Greetings,

We begin with several developments in China.

1. The country's fixed asset investment growth slowed to the lowest level since 2000. Current investment activity is dominated by the government as it tries to target a specific growth rate.

Source: Investing.com

2. One can see the fiscal stimulus in Beijing's official expenditures.

Source: Reuters

3. Regional government tax revenue growth has picked up recently amid improved property investment. It's back to everyone making money on land development deals.

Source:  ‏@fastFT

Source: Deutsche Bank,  ‏@joshdigga 

4. Bloomberg's China GDP tracker shows the overall growth stabilizing. The question, of course, is whether this is sustainable without the fiscal stimulus.

Source: @business

5. China's domestic crude oil production saw the largest year-on-year decline in 15 years.

Source: ‏@JavierBlas2, @business 

6. Monday's yuan drop reignited jitters around the RMB depreciation vs. the dollar. Beijing is trying all it can to stem capital outflows but significant loopholes around capital controls remain.

Source: @barchart

7. China's equities are under pressure again.

Source: @barchart

8. Soy meal futures in China go vertical, with Beijing struggling to contain speculative activity in agricultural futures.

Source: @barchart

1. In Japan, the 15yr JGB yield just went negative. Longer-dated JGB yields all hit record lows. 

2. Bank lending in Japan is growing steadily, suggesting that banks are not hampered by negative rates - as some had feared.

Source: ‏Barclays, @joshdigga

3. Capital investment in Japan seems to be dominated by small and mid-size firms.

Source: ‏Deutsche Bank, ‏@joshdigga

4. The ongoing yen rally (dollar-yen decline shown) is bad news for Abenomics. Is intervention coming?

Source: @barchart

5. As a result of the yen strength, the Nikkei continues to fall - down 23% over the past year (5% in just the last 2 days).

Source: Google

After the Queen's Birthday holiday on Monday, Australian shares are down 2%.

Source: CME Group

1. Now on to the EU, where bank shares have been hammered.

Shares of Greek banks are rapidly reversing the recent rally.

Source: Investing.com

Moreover, Italian bank shares are hitting the lowest levels seen in years. Outside of Brexit, Italian banks present the biggest challenge to the Eurozone/EU in the near-term.

Source: Investing.com

2. Spanish government bond spread to Germany is on the rise again.

Source: @SoberLook

3. Italy's sovereign CDS spread is rising again - to a large extent due to the uncertainties around the banking sector.

Source: @Sunchartist

4. Some member states in the Eurozone continue to struggle with deflation. Here is Slovakia.

5. Swaps-based inflation expectations in the Eurozone hit a new record low. This is an unwelcome news for the ECB.

Source: @fastFT

6. In the UK, the latest Brexit poll shows the 'out' camp widening lead lead over the 'In' crowd. This is causing market jitters globally.

Source: Guardian

Source: @FT

Norway's Riksbank QE and negative rates may have helped worsen the nation's property bubble.

Source: HSBC, @joshdigga 

Now let's look at a few global rate trends.

1. Some suggest that part of the reason for falling longer-term rates in the US is the widening gap between the US and other DM yields.

Source:  ‏@GregDaco, Oxford Economics

2. Globally, government bonds with negative yields just reached a new high.

Source: @ReutersJamie, JPMorgan

3. The 50-year Swiss government bond yield is now lower than the 1-month treasury yield. Of course, we should really be comparing real yields.

Source:  ‏@jsblokland 

4. Apparently, we now have the ‘lowest rates in 5000 years? 

Source: @fastFT, @BofAML

1. In emerging markets, India's CPI came in firmer than forecast on food inflation (7.2% yoy). The RBI is on hold now. This is one of the reasons tracking agricultural commodities is vital.

2. The Mexican peso is pushing toward 19 to the dollar again. Will Banxico have to hike rates to defend the currency? It's a tough situation because inflation remains benign and higher rates could choke off growth.

Source: Investing.com

In the United States, Deutsche Bank published a diagram illustrating the balancing act the Fed has to manage and the effects on various markets.

Source: Deutsche Bank, @joshdigga

Household net worth in the US hits a new record.

Source: @lplresearch

Long-bond futures continue to rally as demand for treasuries remains strong. 

Source: @barchart

Now let's explore the US equity volatility markets.

1. In addition to a sharp move higher in VIX, we've had a spike in VVIX - the volatility of volatility index. It's interesting that this time the spike didn't correspond to a massive equity selloff. Is the vol market pricing in Brexit?

Source:@barchart, h/t @JohnKicklighter: 

2. The S&P500 skew is near all-time highs.

Source: Goldman Sachs

3. The equity vol curve is flattening further (3-month VIX - VIX), which generally indicates market jitters.

Source: Ycharts.com

4. The VIX move we had over the past couple of days is quite large relative to the S&P500 decline over the same period. Once again, is Brexit risk being priced in?

Source: @SOberLook, h/t @MattGarrett3

1. In US equity markets we've had a rough few days for Nasdaq.

Source: @barchart

2. Homebuilders have significantly underperformed over the past 3 days.

Source:Ycharts.com

3.  Smith & Wesson and Sturm Ruger shares jumped sharply after the Orlando tragedy. The political anti-gun backlash is likely to generate more gun sales.

Source: @FT

4. The big event of the day was Microsoft's acquisition of Linkedin. Moody's didn't like this deal very much and may end up cutting Microsoft's AAA rating.

Source: Reuters

Source: Google

5. A spike in the volume of out-of-the-money LinkedIn calls on Friday looks highly suspicious. Was the acquisition news leaked last week? This type of activity is what severely damages confidence in US equity markets.

Source: @stephengandel 

Some have suggested that the spike in Linkedin option activity (above) was part of a bigger trade - an "iron condor." Perhaps. But a full investigation is still in order.

Source: @OptionsHawk, @cheapbeta 

Source: theoptionsguide.com

Next, we have a couple of slides on fund flows.

1. Inflows into short-dated TIPS mutual funds continue at a steady clip. Everyone is waiting for that inflation spike, which remains elusive.

Source: Barclays, ‏@joshdigga 

2. The next chart shows flows into US bonds, equities, and money market funds. The great "rotation"?

Source: Jefferies, ‏@joshdigga

1. In commodities, China's pork demand has investors chasing hog futures.

Source: @barchart

2. This spike in CME milk futures is spectacular - 4% on Monday alone. Not bad for a sleepy commodity.

Source: @barchart

Finally, Bitcoin shoots above $700. Capital outflows from China?

Source: bitcoincharts.com

Turning to Food for Thought, we have 5 items this morning:

1. The deadliest mass shootings in the US.

Source: @Wonkblog,  ‏@JmBadalamenti 

2. On a lighter note, the average movie sequel makes more than eight times the average original release.

Source: @voxdotcom, @JmBadalamenti

3. NYC public schools cutting back on suspensions?

Source: @WSJGraphics, @JmBadalamenti 

4.  EU survey: Should our country help others deal with their problems or mind its own business? 

Source: @pewresearch

5. According to VOX, "for the first time since 1979, America’s cars, trucks, and airplanes emit more carbon dioxide than its power plants".

Source:  @voxdotcom