Leaked ISIS documents with the names of 22,000 militants from 51 countries including the UK, Europe, the US, Canada, North Africa and Middle East have been passed to UK security services. The files, stored on a memory stick were reportedly obtained by Sky News via a defector who stole them from the head of Islamic State’s internal security police.
Ever since the start of ECB's QE, one of the biggest concerns has been how will the ECB continue monetizing €60 billion in debt in a market that is increasingly illiquid and running out of collateral. Moments ago we got the answer when the ECB not only went even deeper into negative rates territory, cutting all three of its main rates, but boosted QE by €20BN.
The spread between the 30Y US Treasury yield and 2Y has plunged by 7.5bps this morning (as 2Y sells off and 30Y rallies post-Draghi) to 175bps. This is the flattest curve since Dec 2008 lows (at 172bps) which can only bode poorly for financials...
30Y bonds are bid (juicy yield compared to Europe) and 2Y yields are surging (room for a Fed rate hike)...
Still buying the Dimon Bottom?
Charts: Bloomberg
For Deutsche Bank's Jim Reid, there is - to put it mildly - a lot riding on what the ECB announces in just about 10 mintues. Recall it was DB just a month ago when, with its stock plunging to near record lows, the bank issued an appeal to the ECB: "Stop Easing, You Are Crushing Us." As it later turned out, all Deutsche did not want is more negative rates, and was perfectly ok with more QE or a two-tier system, but more NIRP by Draghi seems unavoidable. Which is why as Reid asks, "is today's the most challenging central bank meeting in living memory."
2016 has been the year that investors turned bearish on central banks.
Something snapped in the market’s collective psyche when Kuroda went NIRP and things haven’t been the same since. It’s as though everyone suddenly realized just how utterly insane this global monetary experiment has become.