EDITOR'S NOTE: As markets around the world brace for another turbulent week, investors and analysts are keeping a close eye on a handful of key areas and events that could have a major impact on the global economy. From the surprising Bitcoin surge to the skyrocketing price of gold bullion, there are plenty of signs of turbulence and uncertainty ahead. Adding to the mix is the news that the odds of a Fed bailout rate hike have plummeted, leaving many wondering what the central bank's next move will be. With so much at stake and so many moving parts to keep track of, the coming days promise to be a time of intense volatility and unpredictable shifts in the financial landscape. For investors and analysts alike, the challenge will be to stay ahead of the curve and identify the key trends and indicators that will determine the course of the markets in the weeks and months to come.
Who could have seen that coming?
Source: ZeroHedge
Amid hawkish 50bps hike threats and ongoing QT, Jerome Powell and his cronies ride in to the rescue with a new "tool" to save the billionaire tech depositors at SVB (and Signature Bank...and well basically any other bank).
The reaction in markets is dramatic, with expectations for The Fed's rate-trajectory collapsing...
Source: ZeroHedge
The terminal rate has plunged from September 2023 at 5.70% on Wednesday to June 2023 at 5.15%, and expectations for rate-cuts in H2 2023 are soaring...
Source: ZeroHedge
The odds of a 50bps hike in March plunged from 75% to less than 20% and May has collapsed from a coin-toss for 50bps to just 85% odds of a 25bps hike...
Source: ZeroHedge
Perhaps a clearer context is available here - 3 days ago the market was pricing in over 110bps of additional rate-hikes this year... now it is pricing in around 50bps by September at the latest... and then rapid rate-cuts...
Source: ZeroHedge
The reaction in asset markets is QE-esque with stocks up 1-1.5% (not as much as expected)...
Source: ZeroHedge
For context, only Dow futures managed to get back to even from pre-SVB and now they are all fading...
Source: ZeroHedge
Treasury Futures surged at the open, implying a 10bps or so drop in the 10Y yield, but have pulled back a little...
Source: ZeroHedge
As cash bonds open, there is a notable divergence with 2Y bid (-11bps) and the rest of the curve offered (30Y +5bps)...
Source: ZeroHedge
Dramatically steepening the yield curve...
Source: ZeroHedge
Gold spiking to $1900...
Source: ZeroHedge
And Bitcoin surging back above $22,000, erasing all the FUD post-SVB..
Source: ZeroHedge
Additionally, USDC has re-pegged with the $1...
Source: ZeroHedge
What a shitshow - perhaps the stock market's disappointing reaction is starting to realize that $25 billion backstop is nothing like big enough....
Source: ZeroHedge
As we said earlier on twitter, "this is a regulatory failure of historic proportions by both the Fed and Treasury. Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine. Everyone should be sacked immediately."
Finally, does any one else feel like The Fed is trolling the world by naming this bailout: The Bank Term Funding Plan... BTFP - Buy The F**king Pivot?!
Originally published by: Tyler Durden on ZeroHedge
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