Bonds & Bullion Bid, Dollar Skids As Biden Bonanza Hopes Fade

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Bonds & Bullion Bid, Dollar Skids As Biden Bonanza Hopes Fade

Pushback from both sides of the aisle against the pork-laden pile of promises that is the ‘American Jobs act’ appeared to be a significant driver of markets today.

A $2.25 trillion handout… as the first act before the “American Family Act”… appears to have “inconceivably” hit a wall as investors remember just how close we are to a ‘breaking point’

Rate-hike expectations are sliding as hopes of a $2-3 trillion barrel of pork from Washington fade (in a bipartisan way)…

Source: Bloomberg

The 2s5s10s butterfly topped at the highest levels since March on Friday and went back positive; since then the ‘fly has tumbled around 10bp as the belly of the curve has put in a stellar performance over the past two sessions…

Source: Bloomberg

Since Thursday’s close (remember bonds were open half-day on Friday), the belly has tumbled from up over 8bps to down almost 4bps…

Source: Bloomberg

5Y yields are back below 90bps…

Source: Bloomberg

Who’s buying? Maybe the Europeans and the Japanese? After FX-hedged US Treasuries reached their ‘cheapest’ since 2014, they have been bid since Q2 began

Source: Bloomberg

Stocks were a mixed bag with a mirror of yesterday as Small Caps jumped relative to big-tech as the major US equity indices all ended red on the day with a weak close…

Small Caps fell back to unch from last Thursday’s cash market close, Nasdaq was up over 2% from the same before the late day tumble today…

“Most Shorted” stocks slumped late on today to erase their post payrolls squeeze gains…

Source: Bloomberg

Energy stocks have had a tough week so far as Consumer Discretionary and Tech lead…

Source: Bloomberg

Growth held on to its gains but both value and growth have really gone nowhere since the European close yesterday…

Source: Bloomberg

The dollar’s demise continued, erasing almost all the gains post-FOMC spike. Look at the pattern of selling in the dollar is occurring during the European session…

Source: Bloomberg

Just as an aside, we note that EURUSD has recoupled with the GER-US rate differentials…

Source: Bloomberg

As the dollar dumped, gold was bid, with futures back above $1740…

Copper’s surge relative to Gold has stalled of late, suggesting 10Y Yields have at least 25bps downside from here (especially as China kills the golden goose of credit impulse for the rest of the year)…

Source: Bloomberg

Oil managed gains ahead of tonight’s API data but remains in a tight recent range and slid back below $60 into the close…

The Ruble tumbled today as tensions firmed up even more in Ukraine…

Source: Bloomberg

Cryptos were hit this morning with Bitcoin diving from $59 to $57k before bouncing back (some chatter about the Hindenburg short on Ebang being related)

Source: Bloomberg

Ethereum also dived but was met with a wall of buyers around $2050 erasing all the losses…

Source: Bloomberg

ETH is dramatically outperforming BTC again…

Source: Bloomberg

Finally, we note that while gold futures have been on the rise recently, physical gold prices remain seriously more bid (with a premium of over

Source: Bloomberg

Tyler Durden
Tue, 04/06/2021 – 16:00 Read full article at Zero Hedge

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