Market gyrations continued on Monday as Chinese marts reacted to the firing of its market’s regulator over botched intervention and the loss of $5 billion in market cap.
The dollar is soaring as the 10-year is falling to 1.7 percent. It’s a difficult call as a strengthening greenback usually moves equity markets lower, but lately the pairing has been broken.
The crude/dollar ratio is also upside down lately as oil prices move higher on stronger dollar.
So what this tells me is that when these historic pairings are no longer in sync is that institutional investors — the ones that can move market suddenly — are searching for alternative strategies because the system is broken.
Intervention in currency and future markets overnight has been a huge driver the last two weeks in commodities and equities. Vast swings with little news are the tell-tale signs of intervention, with little staying power as old-time investors see the incongruence between the news and the market moves.
This is what adds to the volatility within the markets. No fickle investors, but investors looking at the news, looking at the markets and saying what the hell is going on. That stock or that commodity should not have moved in that direction.
Deutsche Bank announced this morning that it is laying off 75 bond desk traders. More layoffs in Europe as the bank tries to retrench after its CDSs or risk profile soars.