• Gold up $7 to $1628
  • WTI crude oil up $1.75 to $78.46
  • US 10-year yields up 7 bps to 3.95%
  • S&P 500 down 8 points to 3647
  • GBP leads, AUD lags

We're now clearly in a good-news-is-terrible-news trading environment as a four-pack of strong US data points helped to kick off another rout in the bond market and turned a US dollar seloff into a modest rally. Along with the data, comments from the BOE indicated that no immediate help is coming and gilts led the rout once again.

Every additional day of selling in governments is another nail in the coffin of the era of easy-spending governments. We've priced in +400 bps of global central bank tightening and now we may have to price in at least the equivalent amount of government fiscal tightening.

That thinking was one of the reasons that risk appetite turned to risk aversion once again today. On the FX side, the Australian dollar was hard hit, falling 35 pips on the day to a new two-year low at 0.6430 -- about 85 pips from the highs of the day.

USD/JPY also benefitted from rising yields and broad USD strength. That pushed it as high as 144.90, or just a shade below the area that appeared to trigger intervention previously.

The euro and GDP finisehd the day relatively flat but that hides the disappointment of a failed bounce after many days of selling.

Even the loonie failed to make any progress despite a $2 rise in oil.

To wrap it all up, here's an ominous warning from BMO's Ian Lyngen:

"The next area of focus is increasingly becoming the fallout in other economies, and while the UK has garnered the bulk of investors’ attention recently, currency defense and default risk in other, less developed geographies promises to be a space to watch as month-end approaches."