European Union

Trump And The End Of NATO?

Trump does not seem to understand how deeply important NATO or US militarism elsewhere around the globe are to American hegemony under its corporate capitalist system. If and when he does actually try to implement his policy, he will encounter formidable forces that he probably isn’t aware of yet. The last American president who tried to rein in the corporate power of US militarism was John F Kennedy. He was assassinated on November 22, 1963, in broad daylight

Durable Goods Orders Crash Most In 2 Years - Longest Non-Recessionary Streak Of Declines In US History

Despite the longest winning streak for US macro data in US history, Durable Goods Orders collapsed in June. The 4% MoM plunge (vs -1.4% exp) is the biggest drop since Aug 2014. This represents a 6.6% YoY crash - the biggest drop since July 2015. The drop appears driven by  plunge in airplane orders (non-defense aircraft and parts). Worse still, core durable goods orders extended their annual declines to 18 months straight - the longest non-recessionary streak of declines in US history.

Global Stocks, Futures Continue Rise On Apple, Japan Stimulus; Yellen On Deck

The markets were following a rollercoaster night for the Japanese Yen, when after several media headlines Abe was said to have announced a stimulus package that would be more than JPY28 trillion, sending Japanese stocks higher 1.7% while the USDJPY spiked but well off overnight highs, pushing risk assets higher. Europe and US futs were also in the green on optimism from AAPL's earnings, but all eyes will be on today's FOMC announcement.

What The Sudden Spike In The TED-Spread Really Means

Due to the latest government intervention, differentiating between the signal of real market stress and the noise resulting from the shift due to 2a-7 reform, will now be impossible, and thus it will also be impossible to gauge if there is something truly broken with the market, at least until such a "breakage" becomes all too apparent for everyone to see.

"An Extraordinary Development": Record Swiss Gold Flow Into The United States

There was a huge trend change in U.S. gold investment in May.  Something quite extraordinary took place which hasn’t happened for several decades.  While Switzerland has been a major source of U.S. gold exports for many years, the tables turned in May as the Swiss exported a record amount of gold to the United States.

It's 2am In Japan, Time For Nikkei To Drop Another Tape Bomb

Yesterday at 2am local time, Japan's Nikkei reported a doubling of stimulus being proposed (to 6 trillion yen) after Goldman suggest 3 trillion was not enough. That spiked USDJPY briefly. Today, at 2am, Nikkei decided to try it again... announcing that "BoJ officials said to be leaning more toward easing," and sure enough USDJPY spiked...

Frontrunning: July 26

  • Priest killed in French church before police shoot dead hostage-takers (Reuters)
  • On raucous opening night, Democratic stars make a pitch for Clinton (Reuters)
  • Sanders Backs Clinton After Fractious Opening of Convention (BBG)
  • Some in Sanders' army seem determined to march on without him (Reuters)
  • Yen hits two-week high as Japanese stimulus expectations dialled back (Reuters)

"Central Bankers Are Killing Capitalism" Odey Warns, Moving Politics "Fast To Extremes"

"Central banks do their master’s bidding and governments tell them ‘stop recession at any price’... So what we have now is a world in whi ch the Have-nots are rising in number and, thanks to the workings of central banks, see the Haves still seemingly enjoying themselves on the back of rising asset prices. It is no wonder that politics are moving fast to the extremes."

Stephen Roach Says Trump's Right On Globalization: It's A Broken System

"While seemingly elegant in theory, globalization suffers in practice. That is the lesson of Brexit and of the rise of Donald Trump in the United States. And it also underpins the increasingly virulent anti-China backlash now sweeping the world. Those who worship at the altar of free trade, including me, must come to grips with this glaring disconnect."

Frontrunning: July 25

  • Democrats in disarray on eve of convention to nominate Clinton (Reuters); After Gloating, Democrats Face Unity Problem of Their Own (BBG)
  • Florida nightclub shooting leaves two dead, up to 16 wounded (Reuters)
  • Yellen Still Waiting for Overwhelming Evidence to Warrant Hike (BBG)
  • Oil Trades Near Two-Month Low as Drilling Increases Amid Surplus (BBG)
  • Fraud Investigation Ricochets Through Hedge Fund Known for Ties to Jewish Community (WSJ)

US Futures Unchanged As Europe Stocks Rise; Strong Dollar Pressures Oil

There has been little notable market moves overnight, with the record rally in the S&P500 set to continue and European stocks climbing as German IFO business confidence proved more resilient than economists predicted in the month after Britain voted to leave the European Union, falling less than expected from 108.7 to 108.3, above the 107.5 consensus, with expectations printing at 102.2 above the 101.2 expected. Bonds fell with gold as the dollar gained before central bank meetings in the U.S. and Japan this week.

G-20 Meeting Ends With Rising Discord Between China And US

While the G-20 group traditionally tries to put on a united front, a curious divergence emerged following the latest meeting in China, where as Bloomberg notes Chinese and U.S. officials "showed signs of being at odds on how synchronized efforts to boost global growth need to be, with China stressing the need for improved coordination more than the U.S."U.S. Treasury Secretary Jacob J. Lew on Thursday talked down the need for crisis-level coordination as he headed to Chengdu, China, for the meeting.