It is just one of those days..

FX outpaces most of everything else that is happening in the market

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When you look at the antipodeans being down by 1.1% (AUD) and 1.8% (NZD) on the day, with the dollar and yen leading the charge, it is easy to point towards the market being skewed heavily in risk-off territory all things considered.

However, besides oil plunging by 5% at the lows briefly moments ago, dropping to test key support @ $58.59 and then bouncing back to near $59.00 currently, the rest of the market is exhibiting a lesser degree of risk aversion for the most part.

Sure, bonds are bid with 10-year Treasury yields seen down 6.5 bps to 1.629% but given how volatile things have been lately, perhaps the market has become somewhat desensitised to what exactly constitutes to a risk-off play these days.

European equities are only modestly lower while US futures are also down slightly and not really bleeding too heavily. S&P 500 futures are down 0.4%, similar to Dow futures, while Nasdaq futures are down just 0.1% – finding comfort in lower yields.

Going back to oil, demand fears are also part of the story with the worsening virus situation in Europe a factor to throw in there; alongside a stronger dollar today.

Looking ahead for the rest of the week, just be wary that we are approaching month-end and quarter-end rebalancing period so there’s that to take into account as well.