• Gold down $4 to $1819
  • WTI crude down $2.12 to $111.66
  • US 10-year yields flat at 3.196%
  • S&P 500 down 2%, Nasdaq down 3%
  • USD leads, NZD lags

There was a bit of bifurcation in markets today as equities dumped while bonds traded sideways. In FX, the dollar was strongly bid while the yen slumped despite the flight to safety. You wouldn't normally expect AUD/JPY to be up 25 pips on a day when the Nasdaq fell 3%.

You also wouldn't expect a strong dollar rally to start immediately after a poor reading on consumer confidence and from the Richmond Fed. But the dollar surged into the London fix. That and a look at the calendar might be a clue on what's going on. We're into some major quarter-end flows and Citi's model is showing strong USD buying and that's exactly what took place today.

The bond market continues to reel off auction tails but they're shrugged off with some pointing to falling Japanese demand due to the yen drop along with high hedging costs. Whatever the reason, tails that would have upended the market months ago are ignored.

The Canadian dollar was able to keep pace with USD as oil prices rose for the third day. AUD wasn't far behind and other sensitive spots like steel aren't pointing to a global growth slump as the catalyst for some of the moves today.

I wouldn't overthink this one as it's T-2 before quarter end for stocks. Still, we might not be at the end of it with three more days of trading to go in Q2

FX news wrap June 28