Borrowing Costs

Brexit Redux: ECB Ready To Buy More Italian Bonds If Referendum "Rocks Markets"

In a report confirming that the ECB is preparing for a rerun of a post-Brexit scenario, Reuters writes that the ECB is ready to temporarily step up purchases of Italian government bonds if the result of next Sunday's crucial referendum "rocks markets" and sharply drives up borrowing costs for the euro zone's largest debtor. BTP futures briefly spike higher, gaining ~30 ticks in 2 minutes, to session high of 135.46 following the news.

The Market's Next Headache: China's (Not So) Stealth Tightening

In recent weeks, China’s central bank has effectively tightened monetary conditions based on the shifting composition of its repo operations. As a result, the local bond market is getting increasingly nervous as selling - first of bonds, and then of equities - is expected to accelerate in response to what appears to be China's (not to) stealth tightening of financial conditions.

Global Stocks Slide On Italian Bank Worries; Dollar Dips As Trumpflation Takes A Back Seat

European shares dipped and U.S. equity-index futures (-0.3%) pointed to a lower open as traders questioned the stability of the Italian banking sector ahead of next weekend's referendum as well as the longevity of the Trumpflation rally, pressuring the dollar.  "It's a bit of a pull back in the dollar," said Societe Generale strategist Alvin Tan. "The fall in oil is pushing back U.S. bond yields and that is leading the consolidation in the dollar.. there is more scepticism about an (OPEC) output cut now."

Furious Dollar Rally Fizzles On "Black Friday"; US Stocks Set To Open At New All-Time Highs

Having soared to fresh 13 year highs in a quiet overnight session on thin liquidity due to the US Thanksgiving holiday the dollar pared back its weekly advance with modest profit taking after traders wondered if the rally has gotten "too stretched." European shares were fractionally higher, with Asian stocks and US equity futures rising and both the Dow Jones and the S&P set for new all time highs.

Europe Votes To Suspend Turkey EU Accession Talks, Sending Lira Crashing To Record Low Despite Unexpected Rate Hike

The market barely had time to respond to today's surprising rate hike by the Turkish central bank, when an even more unexpected development took place in the European Parliament which voted overwhelmingly to temporarily freeze talks on Turkey’s bid to join the European Union, citing deteriorating human rights and democratic standards under President Recep Tayyip Erdogan’s rule.

Welcome To The "Melt-Up"

As Wile E. Coyote always discovers as he careens off the edge of the cliff, “gravity is a bitch.”

What "The Worst Bond Rout In 15 Years" Means For Stocks

"The paradigm has shifted in terms of inflation. Long-end interest rates are dangerous. Make sure you are being really careful about the long-end exposure as we saw this week." - Rick Rieder, CIO for global fixed income at BlackRock.

Euro In Historic Slide As Dollar Surge, Bond Rout Continues

More of the same this morning as the dollar extended its advance on the still undeteremined Trump reflationary policy measures after Yellen signaled an interest-rate hike could be imminent, while bond yields around the globe rose again, metals declined,  European stocks advanced and futures were modestly in the red just shy of all time highs.

Trump's Election May Strain The Euro To The Breaking Point

Even if Mr. Trump’s administration does not buy wholesale into the neo-isolationist ideology he espoused during the election campaign, it won’t simply champion the cause of the globalists. As a result, the European integration project will be deprived of its most powerful intellectual and political advocate.