Fed piles into black swan gauntlet

Suddenly a Fed hike is back on and markets don’t like it. The US dollar was strong:

Other majors weak, especially JPY:

Commodity currencies were whacked:

Gold capitulated:

Brent held on:

Base metals didn’t:

Big miners fell:

US and EM high yield held on with oil:

US bonds were dumped:

And so were stocks:

There was no specific trigger that added the Fed to the Q4 risk gauntlet, perhaps it was a delayed reaction to the improved ISM. It may also be that Hillary stretched her lead in the polls to nearly 4 points:

I remain unconvinced that the Fed will pull the trigger. Before its December meeting we’ll need to see:

• Deutsche stabilised or resolved. Last night there were rumours of a capital raising but it won’t be enough;
• the BoJ not deflate JPY;
• clarity on ECB QE which is on thin ice;
• a Hillary win;
• an Italian referendum “yes”;
• China negotiate its house price bubble, and
• markets not wake up to the fact that OPEC just made the oil glut considerably worse.

Good luck with that little lot. There’s nowhere to go for markets here. Even if it all succeeds, then the Fed hikes.