• Gold up $21 to $1854
  • US 10-year yields down 15 bps to 3.32%
  • S&P 500 down 123 points to 3666, or 3.25%
  • Nasdaq down 4.0%
  • WTI crude oil up $1.74 to $117.05
  • CHF leads, USD lags

The place to start to try and understand what happened today in the US dollar is here.

It was a wild day and played out very similarly -- almost eerily -- to the May FOMC decision. There was no bottom to the slump in equities, even with yields reversing from much higher to much lower through the course of the day.

Markets are absolutely on edge ahead of the Bank of Japan decision later today and there's no appetite to stand in front of the risk freight-train ahead of a US holiday on Monday. In Europe, an ECB leak suggesting they will sell core bonds to buy the periphery and close spreads that way prompted some level of rethink on that and on EUR/USD shorts.

The bigger move was in the pound, which is now 400 pips from this week's lows. The Bank of England can hardly take credit for that move but it was notable that there were three dissenters and a fair amount of backlash about only hiking by 25 bps.

The SNB decision was a total shocker and everyone is scratching their heads about what's next. They removed the reference to the strong franc in the statement but also appear to be intervening to keep the franc from appreciating further. The franc very strong but not as strong as you might think given such a shocking decision.

At this point, everyone is basically strapped in for anything and the talk about a recession is rampant. That's a tough mentality to switch but bear market rallies can be powerful.

wrap June 16 2022