God Bless Us, Everyone.

Trade concerns are obviously front and center and Larry Kudlow (who is apparently still part of the administration despite having been MIA for what seems like weeks) was on the tape attempting to calm everyone down ahead of the G-7 summit this week:

• TRUMP TO MEET TRUDEAU, MACRON AT G7, KUDLOW SAYS
• U.S.-CHINA TRADE TALKS HAVEN’T LED TO A DEAL YET, KUDLOW SAYS
• U.S., CANADA WILL REMAIN `FIRM FRIENDS AND ALLIES,’ KUDLOW SAYS
• KUDLOW: U.S. EXPORTS WOULD RISE IF ALLIES LOWER TRADE BARRIERS
• KUDLOW: MNUCHIN DIDN’T SUGGEST EXTENDING EXEMPTION FOR CANADA
• KUDLOW SAYS WORLD AGREES WITH U.S. ON CHINESE TRADE PRACTICES
• U.S. ECONOMY MOVING INTO `3% ZONE’ FOR GROWTH, KUDLOW SAYS

Obviously, no one takes him seriously and even if anyone did, it doesn’t matter because Trump just waffles back and forth on his trade stance depending on who the last person he talked to was, so unless Larry is permanently attached to Trump’s hip, what he says doesn’t make a damn bit of difference. Also, note this from CNBC:

Sen. Bob Corker unveiled legislation Wednesday to check President Donald Trump’s ability to impose tariffs, over the personal objections of the president.

The Tennessee Republican said earlier that he informed the president that he plans to go through with his legislation. Trump called the senator to urge him to abandon the plan Wednesday morning.

Stocks rose on catalysts that aren’t entirely discernible – maybe everything is just catching up with tech and small caps. Four-day win streak for the S&P:

Italian assets were characteristically schizophrenic. Equities managed to close slightly higher after diving more than 1.5% early. Basically, the relief rally from late last week is gone:

And although off the lowest of lows, the banks are still a disaster:

As noted first thing Wednesday morning, it has been one hell of a ride for the short end in Italy:

In addition to the indeterminacy inherent in the Italian fiasco, European markets are being forced to cope with an ECB that will indeed be having a discussion about the end of APP next week. Reports that the June meeting is indeed on the table for some kind of definitive forward guidance on QE add a bit more uncertainty to the mix across the pond. Bund yields are up nearly 30bps from last week’s lows and rose 10bps on Wednesday alone following the ECB news:

As Bloomberg notes, market pricing now “shows 15 basis points of hikes for September 2019.” The selloff in bunds and pressure from IG supply drug Treasurys lower. Here’s some perspective:

Crude continues to act confused as traders attempt to make sense of everything from geopolitical turmoil to Venezuela (which belongs in the “geopolitical turmoil” category, but somehow I feel like it needs special mention) to Trump’s efforts to talk the Saudis into stemming the rally. On Wednesday, EIA data showed a build on everything and that was pretty much that for the day:

The dollar was lower:

Notably, EURJPY has risen for six consecutive days, the longest streak since July:

Watch out for CBT tomorrow – that should be interesting in light of Monday’s inflation data out of Turkey. The lira fared well on Wednesday and in an interview with  Handelsblatt Simsek said the following:

The central bank will stay independent, period.

I see. I know one person who begs to differ. For reference, the lira has basically gone nowhere since the knee-jerk highs hit after last month’s emergency LLW hike, reflecting ongoing uncertainty about whether Erdogan is truly prepared to let the central bank do what’s necessary:

I think I mentioned this yesterday at some point, but the real is back above 3.80 and that’s not great. El-Erian seems to agree:

After #Argentina / #Turkey , is #Brazil next in facing disruptive #FX #markets ?
Recent #currency slide (chart) puts #CentralBank in quite a tricky position — and there's little room for error as its response function is being monitored closely by domestic and foreign #investors pic.twitter.com/lGQCOQFLbN

— Mohamed A. El-Erian (@elerianm) June 6, 2018

Finally, for your moment of zen, here is Donald Trump attempting to sing “God Bless America” clearly without knowing the words:

Trump unable to remember words to "God Bless America" at replacement event he commissioned to prove his patriotism: https://t.co/LrMPaCEnen pic.twitter.com/oCcWMX9g39

— Deadspin (@Deadspin) June 5, 2018

Our own little Tiny Tim.