Netherlands

The Long, Sordid Saga Of Cuban Drug Trafficking & US Looking The Other Way

"Today we are left with an international outlaw regime in Cuba, recognized as legitimate by the U.S. government, that has undermined our allies in Europe by helping to send huge shipments of drugs to their countries.  Some very important people in our government knew this and said nothing.  That is not how a friend treats friends."

Axel Merk's 'Best Bubble Indicator' Is Setting Up For "Major Shock"

"In my experience, complacency, with its cousin low volatility, is the best bubble indicator I am aware of. Perceived safety gets investors to pile into investments that they later regret. When it happens on a massive scale, major market distortions may be created that can lead to financial crises. And as the tech bubble that burst in 2000 shows, even if there is no systemic risk, the unwinding can be most painful to investors."

Frontrunning: June 14

  • Federal Reserve Expected to Deliver Rate Increase (WSJ)
  • Fire engulfs London tower block, at least six dead, more than 50 injured (Reuters)
  • Children lost, baby thrown to safety (Reuters)
  • Democrats Accuse Sessions of ‘Stonewalling’ (BBG)
  • World stocks march on as Fed rate hike looms, dollar steady (Reuters)

"Tech Wreck" Goes Global Dragging Worldwide Markets Lower; Cable, USDJPY Slide

Following Friday's "tech wreck" European equity markets have opened lower, with the Stoxx 600 sliding back under the 50DMA for the first time since December, mirroring Asian markets as Friday’s "FAAMG" volatility in U.S. markets spreads globally. European banks lag as the Spanish regulator stepped in to prevent another bank collapse, this time of LiberBank which we profiled yesterday, by banning short-selling in the regional commercial bank to mitigate Popular-related contagion.

The ECB Has Almost Run Out Of German Bonds To Buy

Last month the average maturity of all German bond purchases by the ECB bond plunged below 4 for the first time ever, or just 3.98 years, the lowest on record.  This confirms that the ECB is actively reducing the amount of German Bunds it is buying and suggests that the ECB has almost run out of eligible German bonds to buy.

Qatar Crashes In Escalating Gulf Crisis; Oil Fails To Rebound As Global Stocks Dip

S&P futures point to a slightly lower open ahead of today's US non-mfg ISM and Service PMI data. European shares fall, while Asian shares are little changed. Several European countries are closed for Whit Monday leading to subdued trading. Following the latest unexpected Gulf Crisis overnight, in which Gulf nations cut all diplomatic relations with Qatar amid stunning allegations of funding terrorism, oil spiked but has since pared almost all gains.

"The Western Status Quo Political System Is Collapsing Into 'Something Else'"

"...as the Western status quo political system collapses into Something Else, how is it possible that our capital markets are not similarly gripped by volatility and stress? What is responsible for breaking the transmission mechanism from political risk to market risk? I’ve got a macro answer and I’ve got a micro answer..."

Quiet Month End Markets Hide "Below The Surface" Fireworks

It has been another quiet session for global equity markets, with S&P futures flat, as are European and Asian stocks, which is perhaps odd, as there was quite a bit of newsflow and, in the case of China, outright fireworks.

NATO Recoils From Trump Spending Salvos

Trump’s abrasive attitude to other NATO members last week brings out the real nature of the US relationship. The so-called alliance is really just a spending vehicle for the American economy. In these austere global times, such American bullying will only chafe on the Europeans. This will in turn reinforce calls already underway for an independent EU defense pact, separate from NATO, and possibly led by Germany and France.