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All’s Well That Ends In An Epic Mideast Death Match.

Tension is running high on Monday...

Tension is running high on Monday with Trump stomping through Asia and the Saudis seemingly looking for excuses to go with war with Iran (or maybe it’s the other way around – that’s a perpetual chicken-egg dynamic).

That’s enough for some trepidation but of course not for a selloff and indeed, we ended up at record highs. Nasdaq and small-caps outperformed to start the week:


30Y yield below 2.80 for the first time since late September:


Shit show (brushed 80.7bp matching Friday’s nadir):


USDJPY staged a notable rally overnight in a quick spike to 114.73, the highest since March 15, on Kuroda rhetoric among other things, but eventually gave it all back and then some during the US session:


Best day for gold since September 25, as geopolitical turmoil appears to be creating a safe haven bid – at least in the metals:


Crude of course surged and you can write your own script there, but we would encourage you to at least consider what we wrote first thing this morning (full post here):

Another thing I think it’s important to understand here – and this is something I told a trader who asked for my opinion on the Saudi purge as it was unfolding on Saturday evening – MbS is a foreign policy hawk. And ousting Prince Miteb bin Abdullah from his post as chief of the National Guard consolidates the kingdom’s entire military apparatus in the hands of the Crown Prince. This is going to create a scenario wherein Iran is cementing its grip on the Shiite crescent just as MbS (an architect of the Qatar embargo) is tightening his grip in the Kingdom.

Comments out of Nigeria’s oil minister suggesting they’re willing to cap output didn’t hurt either. As Bloomberg notes, the WTI skew slipped today to levels last seen in mid-September “as geopolitical risk premium floods market.”

Here’s the big picture:


And here’s the intraday action:


The lira has been super-amusing, diving Friday on the highest core inflation since 2004 and then falling even further on reports that Erdogan may get swept up in the Zarrab case only to rebound Monday morning when the CBRT lowered the upper limit for FX use in reserve ops and then climb further on reports that Washington has resumed processing visa applications (albeit on a limited basis):


And finally, another wild day for Bitcoin (go figure):



5 comments on “All’s Well That Ends In An Epic Mideast Death Match.

  1. space tokens, love it. I made $6,000 a coin on 100 space tokens, but it has gotten out of hand lately.

    • yeah, regular readers know that we wish the Bitcoin crowd all the best. same as we wish the people at the gas station buying lottery tickets all the best and the same as we wish people all the best who are long vol. we’re completely agnostic. we just think Bitcoin is more likely to go to zero than it is to a million so we make fun of it. but shit, if you can make a million trading it, go for it

    • What hasn’t out of hand? Well maybe not like that. We can’t all be geniuses like you were. Wow.

      Me, I recently hesitated on a great condo. Two days later, next person paid $1-million more than I coulda, shoulda, woulda. True story, cuz I know the mortgage banker who showed me it on his phone. What a mope I am. Missed out on $6000 a coin, and on a million profit for a two day flip. Missed the boat, then feel smart if I squeeze just an extra tick on a trade that pays for lunch, lol.

  2. There is always a story and a brilliant comeback. Life is a shoulda, woulda, coulda because sometimes you are the windshield and sometimes you are the bug.

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