Yuan

Here are the worst IPO fails of all time in the world. The ones that we thought would be unfailingly good. The ones that we thought we could bet our bottom dollar on and still strike it rich.

• S&P Revises U.S. Credit Outlook To "Stable" From Negative

• Fed's Bullard Details How QE Can Be Cut

• Fed Retreat From Bond Buying Expected By Fourth Quarter - Poll

• U.S., Japan Leading Recovery In Major Economies - OECD

Japan goes to bed with another absolutely ridiculously volatile session in the books following a 5%, or 637 point move higher in the PenNIKKEIstock Market closing at over 13514, which if taking the futures action going heading to Sunday night into account was nearly 1000 points. With volatility like this who needs a central bank with price stability as its primary mandate. The driver, as usual, was the USDJPY, which moved several hundred pips on delayed reaction from Friday's NFP data as well as on a variety of upward historical revisions to Japanece economic data, but not the trade deficit, which came at the third highest and which continues to elude Abenomics. Fear not: one day soon consumers will just say no to Samsung TVs and buy Sony, or so the thinking goes. erhaps the most interesting news out of Asia was the spreading of FX vol tremors to a new participant India, which is the latest entrant into the currency wars, even if involuntarily, where the Rupee plunged to 58, the lowest ever against the dollar.

Privatization is back on the political stroke economic agenda this morning after a report commissioned by Chancellor of the Exchequer George Osborne in the UK looks like he will be set to return bailed out banks to the private sector.

Goldbugs the world over may not know it, but the one catalyst they are all waiting for, is for the PBOC to throw in the towel to Bernanke's and Kuroda's liquidity tsunami and join in the global reflation effort. Alas, those hoping the Chinese central bank would do just this on Friday were disappointed. Moments ago the 21st Century Business Herald, via MNI, reported that the People's Bank of China "decided to shelve plans to inject short-term liquidity into the market late Friday because of concerns it would be sending the wrong signal in light of the government's ongoing commitment to its "prudent" monetary policy stance. Rumors hit the market mid-afternoon about an injection in the region of CNY150 bln via the PBOC's rarely-used short-term liquidity operation (SLO) tool. But how much longer can it avoid the inevitable: what happens when overnight loan yields soar to 20% or 30% or more, and when the repo and SHIBOR markets lock up and no overnight unsecured wholesale funding is available? Because when China finally does join what is already an historic liquidity tsunami then deflation will be the last thing the world will have to worry about. In the meantime, we welcome every chance to dollar cost average lower on physical hard assets, the same hard assets that none other than 1 billion concerned Chinese will direct their attention to when inflation makes it long overdue comeback to the world's most populous country.

Emerging markets have tanked but some of the reasons for their underperformance will prove overblown, providing opportunities for long-term investors.

A dispassionate review of a slew of Chinese economic data.  Why the capital inflows are not a result of Qe as much as Chinese investors gaming their own system.  Why the lower inflation is not evidence of Japan exporting deflation, as some have claimed.  Why the decline in imports may be related to prices and foreign demand, more than Chinese demand itself.  

Looks like the sun has gone behind the clouds in China for a bit! Not only are the solar panels creating friction between China and the EU, but now it turns out that last month saw Chinese export growth unexpectedly decrease.

China continues to be stuck between an external hot money flows rock and a contracting economy and unstable banking sector hard place... Thanks to the G-0 central planners, the PBOC's hands are now tied: if it injects more hot money or lowers the interest rate the inflation on the margins, which it has so far been able to mask will spill over into the streets in a repeat of 2011, and force an even more epic scramble for inflation protection than the one seen two years ago, and which led to gold rising to just shy of $2000. Naturally, at a time when the central planners have gone all in on precipitating the Great Rotation out of bonds and into stocks at all costs, a re-exodus into gold might just end the Keynesian experiment. So the China central bank has that to contend with as well.Which means one thing: in reality Chinese credit and liquidity is in far worse shape than reported. And sure enough, over the past 24 hours we got news courtesy of Bloomberg that the "China Liquidity Squeeze Risks Companies’ Debt Rollover" leading to what may be the first harbinger of a Chinese bank failure which may subsequently lead to a whole lot of dominoes falling.

France Prohibits Sending Currency, “Coins And Precious Metals” By Mail

France has prohibited the sending of currency, “coins and precious metals” by mail.

In new legislation which was enacted May 23rd, the French government decreed that it is forbidden to send all forms of currency - coins and cash and all forms of precious metals – coins, bars and jewellery by mail.

• Reports on surveillance of Americans fuel debate over privacy, security (Reuters)
• Apple to Yahoo Deny Providing Direct Access to Spy Agency (Bloomberg)
• Misfired 2010 email alerted IRS officials in Washington of targeting (Reuters)
• Spy vs Spy: Cyber disputes loom large as Obama meets China's Xi (Reuters)
• When NSA Calls, Companies Answer (WSJ)
• How the Robots Lost: High-Frequency Trading's Rise and Fall (BBG)
• Japan's Pension Fund to Buy More Stocks  (WSJ)
• ‘Frankenstein’ CDOs twitch back to life (FT)
• China’s ‘great power’ call to the US could stir friction (FT)
• Toyota Tries on Corolla Look That’s Just Different Enough (BBG)

• Global Stocks Tumble as Treasuries Rally, Yen Strengthens (BBG)
• China Export Gains Seen Halved With Fake-Data Crackdown (BBG) - so a crash in the GDP to follow?
• FBI and Microsoft take down botnet group  (FT)
• Quant hedge funds hit by bonds sell-off  (FT)
• Russia's Syria diplomacy, a game of smoke and mirrors (Reuters)
• Obama Confidantes Get Key Security Jobs (WSJ)
• BMW to Mercedes Skip Summer Breaks to Keep Plants Rolling even as European auto demand slides to a 20-year low (BBG) - thank you cheap credit
• Paris threat to block EU-US trade talks  (FT)

• National Security Advisor Tom Donilon resigning, to be replaced by Susan Rice - Obama announcement to follow
• Japan's Abe targets income gains in growth strategy (Reuters), Abe unveils ‘third arrow’ reforms (FT) - generates market laughter and stock crash
• Amazon set to sell $800m in ads (FT) - personal tracking cookie data is valuable
• 60 percent of Americans say the country is on the wrong track (BBG)  and yet have rarely been more optimistic
• Jefferson County, Creditors Reach Deal to End Bankruptcy (BBG)
• Turks clash with police despite deputy PM's apology (Reuters)
• Rural US shrinks as young flee for the cities (FT)
• Australia holds steady on rate but may ease later (MW)
• The Wonk With the Ear of Chinese President Xi Jinping (WSJ)
• Syrian army captures strategic border town of Qusair (Reuters)

In almost every asset class, volatility has made a phoenix-like return in the last few days/weeks and while equity markets tumbled Friday into month-end, the bigger context is still up, up, and away (and down and down for bonds). From disinflationary signals to emerging market outflows and from fixed income market developments to margin, leverage, and valuations, here is the 'you are here' map for the month ahead.

Here is what is shaping the global capital markets.