Traders Throw In The Towel On March Rate Hike

As we previously noted, while speculatrs had been reducing their shorts in Treasury futures, they had added to Eurodollar shorts - pushing their bets on Fed rate hikes to record highs. However, as Bloomberg notes, signals are starting to emerge that traders who built up that heavy short, or hawkish, eurodollar base since the start of 2016 could be starting to throw in the towel on a March Fed rate hike.

China Prepares For "Regime Collapse" In North Korea

The noose around Kim Jong-Un is getting tighter: asked whether China had a contingency plan for a North Korean collapse, defence ministry spokesman Ren Guoqiang said Beijing has maintained its usual policy towards Pyongyang, and urged the “relevant parties to refrain from any actions that will escalate tensions”.

DOJ Reverses Obama-Era Decision To Phase Out Private Prisons

Moments ago, US Attorney General Jeff Sessions reversed an Obama-era memo to phase out the use of private prisons, signalling his support for federal use of such facilities and advising that the Bureau of Prisons will "return to its previous approach to the use of private prisons."

Are Rate Hikes Bad For Gold?

Gold does not necessarily rise and fall with interest rates, jewelry demand in India, or any other widely believed nonsense. Rather, gold has moved in conjunction with perceptions as to whether or not the Fed and central banks have everything under control.

RBC Warns "Seeing Clear Signs Of 'Reflation Trade' Unwinds"

"USD longs are being hit while UST / ED shorts are being squeezed on this reset of the ‘fiscal policy kicker’ (1. tax policy downgrade, 2. infrastructure delay) and growth expectations being re-priced lower... 'knocking on' into popular 'reflation' trade positioning."

Recession Concerns Grow After Gasoline Demand Slides Most In 16 Years

Among the numbers in today's weekly update by the DOE, the most anticipated one was that of implied gasoline demand: what it revealed was troubling, with gasoline demand in the past 4 weeks sliding some 5.2% compared to last week, a level which as Goldman qualified recently, "would require a US recession."