Deutsche Bank

Global Stocks Hit New All Time High After Dovish Yellen, Strong Chinese Trade Data

The hawkish tone and global bond tantrum unleashed by central bankers at the Sintra ECB forum two weeks ago is now a distant memory, and after Janet Yellen surprised markets with an unexpectedly dovish testimony yesterday, overnight global shares hit their fourth all-time high in less than a month as Septmeber and December rate hike odds tumbled, pushing the dollar to the lowest level since September 2016.

Bond Selloff Returns As EM Fears Rise; Oil Slides; BOJ Does Not Intervene

U.S. index futures point slightly lower open. Asian shares rose while stocks in Europe fell as energy producers got caught in a downdraft in oil prices and reversed an earlier gain after Goldman unexpectedly warned that WTI could slide below $40 absent "show and awe" from OPEC.

Visualizing "Conundrum 2.0": This Is What The Fed Is Missing

As the latest FOMC minutes demonstrated, the current period of especially loose financial conditions - despite a projected 3 rate hikes in 2017 - is confusing the Fed. Deutsche Bank has called this "Conundrum 2.0", and explains what is going on in the following chart...

Bond Rout Fades With Futures Flat Ahead Of Payrolls; Pound, Yen, Oil Tumble

S&P futures are little changed following yesterday's rout even as Asian and European markets continued selling; the pound slid on poor factory data, the yen tumbled after the BOJ intervened to stabilize the JGB bond market, precious metals flash crashed early in the session, while the selloff in oil accelerated despite yesterday's massive inventory draw, although at least yesterday's sharp bond tantrum has stabilized.

The Reason Why Gold & Silver Have Frustrated Investors Since 2011

"Current levels of complacency are alarming. This is what everyone is talking about. Despite growing uncertainties and tensions, the market volatility refuses to rise. Persistence of low volatility is increasing the penalty for potential dissent and reinforces one sided positioning. As a consequence, the risk of disorderly unwind is growing."

French Market Regulator Sees "Brutal Repricing Of Assets"; Valuations, Volatility "Don't Reflect Real Uncertainty"

"Equity market volatility therefore now appears to be decorrelated from [uncertainty]... combined with high valuations on some equity markets, especially in the US... and extremely low spreads on the bond markets, raises questions as to whether the risks affecting the financial markets are being underestimated, which may lead to a brutal repricing of assets."

Abe "Plunges Into Crisis" After LDP Suffers "Historic Defeat" In Tokyo Elections, USDJPY Slides

On Sunday Japanese PM Shinzo Abe’s Liberal Democratic Party suffered what Reuters called a "historic defeat" in the Tokyo assembly election, and "plunged into a crisis" after losing to an upstart outfit in an vote that is seen as a harbinger for Japan's national elections, and signaling trouble ahead for the premier who has suffered from slumping support after a series of political scandals.

Deutsche: The Market Broke In 2012, "This Is What Everyone Is Talking About"

"After 2011, the two measures of risk decouple with VIX consistently low despite growing uncertainty. The breakdown is structural, and it is visible across all market sectors, not only equities. Current levels of complacency are alarming. This is what everyone is talking about... The longer this regime continues, the lower the threshold of painful unwind."