Europe

It might be a modest exaggeration it to say that Theresa May’s position as Prime Minister is doomed, but that is the general direction as the newsflow for the British PM remains overwhelmingly bad. Scandals aside, May seems to be falling into the growing gulf between Conservative MPs who are pushing more strongly for a “hard” Brexit as negotiations with the EU founder and those who are increasingly alarmed at the prospect, making them more desperate to ensure a softer Brexit.

As we discussed (see here) when Brexit talks resumed this week, the EU is piling pressure on Theresa’s May’s weakened government to extort more money out of the UK in the divorce settlement – now termed “moment of clarification” in EU parlance. Despite rumours before the latest talks began, that Theresa May was prepared to increase the UK’s offer, if this was the case, the EU wasn’t impressed. In the post-talks press conference. the beleaguered Brexit Secretary, David Davis, stated that there is positive momentum in the negotiations…

Submitted by Shant Movsesian and Rajan Dhall MSTA of fxdailyterminal.com

USD correction done yet?

Authored by David Stockman via Contra Corner blog,

The financial system is loaded with anomalies, deformations and mispricings - outcomes which would never occur on an honest free market. For example, the junk bond yield at just 2% in Europe is now below that of the "risk-free" US treasury bond owing solely to the depredations of the ECB.

As increasingly more analysts and Fed-watchers have suggested in recent months, the one catalyst that could send the market into a tailspin is for the Fed to get what it has so long wanted: a sudden spike in inflation. From Albert Edwards (who looks at record U.S.