Some truly astonishing moves have been seen over the last two hours since the United States printed some of the most discouraging data of the year on prices, retail sales and manufacturing sentiment. There was already concerning data on slowing price increases out of the UK and China over the last 24 hours, as well as Greek assets coming under pressure. This all culminated with the 8:30am EST USA data that sent stocks, US yields and the Dollar plunging.
Sentiment on the Dollar has already been in flux since the October 8th FOMC minutes showed that the committee was concerned about a strong Dollar dampening exports and inflation. While the Dollar may be a large contributor, the bear market in oil has been the true villain. Inflation is falling globally as energy prices fall to multi year lows. West Texas Intermediate dropped to a low of day of 80.03 after the US data points came out.
Massive whipsaws were seen all over the tape as 10 year yields made one of the most jaw dropping single day moves in years as rates moved from a 2.17% open down to 1.868% during the post data capitulation before rebounding back to around 2.03% by 10:22am. The US Dollar also experienced wild swings, falling against every major currency with the Euro and Yen led the way in a risk off environment. The Euro traded around 1.2670 as the US data numbers came out, and took off higher just after the release. Stops were run without mercy all the way up to a high at 1.2880 before turning back down to 1.2760 as of now. USDJPY prices action was similar, going from 106.90 down to 105.20 before calming down.
S&P Emini futures stand 25 points off the low of 1830 right now at 10:22am. Markets remain on edge as the picture is currently very cloudy, with the only sure thing we can all bet on is more volatility.