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Russia Prepares 2nd Humanitarian Convoy "Invasion"

Following the 'success' of the first humanitarian convoy, Bloomberg reports that Russian foreign minister Sergei Lavrov said the nation plans to send a second convoy loaded with humanitarian aid to Ukraine. he U.S. and the European Union condemned the decision to send the first convoy of about 280 trucks, which the government in Kiev called an "invasion," and the US accused Russia of painting military vehicles white. This time will be different, according to Lavrov, as the government in Moscow is maneuvering to avoid the border standoff and uproar that marred its first convoy last week, adding “We’ll work on ensuring security guarantees from the side of the militias." Ironically, Lavrov also reminded a "disinformation"-prone media that Russia remains the only nation that continues to seek an MH17 probe as Ukraine has still not released Dnipropetrovsk air traffic control recordings.



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Gold, & Silver Jump As Citi Sells All USD Positions Fearing "Squeeze"

UPDATE: Every dip is to be bought... USD now higher and gold, silver lower

After a week of punishment, precious metals are kneejerking higher this morning on the heels of a Citi FX note explaining they are cutting all USD longs - "This is an opportunistic exit as we feel we may be due for a squeeze of USD long positions similar to what happened at this point in the cycle last year." The USD Index is sliding quickly and Treasury yields inched higher (but remain -1.5bps despite equity strength).



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Key Events In The Current Week

Key highlights in the coming week: US Durable Goods, Michigan Conf., Services PMI, PCE, and CPI in Euro area and Japan. Broken down by day: Monday - US Services PMI, New Home Sales (Consensus 4.7%); Singapore CPI; Tuesday - US Durable Goods (consensus 7.5%) and Consumer Confidence; Wednesday - Germany GfK Consumer Confidence; Thursday - US GDP 2Q (2nd est., expect 3.70%, below consensus) and Personal Consumption; Euro area Confidence; CPI in Germany and Spain; Friday - US Michigan Conf. (consensus 80.1), PCE (consensus 0.10%), Chicago PMI; Core CPI in Euro area and Japan (consensus 2.30%). Additionally, with a long weekend in the US coming up, expect volumes into the close of the week to slump below even recent near-record lows observed recently as the CYNKing of the S&P 500 goes into overdrive.



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France In "Political Turmoil" After Hollande Unexpectedly Dissolves Government

Earlier this morning, those expecting an out of control European deflationary tumble got one step closer to their goal when French President Francois Hollande asked his prime minister, who only assumed the post a few short months ago in March, to form a new government, following what Reuters reported was him "looking to impose his will on the cabinet after rebel leftist ministers had called for an economic policy U-turn" spearheaded by economy minister Arnaud Montebourg demanding an end to French "austerity." The Guardian is somewhat more direct and to the point: "France has entered uncharted political waters after the prime minister, Manuel Valls, presented his government's resignation amid a political crisis triggered by his maverick economy minister who called for an end to austerity policies imposed by Germany."



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Frontrunning: August 25

  • Jackson Hole Theme: Labor Markets Can’t Take Higher Rates (BBG), or anything else for that matter
  • Kidnappers free American missing in Syria since 2012 (Reuters)
  • More unpatriots: Burger King in merger talks with Canada's Tim Hortons (Reuters)
  • California Quake to Cost Insurers Up to $1 Billion, Eqecat Says (BBG)
  • Congo declares Ebola outbreak in northern Equateur province (Reuters)
  • Missouri Governor Defends Ferguson Prosecutor (BBG)
  • Kuroda Douses Japan Stimulus Expectations (WSJ)
  • London Jihadi Call Vies With Banks in Canary Wharf Shadow (BBG)
  • Netanyahu Signals Expansion of Air Attacks in Gaza (WSJ)
  • Libya's Islamist Militias Claim Control of Tripoli (WSJ)


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S&P 500 To Rise Above 2000 On Hopes Euro Collapse Accelerates, Euro Yields Hit New Records

It's been one of those days. First, the CME broke for 4 hours due to what some suggested were HFT connectivity issues, then Russia announced it would send a second humanitarian convoy into Ukraine (a big risk off move the first time it was announced, now not even an algo stirred), then Germany reported that the IFO Business Confidence/Climate dropped for the fourth consecutive month to 106.3 from 108.0, below the 107.0 expected, with the IFO chief economist stating that German GDP expectations are likely to be cut to 1.5% from 2.0% later in the year, and finally the French government collapsed due to disagreement over policy between finance minister Valls and economy minister Montebourg. All in all, a typical day in Europe's slow-motion implosion. So why are Spanish and Italian bank stocks soaring and European bond yields reaching new record highs? Simple: following Draghi's speech on Friday at Jackson Hole, which at initial read was hardly as dovish as many had expected, the FT and various other media outlets promptly changed the narrative and made it seem as if the ECB head was about to unleash QE.



