The disorder in the market today may not be so orderly
After paring losses of over 3% to move close to 0.5800, AUD/USD is now back down by over 1.8% on the day as the pair falls back to 0.5670 in the European morning.
The dollar is also seeing gains come back once again as the greenback pares losses against the euro with EUR/USD falling under 1.0900 and USD/JPY rising above 109.00.
At the same time though, equities have pared some of its earlier losses (US futures down 1.1%) with Treasury yields near flat levels on the day currently.
In trading yesterday, I would argue that we saw "orderly disorder" in the market where the moves were disorderly but the direction was clearer i.e. risk-off, oil plunge, liquidation trades everywhere including bonds, rush to cash/dollar.
Today, the situation feels somewhat different as we start the day.
Central bank action is in part to do with that and because of the fact we're not seeing stocks hit limit-up or limit-down, there is a sense that anything can still happen for now.
In the currencies market, dollar funding pressure will still be a factor but in between, look out for sentiment changes in bonds and equities as investors weigh up central bank and government action today.
As such, the disorder or wild swings in the market today may not be so orderly.
