The Fuse
Monster move up by futures this morning as a 2 week ceasefire was agreed to by the US and Iran. A 2% or more gap up is rare and extremely bullish, but we’ll wait to see if there is some followthrough before diving back in.
With futures ripping higher we expected to see like moves overseas. The STOXX in Europe is higher by 3.5% led by huge gains in Germany and France. The dollar index fell .8%, gold is ripping higher by nearly 3% as is silver, crude oil getting smashed and down about 14% in heavy futures trade. Yields are also falling, the German bund is off 16bps while US 10 yr treasury yields have fallen 5bps. In Asia Japan ripped higher by 5.4%, Hong Kong gained 2.8% while Shanghai was up a similar amount.
Volatility is going to take it on the chin, early this am the VIX is down 20%, a huge move that indicates the hot temperatures are starting to cool off. Can the VIX get back into the teens? Certainly so but it will take some effort by the bulls.
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