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“It’s Really Broken” – Divergences & Decouplings Dominate Week In Stocks, Bonds, FX

Friday, October 21, 2016 14:47
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Distracted much?

US Macro data dumped this week…

Something odd is going on… VIX is down 6 days in a row but stocks are not playing along…

Bond-Stock correlation collapsed this week…

Stocks and bonds decoupled last week on what appears to have been rate-locks ahead of the large Saudi issuance…

Yuan’s collapse overnight hasn’t quite rippled through yet… just like last week…

And today saw USD strength and stocks strength…

8 days in a row and the ubiquitous end of day ramp has not occurred (chatter about SEC probes of end of day ETF rebalancing shenanigans remain unconfirmed for now)…

We did warn…

On the week, futures show the craziness, dips bought but lows retested…China session weakness (red arrows)

Trannies ended the week red,, but the rest (even The Dow) managed to scramble back into the green for the weekend…

The USD Index rose for the 3rd straight week led CAD weakness (and EUR)…

Pushing the USD to the highest sicne Feb 2nd and higher on the year…

Bonds rallied all week, with the same systemic pattern and a notable flattening of the curve…

Gold was the week’s winner among commodities with silver second, despite dollar strength, as copper and crude slipped…

Charts: Bloomberg


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