Business

In a world where stat arbs do most of the trading, and where central banks set the prices, everything is a correlation of a correlation of a correlation, and as we have not tired of pointing out since 2010, virtually every correlation starts with the USDJPY, the preferred funding vehicles for BOJ intervention in capital markets, as well as an indicator of Japanese pension fund, in most cases the GPIF, activity in the US risk assets.

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

President Donald Trump's proposed budget has generated hysteria among the American left. Prominent progressives have accused the president and his allies of wanting to kill children, senior citizens, and other vulnerable Americans.

In its latest weekly Economic Indicators Update, Goldman charts the ongoing paradoxical divergence between the Fed's professed tightening path and what is actually taking place in the US stock market, where it finds that financial conditions are the easiest they have been in two years.

One month ago, Goldman discussed this topic in depth when Jan Hatzius implicitly asked if Yellen has lost control of the market, and warned that in order to normalize fin conditions, the Fed may be forced to follow through with a "policy shock."

More Japanese exuberance overnight (as USDJPY and Nikkei stumbled hard) sent Bitcoin to fresh record highs, blowing through $2800 and nearing $2900 this morning - now up 200% year-to-date.

It seems the momentum trade has caught the eye of Mrs. Watanabe...

But as we noted overnight, it's not just Bitcoin that is soaring, Bloomberg reports that Remixpoint Co., Infoteria Corp. and Fisco Ltd., have all seen volatile swings in their share prices after announcing businesses related to digital currencies.

With Treasury yields at their lowest since the election, it appears a shift towards safe-havens (or Trumpflation unwinds) is well underway. Gold is nearing $1300 this morning - its highest since the election. WTI Crude has sunk back to a $47 handle, ignoring dollar weakness as the Qatarstrophe raises more doubts about OPEC coordination.

A weaker dollar is helping precious metals (and Bitcoin) but not crude - a break in the relationship regime we have seen this year.