WARNO Lima Charlie

 

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Good morning,

Today in History:

On this day in 1774, in response to the British Parliament’s enactment of the Coercive Acts in the American colonies, the first session of the Continental Congress convenes at Carpenter’s Hall in Philadelphia. Fifty-six delegates from all of the colonies except Georgia drafted a declaration of rights and grievances and elected Virginian Peyton Randolph as the first president of Congress. Patrick Henry, George Washington, John Adams and John Jay were among the delegates.    –History.com

Today in Economic News (soon to be history):

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(Source: BoAML) 

To wit: A deterioration in the U.S. current account balance will over “time erode the value of the dollar.
US Trade Balance of Goods and Services SA
That said I don’t think even a widening US trade balance print this morning will stop the appreciation of the dollar against the world’s currencies this morning ahead of the 8:30 print.
EM sentiment has soured anew following a fresh leg lower in the Argentine peso, more pressure on the Turkish lira, election jitters in Brazil and, on Tuesday, a selloff in the rand following news that South Africa has fallen into a recession for the first time since 2009.” – Heisenberg Report
MSCI Index (MXEF) down -1.50% to 1040.17. Back to 2015’s 700 bid.
Eurozone business confidence collapses to a 23 month low with Eurostat Retail Sales Volume Eurozone MoM SA reported at -0.2% (exp. -0.1%). 
In the United Kindom, the FSTE 100 (UKX) opened in the red and reached a low of 7416.97, and as we write looks like it going to test stops around there.
And in like fashion, France’s CAC 40 drops another -1.1% in early morning trade to 5268.53. The CAC is down -3.5% MoM.
In Greece, the Athens General Share Index (ASE) is down -20.74% YTD. Yikes!
In Japan the Nikkei (NKY) was closed down -0.5% despite the Yen being weaker overnight as well.
Over the past five trading sessions, the Nikkei has lost 267bps (-1.17%). Emerging market currency contagion effect.
Things weren’t much better for the Chinese stock market overnight, Shanghai closed down another -1.7% (down -24% YTD)
Indonesian markets are tracking the declines with the Jakarta Stock Exchange Composite Index (JCI) down -3.7% overnight.
In response, Indonesia’s 5-year government bond yield has increased +30.1bps to 8.371%. 
Image result for Nhlanhla Nene bloomberg
In Africa, Zhlanhla Zene,South African Finance Minister was on Bloomberg this morning saying in effect South Africa emergence into recession was a surprise.
South Africa Current Account as % of GDP Current Prices figure lower than expected at -4.8% (survey exp. -3.2%). 
And for laughs, I overlayed the South African 1-year probability of recession.
Yep, we’re there.
Rand (ZAR-USD) responding as expected. 15.6397 +1.93%
Rand 1M volatility +15.58%. 
Argentina goes deeper into recession.
In commodity markets, Oil (CL1) is down -1.1%.
Hurricane risk already priced in?
Copper, the “China-Slowing Proxy” continued it’s decent but exhibiting exhaustions signals to the downside.
-R.W.N II
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