Standard Chartered

RBS Tumbles After Failing BoE's "Toughest Ever Stress Test"

While the term 'stress test' has been applied almost mockingly to European and US banks in an effort to create confidence for investors (because if the government sees risks 'contained' then why worry), this morning's Bank of England stress test results highlighted "capital inadequacies" for three major UK banks. While Barclays and Standard Chartered fell short, it is taxpayer-owned Royal Bank of Scotland that is slumping on a need to cut costs, raise capital, and sell assets.

Global Bonds Plunge As "Trumpflation" Rally Returns, Dollar Jumps

After taking a one day breather, the "Trumpflation Rally" returned with a vengeance as global government bonds tumbled and the dollar rose on renewed speculation the economic outlook is strong enough to allow the Federal Reserve to hike in December (odds are now 94%). Asian shares rose, industrial metals and crude oil fell, European shares and US equity futures were pressured.

Markets In Turmoil: Global Bond Bloodbath, Currency Rout Accelerates As Stocks Erase Early Gains

Monday started off where Friday left off, with the dollar surge continuing, pushing the DXY above 100 for the first time since December, global bond yields soaring, emerging market currencies tumbling, and the Yuan slammed below 6.85 for the first time. However, where Monday is different is that while European stocks and US index futures started off far higher, E-minis have now faded the entire overnight rally and are now red for the session, on concerns that the spike in yields will cap any more stock upside.

"There's Chaos Everywhere" - Indians Angry As ATMs Run Dry After Cash Ban

The blowback from the world's latest strike in the war on cash is unraveling fast in India. This week's decision by PM Modi to ban some high-denomination banknotes (on the premise of fighting corruption) has left "chaos everywhere" according to one official who accused the prmeier of wreaking havoc on the poorest Indians. As Reuters reports, nearly half of India's 202,000 ATMs were shut on Friday and those that operated quickly ran out of the new notes as scores of people descended upon them.

Chinese Capital Outflows Send FX Reserves To Lowest Since 2011

Overnight, China reported that the PBOC’s FX reserves fell another US$46bn to US$3.121 trillion in October as the central banks struggled to offset the impact of accelerating capital outflows, triple the official September decline of US$19bn (recall that according to Goldman, the true FX outflow in recent months has been far greater), and the biggest drop since January. The October decline brought China's total reserves the lowest amount since 2011.

Frontrunning: November 1

  • There is a bubble in articles about China's bubbles: Asset Bubbles Threaten China’s Economy (WSJ)
  • Hillary Clinton’s Wall Street Fundraising Benefited From Loophole In Federal Anti-Corruption Rule (IBT)
  • Clinton and Trump Prepare for Possibility of Election Overtime (BBG)
  • Trump Leads Clinton by 1 Point in New Poll as Enthusiasm Declines (ABC)
  • Investigating Donald Trump, F.B.I. Sees No Clear Link to Russia (NYT)

Global Bond Selloff Resumes; Stocks Rise Following Strong Chinese Data

With October, the worst month for stocks since January, now in the history books S&P futures are eager to telegraph that the streak of five consecutive will end, with a modest gain of 0.3% in overnight trading, coupled with mixed global markets as the global bond selloff returned after strong Chinese economic data prompted concerns about rising global inflation.