Greetings,

1. We begin with emerging markets where the Taiwan dollar weakend over the past few days on speculation that the central bank may intervene. The chart shows the number of Taiwan dollars one US dollar buys.

Taiwan's exports continue to decline, and officials in Taipei have become concerned about capital inflows (from all the funds) strengthening the currency. With the "currency wars" on, exporters constantly try to avoid a (relatively) strong currency.

2. The Korean won has weakened in the past few days as well (chart shows the US dollar buying more Korean won).

3. The Saudi stock market has been struggling lately. Some suggest that this represents a bearish bet on crude oil (in part by Saudi insiders). Perhaps.

4. Softer copper prices over the past month are pressuring the Chilean peso. The second chart below shows the US dollar rising against the peso.

Source: Bloomberg LP

5. Mexico sees the first GDP decline since 2013, although a smaller one than expected. Officials also cut the overall 2016 growth forecast. Some suggest that Mexico is a "barometer" of the US economy.

6. The Ukrainian 5y bond yield is creeping up over the past month on tensions with Russia. It's important to point out, however, that the current yield is still way below the 11%+ level reached in February. 

7. The last chart shows shares outstanding for a large emerging markets debt fund. Are the EM debt inflows starting to ease?

Turning to Japan, Bloomberg points out that buying Japanese short-term bills and converting them to dollars via a cross-currency swap results in a relatively high-yielding product. This trend is driven by a wide cross-currency basis (second chart below). It's another way of saying that Japanese entities trying to borrow dollars end up paying up.

Source: Bloomberg.com, @acemaxx

Related to the above, Chinese money market investors are piling into Japanese short-term bills to take advantage of the resulting elevated yield.

Source: Bloomberg.com, @acemaxx

Separately, we see a divergence between dollar-yen and Japanese shares. It will be interesting to see what this means for the BoJ's policy decision in September.

Source: Morgan Stanley, @acemaxx

Australian consumer confidence hits the highest level since 2013.

1. Turning to the UK, here are the timing odds in the betting markets of the British government triggering Article 50.

Source: @PredictWise

2. The trend below has recently heightened the debate around the merits of Brexit.

h/t @fastFT

The Swiss monetary base now exceeds half a trillion Swiss francs - about 80% of the GDP. As a comparison, the US monetary base is about 21% of the GDP after all of the Fed's QE. This tells you just how massive the SNB's balance sheet is.

1. Speaking of QE, here is a component of the ECB (Eurosystem) balance sheet that includes just the QE bonds (excludes LTRO, MRO, etc.).

Source: ECB

2. The WSJ points out that with the ECB chasing high-rated corporate bonds, companies are more than willing to oblige. Some have structured bonds specifically for private placement with the ECB. Who needs private investors?

Source: @WSJ

The chart below shows the divergence between eligible and ineligible euro-denominated corporate bonds - another broad market distortion.

Source: @WSJ

3. The Portugal - Germany government bond spreads have been rising due to downgrade talk (though remain relatively low).

4. The Spain - Germany 10y government bond spread is now less than 100 bp.

5. The Spain - Italy 10y government bond spread keeps moving deeper into negative territory on stabilization of Spain's political situation (for now).

1. Back in the United States, the Treasury curve is flattening again as Fed's Fischer sets the stage for one rate hike this year (pushing up the 2-year yield).

2. The futures market still sees roughly even odds of a rate hike this year.

3. The Goldman US financial conditions index continues to show an easing trend - which is likely to reverse if the US dollar moves materially higher.

4. The Citi US Economic Surprise Index has declined almost as quickly as it rose, as we see a few disappointing data points.

h/t  ‏@joshdigga, Natixis

1. In fixed income markets, speculative accounts have been increasingly short ultra long-term US Treasury futures. So far the contract has traded sideways (second chart below). 

Source: Bloomberg Terminal

2. The Altman Distressed (corporate) Bond Index (total return) continues to grind higher, though remains significantly below the levels from two years ago.

3. US HY spread is drifting lower, with rising defaults (supposedly) already priced in.

Source: FRED

1. In commodities markets, US wheat came under pressure again. More on this later.

2. China's iron ore and steel rebar futures are grinding higher - with no significant fundamental developments to support this trend. Will Beijing make progress in cutting overcapacity in these sectors?

1. Finally, in the muni markets, financial advisors have been moving jittery clients into intermediate munis, where risk-adjusted performance has been difficult to beat.

Source: Ycharts.com

2. Fitch places US Virgin Islands government debt deeper into junk territory. Some suggest that this is the next Puerto Rico. The bonds have been under pressure since June.

Source: Fitch Ratings

Turning to Food for Thought, we have 5 items today:

1. According to a Harvard study, founder-led companies have dramatically outperformed the market. 

Source:  ‏@tanayj, HBR

2. Meat consumption around the world.

Source: @wef

3. Corporate tax rates over time.

Source: ‏@taxfoundation, @kpomerleau

4. The two charts below provide some statistics on US voters: which issues are important (by party) and the breakdown of eligible voters by ethnicity and generation.

Source: @CarrollDoherty

Source: @jensmanuel 

5. American women performed exceptionally well at the Rio Olympics.

Source: @ngreenberg