Can Equities do it?

A tentative turn to the upside late on Friday will be tested in the days ahead but even if sentiment stabilizes, a big challenge awaits. Gold, silver and the Aussie are the best performers as yields push higher alongside risk appetite. Ashraf is watching 2676 on the SPX and 24706 on the Dow for today's close. Tune in for today's webinar on volatility. CFTC positioning was remarkably steady despite the turmoil. And here is a chart below that very few have mentioned.

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The S&P 500 gained nearly 40 points on Friday and traded 100 points off the lows in a small positive sign at the end of the worst week for global equities in years. Ultimately, the backdrop hasn't changed and the global economy is in fine shape. That was reflected in the general indifference of the FX and bond market. Looking to the week ahead and beyond, it will be bonds that steal the spotlight. The key event is Wednesday's release of US CPI and retail sales.

Despite all the turmoil, US 10-year yields finished the week at 2.85% -- the highest since the end of 2013. Aside from risk aversion, the climb took place despite tumbling commodity prices. A rise to 3% is likely and it's sure to create jitters in the junk bond space and broader markets. Is it a threshold for fear? Probably not but 3.5% might be a spot where negative feedback kicks in.

CFTC Commitments of Traders

EUR +141K vs +149K prior GBP +28K vs +32K prior JPY -113K vs -114K prior CAD +40K vs +33K prior CHF -20K vs -20K prior AUD +14K vs +13K prior NZD +3K vs +3K prior

The above numbers only reflect the close through Tuesday but underscore the lack of real concern in FX despite the turmoil in stock markets.