Every Dog Has Its Day, Vice Versa~

Every Dog Has Its Day, Vice Versa~

08.22.2018， Wed, Cloudy， Air polluted

Summary：Trump's criticism of Fed boosted boosted risk in Asia and EU session with DXY weakened decently. Headlines of Cohen and Manafort hit the market and we can fade it.

Euro Session:

Most cash player didn't care too much about the 6 bps' rally of 10yr UST, totally not in the manner that people are talking about anyway. The rally was more about illiquidity than positioning in the previous US session. The Bloomberg screen was crowded with all kinds of guess on the rally, UST pulled back in 10yr yield to 2.83% throughout Tokyo．　

 

EGBs opened in a relieved way with the spread between core and periphery tightening while EU equities mixed. Euro bulls could cheer by price action over the past 18 hours or so, although it may be too soon to sound the all clear from further downside pressure. But with the consolidation of EU equities and the Italy like issues ahead, I could not see too much resilience here.

 

Trump's words of FX manipulation first was hit back by Merkel's ally Hardt said in a TV interview. He said EU does not manipulate currency, German trade surplus due to product quality. Then European markets continued to rally off the opening lows, trading higher (with the exception

of the FTSE), making a slight recovery following the recent weakness.

 

All in all, EU market has more room to perform especially in periphery, but Italy headline risk and summer illiquidity remain main concern.

 

Economy data:

No

US Session:

US Rates had a bit of a relief selloff overnight as all-time S&P highs put downward pressure on the belly of the curve. Right before 1:30, SPX reached all time high. But soon after that, negative headlines surrounding Manafort and Cohen had treasuries bouncing off the lows into NY close. SPX capped a fourth day of gains, while RTY closed at an all-time high on earnings reports in the consumer sector and relative calm in the trade dispute between the US and China. Much of the focus extended from yesterday's critical comments by Trump about Fed tightening and Chair Jay Powell, driving the dollar down.

 

After NY closed, the two stories were confirmed. Trump’s former lawyer Michael Cohen pleaded guilty to illegal campaign finance charges over hush money paid to a porn actress and a former Playboy model, all but naming Trump as having ordered him to do it. Manafort guilty verdict came at same time on eight counts of fraud as Cohen plea deal. He faces a lengthy prison sentence.

 

 

 

 

As to Fed, Kaplan(non-voter) noted Fed should gradually raise rates to neutral level and it could take three or four hikes to reach neutral. WaPo reported Powell privately promises Fed's independence amid Trump's public attacks.

Economy data:

No。

Key Data And Events Ahead:

Existing home sales

FOMC minutes

Comments:

Although it seems Trump to talk down the dollar, I slowly figure out this could be just an insurance policy against a cyclical downturn. "See, it wasn't me. I was busy ' negotiating very powerfully'. It was that guy who kept hiking." Actually the stronger US economy stats read, the more disturbed I am. This cycle is too long, isn't it?

 

As to Cohen and Manafort, 10YR UST headed down 3 bps with XAU 3 dollars up now. A decent risk-off sentiment we are in. Cohen could be a greater threat to Trump even than Muller probe. Although he unnamed Trump this time, the cycle think he just directly implicated Trump on a broadly base as described by Cohen's lawyer. As to Manafort, US senate's No 2 republican Cornyn just says Manafort verdicts do now implicate ' the president at all , particularly on the Russia investigation".

 

The Russia collusion could shake the market again and again. Only if GOP lose the majority in senator, Trump could be impeached. So, fade the risk off.

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近期重要时间点：

8月20-23日，200bn听证会，期间可能有贸易谈判

8月23-5日，Jackson Hole 研讨会,Powell讲话在24日，Monetary Policy in a Changing Economy

8月26日，意大利财长Tria访华

9月3日，第二批A股纳入MSCI

9月5日，200bn听证会后申诉材料提交截止日

9月13日，ECB议息

9月18日，EU A50会议

9月20日，EU非正式峰会,日本LDP选举

9月26日，FOMC

9月，日本LDP选举,半岛峰会在平壤

9月27日，意大利提交财政预算案

10月16日，EU A50会议

10月25日,ECB议息

10月31日，BOJ议息

11月6日，美国中期选举开始

11月8日，FOMC

11月11日，美国阅兵

12月13日，ECB议息，EU 峰会

12月20日，FOMC

12月22日，改革开放40周年

2019年3月21日，EU 峰会

2019年3月29日，脱欧谈判截止

Appendix：his t overnight

0821 0951 .@DianeHarkey is an extraordinary woman of great accomplishment & potential. She is running as a very popular Republican for the Congressional seat of my friend Darrell Issa-with his complete support. Diane is strong on crime, loves our Military & Vets-has my total Endorsement!

0821 1006 Just watched former Intelligence Official Phillip Mudd become totally unglued and weird while debating wonderful @PARISDENNARD over Brennan’s Security Clearance. Dennard destroyed him but Mudd is in no mental condition to have such a Clearance. Should be REVOKED? @seanhannity

0821 1201 Will be going to the Great State of West Virginia on Tuesday Night to campaign & do a Rally Speech for a hard working and spectacular person, A.G. Patrick Morrisey, who is running for the U.S. Senate. Patrick has great Energy & Stamina-I need his VOTE to MAGA. Total Endorsement!

0821 1201 I am hearing so many great things about the Republican Party’s California Gubernatorial Candidate, John Cox. He is a very successful businessman who is tired of high Taxes & Crime. He will Make California Great Again & make you proud of your Great State again. Total Endorsement!

0821 1841 A Blue Wave means Crime and Open Borders. A Red Wave means Safety and Strength!

0821 1856 Even James Clapper has admonished John Brennan for having gone totally off the rails. Maybe Clapper is being nice to me so he doesn’t lose his Security Clearance for lying to Congress!

0821 1911 Fake News, of which there is soooo much (this time the very tired New Yorker) falsely reported that I was going to take the extraordinary step of denying Intelligence Briefings to President Obama. Never discussed or thought of!

0821 1946 I am sorry to have to reiterate that there are serious and unpleasant consequences to crossing the Border into the United States ILLEGALLY! If there were no serious consequences, our country would be overrun with people trying to get in, and our system could not handle it!

0821 2001 Big Rally tonight in West Virginia. Patrick Morrisey is running a GREAT race for U.S. Senate. I have done so much for West Virginia, against all odds, and having Patrick, a real fighter, by my side, would make things so much easier. See you later. CLEAN COAL!!!!

0821 2216 Bill DeBlasio, the high taxing Mayor of NYC, just stole my campaign slogan: PROMISES MADE PROMISES KEPT! That’s not at all nice. No imagination! @foxandfriends

0821 2301 To the incredible people of the Great State of Wyoming: Go VOTE TODAY for Foster Friess - He will be a fantastic Governor! Strong on Crime, Borders & 2nd Amendment. Loves our Military & our Vets. He has my complete and total Endorsement!

0821 2326 Join me tonight at the Charleston Civic Center in West Virginia at 7:00pmE! Tickets: https://t.co/OX8gGhdmg9

0821 0536 Just landed in West Virginia. Big crowd, looking forward to seeing everyone soon! #MAGA

Disclaimer：This material was prepared in private name and out of pernaonal hobby,definitely based upon facts and robust analysis with delicate consideration of highly professionality.But with no means to conduct any trade , and before using the contents of this note in any internal or external communication, please ensure you are comfortable and fully aware this could not be sufficient enough as any action base.

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