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A Bit Of Confusion.

Well, that was interesting.

The big news at the end of the day came courtesy of a report that Rod Rosenstein has informed Trump that he’s not the target of any part of the Mueller probe.

You can read more about that here, but suffice to say it’s either really good news for the President or else some kind of gambit to preserve the integrity of the special counsel investigation by forestalling any move to fire Mueller.

Here’s your Rosenstein bounce:


Beyond that, Thursday was somewhat confusing if you’re one of those people who needs to ascribe causality at every turn, but generally speaking, it looks like the recent rally in commodities (on soaring crude prices and gains in the metals complex catalyzed by the Russia sanctions) are stoking inflation fears.

As a reminder, the BCOM is sitting near its highest levels since 2015:


Prices came off a bit on Thursday, but you get the idea. 10Y yields are back above 2.90 and that’s apparently enough to reignite at least some of the concerns that surfaced back in February:


And this is a global thing. Gilts and bunds sold off on Thursday as well:


Of course during the early February rout, the curve was steepening pretty aggressively while it’s been flattening relentlessly of late. That flattening is all anyone has wanted to talk about. There was some respite from that today as the long end soldoff (5s30s steeper by 1.5bp, 2s10s by 3.5bp).

This gave financials a welcome reprieve from days spent fading good earnings and fretting over the seemingly inexorable curve flattening:


Outsized underperformance for the broad market versus the financials:


Blame Taiwan Semi for this bloodbath:


In FX land, the peso (a top performer on the year) dropped on politics:


And it happened – 1.20:


Worst day in a decade for cancer:

PMHigh yield has rallied again recently although there are all the usual questions (e.g., late cycle jitters, etc.). Back near post-crisis lows:

Oh, and just to kind of come full circle by closing where we began (i.e. with the ongoing fallout from alleged Russian election meddling), Mnuchin wants you to know that the sanctions which roiled the ruble and upended the metals complex are very “powerful” and “important”:

Also, no one was trying to make an ass of Nikki Haley, ok?


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