July 5. New highs, new lows

–New lows this morning in: Sterling, US treasury yields, yield curve (5/30 at 120), DB.  New highs: silver, gold, yen (almost), the amount of debt with negative yields, and USD vs CNY, which is 6.6712.  While the Brexit vote is having sudden impact on some things, for example ZH reports that Standard Life in the UK has halted redemptions from some property related funds, the situation that is being pushed into the forefront is weakness in Italy’s banking system.  Non-performing loans are reportedly €360bn.  Of course, China also has a tremendous problem with bad debt, however, China has the option to depreciate the currency, which is the policy they are pursuing, thus blanketing the world with a disinflationary cloud.  Italy needs a banking bailout of significant size, and a weaker euro would probably help.
–Dudley speaks this afternoon at a roundtable discussion.

Posted on July 5, 2016 at 5:24 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply