Global markets continued to fret over Trump’s trade war on Thursday, leading to sour risk sentiment both in the U.S. and across the pond in Europe.
But let’s just kick this off with a little slow motion “covfefe”:
You’re in good hands America.
Stocks were sharply lower and the Nasdaq couldn’t save you today.
8-day losing streak for the Dow.
Treasurys rallied – 10Y yields lower by 4bps:
The Daimler news weighed on sentiment. This looks like it was the worst day for the European autos sector since Brexit and it caps off a five day decline (down everyday since Draghi):
Italian assets were crushed as two euroskeptics were appointed to head up parliamentary committees. There’s more on that here, but the bottom line is that this was the second-worst day for the FTSE Italia All-Share Banks Index since the May 29 massacre:
BTP-bund spread wider by some 25bps:
Stoxx 600 lowest since late April:
Obviously, the FTSE was all about the BoE today. That 6-3 vote was a surprise – Haldane’s in the hike camp now. Goldman’s base case is still November, but we’ll get something by the end of the year and August is alive. No need to overcomplicate today’s action:
Some folks are buying the dip in EMB:
As Lisa notes, that’s the biggest one-day inflow in history.
The Argentina ETF and the Saudi Arabia ETF both got a boost today from the MSCI news:
BCB is still struggling to keep control of the BRL – more swaps auctions:
Capital Economics doesn’t see things getting any better anytime soon for EM. “The selloff that began in April shows no signs of slowing down and external conditions aren’t improving,” Oliver Jones wrote in a note on Thursday, adding that the “policy adjustments by EM central banks, like previous rate hikes in Turkey, Indonesia and Argentina, FX auctions and currency swaps, will probably be insufficient to prevent EM currencies from weakening further.” So that’s fun.
On the heels of yesterday’s FT report that tipped a 600k-800k bbl/day deal, Iran still sounds recalcitrant. “It wasn’t a good meeting. It was just ceremonial statements,” Zanganeh told reporters in Vienna, adding that he’s not optimistic. That came just after this headline hit:
- OPEC+ TALKS INCLUDE 1M, 1.5M, 1.8M B/D QUOTA HIKES: DELEGATE
Brent on the day:
WTI fared better and as Bloomberg notes, Genscape apparently caught motherfuckers off guard today, reporting that Cushing supplies fell some 2.45m barrels Friday through Tuesday.
Oh, and the iShares China Large Cap ETF has fallen for 11 straight sessions, the worst streak since May 2012:
Finally, for your moment of zen…