Problems Are Emerging.

Well, first thing’s first.

Donald Trump sent 11 tweets by 3:00 p.m. ET, a truly impressive “covfefe” tally, that included this batshit ramble about Lisa Page and Peter Strzok:

Lisa Page, who may hold the record for the most Emails in the shortest period of time (to her Lover, Peter S), and attorney Baker, are out at the FBI as part of the Probers getting caught? Why is Peter S still there? What a total mess. Our Country has to get back to Business!

— Donald J. Trump (@realDonaldTrump) May 7, 2018

Yes, “what a total mess.” And for Christ sake, will someone please teach him what a proper noun is or, more to the point, what a proper noun isn’t?

But this was the one that mattered:

I will be announcing my decision on the Iran Deal tomorrow from the White House at 2:00pm.

— Donald J. Trump (@realDonaldTrump) May 7, 2018

That came amid other headlines, including these (from Barak Ravid of Israel’s Channel 10):

• EUROPEAN, U.S. ARE SAID CLOSE TO DEAL ON IRAN: CHANNEL 10
• DEAL AIMS TO PERSUADE TRUMP NOT TO END ACCORD
• UNCLEAR TRUMP CAN BE PERSUADED TO MAINTAIN IRAN ACCORD

Whatever the case, oil careened lower…

…after breaching $70 for the first time since 2014 earlier on Monday:

The dollar rose and is coming off its third consecutive week of gains:

YTD high:

Stocks faded what was a pretty impressive rally when the Iran headlines/Trump tweet hit:

Futs:

Citi doesn’t think this is a particularly attractive entry point:

Citi doesn't think your "good value" thesis is very "compelling".. pic.twitter.com/VyCl0WZW9L

— Heisenberg Report (@heisenbergrpt) May 7, 2018

Nothing doing to speak of in Treasurys. As Bloomberg notes, 10-year yields were confined to a 2.4bp band, “among the smallest this year”. Panning out a bit for some context vis-a-vis Friday’s payrolls miss:

Emerging markets are of course still in the spotlight. We talked more about this earlier today in the context of who’s been selling.

YTD high for Brazil CDS:

It’s the same story – external concerns (read: aggressive Fed, dollar strength, rising U.S. rates) are colliding with country-specific risk. To be sure, there are folks out there pushing a bullish narrative for Brazil, but election uncertainty and the broader jitters weighing on EM are making a dent.

Commenting on the widening in CDS spreads, Credit Agricole’s Italo Lombardi blamed “a somewhat less favorable external environment, higher US rates and expectations for Fed adjustments, in addition to the whole issue of protectionism.” Obviously, Brazil is better shape than it was in 2015 when a rolling political crisis pushed things to the brink, but you can see the stress showing up in the real:

Another jittery day for the lira (much more on that here). CBT tried something feeble, but as you can see, the relief “rally” was shallow and short-lived:

Tough day for MXN, which slid past 19.50 late in the session:

Broadly speaking, the pressure on EM is mounting:

Here’s a bit more color on this from JPMorgan:

What about currencies? What picture do we get from the available spec positions on EM currencies? We use two proxies to gauge overall EM currency positions: 1) the aggregate spec positions on the USD (Figure 8) and 2) our spec position indicator on Risky vs. Safe currencies (Chart A17). The former suggest that a previous short base in the USD is still being covered but has yet to be covered completely. The latter suggest that while “Risky” currencies including EM currencies saw a significant reduction in their positions vs “Safe” currencies, they are still far from capitulation.

Archer “danger zone” clip (and if you aren’t an Archer fan and thus don’t get the reference, then you need to rectify that at your earliest convenience):

 

Finally, for your moment of zen, here’s Rudy Giuliani proving once again that he is definitely not the man for this job: