Barclays

High Yield IED

The high yield bond market has come to resemble an IED in the financial markets for investors with risks that are both disguised and highly destructive. Awareness of these risks is the first step toward defusing them.

Frontrunning: July 18

  • U.S. Republicans left scrambling after health bill sinks again (Reuters); Republicans Give Up on Health-Care Reform, Now Seek Straight Repeal (BBG)
  • Trump Blames Democrats and a ‘Few Republicans’ for Health-Bill Wreck (BBG)
  • House Republicans Set Out Plan to Rewrite Tax Code (WSJ)
  • House GOP Budget Ignores Trump’s Cuts to Domestic Agencies (BBG)
  • House Republicans unveil 2018 budget with tax reform instructions (Reuters)

BNP Fined $246MM After Its Traders Were Found To Still Use Chat Rooms To Rig FX Trading

Two months after the Fed fined Deutsche Bank a paltry $157 million for manipulating currency markets after the German bank's traders were found to be using "chat rooms" to rig FX trading, we learn that there was mor gambling going on here and on Monday the Fed announced that it will fine French BNP Paribas $246 million "for the firm's unsafe and unsound practices in the foreign exchange (FX) markets."

Frontrunning: July 17

  • Americans Feel Good About the Economy, Not So Good About Trump (BBG)
  • GOP Leaders Brace for CBO Estimate on Revised Health-Care Bill (BBG)
  • From $2 Billion to Zero: A Private-Equity Fund Goes Bust in the Oil Patch (WSJ)
  • Turkey Building Up Army Base in Qatar, Erdogan Adviser Says (BBG)
  • U.S. Companies Have a New 401(k) Fix: Spend More (WSJ)

Global Stocks Rise Amid Strong Economic Data; Yen Drops To 2 Month Low As Oil Resumes Slide

In a quiet overnight session, S&P 500 futures are fractionally in the green (2,426, +0.2%) with European and Asian stocks as oil drops second day after an initial ramp higher amid speculation that LIbya and Nigeria may be asked to cap their production. Nasdaq 100 Index are again higher, following the biggest daily advance in more than a week, up 0.4% as of 6:20 a.m. in New York.

June Payrolls Preview: With The Fed On Autopilot, You Can Skip This One

After a poor March jobs report, followed by an April scorcher, then another debacle in May, the June payrolls report due at 8:30am will be... very much irrelevant, because as Citi pointed out earlier, the Fed is now data-indepdendent and will keep hiking until financial conditions finally tighten (read: stocks drop). For what it's worth, here are the consensus expectations for tomorrow's report.

Global Bond Rout Sends S&P Futures, European Stocks Sliding

S&P futures are sliding this morning, down 0.4% and tracking the accelerating decline in European and Asian stocks, driven by a move higher in global interest rates, which started with Japanese 10Y yields rising to 0.1% for the first time since February, but mostly Bund yields which spiked after tripping stops, and jumped as high as 0.53% for the first time since early 2016.

Frontrunning: July 3

  • Health Bill Faces Resistance Among GOP Governors (WSJ)
  • Saudi Arabia, allies give Qatar two more days to accept demands (Reuters)
  • Qatar Responds to Saudi Bloc Demands as Trump Works Phones (BBG)
  • Trump says he will speak with German, French officials on Monday (Reuters)