Despite already record levels of "long USD", from Cable to EUR, traders are dumping everything and buying USDollars, sending the USD Index surging off overnight lows. At the same time, Treasuries are being dumped en masse with the bellyu of the curve up 15-17bps since Friday.
The USD is going vertical...
And bonds are being dumped...
But the problem for stocks is that USDJPY seems to have lost control...
Charts: Bloomberg
Submitted by Leonard Brecken via OilPrice.com,
Where most analysis on oil markets tends to fall short is on the depth of analysis vs. reading headlines and group think, the latter of which is heavily shaped by misinformed media and government propaganda.
Among the many consensus expectations from Yellen tomorrow is that the Chairwoman - while hiking rates by 25 bps - will cushion the announcement in extensive language explaining why this is the most dovish rate hike in history, a message which will likely be conveyed by a decline in slope of the Fed's "dots", suggesting fewer hikes over the next year.
However, that is a problem and as Deutsche Bank explains there is really no such thing as a "dovish rate hike." Here is DB's Dominic Konstam:
The Fed is “right”
Shortly after the Fed adopted the so-called “clean relent”, in September, we explained the dollar dilemma Janet Yellen faces in hiking rates. The problem for the Fed - and this is well worn territory by now - is that even as 25 bps might fairly be characterized as merely “symbolic”, it still marks a notable policy divergence from the rest of the DM world which is still in easing mode.
Soaring junk bond redemptions; rising investment grade (and high yield) yields pressuring corporate buybacks; record corporate leverage and sliding cash flows; Chinese devaluation back with a vengeance; capital outflows from EM accelerating as dollar strength returns; corporate profits and revenues in recession; CEOs most pessimistic since 2012, oh and the Fed's first rate hike in 9 years expected to soak up as much as $800 billion in excess liquidity. To Wall Street's strategists none of this matters.