Europe

Ever since "Trumpflation" emerged as a driver of risk-assets, a tension has emerged in capital markets: how much higher can rates rise (and by implication the US Dollar) before financial conditions become so tight that the equity rally reverses under the weight of the very reflation it is pricing in. Ten days ago, SocGen became the first to attempt an answer, by providing the following table, according to which the answer was roughly 2.6% on the 10Y Treasury: a level at which equities become rich relative to bond yields.

"We are entering a very dark phase in this battle to retain our liberty," warns Armstrong Economics' Martin Armstrong, adding that "this is the most dangerous period we are heading into for governments will respond only to their own self-interest to survive."

The war on cash is in full swing.

First we saw India's Modi demonetize bank-notes in the interest of fighting corruption and tax avoidance in the black economy... later admitting that this will eventually lead to a cashless society.

In its 2017 global strategy outlook note titled "Sparkle and Fade", Morgan Stanley is bittersweet about the future.

Authored by Edward Luce, originally posted at FT.com,

Authored by Anatole Kaletsky, originally posted at Project Syndicate,

 For those of us who were wrong about the United States’ presidential election, it is worth suppressing emotional reactions, at least for a month or two, and attempting a dispassionate judgment about what Donald Trump’s administration may mean for the world. So here are ten likely consequences of the Trump presidency, divided equally between the good and the bad.