Here is a quick update following yesterday’s mid-week chart refresh. Things have been moving spectacularly, with tons of currents witnessed already last week but getting more violent. What started with the JPY carry unwind has now filtered through many deleveraging processes. If you are not used to this volatility, stay away. My gut feeling is that this won’t end swiftly. We have a week to run into the FOMC and month-end, plenty of time in these fast moving markets. My overall thinking in the longer term is that the risk drawdown will have an impact on growth further out. So, while spot growth is still tracking nicely and even picking up, this will weigh on growth. As FCI eases have positive loops to growth, the reverse must also be true. It's notable, however, how bonds, aside from short-ends, can’t hold their ground, not even when stocks tank more than 2%. This is indicative of market positioning, which has already been quite long for a while. These are times to write down your plans and trades you would like to put in a longer time frame, but I would be nimble and wait for the storm to pass. Macro, for now, is not at the forefront of thinking; it's all positioning-related based on the amount of leverage that has to be taken down in pretty illiquid summer markets.
So, let’s take some measurements and update some charts on this meaningful day, which has set some records for this and last year.