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Gold & Crypto Jump As Dollar Dumps After FedSpeak-Fest

Courtesy of ZeroHedge View original post here.

From the European open, US futures accelerated higher after a quiet start, but once the initial chaos of the US cash open was over, stocks faded back to unchanged (or very modest gains). Nasdaq Composite closed higher but Nasdaq 100 ended lower – ending its win-streak at 10 days…

One thing of note today was the market’s behavior seemed a lot more skittish than recent days – far more higher frequency swings than has been typical recently.

The Nasdaq Composite is up 11 straight days (while Nasdaq 100 lost its win streak today). The composite has not had a longer win-streak since July 2009

Nasdaq was the weakest overnight, hit by selling pressure from TSLA shares after Musk’s Twitter poll. TSLA shares opened ugly but the standard deep OTM call buying did its best to ramp the stock… but failed to get it back to $1200…

Another day, another short-squeeze. That is 8 straight days of short-squeezing – the longest streak since Nov 2017…

Source: Bloomberg

Google parent Alphabet joined the $2 trillion market cap club today…

Source: Bloomberg

VIX rose back above 17 today, knee-jerking higher at the open for the 3rd straight day (which given the depths of Put-Call ratios, we suspect is actually levered buyers loading up on calls rather than hedgers loading up on protection)…

Also note that  Nasdaq 100 just rose along with the Cboe NDX Volatility Index for three straight weeks, the longest stretch since January 2018…

Today’s action in the US was dominated by a veritable FedSpeak extravaganza:

0830ET BULLARD HAWKISH: SEES GROWTH RETURNING IN Q4; WE’RE IN PRETTY GOOD SHAPE FOR ECONOMIC GROWTH; NOT LOOKING FOR LABOR-FORCE PARTICIPATION IMPROVEMENT; SUPPLY-CHAIN BOTTLENECKS MAY EXTEND THROUGH 2022; MAY HAVE TO TAKE SOONER ACTION TO CONTROL INFLATION; I’VE GOT TWO RATE HIKES PENCILLED IN FOR 2022.

0900ET CLARIDA DOVISH/NEUTRAL: SEES JOB MARKET REACHING MAXIMUM EMPLOYMENT BY END-2022; EXPECTS SUPPLY IMBALANCES TO DISSIPATE OVER TIME; FED CLEARLY “A WAYS AWAY” FROM CONSIDERING LIFTOFF.

1030ET POWELL NEUTRAL: PANDEMIC HAS WIDENED DEEP-ROOTED INEQUITIES IN ECONOMY; DOESN’T COMMENT ON MONETARY POLICY.

1200ET HARKER NEUTRAL/HAWKISH: EXPECT INFLATION WILL COME DOWN NEXT YEAR; DON’T EXPECT RATE HIKES BEFORE TAPER IS COMPLETE; If Inflation Doesn’t Cool, Fed May Have to Move Forward Rate Hikes

1200ET BOWMAN NEUTRAL: CLOSELY MONITORING DEVELOPMENTS IN HOUSING MARKET; SEES SIGNS SUPPLY-DEMAND IMBALANCE RAISING HOUSING COSTS; U.S. HOUSE-PRICE GAINS HELPED BY LOW RATES, HIGH SAVING

1310ET EVANS NEUTRAL/HAWKISH: SEES SOME INDICATIONS OF INFLATION SPREADING MORE BROADLY, EXPECTS ELEVATED INFLATION WILL EVENTUALLY FADE, UNCLEAR HOW LONG SUPPLY IMBALANCES WILL TAKE TO EASE

Quarles quit – which likely biases the entire Fed more dovish as Biden now has 4 potential spots to fill.

Stop meddling!!

But overall, rate-hike expectations shifted hawkishly after all that Fed chatter…

Source: Bloomberg

But, despite the hawkish shift, the dollar dived back to FOMC taper lows…

Source: Bloomberg

And as the dollar dived, gold extended its recent gains, back up near $1830…

Cryptos were also bid as the dollar faded, with the aggregate market cap topping $3 trillion for the first time…

And Bitcoin’s market cap is now bigger than TSLA’s…

As Bitcoin topped $66,000…

Source: Bloomberg

And Ethereum tested up toward $4800 – a new record high…

Source: Bloomberg

Oil prices rallied today with WTI back above $82…

Treasuries were very mixed today with the belly battered worst, as the long-end flatlined

Source: Bloomberg

The bad news is that this dramatic flattening once again revives the ‘policy error panic’ fears that The Fed will blow it…

Source: Bloomberg

The long-end of the curve continues to be inverted. This is the 8th straight day the curve has been inverted.

Source: Bloomberg

The 30Y US Real Yield plunged below -50bps today – a new record low…

Source: Bloomberg

Finally, Greed just keeps getting extremer and extremerer…

What could go wrong?


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