Europe

On Wednesday, Greek yields surged when it emerged that diplomatic relations between Greece and the Eurogroup had broken down once again, after European finance ministers suspended negotiations over granting short-term debt relief to Greece as a result of pledges by embattled Greek PM Tsipras unexpectedly said he would grant low-income pensioners a pre-Christmas payoff by spending €600 million to the nation's 1 million low-income pensioners, to replace a Christmas bonus scrapped by the Greek bailout supervisors.

Submitted by Jennifer Thomson via Gavekal Capital blog,

Flash PMI data for Europe’s manufacturing sector, at 54.9 for December, paints an ever more positive picture, having surpassed the most recent high reached in early 2014 to retake levels not seen since 2011. The problem? Hard data (i.e. industrial production, released yesterday) isn’t keeping pace with the increasingly optimistic survey data.

Authored by Carl Bildt, originally posted at Project Syndicate,

In August 2015, I tweeted that if Donald Trump were to be elected President of the United States, we would have to “head for the bunkers.”

A Trump presidency was considered highly unlikely back then; but here we are. And while heading for the bunkers might not be the most appropriate response (yet), where we are is undoubtedly a more dangerous world.

The Great Rotation continued for one more week today with global equity funds receiving $21 billion in inflows in the past week according to Bank of America, the ninth-biggest inflow ever, as investors rushed into 'Trump trade', while money flowed out of bonds for seventh week in a row. The EPFR-based report showed overall equity inflows of $63 billion since Donald Trump's U.S. presidential election win on Nov. 8, offsetting somewhat the $151 billion in outflows observed from January to October.