Santa gets stuck in chimney
Price action in financial markets turned erratic yesterday, with US equity bourses suffering some of the biggest reversals in months. The dollar gained on a flight to safety, Treasury yields crumpled, and risk-sensitive currencies sold off. We have no idea what triggered the move*, but it appears technical in nature: with the chimney narrowing (liquidity drying up ahead of the holidays) and Santa’s girth expanding (a range of asset classes looking overbought amid the euphoria surrounding the Federal Reserve’s pivot toward easing), some form of correction had become likely. A recovery is now underway, with stock futures rising into the...