An important post from Rodney Lay at LiveWire:
A near unprecedented crash in equities, oil smashed, 10Y Treasury futures soaring, and also for the first time in over a decade in that market, locked limit up for about an hour prompting a brief trading interruption. And, the entire US Treasury curve – including the 30Y – trading not only below the effective fed funds rate, but also below 1.00% for the first time ever. Then, a flash crash in the Australian dollar, most likely the result of a macro fund being margined out and liquidating carry positions. All unleashing another bout of risk-off liquidation across asset classes.
The big irony – unable to sell anything else, funds – facing historic margin calls on Monday (Northern hemisphere time)- are selling what they can… such as gold, which after hitting $1700 earlier in the session tumbled 0.7% as investors liquidate the safe asset to shore up liquidity ahead of a Monday (Tuesday Australia).
