Collateral Damage?
NoKo Kim testing again? Trade deadline concerns with China? Trump Tariff Threats Tweeted the market down?
All of the above are MSM cooked misdirection, and much like recent GDP, PCE and unemployment reports based in econometric falsity, are a thin veneer of lipstick on this pig or train wreck in progress.
Bottom line, near term under what appears to be a big (triple) top (future Nattering), will we see a breakout or failure? Pay attention as the RUT, NYA, Nikkei, DAX and Shenzen Comp are NO WHERE NEAR all time highs. TBD. But wait that's not all you get....
Above note, over the last year, due to "liquidity preferences" the cost of short duration collateral has risen. The resulting yield curve inversion (interest rates are the price of loan funds, and not to be conflated with the price of money) is causing liquidity issues.
This AM, one trading day after MAY 3rd, cash markets for Treasuries in London and Tokyo are closed due to holidays. Think McFly, anybody in there? BOTH CLOSED coterminous with the squeeze of the 3rd seasonal inflection point?
Carry much? This AM, JPY/USD, JPY/CNY and USD/CNY exploded for the former (base currency) on all those FX trade pairs. Any "collateral" damage?
Shenzen Comp which had been trending down since April 8th and 22nd, dropped a deuce at -7.5%, the VIX exploded 44% to 18.59, while Asia, Europe, and US market futures all followed suit at -2%.
How far, how long? As New York will front US markets today, tomorrow with London and Tokyo open should give a clearer global picture. TBD.
....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!— Donald J. Trump (@realDonaldTrump) May 5, 2019
All of the above are MSM cooked misdirection, and much like recent GDP, PCE and unemployment reports based in econometric falsity, are a thin veneer of lipstick on this pig or train wreck in progress.
Bottom line, near term under what appears to be a big (triple) top (future Nattering), will we see a breakout or failure? Pay attention as the RUT, NYA, Nikkei, DAX and Shenzen Comp are NO WHERE NEAR all time highs. TBD. But wait that's not all you get....
The most probable selling will be triggered by any decline in liquidity. So, the 3rd inflection point, shortly before 5/8/19, is the most likely time frame. - Salmo Trutta 19 Mar 2019, 10:27 AM
Short-term rates are rising (to be expected). We are at the bottom of payment's rotation (Apr. 10, 2019). - Salmo Trutta 22 Apr 2019, 02:28 PM
"The heart of the real economy — private-sector consumption and investment — slowed sharply in the first quarter to a 1.3% annual rate, the slowest in nearly six years"-------------|
Not so good. May 3rd, the 3rd seasonal inflection point, could also mark a sell off in equities.-------------|
When you get a preponderance of short-term assets on the front-end of the yield curve, markets are ultimately set up for a free-fall. - Salmo Trutta 26 Apr 2019, 11:12 AMSpeaking of the yield curve, a preponderance of short term assets, and LIQUIDITY which has set the market up for a fall... the 3rd seasonal inflection point in monetary flows (May 3rd, driven by the NY Fed POMO trading desk) started squeezing earlier last week, driving indices downward until Friday's bounce.
This AM, one trading day after MAY 3rd, cash markets for Treasuries in London and Tokyo are closed due to holidays. Think McFly, anybody in there? BOTH CLOSED coterminous with the squeeze of the 3rd seasonal inflection point?
Carry much? This AM, JPY/USD, JPY/CNY and USD/CNY exploded for the former (base currency) on all those FX trade pairs. Any "collateral" damage?
Shenzen Comp which had been trending down since April 8th and 22nd, dropped a deuce at -7.5%, the VIX exploded 44% to 18.59, while Asia, Europe, and US market futures all followed suit at -2%.
How far, how long? As New York will front US markets today, tomorrow with London and Tokyo open should give a clearer global picture. TBD.
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