Volatility is back - stocks slip, silver soars, USDJPY roars.


Thursday was an exciting day, and Friday will most likely remain in the same tone as correlations are breaking down everywhere and volatility has picked up notably.

US equities rose notably on Thursday but failed to hold gains and rolled over in the last trading hour. Friday saw some selling, with US benchmarks down circa 1%.

There was more good news on the vaccine front as the biotech firm Novavax said late Thursday that its coronavirus vaccine was more than 89% effective in protecting against the virus in its phase three clinical trial conducted in the United Kingdom.

The 10-year US yield rose sharply after touching the psychological 1% level and was trading at around 1.07% at the time of writing. 

Rising yields helped stage a nice comeback of the USDJPY pair, which rose 1% and was seen at two-month highs near 104.90. The EURUSD pair has been so far unimpressed and remained in a tight range at 1.21.

In commodities, silver soared 5% yesterday, but gold ended flat as any rally in gold is immediately sold aggressively. The medium-term outlook for gold remains bearish, while silver looks to be breaking out. Either silver will drop to catch down to gold, or gold needs to rise sharply to catch up with silver. Interesting times ahead. 
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