Bank of Japan

Japan - It's Finally Happening

"I still shake my head at the stupidity. One of the most overindebted countries in the history of modern finance trading with a 0% thirty year bond... But this week the market decided to test the BoJ’s resolve... The market is finally saying the demand for credit is enough to force the Bank of Japan to buy bonds to keep rates down. And that was the signal I was waiting for. I am shorting JGBs with both fists."

Meanwhile, Over In Zimbabwe...

They’ve threatened to throw anyone in jail who’s caught trading bond notes at anything other than the official 1:1 exchange rate. Naturally these threats have only spurred the creation of a black market where Zimbabwe’s bond notes are bought and sold at their real values. Right now the bond notes are trading at 5% to 10% below the US dollar. But this is just the beginning.

Frontrunning: February 3

  • Trump Plans to Undo Dodd-Frank, Fiduciary Rule (WSJ)
  •  CEOs to meet with Trump amid tensions (Reuters)
  • Trump’s CEO Brain Trust Meets Amid Widening Rifts (BBG)
  • Business coalition supports border tax (Reuters)
  • Nordstrom winds down relationship with Ivanka Trump brand (Reuters)

Spot The Intervention (Bank Of Japan Edition)

We warned earlier "the market would test the BoJ," and sure enough Kuroda and his 'lost boys' answered the market's question by intervening aggressively (offering to buy an unlimited amount of bonds) to rescue what was a rapidly escalating collapse in Japanese government bonds.

Futures Fall On Rising Trump Uncertainty; Europe Stocks Rise As Euro-Area Inflation Surges

European bonds fell and stocks rose led by banks and retailers as surging inflation data prompted investors to switch into reflationary assets even as speculation about ECB tapering has returned. Asian stocks and US equity futures declined. The Yen and gold advanced after Trump’s firing of the U.S. acting attorney general added to concern over the unpredictability of decisions in the new administration.

Key Events In The Coming "Big Week" For The US

Markets will again zero in on the U.S. this week, and not just because of Donald Trump. The Federal Reserve meeting and nonfarm payrolls may set a clear direction for dollar and yields for the next few months. Other key releases include ISM, ADP, housing data, personal income & spending, vehicle sales and core PCE.

Global Stocks, Futures Slide On US Protectionism Worries Following Trump Travel Chaos

European, Asian stocks and S&P futures all drop after traders were left with a sour taste from the potential fallout of Donald Trump’s order halting some immigration and ahead of central bank decisions from the U.S. and Japan.  Markets in Hong Kong, China, Malaysia, Korea, Singapore, Taiwan and Vietnam are all shut due to the Lunar New Year public holiday.

Jeff Gundlach's Forecast For 2017

Investors will confront excessive debt, high P/E levels and political uncertainty as they enter the Trump presidential era. In response, according to Jeffrey Gundlach, U.S.-centric portfolios should diversify globally.

It's The Debt, Stupid - Massive Borrowing Binge Producing Fake Recovery

Taken together recent economic data paint a picture of a global economy that’s finally returning to the kind of solid growth and steady, positive inflation that most people consider both normal and good. Unfortunately, the reason for the improvement is emphatically not good: In 2016 the world borrowed a huge amount of money and spent the proceeds. The result is “growth,” but not sustainable growth.

Nomi Prins' Political-Financial Road Map For 2017

Today, the only thing keeping a lid on financial calamity is epic amounts of artisanal money. Deregulating an inherently corrupt and coddled banking industry, already floating on said capital assistance, would inevitably cause another crisis during Trump’s first term.