The Fuse
Equity futures are giving back a small portion of Wednesday’s large gains as traders try to assess how thing will eventually shake out. The price action was strong yesterday and could be poised for followthrough, but something seems amiss here.
Modest declines in Europe with STOXX down .2%, FTSE went the other way adding .1%. The dollar index gained .1%, gold is slightly lower as is silver, crude oil is rallying 5% today. Yields in Germany are on the rise, up 3bps while US 10 year treasuries down 1bp. Japan fell .7%, Shanghai down the same while Hong Kong lost .5%.
Volatility got smashed yesterday, down close to 20% as the burden of uncertainty was lifted. Still, the VIX remains elevated, above 20% and that means rather wide moves about 1.2% daily are expected. Yesterday’s stealth rally did not move too much from the center.
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