Asia

• Global Stocks Bounce Back After Market Selloff; Asia Stumbles (WSJ)
• New Hampshire Bucks the Establishment to Back Trump and Sanders (BBG)
• Trump shows his U.S. presidential bid is no mere publicity stunt (Reuters)
• Clinton Is Outdone by a Competitor Once Considered a Fringe Candidate (WSJ)
• Deutsche Bank Jumps as Lender Said to Consider Bond Buyback (BBG)
• Bank Executives Leading Surge of Insider Buying Amid Stock Rout (BBG)
• Morgan Stanley Trading Executive Provides Grim Picture for Wall Street (WSJ)

While algos patiently await the only thing that matters for US stocks today which is Janet Yellen's testimony before Congress. expected to be released at 8:30 am (and previewed here), the rest of the world this morning is a hot mess of schizophrenic highs and lows.

Gold fell $2.40 to $1,187.80 yesterday. It remained resilient despite Chinese markets being closed due to strong physical demand and concerns about the global economy, the banking sector and the risks of a new global financial crisis.

Gold jumped $34.70, or 3%, to $1,192.40 an ounce on Monday and registered its best single-session point and percentage gain since December 2014.

Yesterday, when looking at the exposure of the Canadian banking sector to energy, we found something disturbing: according to an RBC analysis, local banks were woefully underreserved.

It all started in mid/late 2014, when the first whispers of a Fed rate hike emerged, which in turn led to relentless increase in the value of the US dollar and the plunge in the price of oil and all commodities, unleashing the worst commodity bear market in history.

The immediate implication of these two concurrent events was missed by most, although we wrote about it and previewed the implications in November of that year in "How The Petrodollar Quietly Died, And Nobody Noticed."