The Week Ahead
Happy Saturday world from a sunny UK!
Another crazy week with lots of blood on the street - S&P was down 195pts for the week. A very strong rejection of 4175 (2pts above my 4173 level in last weeks post). 2s10s inverted to -42bps, 10yr was just shy of 3.5% and 2yr saw 3.9%! The moves in rates fit in with my previous posts.
The greenback trickled back up to ~110 which alongside the moves in rates aided the sharp sell-off in stocks post CPI. All things considered, vol was relatively compressed for the week. I think Tuesday’s move was a combination of retail continuously buying the dip & getting stopped out, vol control forced people to cut gross exposure and net exposures being reduced, the lack of liquidity just added to the velocity of the move.