Some time in the past 3 years, US capital markets – already rigged and broken beyond comprehension by central banks and HFTs – crossed over into the realm of absurdity, but it wasn’t until this Friday that we got official confirmation. That’s when JPMorgan came up with the “Volfefe Index” (remember Covfefe) to quantify Trump’s impact on rate volatility.
When it comes to Trump’s tweeting habit, there are two approaches. One can ignore them, as Asia is increasingly doing, or one can obsess over them and use them as the springboard for violent daily market reversals.
Commenting on the former, last week we said that Asia has starting to ignore Trump’s tweets, for three reasons: First, China doesn’t have easy access to them, since the social media service is banned there; second, the President’s tweets often occur outside of Chinese trading hours, causing them to have less of an effect on Chinese markets than U.S. markets; Finally, the novelty simply seems to be wearing off. Zhang Haidong, a fund manager at Jinkuang Investment Management in Shanghai said: “It’s pointless following him too closely — he might say something today and it will be a whole different story tomorrow. Trading off his tweets alone would be too volatile.”
Indeed, as the next chart shows, the Chinese stock market is becoming increasingly immune to anything the Trump twitter feed unleashes on the world.