Stocks Suffer 'Shocking' Down Week As Fed Balance Sheet Unexpectedly Shrinks

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Source: Bloomberg

The Treasury curve (3m10Y) has flattened a dramatic 20bps in the last two weeks (after 5 straight weeks of steepening), the biggest such flattening since May...

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Source: Bloomberg

And the 2s10s curve has broken down from its uptrend channel...

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Source: Bloomberg

As BMO's rates-desk notes:

If the 2s/10s curve is unable to steepen above the YTD high of 30.8 bp or reinvert below the -6.6 bp low, this 37.4 bp zone will be the tightest annual rage in history. A fact all the more remarkable given that 10s themselves have traded in a 137 bp range. At a high level this indicates that a shift in the structural level of interest rates has been the dominating theme in 2019. Lower for longer reflecting middling growth prospects and concerns about monetary policy effectiveness are powerful influences in the background; the past 24 hours have been a decent case in point.

And Treasury 'VIX' is testing back to its lowest since May...

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Source: Bloomberg

The dollar lurched higher today, pushing for recent highs...

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Source: Bloomberg

As the dollar rallied, offshore yuan faded this week...

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Source: Bloomberg

Crypto carnage after China cracks down on local exchanges...

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Source: Bloomberg

Bloodbath in Bitcoin this week...

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Source: Bloomberg

Despite a rally in the dollar this week, commodities ended modestly positive (apart from gold's small drop)...

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Source: Bloomberg

WTI has traded in an upward channel for a while with chaotic trading this week to get back to $58 by the close...

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And finally, it's not the fun-durr-mentals...

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