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Win ^2 Prevail on Win^n

08.28.2018, Tue, Cloudy, Air Polluted

Summary： 美墨协议提振风险资产，Cohen律师改口为其锦上添花。另，FXFI trader 的春天可能回来

Euro Session:

With no apparent catalyst, UST traded in a quite fashion while risks were in a firm tone (Nikkei +0.9%, Shanghai +1.7%). It wa a bank holiday in London, USD Rates will close at 3pm Tokyo (2pm Beijing time)to re-open at 6am New York.

Without UK on the party, Trading was very thin with EU markets of FI and equity opening flat and quietly. But as to FX, EUR and GBP were hit by the story that France’s finance minister Bruno Le Maire said French deficit should stand at around 2.6% of gross domestic product this year compared with an initial target of 2.3%.

At 4:00, GE Aug IFO bounced back sharply which saved EUR and GBP for while. This could be the strongest headline reading since Feb, very close to the peak seen late last year at a broad base. IFO is a soft data with no leading effect. So the market could be right since it was not thrilled too much.

If there could be something extraodinary, it could be Macron says the security of EU should no longer depend on the US. Could he be kidding?

Economy data:

4:00, GE Aug IFO Business climate 103.8 vs 101.8, prior 101.7;

GE Aug IFO Expectation 101.2 vs 98.4, prior 98.2

GE Aug IFO Current Assessment 106.4 vs 105.3 , prior 105.3 revised up to 105.4

US Session:

Early in the NY morning, CNBC reported that, according to Mexican officials, US-Mexico trade talked were wrapped up having reached an understanding on key issues, and that Canada is now open to re-engage. Trump soon after tweeted “a big deal looking good with Mexico!”

US rates sold off overnight on the positive headlines regarding US-Mexico trade deal. The front end selloff was also fanned by the UST supply, with 2yr and 3yr notes trading heavy all session. The belly outperformed in the down trade. The 2yr auction came with a small tail near the lows of the day, only to recover on solid buying in the belly of the curve post auction.

After the worst day of last Tuesday, Trump had his luck back overnight even beyond the Trade treaty. Cohen's lawyer Lanny Davis told the press that he was not sure if Cohen has the true information of Russia collusion, which was totally against what he said only 4 days ago. What's more, he said he did regret about those previous word and should expressed in an explicit way.

1:00, 36bn 2yr went unevently.

Economy data:

Jul. Chicago Fed NAI was 0.13 from 0.48.

Aug. Dallas Fed was 30.9 from 32.3.

Key Data And Events Ahead:

FR IT confidence

US whole sale inventory,confidence

Comments:

Right now, risk-on tone continues from the open in Asia with SPX mini **res holding gains. Could the spring of FXFI traders come soon? There are two positive factors :first, CCAF(short for "counter-cyclical adjustment factor") has emerged again. It should be well know USD/CNY slid from 6.9 to 6.5 in the seven months after yangma introduced its new yuan fixing rule in May 2017 to stem market volatility. It could be a strong signal for our market opening a little faster as one required condition for the truce of trade friction across the ocean. Second, here come the US-Mexico trade treaty , no far for that between US and Canada, then that of US-Europe which is really hard to be get but what Trump need is only "tiny" progress(just now, TRUMP, MERKEL AGREED ON MORE TALKS OVER US-EU TRADE BARRIERS), and at final, Sino-US. Once this kind of scenario comes true, even humble trades could have its day.

As to FI, corporate bonds could be benefited well but the bind for 10yr yield to go beyond 3% is still very high. Generally speaking, a country that has a low savings rate and whose growth depends on borrowing should prefer a low level of uncertainty, since high uncertainty discourages both lenders and borrowers. The birth of US-Mexico trade treaty should not be regarded as US want to compromise , nothing but a trade-off between the risk and return. In my gut, US is in deep need for fund flow to maintain its economy under the background of its economy paradigm shifting from consumption driven to consumption and manufacturing dual driven. Besides, we shall look at Trump’s ability to influence the Fed if the Fed’s balance sheet reduction could end sooner than originally expected In this week.

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近期重要时间点：

9月3日，第二批A股纳入MSCI

9月5日，200bn听证会后申诉材料提交截止日

9月13日，ECB议息

9月18日，EU A50会议

9月20日，EU非正式峰会,日本LDP选举

9月26日，FOMC

9月，日本LDP选举,半岛峰会在平壤

9月27日，意大利提交财政预算案

10月16日，EU A50会议

10月25日,ECB议息

10月31日，BOJ议息

11月6日，美国中期选举开始

11月8日，FOMC

11月11日，美国阅兵 (取消了，说是因为预算问题)

12月13日，ECB议息，EU 峰会

12月20日，FOMC

12月22日，改革开放40周年

2019年3月21日，EU 峰会

2019年3月29日，脱欧谈判截止

Appendix：his t overnight

0827 2102 Thank you to the great @JimBrownNFL32, perhaps the greatest running back of all time, for your wonderful words and support. Since our meeting in New York, African-American UNEMPLOYMENT has reached the LOWEST LEVEL IN HISTORY. You get it!

0827 2142 The Fake News Media worked hard to get Tiger Woods to say something that he didn’t want to say. Tiger wouldn’t play the game - he is very smart. More importantly, he is playing great golf again!

0827 2142 A big deal looking good with Mexico!

0828 0122 Rick Scott of Florida is doing a fantastic job as Governor. Jobs are pouring into the State and its economic health is better than ever before. He is strong on Crime, Borders, and loves our Military and Vets. Vote for Rick on Tuesday!

0828 0122 Congressman Ron DeSantis is a special person who has done an incredible job. He is running in Tuesdays Primary for Governor of Florida….Strong on Crime, Borders and wants Low Taxes. He will be a great Governor and has my full and total Endorsement!

0828 0122 Governor Doug Ducey of Arizona is doing a great job. It would be really nice to show your support tomorrow by voting for him in Tuesdays Primary. Doug is strong on Crime, the Border, and our Second Amendment. Loves our Military & our Vets. He has my full and complete Endorsement.

0828 0212 United States-Mexico Trade Agreement: https://t.co/E1AzveYPli https://t.co/ZYbHt1pD8a

0828 0622 RT @FLOTUS: It was a pleasure having @FirstLadyKenya at the @WhiteHouse today. I enjoyed learning about @BeyondZeroKenya & discussing our shared concerns for the well-being of children. #BeBest https://t.co/MNrXaL7f16

0828 0622 .@FLOTUS Melania and I were honored to welcome the President of the Republic of Kenya, @UKenyatta and Mrs. Margaret Kenyatta to the @WhiteHouse today! https://t.co/ZU5MovNKt8

0828 0922 VOTE FOR RON! https://t.co/80NShvQ73u

Disclaimer：This material was prepared in private name and out of pernaonal hobby,definitely based upon facts and robust analysis with delicate consideration of highly professionality.But with no means to conduct any trade , and before using the contents of this note in any internal or external communication, please ensure you are comfortable and fully aware this could not be sufficient enough as any action base.

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