Post-Payrolls Panic-Buying Evaporates As “Bad News Is Bad News” After All

Well that escalated quickly…All-time highs within reach… everything is awesome…wait what…

Quite a week:

Gold +5.25% in last 2 weeks – best run in 4 months
Silver +5.65% this week – best week since May 2015
Copper -4% this week to lowest weekly close since January
Sterling -2.5% in last 2 weeks – worst drop in 3 months
US Dollar Index +0.6% – up 7 of last 9 weeks
30Y Yields -21bps in last 8 days – best rally in 4 months
2Y Yields -17bps in last 7 days – biggest plunge since Jan 2015
Nasdaq -1.51% today – worst day since Feb 8th
VIX +3vols in last 2 days – biggest spike since Feb 9th – highest close in 3 months…

Bonds were the big news this week – as equities tried to ignore the message from the massive institutionalized buying of fixed income to record low yields…The yield on the Bloomberg Global Developed Sovereign Bond Index dropped to a record 0.601 percent Thursday.

In April 2015, with 10Y German bond yields at 5bps, Bill Gross and Jeff Gundlach called Bunds the "short of a lifetime." Just over a year later – having spiked to over 100bps – 10Y bund yields have crashed since The Fed hiked rates in December and The ECB escalated its bond-buying. Today marked a dramatic moment as Germany almost joined Switzerland (-50bps) and Japan (-17bps) with a 10Y bond yield below zero… as Bunds traded to 0.9bps.

And Treasury yields tumbled…and the curve flattened

It appears renewed turmoil in Chinese currency markets started rippling through markets…as Yuan hits 4month lows…

But Gold and bonds are leading the way post-payrolls, with S&P and WTI lagging…

On the week, Nasdaq was the biggest loser…

They did try to ramp it in the last 30 – managing to get close to VWAP (but missing out on 2,100 and unch on the week)…

And stocks finally caught on to the weak growth, event risk concerns priced into bonds…gold.. and FX carry… Who could have seen this coming?

Financials appear to be waking up to the reality of a collapsing yield curve…

Today's weakness started when Europe opened, as it seems "sell the news.. AND EVERY BANK" was the meme, but really accelerated when the Brexit poll hit this afternoon…