Bonds & The Dollar Ignore Equity “Putin Deja Vu” Exuberance

Bonds & The Dollar Ignore Equity “Putin Deja Vu” Exuberance

US equity markets are up around 2% from Friday’s close – extending yesterday’s hope-filled gains on the back of Vladimir Putin not nuke-ing the world this morning and lower-than-expected inflation prompting hope for moar free money tomorrow. This jump is a ridiculous deja vu all over again of Putin’s first press conference. Bear in mind that the USD is unchanged on the week and Treasury yields are up a mere 1-2bps – so hardly a resounding risk-on conviction. Following yesterday’s epic low volume, today was little better. Copper was flat as Oil prices rose back towards $100. Gold and silver were pummeled – just for good measure (gold’s biggest 2-day drop in 3 months) – as was VIX (which took over the role of S&P 500 driver from AUDJPY after Europe closed). The afternoon saw VIX diverging (higher ahead of tomorrow’s FOMC) from rising stocks. For the week, USD unch, Bonds unch, Stocks +2%, Gold -2%.

Deja Vu all over again…

As AUDJPY ruled until Europe closed

with VIX strongly in control from there – until 2pmET for that late-day divergence, which is worrisome…

While stocks are exuberant, Treasuries are not…

Credit markets have rallied but merely back to pre-Putin PR 1.0 levels…

And nor is the US Dollar… plenty of vol here but the USD s almost dead flat…

As gold and silver mirror equity strength…

Gold’s biggest 2-day drop in 3 months… as it looks like gold will have “golden cross” tomorrow as the 50DMA crosses above the 200DMA

Charts: Bloomberg

Bonus Chart: Something happened today… USDJPY and Bonds stayed in sync as stocks disconnected

Bonus BonusChart: A little reminder of the concept of mean-reversion – and how it is gone from the mainstream media’s vocabulary… (h/t @Not_Jim_Cramer)

Bonus Bonus Bonus Chart: The Japanese stock market is not enjoying the exuberance of global stocks…

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