And the yuan weakened (along with most Asian FX) even with the relative strength of the yuan fix...
And EM FX overall continued to collapse to record-er lows (against the greenback)...
US equities were ugly again, erasing all of yesterday's post-OpEx rally and then some. They did rally again late in the day - some suggested after headlines noted that Putin would not be addressing his nation today - but unlike yesterday's late melt-up, today's did not last...
Put volume relative to call volume has surged above June peak levels in recent days...
All of last week's short-squeeze gains have now been erased...
Judging by the ongoing surge in real yields, there is a lot more room to the downside for stocks...
Oil was down today...
Gold was down today...
Crypto was down today...
Russian stocks were clubbed like a baby seal on fears that Putin was escalating the war...
Bonds were where a lot of today's focus was with yields higher across the curve as the belly underperformed (5Y +7bps, 2Y30Y +3bps)...
Intraday, the yield on 2Y US Treasury bonds neared 4.00% (which would be the first time since October 2007)...
The market is assigning a 20% or so chance of a 100bps hike tomorrow, and if they go 75bps tomorrow, a 75% chance of The Fed going 75bps again in November...
Meanwhile, the terminal rate for Fed rate-hikes has risen to 4.49% this morning, expected in March 2023...
Do we really think The Fed can get there without folding to political pressure or flip-flopping to abate risk-asset carnage?
As we noted earlier, how do we think Elizabeth Warren is going to react to this?
Finally, which would you rather own: 2Y notes backed by the US govt paying 4% or the S&P 500 paying 1.7%?
TINA is dead.
What to expect from the markets tomorrow? With the exception of May, stocks rallied after the meetings.
As Bloomberg's Ye Xie notes, the buy-the-rumor-sell-the-fact type of price action is evident. Granted, it’s a small sample. But, with the markets pricing in a terminal rate of 4.5%, the bar is high for the Fed to surprise on the upside.
Nevertheless, none other than Dr.Doom himself, Nouriel Roubini, told Bloomberg this morning that he sees a stagflation like in the 1970s and massive debt distress as in the global financial crisis.
“It’s not going to be a short and shallow recession, it’s going to be severe, long and ugly,” he said.