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RANsquawk Week Ahead - 25th August 2014



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What's $100 Really Worth In Each State?

Because average prices for similar goods are much higher in California or New York than in Mississippi or South Dakota, The Tax Foundation notes points out that the same amount of dollars will buy you comparatively less in the high-price states, or comparatively more in low-price states. Regional price differences are strikingly large, and have serious policy implications. The same amount of dollars are worth almost 40 percent more in Mississippi than in DC, and the differences become even larger if metro area prices are considered instead of statewide averages.



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Russia Asks If America Is Still Fit To "Participate In Solving International Problems"

"Cynical disregard for the fate of civilians and 'couldn't care less' attitude toward the international humanitarian law when it comes to geopolitical interests, becomes the core of the policy of the United States and its  European satellites regarding Ukrainian. More and more questions are being raised about the ability of the current US administration to participate in the development of realistic and pragmatic approaches to international problems, to adequately assess the situation in the various regions of the world." - Russia Foreign Ministry.



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Cornel West Blasts Obama Is A "Brown-Faced Clinton", A "Post-Traumatic Depression" Will Follow

Outspoken Union Theological Seminary professor Cornel West goes where very few 'thinkers-of-color' have had the courage to go in this interview with Salon's Thomas Frank: "The thing is, [Obama] posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency, a national security presidency. The torturers go free. The Wall Street executives go free... we ended up with a brown-faced Clinton. Another opportunist. Another neoliberal opportunist... So you got low-quality black leadership. Al Sharpton is who? He’s a cheerleader for Obama... Eric Holder won’t touch the Wall Street executives; they’re his friends... I think a post-Obama America is an America in post-traumatic depression."



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Immigration For Republicans

This essay is not intended to address a crisis that may be occurring on the border at this time. We make no comment on that. Nor does it discuss the issues around war, such as how to deal with citizens of enemy nations. This essay is not a policy proposal, it does not set out, for example, when an immigrant can become a citizen and attain the vote or what to do to immigrants who commit crimes. It has but one purpose: to enumerate and respond to the common arguments used in favor of an impenetrable and guarded border fence to shut down immigration.



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China Plans To Unveil Domestic "Operating System" In October

With Russia pushing to end its government's dependency on Microsoft's Operating System, it is perhaps not surprising (especially following the various raids that have been undertaken) that another BRICS member, as Reuters reports, China could have a new homegrown operating system by October to take on imported rivals such as Microsoft, Google, and Apple, Xinhua news agency said on Sunday. A spokesperson stated, China hoped domestically built software would be able to replace desktop operating systems within one to two years and mobile operating systems within three to five years.



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Local Paper Sums Up Jackson Hole Perfectly

There was something missing at this year's Jackson Hole meeting of the world's most 'brilliant' monetary minds - a stock market rally - and while VIX was slammed lower (by mysterious forces assuming that uncertainty must have fallen), even the local rag understood i) the context - Yellen did not even make the main headline in The Jackson Hole Daily (the 'common folk' preferring something far more - or less - trivial, like the weather); and ii) All she has done is raise uncertainty. We await the machines to manually read these headlines before the requisite trading actions are taken... It seems, as we noted before, the Fed's magic is running out (for now).



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CME Delays Futures Opens Due To "Glitch"; Update: To Reopen At 9:00 PM Central

Update:

  • CME GLOBEX RESUMES FUTURES TRADING AFTER TECHNICAL ISSUE

It appears - judging from FX markets this evening - that consensus on Jackson Hole is Yellen was more hawkish and Draghi & Kuroda more dovish than expected. The USD index is pushing on towards one-year highs as EUR is down 50 pips (not helped by a dovish FT article on deflation fears) to 11-month lows, and USDJPY broke to as high as 104.45 (weakest JPY in 7 months).

In addition to this action, the CME confirms all Globex Futures products will have a delayed opening due to technical issues with NO estimated opening time.



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No More Broken Promises In One Cartoon

Boots on the ground?



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