Roller Coaster Markets
January 24, 2022
–Yields fell Friday as stocks melted, with both SPX and NDX closing below 200 DMAs. On the euro$ curve, reds outperformed, up 8.5, while golds (5th year) were up 7.0. Ten year was the leader on the treasury curve, with the yield falling 8.7 bps to 1.744%. Open interest was down significantly in every treasury contract apart from 2’s as shorts pared back and Feb options expired. FV -51k, TY -34.5k, UXY -33.7k, US -16k and WN -1.3k. New lows Friday in 5/30 at 51.6, and the ten year treasury/tip breakeven at 2.36%.
–Bitcoin is below $34k this morning. According to coinmarketcap.com total cap of cryptos is about $1.5 trillion, an equal amount has vanished since the beginning of November. For example, in early Nov, Ethereum was 4800, this morning it’s sub 2300. It’s the wealth effect in reverse, and the Fed will likely tone down the hawkishness at Wednesday’s FOMC as financial assets in general weaken. Treasury auctions 2s and 5s today and Tuesday, with 7s following on Thursday. IT has already been quite a ride in ESH since last night. Early ESH trade 4427, or up 37 from Friday’s close. As of this minute it’s 15 at 4375, a new low.
