Europe

Today's sudden 'Minsky Moment' in markets has pushed US equity risk perceptions to their highest relative to Europe since August 2015, back to old 'norms'.

As Bloomberg notes, U.S. politics are taking center stage as risks recede in Europe following the French presidential election. With Donald Trump facing the deepest crisis of his presidency, the CBOE Volatility Index surged on Wednesday, while Europe’s VStoxx Index rose less than 5 percent.

Authored by Brandon Smith via Alt-Market.com,

Authored by Irina Slav via OilPrice.com,

When President Trump came into office, he openly resented the major trade deficit with Asia’s number-two economy and vowed to remedy the situation. While his words smacked of economic protectionism to many, the latest news about China-U.S. economic relations reveal a different picture.

It was just over two months ago - well before VIX hit its record stretch of nearly 20 days below 11 - when we first discussed why one of the major threats to the complacent market was the danger of a forced liquidation by trend-following and vol-neutral, CTA, risk-arb and other systematic funds - many of whom have been the fundamental catalyst for the unprecedented VIX compression seen in May -  resulting in an explosive unwind of vol positions.

A risk-off mood dominated the overnight session amid growing concern over the turmoil engulfing the Trump administration, as fresh allegations add to deepening political scandals in Washington, the latest coming from Tuesday's NYT report citing former FBI director Comey’s memo which raises possibility of obstruction of justice, an impeachable offense. The dollar, already in retreat after a report that the U.S.