Bonds Bid, Stocks Skid Ahead Of Fed As US NatGas Soars To 2008 Highs

Another day, another illiquid chopfest in stocks… Small Caps outperformed on the day but late day weakness took The Dow, S&P, and Nasdaq red before a last second bid lifted them green…

Interestingly energy stocks rallied today, despite oil prices sliding significantly, Staples continued to lag…

Source: Bloomberg

VIX continue to be pressured lower into tomorrow’s FOMC meeting (hedge unwinds amid macro derisking?)

Treasuries were bid today, erasing much of yesterday’s losses as the long-end outperformed…

Source: Bloomberg

As Bloomberg notes, the recent brief flirtation with 3% in Treasury 5-, 10- and 30-year bonds drew in real-money buyers, according to brokers that saw the flow. The purchases were particularly heavy in 10-years, multiple brokers add. Size was described as healthy Monday with the buying continuing today.

Source: Bloomberg

Simply put, as we noted last week, TINA is dead and bonds are an alternative now. In fact, bonds are the most attractive relative to stocks since 2011…

Source: Bloomberg

The yield curve (3s10s) flattened today, nearing inversion once again…

Source: Bloomberg

Heading into tomorrow’s Fed meeting, the 50bps hike is fully priced into STIRs (and odds of a 75bp hike in June are rising). In fact, since the last FOMC Meeting (where they hiked 25bps),

Source: Bloomberg

The dollar was flat on the day, recovering the puked losses this morning…

Source: Bloomberg

Meanwhile the Ruble is trading at its strongest against the dollar since March 2020…

Source: Bloomberg

Cryptos were clubbed like a baby seal again with bitcoin back below $38k…

Source: Bloomberg

Gold managed some gains today, but remains well below $1900 still…

Oil prices reverted back lower today, erasing yesterday morning’s panic-bid…

Finally, and perhaps most notably on the day, NatGas surged back above $8, to its highest level since 2008…

Source: Bloomberg

How is Biden going to explain shipping it all to Europe to Americans facing soaring energy bills: “shared sacrifice for the sake of global democracy” we assume? We wonder how well that will ‘poll’ with his base?

Source: Bloomberg

…and how will that base feel after The Fed hikes rate 10 more times this year?