Europe

NIRP has proven to be a dud as far as monetary policy goes.

Europe has implemented FOUR NIRP cuts since June 2014. Throughout this period, EU inflation has barely flat-lined.

The story is similar for Japan, which implemented NIRP at the end of February 2016. Since then the Yen has surged.

While Japanese inflation is trending down:

• Early Warning Signs of Recession Flash Faintly in U.S. Jobs Data (BBG)
• Who Needs Buybacks? One S&P 500 Variant Just Rallied to a Record (BBG)
• The unpredictable new voice of Saudi oil (FT)
• Saudi's Other Warning Makes Oil Traders Sweat After Doha Failure (BBG)
• U.S. oil investors rush for protection at $35 as Doha talks collapse (Reuters)
• Trump candidacy: Where some fear to tread others see a path to victory (Reuters)
• Iron Ore Powers Above $60 as Steel Rally in China Spurs Demand (BBG)

If asking traders where stocks and oil would be trading one day after a weekend in which the Doha OPEC meeting resulted in a spectacular failure, few if any would have said the S&P would be over 2,100, WTI would be back over $40 and the VIX would be about to drop to 12 and yet that is precisely where the the S&P500 is set to open today, hitting Goldman's year end target 8 months early, and oblivious of the latest batch of poor earnings news, this time from Intel and Netflix, both of which are sharply down overnight.

As a result of incorporating the Schengen Agreement (initially signed in 1985 between just five countries) into the Treaty of Amsterdam (signed in 1997, effective in 1999), Europeans and European businesses enjoy border-less travel in most countries that are part of the European Union. 

Or, at least they did.

In an effort to slow Syrian, Afghan, and Iraqi migrants traveling to Europe, many countries are now implementing border controls, a decision that could prove to have significant negative consequences for Europe's economy.