Markets Columnist @Reuters
The Good Day Sunshine State
Joined April 2011
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Japan leads the Asia-wide stock market recovery charge from Monday's selloff
Monday - Nikkei 225 index -12.4%, second largest fall on record
Early Tuesday - Nikkei 225 index +10 .3%, on track for third largest rise on record.
A sign that Monday's volatility was way overdone?
"Up the escalator, down the elevator shaft" - not dollar/yen, but US interest rates. Fed hiking cycles are often gradual - "measured pace", anyone? - but not easing cycles. This time is no different.
COLUMN-Gradual Fed rate cut hopes were always misplaced
reuters.com/markets/us/hopes…
Jamie McGeever retweeted
woah, maybe the US economy is not crashing?
ISM services employment up 5 points to 51.1. Entire PMI in expansion
VIX volatility index - Wall Street's 'fear index' - surges above 65, its highest ever except for global financial crisis in 2008 and pandemic in 2020.
Higher than peaks of Asian crisis, LTCM, dotcom crash, 9/11, taper tantrum, US debt downgrade, Volmaggedon.
Panic or justified?
Japanese stocks tumbling. The broad Topix index is down 7% and on track for a two-day fall of 13%.
That would be the fourth biggest two-day fall in almost 50 years, topped only by:
Oct 1987 (Black Monday)
Oct 2008 (Great Financial Crisis)
March 2011 (Fukishima disaster)
Carry trades getting clobbered - Japanese stocks, dollar/yen, Nasdaq futures and crypto all posting heavy losses as Friday's 'risk off' momentum spills into early Asian hours Monday.
Topix -7%
USD/JPY below 145.00
Nasdaq futures -2.5%
Ethereum -15%
CFTC data shows that as of Tuesday, asset manager long & hedge fund short US Treasury futures positions rose to new records worth $1.12 trln and $1.08 trln.
Yield collapse since Thursday - 45 bps in 2y, 30 bps in 10y - will be hurting some of these highly leveraged funds.
Remember the basis trade? Record asset manager, hedge fund US Treasury futures positions of >$1 trillion not a problem if vol is low, rate changes are gradual. They may be vulnerable...
COLUMN-US Treasury futures in unchartered waters as Fed cuts loom
reuters.com/markets/us/us-tr…
Remember the basis trade? Record asset manager, hedge fund US Treasury futures positions of >$1 trillion not a problem if vol is low, rate changes are gradual. They may be vulnerable...
COLUMN-US Treasury futures in unchartered waters as Fed cuts loom
reuters.com/markets/us/us-tr…
Bad U.S. jobs numbers - affirms economic slowdown, will fuel recession talk and need for bolder rate cuts.
Unemployment rate up to 4.3%, higher than expected
Payrolls +114k in July, less than expected
June payrolls revised down
Wage growth slows more than expected
Jamie McGeever retweeted
NEW
The Conservatives have just set an all-time record in the number of deposits lost at this election. They’re up to 30 and counting, beating their record of 28, from the Oct 1974 election…
* candidates forfeit a deposit if they fail to win 5% of the vote
UK election exit polls suggest Labour win a landslide victory. Tories massacred, projected to be their worst result in nearly 200 years.
UK polls point to 'electoral extinction' for the Tories, with one indicating they'll win just 72 seats, the lowest in their nearly 200-year history.
reuters.com/world/uk/uk-poll…
Fed raises median long-term neutral rate projection to 2.8% from 2.6%. That's the highest since Q1 2019, and the biggest increase since the Fed started publishing median l/t fed funds forecasts nine years ago.
