CRB

Getting caught in end of day divergence between recovering Bunds / UST and equities readying up a pre-close squeeze out.Note a rather muted, in line, Credit performance.

No real data anywhere tomorrow, so either the good spirits of recovery keep up their heads up – or not…

Bizarrely, and even after slapping my screens several times to make sure things were working, real opening levels in EGBs very quite simply FLAT. All flat! Haven’t seen that in ages!

Had to slap my screens again tonight, given the tons of “unchanged” data in EGBs. Have decorrelated from equities, as has the USD (closing about unchanged).

In absence of really negative news, outside the heavier macro / sentiment data, the lukewarm Italian auction and US data, markets remained on a slight tentative rebound.

Will need to await further details and overnight analysis of the Spanish budget. Lots of reforms...

Hmm, and in how much time can all that be passed - if at all???

Yes, it did feel kinda rainy already yesterday with “Purple Rain”.

Total Risk Off close today.

Bad Rain. Bad, Bad Rain...

Another fairly uninspiring day.

In absence of hard data, subject to rumours and sentiment, as well as sudden “squeezes” or “sell-offs”, albeit in very tight ranges.

Mood maybe less rainy then yesterday, but, call me a bear, it doesn’t feel very convincing out there.

Uninspiring day. Light ROff, but nothing major.

In absence of hard data, subject to rumours and sentiment. 

Rainy.

So after 2 hell of positive weeks with fairy dust sprinkled by the CBU (Central Banks United), things seem a little out of breath here.

Post-Central Bank intervention depression, so to speak, as the question on everyone’s mind is “What’s next?

Add to that soured geopolitics that stirred spirits in Asia, MENA and to some extend in regional Spain.

It’s not like anvils are flying low, nor shoes dropping.

No major news, but jittery here.

No fun.

On the heels of last Thursday’s Fed announcement, there has been much commentary on the whys and wherefores of a new quantitative easing (the so-called QE3). Rather than re-hashing well-covered ground, I want to instead discuss the potential effects and unintended consequences of this policy and how it may impact the investment landscape going forward. Suffice it to say that the Fed had its reasons. QE3 evidences a belief in the so-called “wealth-effect” – the idea that one will spend more if he/she feels wealthier – and the Fed also believes it can contain any negative consequences. However, others would argue that it’s another shot across the bow of our foreign lenders that we are willing to engage full-out in a currency war as this policy clearly weakens the U.S. dollar. Because the Fed has embarked on a path with little historical precedent – where a central bank has signaled the intent to expand its balance sheet as much as it needs to – we are all now part of an experimental economy.

Hmmm, if that is all what JPY 10trn can buy…

Where’s the thrill?

Lot of noon / afternoon official chatter on the wires, but eventually nothing highly conclusive.

And oops… I still have the Blues.

There was a time when sentiment and newsflow mattered, and then Bernanke took over. If there is anything today's soaked vacuum tubes will focus on is that it is the 81st anniversary of the invasion of Manchuria by Japan, as developments in the East China Sea are starting to get decidedly deja vuish, if somewhat inverted. Also notable is the ever louder chatter that Spain will have to be destroyed (bonds plunge), for it to be saved (Rajoy submits bailout request), as we observed over a month ago. For that to happen, the central planners will need to allow the markets to take a deep breath and actually slide, which in turn may crush confidence in central planners' ability to keep markets rising in perpetuity. What's a central planner to do these days to be appreciated anyway. It also means that the days of innocence, when nothing at all matters on the fundamental side, will, just like in Q1 after the LTRO $1.3 trillion injection, be followed by days when fundamentals matter with a vengeance. Alas, we are not there yet. Instead, the best we can do is wonder just what asset will experience today's flash crash du jour following yesterday's still unexplained 5% plunge in crude in minutes. New Normal indeed.

Having had the last 2 weeks propped up by Ben and Jerry, oops, Mario, who delivered the f(l)avours that had been expected throughout the summer, markets will be in need for some concrete impulses to push further.

Spanish bond auction on Thu rather on the mighty side.

Mostly bored today, though...

Given how many unconventional means have been deployed over the last weeks, I wouldn’t exclude some form of stimulus postpartum depression… With nothing in immediate sight, it’d better hold. Why does my heart feel so bad?