BOE

Dow Futures Slide Over 100 Points Despite Fed's Dovish Relent; Oil Drops On IEA Pessimism

After yesterday's torrid rally, which sent stocks higher the most in 2 months on the back of Lael Brainard surprisingly dovish comments, we have seen an unexpected profit-taking session overnight in ES, with US equity futures down 0.6%, driven largely by a renewed drop in oil prices which slid after the IEA said a surplus in global markets will last longer than initially estimated, persisting well into 2017 as reported previously.

Key Events In The Coming "Fed Blackout" Week

The spotlight turns to US data and Fed speakers ahead of the Fed blackout period this week. The BoE and SNB meet to decide policy but consensus expect no change from either. Elsewhere we get inflation data from the US, UK, Sweden & EZ (F), Q2 GDP from NZ & SW and labor market data from the UK & AU.

"Global Market Rout" - Bond Selloff Snowballs Into Stock Liquidations On "Stimulus Pullback" Fears

With traders in the US arriving at their desks, the global selling appears to be accelerating and as Bloomberg notes, "a selloff in fixed income is starting to snowball into a global market rout" driven by what Reuters dubbed "growing concerns that global central banks' commitment to the post-crisis orthodoxy of super-low interest rates and asset purchase programs may be waning."

"Get Ya Popcorn Ready" RBC Says: "Markets Are Paralyzed With Uncertainty" As "Spook Story" Arrives

"So here we go: BoJ ready to commit to go deeper negative rates and experiment with their curve, the Fed is seemingly locked-and-loaded on a hike as global growth rolls over, a deluge of supply into a suddenly wobbly rates backdrop, and a loaded-coil of synthetically low volatility across asset classes…as cross-asset correlations trickle back near multi-year/crisis extremes."

With All Eyes On The ECB, Catatonic Global Markets Remain In State Of Near Paralysis

As the market's comatose trading range continues with no notable moves for nearly 40 consecutive days, there is some hope volatility may return after today's main event, the ECB's announcement due in just two hours, when Mario Draghi may surprise the market in either direction. As of today, the S&P500 has held in a band of 1.5% for 39 days, the narrowest ever for that length of time.

JPM's Head Quant Is Back With A Stark Warning: Volatility Is About To Surge; Here's Why

"Over the past 2 months the S&P 500 has been trading in a dead zone. Now this is all about to change as a number of important catalysts materialize this month, seasonals push market volatility higher, and leverage in systematic strategies and option positioning provide fuel for volatility. We expect a significant increase in realized volatility, correlations and tail risk in September and October."

Eerie Calm Continues: Futures Flat Ahead Of Apple's Latest Product Launch

The unprecedented period of low volatility, in which the S&P hasn't moved more than 1% in either direction, is now well into its 40th day and the muted overnight session has done nothing to put this streak in jeopardy with S&P futures once again hugging the flatline ahead of the widely expected 3:30pm ramp. European stocks were likewise little changed while Asia was fractionally higher depite a modest dip in the Nikkei.

The High Yield Bond Market Has Never Been This Decoupled From Reality

...the revelation of a default event exposes the vast gap between 'real' asset values (upon liquidation or bankruptcy) and the artificially supported 'prices' seen in bond markets. In the 30 year life of the so-called junk bond market, the chasm between reality and central-planner-created markets has never been wider.

Stunning Chart Shows That Central Bank Liquidity Is Now Driving All Asset Prices

If there is a reason why traders walk into their office every day in a state of zombified daze, no longer able to trade various asset classes based on fundamental data or incremental news flow, there is a simple reason for that: global central bank liquidity injections have never been greater, and as of this moment, have surpassed all previous post-financial crisis central bank intervention.

"All Eyes On Central Banks" In September, But "No Reason To Smile"

September will be quite a busy month for investors since there are around 30 major central banks meetings scheduled. Since the Bank of England’s last policy announcement, the total monthly amount in global official quantitative easing has reached almost $200 billion, which corresponds, for the purpose of comparison, to Portugal’s annual GDP in 2015. Long-rumoured and oft-discussed, QE infinity is now a reality.

The Blessing Of Cash (And Why Central Bankers Hate It So Much)

Cash is an unambiguously a blessing to productive workers, savers, and entrepreneurs who wish to protect their hard earned money from the crazed theories and swindling schemes promoted by statists like Rogoff and the central bankers he advises.

In "Victory For Eurosceptics" British PM Will Begin Brexit Negotiations Without Parliamentary Vote

In what the Telegraph dubs a victory for Eurosceptics, the conservative newspaper reported overnight that Britain's new Prime Minister, Theresa May, will not hold a parliamentary vote on Brexit before formally triggering Britain's withdrawal from the European Union. "Her decision will come as a blow to Remain campaigners, who had been hoping to use Parliament to delay or halt Brexit entirely."

Why Today's 2 Year Auction Is Important

"the most important tell on sentiment will be the U.S. Treasury auctions. Especially as they involve the two-year and belly. Yesterday morphed from “uh, oh they’re hawkish” to “I knew I should’ve bought the damn dip.” Buy every dip when facing the possibility of a third big NFP in a row? Sure, if you believe in the status quo"