Europe

Year-to-date, BofAML's Baraby Martin notes that the market narrative has swung wildly. "US recession...", “global recession...", "China devaluation...", "commodity bust..." and "energy defaults..." have all been blamed as the major drivers of risk assets thus far in ‘16. The bearish concoction has left markets way down from their January levels. In credit, investment-grade spreads widened 16bp last month, and high-yield 36bp – the worst start to the year since 2008.

Over the past year, and certainly in the aftermath of the BOJ's both perplexing and stunning announcement (as it revealed the central banks' level of sheer desperation), we have warned (most recently "Negative Rates In The U.S. Are Next: Here's Why In One Chart")  that next in line for negative rates is the Fed itself, whether Janet Yellen wants it or not. Today, courtesy of Wolf Richter, we find that this is precisely what is already in the small print of the Fed's future stress test scenarios, and specifically the "severely adverse scenario" where we read that:

“Migrants gone wild” is the new video craze sweeping the internet as cell phone footage of refugee-related shenanigans has replaced clips of Russia vaporizing “the terrorists” on geopolitics junkies’ must watch lists.

Submitted by Ben Hunt via Salient Partners' Epsilon Theory blog,

Late last month, we noted that Austrian Foreign Minister Sebastian Kurz was set to cut social benefits for refugees who failed to attend “special integration training courses.”

Austria, like Germany and multiple other countries in the Schengen zone, is struggling to cope with the influx of asylum seekers fleeing the war-torn Mid-East. Of particular concern is the “integration” process whereby those hailing from “different cultures” are having a decidedly difficult time blending into polite Western society.