Of Morons And Missiles.

If Monday was largely a bore outside of some overnight fireworks in Asia, Tuesday made up for it. Before we dive into the details, it was the best day for the Dow and the S&P since early September:

To be sure, everyone knew there would plenty to trade on this week and the ball got rolling in earnest today when stocks surged to intraday highs on optimism around Jerome Powell who said the “right” things during his “chat” with the Senate Banking Committee, where “right” means this: “what’s good for banks and markets.”

But it wasn’t all smooth sailing. Trump tried his best to tweet America even further into the depths of partisan gridlock when, ahead of a planned meeting with McConnell, Paul Ryan, Chuck Schumer and Nancy Pelosi, he inexplicably blasted out this to 41 million people:

Meeting with “Chuck and Nancy” today about keeping government open and working. Problem is they want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes. I don’t see a deal!

— Donald J. Trump (@realDonaldTrump) November 28, 2017

Why he would do that is anyone’s guess, but he did, prompting Schumer to (correctly) say that it would be pointless to go to a meeting if Trump has already decided there won’t be a deal. 

Then came this:

• N. KOREA FIRES BALLISTIC MISSILE: YONHAP CITES S. KOREA JCS

And then finally, this:

• Senate Budget Cmte advances Republican tax bill on party-line vote, moving the measure closer to a full vote as early as Thursday.

Here’s USDJPY and gold with annotations to help you navigate the madness:

And here’s stocks:

Treasurys were mixed, while the dollar rose for a second-straight session.

Great day for the banks for obvious reasons:

The pound was nuts, whipsawing as this…

• UK, EU SAID TO REACH AGREEMENT ON BREXIT DIVORCE BILL:TELEGRAPH

…competed with this…

Government sources insisting they “don’t recognise” reports that UK and EU have agreed a circa £50bn Brexit divorce deal. Regardless, it’s the Irish border issue that’s the toughest nut to crack.

— Kevin Schofield (@PolhomeEditor) November 28, 2017

…with the result being this:

Which reminds us:

Email: "Bitcoin: Can it really be called a currency with 15% fluctuation in a day?"

Well, works for sterling

— Katie Martin (@katie_martin_fx) November 28, 2017

The lira is in deep shit again, plunging back near a record low against the dollar as the trial of Mehmet Hakan Atilla gets underway. Notice we did not call it the “Zarrab trial.” That’s because Zarrab is no longer on trial. Now he’s a witness and that’s bad news for Erdogan and potentially for Michael Flynn (and there was more news on Flynn from the Daily Beast, which we’ll get to later). Here’s WSJ:

Reza Zarrab, the Turkish gold trader whose prosecution in New York has strained relations between the U.S. and Turkey, has pleaded guilty and will serve as a cooperating witness for the U.S. government, lawyers said Tuesday.

The disclosure came just before opening statements in the Manhattan federal trial of Mehmet Hakan Atilla, a Turkish banker accused of conspiring with Mr. Zarrab and seven others to help Iranian businesses illegally process billions of dollars in transactions, in violation of U.S. sanctions. Mr. Atilla has denied the charges.

Mr. Atilla’s lawyers had asked the judge Tuesday morning to delay the trial by two weeks, arguing they needed more time to prepare after receiving more than 10,000 pages of material from prosecutors Monday night related to “the government’s most important witness.”

When the judge asked for the identity of the witness, Robert Fettweis, a lawyer for Mr. Atilla, hesitated before responding, “Reza Zarrab.”

Prosecutors said Mr. Zarrab admitted to evading U.S. sanctions and laundering money, but they haven’t yet unsealed his guilty plea.

The revelation about Mr. Zarrab ends weeks of speculation about his whereabouts. He had been expected to go on trial with Mr. Atilla, but his lawyers haven’t appeared at court hearings or filed pretrial motions since September. The Bureau of Prisons website listed Mr. Zarrab as “released” on Nov. 8, fueling speculation that he may have been cooperating.

And here’s the lira:

Turkish stocks fell 2.5% and are sitting at their lowest levels since October 10:

And short interest in the MSCI Turkey ETF is at a 20-month high.

European shares were higher across the board with the FTSE leading the way:

The Stoxx 600 Oil & Gas Index rose sharply:

Call it $10,000…

… but remember, we’re still a long way away from obviating the need for this…

if not, I will eat my dick on national television.

— John McAfee (@officialmcafee) July 17, 2017