Dollar Dumped To 4-Mo Lows, Bitcoin & Big-Caps Pumped Ahead Of CPI Tsunami
Cooler than expected headline and core PPI (dovish for monetary policy hopefuls) trumped the margin-compression (bearish for corporate profitability and therefore stocks) aspect of the producer prices data this morning exaggerating a weak-dollar/BTFD stocks trend that emerged overnight.
The 'cool’ PPI knocked the 'inflation-surprise’-macro-index down to its lowest since February… but at the same time 'growth-surprise’ data has also stagnated significantly…
Source: Bloomberg
But, it was the dollar index that stood out today, tanking to post-payrolls plunge lows…
Source: Bloomberg
… dumped to its lowest in four months, breaking below its 200DMA…
Source: Bloomberg
Interestingly, as the dollar tanked, it was a buy-all-the-things day with bonds (prices) up, stocks up, and crypto up; but of particular note was weakness in oil (well, Iran hasn’t blown anything to shit today), and gold (flat – at record highs – as WW3 appears to be postponed… for now).
Nasdaq was the biggest winner on the day (surging 2.5%), but all the majors were up strong today…
Seems like we could have seen this one coming…
Goldman Sees Surge In Stock Buyback Orders As Volatility Fades https://t.co/sOXXasrUwr
— zerohedge (@zerohedge) August 12, 2024
Mag7 stocks continued to roar back to life…
Source: Bloomberg
…and 'most shorted’ stocks were squeezed hard, having now erased exactly 50% of their plunge from last week…
Source: Bloomberg
VIX was sold once again, back down to an 18 handle (and the levels before the payrolls panic)…
Source: Bloomberg
But shorter-dated vol is aggressively bid into tomorrow’s CPI and NVDA’s earnings
Source: Bloomberg
Treasury yields tumbled on the day, extending lower after the cool PPI. The Short-end outperformed (2Y -8bps, 30Y -4bps)…
Source: Bloomberg
The 2y Yield broke back below 4.00%…
Source: Bloomberg
Rate-cut expectations jumped around 10bps on the day, mainly focused on the 2024 shift…
Source: Bloomberg
Bitcoin surged back to $61,500, erasing all of the weakness from Sunday…
Source: Bloomberg
Crude oil prices dipped after WTI double-topped at $80…
Source: Bloomberg
Gold was relatively flat today, holding at record highs…
Source: Bloomberg
Finally, for context, today’s tumble in the dollar was NOT driven by a resumption of the yen-carry trade…
Source: Bloomberg
…of course tomorrow’s CPI print will decide which way yen breaks out.
Tyler Durden
Tue, 08/13/2024 – 16:00