The soundtrack of the day in financial markets is being supplied by Devo, singing 'Whip it.' The bond market continued yesterday's rally early this morning but has subsequently reversed course. Maybe it's because of the mortgage applications (up strongly), maybe it's because the short term market got caught long, or maybe it's because yesterday's buyers bought too much. Regardless, the market has retraced about half of yesterday's rally, peak to trough.
FX, meanwhile, has degenerated into a farce. Today, Macro Man has heard the following:
1) A report that China has $5 billion a day to sell between now and the end of the year.
2) A denial of the report by the purported author
3) A report that 'Asian CBs' were sellers of EUR/USD above 1.28.
4) A report that 'Asian CBs' were buyers of EUR/USD below 1.2750
5) A report that SAFE will begin transacting foreign exchange via the CME.
6) A report that CBs are selling USD/JPY
7) A report that CBs are buying AUD as the market sells the fact of the RBA tightening.
Equities, meanwhile, appear to be 'selling the girdlock fact'. Macro Man is unsure at this jucnture if there is anything to do there but sit tight.
In summary, all that Macro Man can hear at the moment is 'Whip it......whip it real good" played at a very high volume. The noise, it goes without saying, is deafening.
FX, meanwhile, has degenerated into a farce. Today, Macro Man has heard the following:
1) A report that China has $5 billion a day to sell between now and the end of the year.
2) A denial of the report by the purported author
3) A report that 'Asian CBs' were sellers of EUR/USD above 1.28.
4) A report that 'Asian CBs' were buyers of EUR/USD below 1.2750
5) A report that SAFE will begin transacting foreign exchange via the CME.
6) A report that CBs are selling USD/JPY
7) A report that CBs are buying AUD as the market sells the fact of the RBA tightening.
Equities, meanwhile, appear to be 'selling the girdlock fact'. Macro Man is unsure at this jucnture if there is anything to do there but sit tight.
In summary, all that Macro Man can hear at the moment is 'Whip it......whip it real good" played at a very high volume. The noise, it goes without saying, is deafening.
