From Dave Rosenberg
In the strangest of days, the stock market sold off, but the dollar sold off too. Usually when the equity market goes down, the dollar improves from a flight to safety. This time around, the flows were into the Yen. And despite the decline in the dollar, things that are priced in dollars all went south, from copper (China's imports of copper fell in July for the first time in six months — and by 15%!), to gold, to oil (don't look now but crude is down four months in a row). The CRB index got clocked two points and based on the performance of the Baltic Dry Index, more declines are likely over the near-term. Only the 11bps rally in the U.S. 10-year Treasury note made sense (then again, this is in the face of a $75 billion supply calendar). But the 3-year T-note auction did go very well (amazing what can happen after the market cheapens up like it did) with a strong bid-to-cover ratio of 2.89 (versus an average of 2.52 at the last seven auctions) and a record 62.5% indirect bidding, which was the strongest since this maturity was brought back into the fold in November 2008 (now that was impressive). What happened to the foreign buyers' strike?
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In the strangest of days, the stock market sold off, but the dollar sold off too. Usually when the equity market goes down, the dollar improves from a flight to safety. This time around, the flows were into the Yen. And despite the decline in the dollar, things that are priced in dollars all went south, from copper (China's imports of copper fell in July for the first time in six months — and by 15%!), to gold, to oil (don't look now but crude is down four months in a row). The CRB index got clocked two points and based on the performance of the Baltic Dry Index, more declines are likely over the near-term. Only the 11bps rally in the U.S. 10-year Treasury note made sense (then again, this is in the face of a $75 billion supply calendar). But the 3-year T-note auction did go very well (amazing what can happen after the market cheapens up like it did) with a strong bid-to-cover ratio of 2.89 (versus an average of 2.52 at the last seven auctions) and a record 62.5% indirect bidding, which was the strongest since this maturity was brought back into the fold in November 2008 (now that was impressive). What happened to the foreign buyers' strike?
