Last night looks normal as in express elevator down followed by the escalator up. But when it started to head south mid morning something triggered a big spike up which failed to turn things around. Then yet another spike, this one a two leg move going into the Euro zone close and then yet another escalator down.
If I didn't know any better I would think they switched the rules back to declining markets punctuated with violent short covering rallies.
2nd spike up to VWAP in 2 hours and it looks like a repeat pattern so far, waiting for the second leg to fire. I admit drawing trendlines today has been beyond my ability but you do what you can.
Additionally, here is the take from Nomura's Charlie McElligott who warns that today's Minutes have "potential for actual relevance" for the following reasons:
Potential for further clarity on Powell’s recent characterization of inflation weakness as “transitory”
There too is potential for an update on Fed balance-sheet normalization—recall, QT is “still a thing” currently (keeping USD “bid” with b/s runoff, policy rates at 11y highs and increased Treasury issuance acting to restrict USD liquidity), but shifts to QE-Lite in Oct; thus we could hear more about the Fed’s vision for the composition of the balance-sheet and the concept of something where purchases look “reverse operation twist”-like by being concentrated into T-Bills in order to shorten WAM and steepen curve
Finally, we should be on the lookout for any further developments on a standing repo facility as a long-term solution to ease the current / recurring funding squeeze dynamic—as this mechanism would allow for USTs to be “fungible” into Reserves if required “on demand,” helping in periods of “tighter” funding rates
In English the repo facility change would be an acknowledgement that we have a major liquidity crisis and the Treasury is crowding out private sector as the Chinese dump their holdings and Congress tries to up spending.