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Markets:

  • Gold down $47 to $1528
  • WTI crude oil up $1.80 to $33.29
  • S&P 500 up 230 points to 2711
  • US 10-year yields up 17 bps to 0.97%
  • CAD leads, JPY lags

It was a wild ride and there isn’t making much sense of anything right now. I’ll do my best.

There was a monster bid in the US dollar throughout the day and it seems to be tied for funding demand for US dollars. There was a relentless bid in USD/JPY that took it all the way up to 108.50, breaking the 61.8% retracement of the drop since February. Late it fell back to 107.84 even as US equities ripped higher on a short squeeze into the close.

The pound was trashed again and is at 1.2278 and suddenly within striking distance of Brexit lows. You could look to lower BOE rates and flows out of Gilts but that’s a stretch. I can see an argument for worries about the virus hitting London particularly hard but that’s a stretch to me as well. In any case, it was a brutal week for cable, down almost 6%.

It was an even-worse week for the Australian dollar and it got no help from the late risk rally. It fell to the lowest since 2009 at 0.6124 after finished 80 pips higher but well below the 0.6300 Asian levels.

The euro held 1.1050 for the second day despite heavy selling. There is an epic fight taking there and it bounced to 1.1100 late. It had traded at 1.12 in Europe where it was a wild day in equities and bonds. The German DAX rose as much as 9% before finishing 0.8% higher.

CAD hardly reacted to the BOC surprise cut but it liked the late risk appetite and the rally on oil after the talk of filling the SPR. It took a run at 1.40 but sellers fought it off and that prompted continued selling down to 1.3800.

What a week. Have a safe weekend. 



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