Credit/Risk Assets

Here's a look at how Credit and Risk Assets in general are performing today.

 Commodities faltered Thursday, followed by the market Friday. This morning commodities are not sharing the enthusiasm of the SPX as they remain in Friday's range. There is a slight bounce in the $USD on a bit of EUR weakness or weakening that I shoed you in the last post, but it's not enough to explain commodities lack of relative performance today.

 High Yield Credit as I mentioned last week seems to be de-leveraging as it has not made a higher high with the SPX in over a week.

 Rates, which are like a magnet for equities gave an early tip off on Thursday, today they are not moving out of Friday's sell-off range.

 For those who think the Euro correlation is not alive, here you can clearly see the Euro posted higher lows while the SPX was still bottoming, dragging the SPX higher last week, it also warned on Thursday.

 Here's the longer view since QE2 ended and the correlation started coming back.

As for today,

The same enthusiasm is not there, especially recently in the last hour or so, I suspect the SPX is outperforming a bit on the opportunity to fill Friday's gap.

 High Yield Corporate Credit is also underperforming on the day, it seems everywhere we look thus far, the only risk appetite is in equities, not commodities or credit.

 It's been nearly 2 weeks that High Yield Corp. Credit has failed to make a higher high with the SPX, again... de-leveraging?

While Financials are the best performer on the day, they did warn on Thursday before Friday's gap down, there's pretty good performance today, although in the last 30 mins or so it is starting to diverge from the SPX.

All in all, while the equity market points to risk appetite in a gap fill, the rest of the risk market is not so enthusiastic.