Magnificent 7 was sold around 10am (after 0-DTE call-buying dominated at the open)…
Source: ZeroHedge
The Swiss Franc soared today by over 1% against the USD – the second biggest ‘ultimate safe-haven’ gain of the year outside of FOMC/ECB days…
Source: ZeroHedge
That lifted Swissy to its strongest since the SNB intervention in Jan 2015. 2023 has seen the Swiss Franc’s strongest annual gains against the dollar since 2010…
Source: ZeroHedge
2Y yields crashed today, gapping down by 8bps this morning as a wave of safe-haven buying hit multiple asset-classes.
Source: ZeroHedge
But the entire curve was lower in yield on the day (down 10-11bps) thanks to a strong 5Y auction also…
Source: ZeroHedge
The bond rally today snapped the 30Y yield down to unchanged for 2023 (the rest of the curve is all lower in yield for 2023 already)…
Source: ZeroHedge
Put another way, Fed Funds are up 100bps on the year and the rest of the curve is flat or lower in yield…
Source: ZeroHedge
The S&P 500 surged on the strong 5Y auction (as yields declined) but reversed all that back to unchanged. The market then exploded higher in the last 2 minutes of the day on the back an almost $3BN MoC sell imbalance…
Source: ZeroHedge
The dollar plunged at around 7am after drifting lower all night…
Source: ZeroHedge
That smashed the greenback to its lowest since July…
Source: ZeroHedge
Dollar’s loss was Gold’s gain as the precious metal jumped to
Source: ZeroHedge
And closed at a new record closing high…
Source: ZeroHedge
Elsewhere it was a big day in crypto with Ethereum dramatically outperforming (as Solana faded)…
Source: ZeroHedge
Today saw $29 million in ETH short liquidations – the most since early December…
Source: ZeroHedge
That pushed ETH/BTC up to recent key resistance, where it stalled again (for now)…
Source: ZeroHedge
…as Bitcoin extended its roundtrip rebound back up to $43,500…
Source: ZeroHedge
Despite the dollar weakness, oil prices fell today, erasing most of yesterday’s spike gains ahead of tonight’s API inventory data…
Source: ZeroHedge
Finally, in case you wondered, only one thing matters still – global liquidity. As macro funny-mentals have deteriorated, stocks have soared in line with global liquidity….
Source: ZeroHedge
And, while the last two months have seen real yields declining as P/Es rise, they remain dramatically decoupled from their prior regime…
Source: ZeroHedge
This level of S&P 500 forward valuation implies a negative real-yield… is it any wonder that gold and crypto are rallying too?
Originally published by: Tyler Durden on ZeroHedge
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