Europe

President Trump is expected to release the new National Security Strategy for the United States this afternoon. We discussed the potential drivers behing his reportedly aggressive stance yesterday, but the bigger questions remain...

Will it rein in some of the global adventurism of the Bush and Obama presidencies?

 

Will it correct the gaping disconnect between what the White House says about places like North Korea and what the Secretary of State says?

 

US military personnel fired shots at a man who tried to force his way into a military base in central England used by the U.S. air force on Monday. The Mildenhall Royal Air Force base in Suffolk, eastern England said security staff locked down the base, used by the United States to refuel U.S. and NATO aircraft in Europe, at about 1300 GMT following reports of a disturbance. The man was subsequently arrested after the incident.

Global stocks and US equity futures roared upward to new record highs to start the second-to-last week of the year, boosted by optimism over a Republican agreement on the shape of U.S. tax cuts aimed at lifting growth; incidentally this is the 6th consecutive day that the "tax bill" has been priced in by the market, and according to cynics, 6th consecutive week and/or 6th month. Meanwhile, the dollar dropped and Treasuries headed lower.

Since the common currency's inception in 1999, the EUR-hedged yield 'offered' to European investors from investing in US Treasuries has never been worse...

As Bloomberg notes, for European investors using swaps to protect against currency swings, the benchmark 10-year U.S. yield fell Friday on a euro-hedged basis to around -60bps.

In other words, it costs European investors 60bps per year to 'own' 10Y Treasuries on a EUR-hedged basis.

Authored by Soeren Kern via The Gatestone Institute,