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