Euphoria To Gloom
Markets have gone from euphoria to gloom in three days. Nothing fundamental has changed, it is just a swing in the sentiment.
All those pure technical investors and the momo crowd that was buying last week are now panicking and selling at lower prices than they bought last week.
Money is rushing into the safety of German bunds, all the demand has driven yield below zero for the first time.
Retail Sales in the United States were strong. Retail Sales came at 0.5% vs. 0.3% consensus. Retail Sales ex-Auto came at 0.4% vs. 0.4%.
Market is becoming more awake to Brexit worries. Clients may have noticed that we sold long UK positions before the current swoon. We also trimmed positions in Europe before they started falling.