BofA Looks At The "What If" Scenario For Bonds: Find A Surprising Result

One of the big fears among the bond market, where most participants now openly admit there is a "bubble in credit", is that an unwind in global bond yields would lead to substantial losses.  To test this assumption, Bank of America's Ralf Preusser looks at the "what if" scenario, namely what would happen to total returns should government yields fully reverse their 30 year historical evolution. What he finds is surprising.

"Evidence Points To Another Snowden At The NSA"

"Rather than the NSA hacking tools being snatched as a result of a sophisticated cyber operation by Russia or some other nation, it seems more likely that an employee stole them. If Snowden could not have stolen the hacking tools, there are indications that after he departed in May 2013, someone else did, possibly someone assigned to the agency’s highly sensitive Tailored Access Operations."

Texas Judge Blocks Obama Transgender Bathroom Policy: "It Threatens Students’ Safety And Privacy"

In a hit to Obama's appeal to the transgender community, a federal judge in Texas has temporarily blocked an Obama administration directive on bathroom rights for transgender students in U.S. public schools. U.S. District Judge Reed O'Connor in Fort Worth issued the preliminary injunction Sunday. Judge O'Connor in Fort Worth sided with Texas and 12 other states that argued the administration’s policy usurps local control and threatens students’ safety and privacy.

"Regretful" Trump Reaches Out To Latino Leaders: "No, I Am Not Flip-Flopping"

Donald Trump exclaimed "I'm not flip-flopping on immigration, we want to come up with a really fair but firm answer," this morning after meeting with his newly announced Hispanic advisory council this weekend in an effort to figure out a “humane and efficient” manner to deal with immigrants in the country illegally.

Jackson Hole Looms: The Main Events In The Coming Week

The key economic releases this week are new home sales on Tuesday and durable goods on Thursday. However, the main event in what is one of the slowest summer weeks, will be the Jackson Hole symposium starting this Friday, where focus will be on Yellen's speech who will be scrutinized to see if she can bring the Fed's message back on track after several conflicting statements by Fed speakers in recent weeks.

Merkel, Hollande And Renzi Meet To Discuss The "Relaunching Of Europe"

Italian Prime Minister Matteo Renzi hosts German Chancellor Angela Merkel and French President Francois Hollande on an island off the coast of Naples ahead of September's EU summit called to discuss reverberations from the Brexit vote. "They will be coming to discuss how to relaunch Europe from the bottom up, there's a big need," Renzi said on Sunday. "Relaunching Europe is a totally open game but it needs to be played."

A Displeased Colin Powell Accuses Hillary Of "Trying To Pin" Email Scandal On His Advice

In response to Friday's allegations that Clinton started using a personal email server following the advice of Colin Powell, the former Secretary of State said Hillary Clinton’s campaign has been trying to use him to help justify her use of a private email server while she was secretary of State, and accused her of "trying to pin" her violation of department rules on him.

Frontrunning: August 22

  • Oil falls as China fuel exports jump, U.S. rigs rise (Reuters)
  • Fischer Signals 2016 Rate Hike With Economy Nearing Fed Goals (BBG)
  • Show of European unity: Merkel, Hollande, Renzi meet to discuss gameplan (Reuters)
  • Rainy Rio wraps up challenging Games on upbeat tropical note (Reuters)
  • Japan's Abe Plays Super Mario in Rio to Promote 2020 Tokyo Games (BBG)
  • Donald Trump the Mortgage Broker Was in Trouble From Moment One (BBG)

US Futures Fall, European Stocks Rise As Stronger Dollar Sends Oil Lower

European stocks rose and US S&P futures fell after the dollar strengthened following the latest hawkish comments from Fed vice-chair Stanley Fischer signalled that a 2016 rate hike is still being considered and again boosted speculation that US rates will rise this year. The rising dollar pressured commodities and notably oil, which dropped 2% breaking a 7 days stretch of increases; emerging markets retreated. 

Migrant Problems Still Threaten Europe

The picture drawn by the present migration into Europe may fundamentally undermine the "Refugees Welcome" narrative that dominated news reports last year, but the continent-wide economic ramifications of its effects on a country such as Italy, already subject to considerable political tumult, should not be underestimated.