What Happens Next?

'Investors' are buying both bonds (yields below post-Italy vote lows) and stocks (new record highs) ahead of tomorrow's ECB meeting...

US F/A-18 Fighter Jet Crashes In Southwestern Japan

A US F/A-18 Hornet military jet stationed at the Iwakuni base in the Yamaguchi prefecture, crashed in Japan, NHK reported citing the country’s Defense Ministry. The plane crashed around 6:40pm local time in the Kochi Prefecture, the report said, adding that the pilot survived.

Trump Picks Iowa Governor Branstad As US Ambassador To China, Beijing Calls Him "Old Friend"

Trump has picked Iowa Governor Terry Branstad as the next U.S. ambassador to China, choosing a longstanding friend of Beijing after rattling the world's second-largest economy by speaking to Taiwan's president. Earlier in Beijing, Foreign Ministry spokesman Lu Kang called Branstad an "old friend" of China when asked about a report on the appointment.

Indian Economy Crashes As Modi's "Black Money" Theory Collapses

Amid social unrest and loss of faith in the nation's currency, India's economy has ground to a halt with its Composite PMI crashing by a record in the last month as demonetization strikes. However, even more problematic is that Indians have validated 82% of bank notes rendered worthless by PM Modi, dramatically undermining the government’s estimate of unaccounted wealth in the economy.

Chinese Reserves Tumble By $69 Billion, Biggest Drop Since January

Overnigt China disclosed that, as expected, FX reserve liquidation has spiked with reserves falling by nearly $70 billion last month as the country’s central bank burned through more of its reserves in the fight to defend the renminbi from greater depreciation on the back of accelerating capital outflows. This was the largest decline since January.

Crude Tumbles Below $50 After Biggest Cushing Build Since Jan 2009

Crude prices are lower this morning following API's huge reported build at Cushing (biggest since 2008) and fears over OPEC deal realities. With expectations for a crude draw (on lower imports), DOE confirmed a bigger than expected overall draw but also Cushing saw a 3.78mm barrel build - the biggest since Jan 2009. Both Distillates and Gasoline (most since Jan) also saw bigger than expected builds as US production dropped very modestly.

Our "Gaslight" Economy

If you don't like what these charts are saying, please notify The Washington Post to add the St. Louis Federal Reserve to its list of Russian propaganda sites.

Italy PM Renzi To Resign Today After Approval Of Budget Bill

In what appears to be an unexpected development, following yesterday's news that Renzi would hold off resigning for the immediate future, moments ago the Italian prime minister tweeted that he would formally resign at 7pm local time, well ahead of expectations, following passage of the budget bill.

Gold & Silver Spike, Erase Italy Vote Losses

After puking over $30 from post-Italy vote highs, gold prices are jumping this morning and have erased the losses. Silver is soaring, breaking back above $17, well above pre-Italy levels...

OPEC Cheating Will Cap Oil At $52

OPEC succeeded in pulling off what many thought was impossible, overcoming mutual disdain and mistrust to reach a deal on reducing its oil output. Oil prices skyrocketed on the news, up more than 12% since the agreement was announced last week. But what if there is much less to the deal than meets the eye? What if OPEC does not actually follow through on the promised production cuts?

Another Trump Win: Apple Supplier Foxconn Says It Is In Discussions To Expand US Operations

There is over a month left until Trump's inauguration, and the President-elect's hard-hitting negotiating style may have scored yet another economic victory: according to a statement issued by Foxconn, the world's largest contract electronics manufacturer and a major Apple Inc supplier, the company said it was in preliminary discussions to expand its operations in the United States.

Frontrunning: December 7

  • Futures rise for third day in a row (Reuters); Banks Lead Stock Rally as Bonds Gain With Hopes Pinned on Draghi (BBG)
  • Monte dei Paschi bolsters European stocks, ECB looms (Reuters)
  • Finding Risk in All the Wrong Places as Trump Era Begins (BBG)
  • Goldman Tells Stock Pickers to Rejoice as Correlations Decline (BBG)
  • Trump’s ‘Wall’ at Mexico Border Vanishing as GOP Lawmakers Bolt (BBG)

"Panicked" Citi Trader "Who Fired Off Repeated Sell Orders" Behind Pound Flash Crash

A probe into October’s sterling "flash crash" has focused on the Japanese trading operations of Citigroup, which fired off repeated sell orders that exacerbated the pound’s fall. One of the US bank’s traders "panicked" and placed multiple sell orders when the currency slumped in unusually fragile market conditions.

JPMorgan, HSBC, Credit Agricole "Bank Cartel" Fined $521 Million For Euribor Rigging

The European Commission has fined Crédit Agricole, HSBC and JPMorgan Chase, a total of €485m for participating in a cartel concerning the pricing of interest rate derivatives denominated in euros. “The aim of the cartel was to distort” Euribor, said EU competition policy chief Vestager. The traders involved "tried to submit quotes to move the Euribor rate up or down."