This is about one of the best you would have hoped for a couple of hours in the past

It’s still a bloodbath in markets but it’s not the kind of reckoning we’re seeing in Japan.

A few hours ago, it was looking bleak but some strong hands have waded in. The first hint might have been the bounce in the Australian dollar. That’s been followed by a bounce in Treasury yields, oil and now in stock markets.

The S&P 500 is still down 3% and the Nasdaq down 4% but stocks are off the lows.

The data and commentary in the US session today was calming and a reminder that there is no monster under the bed. Yes, the economy is slowing and may be heading for a recession but it’s not some kind of economic crash (at least at this point) and the US financial system is solid.

There is still 500 bps of ‘Fed put’ available and it could all be put to work with the way inflation expectations are coming down.

I think the deleveraging will continue because there just isn’t a great reason to buy so long as the Fed is behind the curve but at least there is some two-way action.