• Gold down $30 to $1853
  • WTI crude oil down $7.41 to $102.35
  • US 10-year yields down 8 bps to 3.04%
  • S&P 500 down 135 points, or 3.4%, to lowest since April 2021
  • JPY leads, AUD lags

There weren't any headlines driving the move to start the new week but there were some interesting quirks compared to recent price action. For one, the US dollar didn't sustain a bid against JPY, GBP or EUR even as the wheels fell off in equities. Perhaps that's just the ebb and flow but it could be a sign of rising worries about the US economy or the realization the Fed might not need to hike as much if growth starts to look as bad as the stock market.

Secondly, the broad deleveraging in all assets gave way to some buying in bonds. That could reflect unleveraged funds in a flight to safety finally overwhelming the deleveraging sales.

In stocks, every bounce was sold. It wasn't the kind of puke that some bottom-pickers would like to see but rather a controlled demolition of longs. After five weeks of selling and a Monday like this, we might not be far off from disorderly selling. Certainly we're seeing that in pockets of tech and have been for some time. ARKK was down 10.4% today as towels are thrown in.

Another difference was that energy and commodities were sold off alongside stocks today. Previously, they'd been remarkably resilient. That points to a brewing global growth slowdown and continued frustration with China covid policy. Oil and gas took sharp legs lower and copper continued its slide.

Perhaps the worst signal for commodities was commodity currencies. CAD and AUD both touched below levels that have held multiple times. USD/CAD rose above 1.30 for the first time since Nov 2020 while AUD/USD fell below 0.7000 for the first time since July 2020. Both charts are ominous.

FX news wrap May 9 2022