Avoiding Qualitative Color; Quantitative Prefered

fullsizeoutput_55bc.jpeg


Today in History: 

1863 Confederates evacuate Battery Wagner and Morris Island, South Carolina.                   – History.com 

Image result for 1863 Confederates evacuate Battery Wagner and Morris Island, South Carolina


Okay, what happened overnight?

The dollar value of world money supply has contracted by USD3.4trn since the
end of Q1. The regional breakdown shows small growth in the U.S. with almost
all other countries suffering declines.


In Japan, Nikkei fell for it’s third straight session by -0.4%. BOJ board member Goushi Kataoka criticised the central bank’s July decision to make its policy framework more sustainable, arguing instead that it should have ramped up the stimulus to hasten the achievement of its inflation target. He warned that price growth was weakening as a trend, and that with next year’s sales tax and escalating trade frictions, there is no
room for complacency.

In Tigger-land (China), stocks continuing correcting down another -0.5% overnight. YTD the Chinese markets have shed -27.08%.

China unveiled tax breaks for banks and other financial institutions to
encourage lending to small firms. Interest income from loans by financial
institutions to smaller firms, or “micro loans” will be exempt from VAT
until the end of 2020.


Filipino markets were also down -1.5% overnight.

Indonesia’s Jakarta corrected off yesterday lows overnight, up +1.4%. Moreover, In Indonesia Economic News; Indonesia will raise import taxes on 1000 goods ranging from cosmetics to cars as part of measures aimed at cutting imports and supporting the
currency. The import tax will be raised to 10% on 1,147 items from a present
range of 2.5% – 7.5%. 


In Turkey the Borsa Istanbul 100 Index, bounced +1.1% in morning trading but ultimately closed flat on the day. 


In Russian 10 year yield crosses the 9% YTM level, meanwhile, the Russian 5Y rose +25bp to 8.81%. Reminds me of 1991, when Russian defaulted on their sovereign debt.

The Russian Trading System Index was marginally higher by +0.36%


In Germany, the Deutsche Boerse AG German Stock Index (DAX) fell for the sixth straight day, as German government bonds caught a bid across the yield curve.


Spain’s IBEX 35 Stock Index falls 1%; Banco Bilbao Vizcaya (BBVA) leads the decline. This marks the lowest level in the IBEX since November 2017. 

 


Screen Shot 2018-08-05 at 4.29.51 PM

Implied Volatility Commodity Correlation Matrix


WTI Crude Oil lower overnight after yesterday -1.8% selloff. Sentiment has turned Bearish according to a Bloomberg Survey. Although looking at the Sentiment chart from Hedge Fund Telemetry, sentiment isn’t making lower highs. Screen Shot 2018-09-06 at 1.12.45 PM.png

Looking at the Term Structure for WTI, it is still backwardated, however, has become significantly less steep over a 1D & 1W time frame. 

And just to add another variable to the calculus, this from Bloomberg TV. 


Hey-o, is there life in Gold? The Gold-Dollar Spot Index (XAU) bounced higher overnight with a slight pullback in the Dollar. 

Gold Volatility Surface


 

-R.W.N II

Mail AttachmentMail Attachment-1

Banyan Capital Management, LLC (“BCM”) is a publisher, not a registered investment advisor, and nothing in BCM’s newsletter is intended, and it should not be construed, to be investment advice. BCM’s newsletter is for informational use only. Any mention in BCM’s newsletter of a particular security, index, derivative, or other instrument is neither a recommendation by BCM to buy, sell, or hold that security, index, derivative, or other instrument, nor does it constitute an opinion of BCM (or of any of its officers, employees, agents or representatives) as to the suitability of that security, index, derivative or other instrument for any particular purpose. BCM is not in the business of giving investment advice or advice regarding the suitability for any purpose of any security, index, derivative, other instrument or trading strategy and nothing in BCM’s newsletter should be so used or relied upon. BCM is not acting as your financial advisor nor in a fiduciary capacity, with regard to any securities, index, derivative or other instrument referred to in BCM’s newsletter. Also, no representation is made concerning the tax implications in any applicable jurisdiction regarding any securities, index, derivative or other instrument and BCM is not advising you in respect of the tax implications. All opinions and estimates in the newsletters are given as of the date of their publication on the BCM’s website and are subject to change and BCM does not assume any obligation to update the newsletters or to reference any such changes. BCM hereby expressly disclaims any and all representations and warranties that: (a) the content of its newsletters is correct, accurate, complete, reliable or a guaranty of future performance; (b) any of its newsletters will be available at any particular time or place, or in any particular medium; and (c) that any omission or error in any of its newsletters will be corrected. BCM shall not be liable for any errors or omissions made in its newsletters or for any inaccuracies in its assumptions. BCM specifically disclaims liability for any losses or damages (incidental, consequential or otherwise) that may arise from the newsletters and that are either used or relied upon by anyone for any reason, including without limitation, the use of the newsletters in the preparation of any financial books and records. Although from time to time BCM’s newsletter may link to or promote others’ websites or services, BCM is not responsible for and does not control those websites or services. BCM’s newsletter is published and distributed in accordance with applicable United States and foreign copyright and other laws. Without the prior written consent of BCM, no person or entity, directly or indirectly, may copy, reproduce, recompile, decompile, disassemble, reverse engineer, distribute, publish, display, perform, modify, upload to create derivative works from, transmit, or in any way exploit all or any part of BCM’s website, its newsletter, or any other material belonging to BCM.Without the prior written consent of BCM, no person or entity, directly or indirectly, may offer all or any part of BCM’s website, its newsletter, or any other material belonging to BCM for sale, nor may any person or entity, directly or indirectly, distribute all or any part of BCM’s website, its newsletter, or any other material belonging to BCM over or by means of any medium.Without the prior written consent of BCM, no person or entity, directly or indirectly, may make all or any part of BCM’s website, its newsletter, or any other material belonging to BCM, available as part of or in connection with another website, whether by hyperlink, framing on the Internet or otherwise. At any given time BCM’s principals may or may not have a financial interest in any or all of the securities and instruments discussed herein. At any given time BCM’s principals may or may not have a financial interest in any or all of the securities and instruments discussed herein.

 

 

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.