And that’s the week ladies and gentlemen.
A dovish Yellen on Capitol Hill largely offsetting the rate hike from Poloz, a couple of ECB leaks to make sure the messaging is “just right”, and (another) miss on the CPI print which promptly pushed the odds of a September hike below 10%:
The S&P hit a record on this “sign-of-the-times-ish” headline: “Tepid Inflation Ignites Rally”…
The VIX is back to a 9-handle (of course)…
Yields plunged on Yellen’s prepared remarks and again on the CPI miss:
Gold rose to a two-week high:
Crude was its usual batshit crazy self with the now customary API/ EIA pump-n-dump/ dump-n-pump (the order depends on the week) on Tuesday/Wednesday, Goldman suggesting prices could fall below $40, the IEA revising up its demand forecast but painting a rather bearish supply picture and the rig count rising again. On the week, oil managed to end 5% higher:
Corporate credit is in a Teflon-ish word all its own (“honey badger don’t care”):
European stocks benefited from Yellen’s dovish lean, rising nearly 2%:
South Korean shares hit a record, buoyed by a BoK that’s on hold and more optimistic about the economy despite the threat of a mushroom cloud over Seoul:
The dollar sank to a 10-month low with Friday’s lackluster CPI and retail sales data exacerbating the decline. AUD and CAD both rose to highest in more than a year with the latter supercharged by Wednesday’s rate hike:
The dollar also fell against most of EMFX – obviously, lower yields in US ensured there was appetite for riskier currencies. The MSCI EM Asia Index was up over 3% on the week, posting gains every day. “The gain in Asian currencies this week has largely been due to the overall pullback in expectations on the U.S. dollar, not least of all due to Janet Yellen’s comments to Congress,” Julian Wee, a senior market strategist at National Australia Bank in Singapore noted.
