Similarly, to the past three weeks, the relatively tame changes witnessed on the scorecard for the past week covered up a high level of intraday and intraweek volatility. There were not many economic numbers to chew either but those we saw were indicative of more weakening in the global economy. The highlights of the week were the Jackson Hole Symposium of Central Banks which delivered less in terms of expected easing pre-announcement, judging from D. Trump’s reaction who tweeted that he was not sure who the worst enemy of the nation was between Fed Chairman and the Chinese President. D. Trump was given many occasions to excuse himself, to retract or to refine his thought but he may have brought the law against him one more time. Accusing the Federal Reserve Chairman of being an enemy of the nation is not an accusation to be taken lightly… Too bad he could not “impeach himself” from doing this. L. Kudlow is trying to backpedal for D. Trump tonight, saying those words should not be heard literally… In any case, D. Trump witnessed a Berezina last week which started with the Danish Prime Minister labelling as “ridiculous” his proposition to buy Greenland (which he communicated by Tweet), adding that Denmark could probably not afford to keep Greenland anyway. Perhaps he is not aware that Danish rates are negative as well and that everybody can afford everything these days. Then came the Iceland Prime Minister (another distinguished member of the female elite of world leaders whom he seems to have a difficult relationship with) who declined an invitation from M. Pence (probably to discuss the same thing) and for which Trump took great offense “in the name of America”… (as always he has been very insulting in his own ways but expecting the greatest respect in return). Spiegel had a very enlightening article on the breakdown of US-German relations over the week end. Then on Friday, China announced retorsion measures against the latest US latest tariffs, only minutes after US Treasury Secretary L. Kudlow referred to productive talks taking place with China and literally seconds before Fed Chair Powell took centre stage to address Central Bankers at Jackson Hole. This was a royal “party pooping” orchestrated by China which enraged D. Trump so much that he swiftly tweeted that he would respond to these measures with new measures of his own by the end of the day which he did with an increase of 5% on most existing tariffs. As a result of all this, Friday’s session was a bloodbath; stocks dropped sharply, bonds rallied, credit markets weakened and the dollar, slipped with talks still circling about M. Carney’s speech at Jackson Hole. There was hope over the G7 meeting that D. Trump had second thoughts over the trade war escalation with China but those were immediately “corrected” by the White House which said the only second thoughts D. Trump had was about not raising the tariffs against China even more. For the rest, the G7 went well although it had been decided in advance not to issue a communique this time so as to not communicate disagreements. D. Trump was happy to see UK Prime Minister B. Johnson at his table who did his best at calming D. Trump on the ongoing trade war with China. B. Johnson said “no deal no money” reiterating his intention to use the EUR39bn owed to Europe as a bargaining chip in the Brexit negotiation. The violence between Hong Kong riot police and anti-government protesters escalated on Sunday - one of the most violent nights of pro-democracy demonstrations which began three months ago, Bloomberg also reported. It is not clear what good this will bring to risk markets tomorrow. Over the past week, the S&P500 dropped -1,4% (14,0% YTD) while the Nasdaq100 dropped -1,8% (18,0% YTD). The US small cap index sold off by -2,2% (8,6% YTD). CBOE Volatility Index rallied 7,6% (-21,8% YTD) to 19,87. The Eurostoxx50 gained 0,3% (13,4%), outperforming the S&P500 by 1,7%. Diversified EM equities (VWO) dropped -1,2% (3,1%), outperforming the S&P500 by 0,2%. CSI300 Chinese equity index (ASHR) dropped -0,6% (21,6%). The Dollar DXY Index (UUP) dropped -0,5% (4,2%) largely as a result of Friday’s move while the MSCI EM currency index (measuring the performance of EM currencies vs. the USD) dropped -0,2% (-0,7%) over the past week. USDCNY gained 0,7% (3,2%). Elsewhere in FX, EURGBP dropped -0,4% (1,2%) as hopes remained that the worst is not sure yet for the hard Brexit scenario. 10Y US Treasuries rallied -2bps (-115bps) to 1,54%. 10Y Bunds climbed 1bps (-92bps) to -0,68%. 10Y Italian BTPs rallied -8bps (-143bps) to 1,32%. Gold gained 0,9% (19,1%) while Silver rallied 1,8% (12,5%). Major Gold Mines (GDX) rallied 4,8% (40,5%). Goldman Sachs Commodity Index dropped -0,6% (3,8%). WTI Crude dropped -1,3% (19,3%). 

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