At the end of January, the Euro soared following an FT piece in which Trump's trade advisor and director of the White House National Trade Council, Peter Navarro, launched what was then seen as the first shot in the transatlantic trade wars, when he accused Germany of using a “grossly undervalued” euro to "exploit the US and its EU partners", comments which triggered alarms in Europe’s largest economy.
With spreads at post-crisis tights, equities making new highs, and new issues oversubscribed, markets are clearly exuberant. But could it be rational this time? We’re not convinced.
- Citi's Matt King
By EconMatters
Via Kevin Muir of The Macro Tourist blog,
The other day in the midst of an epic food-fight-rally in the stock market, a younger kid from my office wandered by and expressed his disbelief at the incessant bid. Shaking his head he asked me if I had ever seen something so insane.
Ahhh…. the joys of being young - everything is new.
I explained to him that I had indeed seen this movie play out before. A few times actually.
Confirming last week's report of an imminent share sale, on Sunday the biggest German lender announced it would raise €8 billion ($8.5 billion) in new capital through a rights offering sale of 687.5 million new shares, and sell parts of its asset management business in its latest attempt to shore capital following €8 billion in losses in the past two years after a major operational and balance sheet restructuring was launched by CEO John Cryan in 2015, settling misconduct investigations and scaling back capital-intensive debt-trading businesses.