Reverse Repo

Dollar Slammed, USDJPY Roiled On Trump Campaign Subpoena Report

it has been a rocky session for the dollar which has dumped to a 4-week low, dragging with it USDJPY, the Nikkei and Treasury yields - and to a lesser extend US equity futures - all of which have slumped in the Japanese am session, following a WSJ report that Robert Mueller’s team "caught the Trump campaign by surprise" in mid-October by issuing a document subpoena to more than a dozen top officials.

The Dollar Funding Shortage: It Never Went Away And It's Starting To Get Worse Again

Negative cross currency basis swaps indicate that the structural tightness in dollar liquidity never disappeared despite the weaker dollar. If dollar funding markets get a lot tighter again, this won’t be good news for EM markets with offshore (Euro) dollar debt in the region of $10 trillion. Rolling over dollar debt periodically will be uncomfortable, to say the least, for some of the region’s banks.

China Announces RRR Cut Of At Least 50 bps; First Since February 2016

In a sign that China's ongoing attempts to delever the economy may have gone a bit too far, on Saturday morning China’s central bank announced a targeted reserve requirement ratio (RRR) cut, its first since February 2016 and which will go into effect in 2018, in an attempt to boost lending to struggling smaller firms and energize China's lacklustre private sector.

Goldman Interviews Former Head Of The Plunge Protection Team

"Purchasing a wider set of assets—as do some other central banks—might enable the Fed to have a larger effect on financial conditions and promote faster recoveries. But it would also involve putting more taxpayer money at risk and having an imprint on a wider set of risk premiums in the market."

Axiom: "Red Flags" Suggest China Credit Event Is "Closer Than It Appears"

The more recent red flags are among the most profound we’ve seen in years – in short, we agree with fresh observations made by some of the world’s most famous iron ore bears. Thus, while it is nearly impossible to pinpoint exactly when the credit bubble will definitively pop in China, a number of recent events, in our view, suggest the threat level is currently at red/severe

Is The Fed's Balance Sheet Headed For The Crapper?

It’s no secret the plumbers at the Fed are feverishly devising a way to unwind their $4.5 trillion balance sheet with officials claiming this will nary elicit an inkling of a disturbance in the markets they’ve coddled all these years. But one must wonder, at the timing, at the ostensive optics, if nothing else...Unless, that is, the motivations of shrinkage are less than magnanimous and dare one say, immoral.

China Manufacturing PMI Jumps To Five Year High

China's reflation story (on the back of a record amount of debt created last year) was put on display on Friday morning when both the Chinese manufacturing and non-manufacturing PMI rose more than expected, with the Manufacturing PMI rising to a level not seen since April 2012.