Volatility

Bond Yields Break Out Around The World As Japan's Record Stock Rally Ends

S&P futures are fractionally in the red while traders await President Trump’s pick for Fed chair and more clues on the fate of tax reform; Asian stocks slide, European shares are little changed ahead of tomorrow's ECB tapering announcement as US 10Y yields finally break out of their multi-month range below 2.40%.

"It's A Huge Story": China Launching "Petroyuan" In Two Months

"...the yuan-based oil contract will be a 'wake up call' for investors ...besides serving as a hedging tool for Chinese companies, the contract will aid a broader Chinese government agenda of increasing the use of the yuan in trade settlement...it's a 'huge story'..."

BofA: "The Market Implies There Is No Way A Shock Can Happen"

Generally, the longer time passes without an abrupt market correction, the higher the likelihood of it happening. Markets pricing very little potential for a shock seems at odds with still elevated geopolitical and policy risk globally.

China Regulator Instructs Companies To Delay Bad Results Until After Congress

Shandong Minhe, which estimated a loss for the Jan.-Sept. period in an Oct. 13 filing, said on Sunday that it hasn’t finished checking the content of its earnings report and will postpone its release.  Shenzhen Hifuture, which also projected a Jan.-Sept. loss on Oct. 13, gave this explanation for a similar delay in a Sunday filing: “We have a lot on our plate to deal with.”

Washington Is "The New Rome"

"Washington’s relationship to the rest of America is the same as Rome’s relations with the agrarian and plebeian citizens of its vast domains in late antiquity... Washington is a parasite that sucks the rest of the country dry. "

What Selloff: Futures Rebound, Nikkei Extends Record Winning Streak

European shares are modestly lower as investors monitor fluid events in Spain and as focus turns to Thursday’s ECB meeting; US equity futures have rebounded from yesterday's sharp but shallow selloff and are in the green amid rising odds of U.S. tax reform and the imminent unveiling of the next Fed chair while Asian shares rise and Japan extends its winning streak to a record 16 days.

Is Capitalism Dead Or Merely Dying?

"If the remaining wealth is not divided better than it is today, those who have gathered most of it will also find themselves in non-functioning societies and communities..."

The 4 Possible Channels For A Chinese Financial Crisis

An analysis by Victor Shih of Merics lays out 4 plausible scenarios of financial crisis in China: household defaults, shadow banking panic, capital flight, and a sudden stop of international lending. It finds that China’s greatest vulnerability resides in its dwindling foreign exchange reserve and escalating external debt, which can trigger a confluence of maxi-devaluation, external defaults, and sharp asset price depreciation.