SocGen: Lethargy Is Creeping Into FX Markets

"The question, this week as it has been for a while, is whether a market with what seem stretched positions in both bonds and FX, can really take EUR/USD on upwards without some kind of correction?"

SocGen's "Pretty Simple" Explanation Of Janet Yellen's Testimony

“It’s pretty simple.....don’t overcomplicate it...As long as US interest rates consolidate and fears about a move to well north of 2.5% remains in check, the positive tone in emerging markets that prevailed prior to mid-June should resume”.

SocGen Asks: "Is It Groundhog Day, Or Goldilocks And The Three Bears?"

"Weak productivity and weak real wage growth leave the economy in an endless winter of mediocrity, while solid employment growth without inflation is the ‘not to cold, not too warm’ mix that keeps the Fed normalising policy ever so slowly, equity indices marching ever higher and the economic cycle able to trundle on with no recession in sight."

BMO Finds An A New Source Of Systemic Risk

BMO's Mark Steele has created a basket of Chinese Bank CDS to look for systemic risk there, and as he points out today, it has notably broken above a narrowing trend.

SocGen: "Are We Just Prisoners Here, Of Our Own QE?"

"What strikes me, looking back to the immediate post-crisis analysis, is that while several people understood by then that the recessions which follow a financial crisis tend to linger (‘This Time is Different’ was published on September 1 2009), the idea that we could be trapped by zero/low rates(and then by QE) was not yet fashionable."

"Oil Hits The Floor And Is Now Set To Soar": Citi

We believe that WTI Crude has posted a short term bottom. Previous short term bottoms have typically seen strong upside follow through with an average low to high rally of 22% over three weeks

SocGen: "Fundamentals No Longer Matter? Yeah Right..."

"Any systematic strategy formulated around any notion of price momentum (we’d put volatility weighted and risk parity into this group as well) are simply following slavishly these changes in fundamentals using price as the principal signal for a change in expectations. So it is not that systematic strategies are not driven by fundamentals, it is they offer no view to the future"

"The Day Of The Dovish Hike?"

At 2.21%, US 10year yields are firmly in the low end of the 2017 range, while at 1.35%, 2s are very close to the highs. The Treasury market is convinced the Fed will hike today, but not convinced about the longer term.