Good Morning, and Happy Friday! Today brings us September “Quadruple Witching” options Expiry Day, so be watchful for explosive volume and tractor beams towards big strikes. It’s a sea of red over in Europe, as investors flood back into the credit market – Bund yields are down to week’s lows, and Several Asian Sovs are seeing some of the biggest drops in yields this year – Aussie, Kiwis, Japanese, Indonesia, etc. Practically every sector is seeing heavy selling in Frankfurt, with the big financials taking the brunt of the weight. In London, the Miners weighing on FTSE with Glencore off 4%. Over in Asia, aside from Tokyo the markets welcomed the Fed’s decision. Shanghai managed to close the week green, Korea popped 1%, Aussie added 50bp – and most EM markets closed unch. The big loser was Japan - Nikkei was hit for 2%, led by exporters as the Yen soared against the $. Japanese markets are closed until next Thursday for Holidays. Reminder that many popular ETFs, including SPY and QQQ, go ex-divvy today

That US 10YY continues to grind lower, now under 2.15% with eyes on the 200dma for support at 2.12% - as the 10YY makes fresher lows, CTAs will be rebalancing further away from equities. Fed Funds continue to trend dovish as well, with only a 18% chance of an October lift, and on balance not pricing in a liftoff until Q1. Further buying in the front-end is pressuring that 2YY off another 2bp, and the yield curve is flattening sharply again – Financials in store for another very sloppy day if this persists. The DXY is trying to rally from 3week lows near 94 – Euro is reversing on dovish commentary – but that Aussie $ is flying again, taking out yesterday’s flash spike on the FOMC – That bodes well for base metals, and we have Gold up 1.5% and nearing key resistance. The energy complex is seeing some more profit-taking from the recent spike, with WTI off 1% into the Baker Hughes Rig Count later today

While Options Expiry will be setting the early tone, we do get US Leading Index at 10 – and the US Treasury is auctioning off Inflation-Protected securities at 11:30 (interesting in light of Fed comments on Inflation) – We get “Household Change in Net Worth” at 12. That Baker Hughes Rig Count hits at 1pm – just ahead of 2 FOMC speakers: San Francisco Fed's John Williams Speaks in New York at 1:30, and Fed's Bullard Speaks on U.S. Economy, Banking in Nashville at 3:30 – right when the CFTC “Commitment of Traders” data hits. Looks pretty quiet down in Washington as Congressmen flush toward Reagan National and Lobbyists find their way to Old Ebbitt.

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