The Tapir Strikes Again

aWhile the Fed would dearly love the market to believe that "tapering is not tightening," the message of today's reaction to merely the sugestion that a taper is closer than 'some' believed says it all about how boxed in the Fed really is. US equities have retraced half the pre-Yellen ramp gains, US Treasury yields had their 2nd worst day in 5 months, gold (and silver) collapsed (limit down for a while); the USD jerked higher (+0.3% on the week). VIX and credit markets had been hinting that markets were restless and while today's drop was only 0.5%, the sad psychological truth is that given realized volatility, it is significant. The ubiquitous late-day ramp saved us from a "deer" day - but nether FX carry nor VIX supported that lift. This is the first 3-day losing streak for the S&P in 2 months.It just feels like a "deer" day... but not quite... Oops...Some context for today's move - from when the Yellen excitement began last week... Spot The Odd One Out...This morning's ECB negative rates comment broke the FX carry game - but the FOMC Minutes recoupled tyhat reality...Credit remains under-impressed and over-saturated - not exactly supportive of moar buybacks...and VIX remains bid...Off the debt-ceiling lows, things are rolling over... led by homebuilders (and it seems financials didn't get the mainstream edia memo that higher rates are good)Charts: BloombergBonus Chart: The last time China-US bonds were this far apart, Treasury yields hammered higher...(h/t Brad Wishak of NewEdge)Average: Your rating: None Average: 4.4 (7 votes)