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Die Another Day.

So the real drama (if there proves to be any) will come tomorrow.

Well predictably, Tuesday was a bullshit session in the U.S. as everyone waits for clues from tomorrow’s CPI number, Also tomorrow, keep an eye on VIX expiration.

Apparently, some folks are now hedging against a downside surprise on CPI.  On Tuesday morning, Bloomberg flagged a block trade in three-week calls on 10-year Treasurys, expiring Friday that looks like it’s designed to hedge against a rally down to 2.75%. That would be a notable move from the current ~2.83 on 10s. This comes against a backdrop where spec positioning is “bigly” short – at least according to the latest CFTC data.

So the real drama (if there proves to be any) will come tomorrow.

 

While U.S. stocks spent a good portion of Tuesday in the red, things ultimately closed on a positive note, leaving the benchmarks green for a third straight session.

SPX

YTD:

YTD

The VIX was lower, but just barely and is still elevated:

VIX

Americans are in debt. Lots of it. The NY Fed was out on Tuesday with its Quarterly Report on Household Debt and Credit, which showed total household debt rising by $193 billion (1.5%) to $13.15 trillion in the fourth quarter of 2017. That’s a record.

Debt

Let’s see, what else on the news front? Oh, John Kelly’s fucked:

  • FBI DELIVERED COMPLETED BACKGROUND CHECK ON PORTER IN JULY

So yeah, the White House knew. That’s bad. Here’s Sarah Huckabee Sanders trying to explain the situation in her daily damage control briefing:

The Mooch has seen enough:

  • SCARAMUCCI SAYS WHITE HOUSE CHIEF OF STAFF KELLY `MUST RESIGN’

Don’t say we didn’t try to tell John to get out a long time ago before things got worse for him, because we did.

The yen is the story in FX land:

USDJPY

This is the big picture on that:

USDJPY

Obviously that’s indicative of something and some of the things it might be indicative of aren’t great in terms of risk sentiment.

The dollar looks like it’s losing its footing again after a stretch where it looked like the greenback might try to get off the mat after the myriad headwinds it faced to start the year:

DXY

European shares were lower across the board on Tuesday as Monday’s bounce proved short-lived. The DAX led losses and as a reminder, this situation isn’t great:

DAX

In Asia, the Hang Seng was higher (mercifully) after a tremendously bad stretch:

HangSeng

H-shares managed to rise for the first time in seven days. Don’t forget how this story has played out. They were the world-beater in January but during the February rout, it’s been a “the first shall be last” type of deal:

CEI

Mainland shares rose again on Tuesday. They’re getting state support ahead of the holiday. Over the weekend there was a directive to large investors to avoid doing anything to destabilize markets (i.e. “don’t you fuckers sell or we might have to arrest you”) and then overnight there was an MLF holiday gift.

Basically, China is going to ensure that what happened last week doesn’t get out of control. Here’s the two-day bounce:

China

Finally, for your moment of zen, here is Trump responding “thank you very much” when asked if he “has a message for domestic violence victims”:

 

 

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2 comments on “Die Another Day.

  1. a little H humor never hurts.
    and it was a very nice to me, the last 15 minutes of the market.
    god i hate being a dip buyer, being short is just to hard.
    maintaining a hedge is prudent going forward.
    it is still going to end badly, but not today.
    good luck all.
    sb

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