Meet Me In Singapore

Well, “the most important week of the year” got off to a relatively quiet start, all things considered.

Of course, Trump was anything but “quiet”. Or actually, he was quiet during U.S. business hours but his Twitter account lit up late Sunday evening with still more attacks on Canada and Europe. The man who on Saturday proclaimed the world “tariff-free” was, by Sunday evening, insisting that henceforth, “fair trade” will be called “Fool Trade”:

Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B. Tax Dairy from us at 270%. Then Justin acts hurt when called out!

— Donald J. Trump (@realDonaldTrump) June 11, 2018

We are now literally living out the plot of many a farcical movie/cartoon: Canada has, according to Trump, Kudlow, and Navarro, become one of America’s enemies on the global stage.

Then there was the usual “real estate moguls doing it for the poor farmers”:

Why should I, as President of the United States, allow countries to continue to make Massive Trade Surpluses, as they have for decades, while our Farmers, Workers & Taxpayers have such a big and unfair price to pay? Not fair to the PEOPLE of America! $800 Billion Trade Deficit...

— Donald J. Trump (@realDonaldTrump) June 11, 2018

And also the “we’re protecting you and we’re not getting anything out of it and you’re laughing at us” meme:

....And add to that the fact that the U.S. pays close to the entire cost of NATO-protecting many of these same countries that rip us off on Trade (they pay only a fraction of the cost-and laugh!). The European Union had a $151 Billion Surplus-should pay much more for Military!

— Donald J. Trump (@realDonaldTrump) June 11, 2018

All of that as he was en route to Singapore to meet with Kim and, of course, Dennis Rodman:

Former NBA star Dennis Rodman arrives in Singapore ahead of summit between Pres. Trump and North Korean leader Kim Jong Un: "I'm just happy to be a part of it. I think that I deserve it" https://t.co/LYDwLNzu5u pic.twitter.com/PllG1b4ZiK

— ABC News Politics (@ABCPolitics) June 11, 2018

This is so laughable at this point that there’s almost no point in documenting it. It’s just a spectacle. There is absolutely nothing serious about any of this. It’s a joke and everyone on Earth knows it.

What I think is critical to understand here is that this thing where he and his surrogates are accusing critics of not wanting him to succeed isn’t true. No one wants a goddamn nuclear war with North Korea. The problem is that everything said above is patently, objectively and unquestionably absurd, so it’s all being treated as such by everyone with any semblance of sense.

U.S. stocks were marginally higher in an uninspired session as everyone holds their collective breath for the myriad key events on deck this week.

Treasurys were rangebound and new supply (3-year and 10-year auctions) was easily absorbed. Here’s some context panning out to include last week’s two sharp rallies that coincided with the turmoil in the real and the early morning Friday Apple headline:

 

The loonie took a hit from Trump’s trade banter, as USD/CAD hit a day high of 1.3025 just after 8:00 am before paring gains:

 

Meanwhile, Italian assets extended gains logged early on in response to Giovanni Tria’s assurances about the country’s future in the euro. Broadly, Italian equities had their best day since the Macron rally: 

 

The FTSE Italia All-Share Banks index surged nearly 6%, in another “since the Macron bump” moment. Obviously, there’s still a lot of ground to make up though (top pane):

 

10Y yields fell a remarkable 29bps and the BTP-Bund spread compressed dramatically:

 

The lira resumed its decline on signs that the economy is still running hot and on a further widening in the current-account deficit:

 

“Given the authorities’ pro-growth bias, to what extent the economy will be allowed to slow down remains to be seen,” Goldman wrote this morning, adding that while “some moderation in gold imports and continued recovery in the tourism sector could help to contain the deficit, without a slowdown in domestic activity, a genuine improvement in the current account seems unlikely.”

Meanwhile, that other problem currency, the Argentine peso, fell to a new record low in a continuation of last week’s post-IMF deal selloff (presumably, the central bank won’t defend 25 anymore now that the IMF is in the game):

 

Oh, and Bitcoin is down 12% over the past three days after (another) hack and as jitters about the ongoing China crackdown continue to weigh.

 

Seriously you guys… stop listening to morons and conspiracy theorist bloggers who swear cryptocurrencies are going to replace the fiat money they spend every waking moment railing against. Get the hell out of this P.O.S. before it’s too late:

 

Finally, for your moment of zen…

NEW: @FoxNews video of Kim Jong Un at @marinabaysands in #Singapore during his night time tour of the city. Video: Rosie Melville pic.twitter.com/9lgt8L8CNb

— Fin Gomez (@finnygo) June 11, 2018