Its Over

BoE intervention in the bond market saved the day from what appeared to be an erratic, volatile and chaotic market and send a strong message to the markets that central bankers puts are not dead, that was enough to bring about an emphatic rise across equity and currency markets , the long anticipated and overdue relief rally finally came. The Dow was 548pts higher or +1.88% to 29,683, the S&P500 averted the test of 3636 and climbed +1.97% to 3719 despite Apple's -1.27% drop , Nasdaq stronger by +2.05% to 11052.

US 10 year yield plunged 5.7% to 3.73% from a 4% high , DXY retraced to 112.70 and commodities breathe a sigh of relief. Crude returned above $80, Gold to $1660. GDX and GDXJ screamed higher by +7.18% and 7.87% respectively and XLE +4.43%. AUD recovered over 1+ c to 65.2c.

CNBC's Joe Kiernan asked a good question - is the dysfunctional market attributable to Truss' failed fiscal policy or is this an outcome of rising global yields phenomenon? If it is the former, then Krugman and Rosenberg both have their points, but if it the latter or more likely both, then you'd think it may not be over, just yet.

Yes, didn't I say its blindsiding? Just when things started looking better, it soured and just when things started like falling apart, we have a meteoric rise. Expect this choppy and volatility to maintain going forwards. As they say, when you start to see one cockroach, you should believe that there are possibly many more that are out there yet to surface. As Slim would say, take care because itssss craaazzy out there.

Bonds, Stocks, Bitcoin, & Bullion Soar After Brits 'Save The World'

BY Zero Hedge
THURSDAY, SEP 29, 2022 - 06:01 AM

First one to 'pivot' wins?
The Bank of England's desperate bailout of its pension funds - by pivoting back to QE (only temporarily of course) - sparked chaotic buying across global markets. Bonds were the most dramatic movers, but FX swings were sizable, and stocks, gold, crypto, and oil all ripped on the renewed easing efforts.
First the scene of the crime... UK 30Y Gilt yields collapsed (-106bps) after BoE intervention...

Source: Bloomberg
US Treasury yields followed suit with the belly of the curve plunging over 25bps, erasing all the week's yield increase...

Source: Bloomberg
10Y yields reversed perfectly at 4.00% coincidentally, puking over 32bps from high to low intraday - this was the biggest daily drop in 10Y yields since 2009...

Source: Bloomberg
Expectations for rate-hikes are dropping (Terminal rate now down 40bps from its peak), but today saw subsequent rate-cuts on the rise once again...

Source: Bloomberg
...with EDZ2-H3 negative again (implying a rate cut in Q1 of next year)...

Source: Bloomberg
Additionally, as rate-cut expectations begin to rise again, we saw another large options trade betting on a huge rate-cut in Q1 (around 100bps).
As rate trajectory expectations shifted dovishly so the Dollar Index tumbled...

Source: Bloomberg
But cable rallied, despite BoE's actions...

Source: Bloomberg
Crypto rallied on the day - after yesterday's massive roller coaster - with bitcoin back above $19,000...

Source: Bloomberg
European stocks spiked on the news, then faded, then rallied into their cash close to end slightly green (FTSE-250 was unchanged after being down 3% early in the session)...

Source: Bloomberg
US futures were notably lower overnight before the Brits 'saved the world', then spiked green, trod water, then soared after the cash open. Small Cap rose over 3.5% on the day and were up over 5% from overnight lows. The rest of the majors rallied 3.5-4% off overnight lows. Some profit-taking at the close wiped a little lipstick off...

On the heels of a massive short squeeze today...

Source: Bloomberg
VIX crashed back from almost 35 to almost 30.00...

Spot Gold spiked back above $1660...

Source: Bloomberg
WTI surged back above $81...

Notably, US retail gas prices at the pump are up 8 straight days...

Source: Bloomberg
Finally, we note one of the market's most important 'stress' indicators is flashing red...

Source: Bloomberg
This is happening as a record $2.37 trillion was lodged with The Fed for o/n repo.