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R.T.M. ~ Frontrunning ~ 11th Ed., Vol.2 ~ Mar 14th - 18th

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#2

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#3
Gerald Celente Predicts “The Panic of 2016.”
Greg Hunter


Published on Mar 13, 2016
What does the top trends forecaster predict for 2016? Celente says, “Here’s the cover of our Trends Journal, and it says “The Panic of 2016.” It is under way. Gold is up over 20% since the beginning of the new year. Look at the banking stocks. They are down. Follow the money, that’s the story. Follow the money, and look at the problems the banks are in . . . There is a commodity crisis going on. I am mentioning this because it all ties in together and going back to the banks. When they started the heroin and cocaine addiction, all that cheap money from heroin and cocaine addiction went into the emerging markets. Yeah, all those resource rich nations borrowing money for nothing, and the banks loaning them more. Now, these resource rich nations . . . around the world borrowed this money in dollars, and their currencies are way down. The banks loaned them the money, they have to pay it back now and . . . they are not going to be able to pay back their debt. Follow the banks, and follow the money.”

Join Greg Hunter as he goes One-on-One with Gerald Celente, the Publisher of The Trends Journal.

All links can be found on USAWatchdog.com:http://usawatchdog.com/feds-cocaine-a...

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#4
Weekly Forex Review - 14th to the 18th of March
Forex Reviews


Published on Mar 12, 2016


Weekly Forex Outlook and Review for the 14th to the 18th of March 2016.

Lot's of potential zones and areas of interest covered this week in the review to look for potential evidence and opportunities in the upcoming market ahead. Some zones being tested right now while others to set alarms for when the price gets to the zone.

Zones and areas of interest covered this week include trend based zones as well as some high probability counter trend based zones.

Thanks for watching and Happy Trading, if you watched this bio do not forget to comment, like and subscribe. Also comment "Happy Trading" below to let me know you read the bio as well.

I appreciate you all. Have a great trading week!
 

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#5
Frontrunning: March 14


Submitted by Tyler Durden on 03/14/2016 06:29 -0500


  • Fed to sit tight on rates at March meet, hint at hikes to come (Reuters)
  • Election setback a 'wake-up call' for Merkel, media and politicians say (Reuters)
  • Germany’s Merkel under renewed attack after populists’ poll success (FT)
  • Temperatures Rise on Eve of Next GOP Contests (WSJ)
  • Carl Icahn setting up son to take his place: sources (Post)
  • Turkey Vows Swift Retaliation After Bomb Kills 37 in Capital (BBG)
  • One of Ankara bombers was female PKK member: Turkish security sources (Reuters)
  • ECB’s Cheap Loans Highlight Rift Among Europe’s Banks (WSJ)
  • Pimco May Have to Face Gross’s Suit After Stormy Exit (BBG)
  • Trump’s Long Trail of Litigation (WSJ)
  • Putin's $50 Billion Oil Cache Gives Russia Luxury to Ignore ECB (BBG)
  • Obama's prisoner clemency plan faltering as cases pile up (Reuters)
  • Inflation Target Draws Fire From All Sides
  • Russia ready to cooperate with U.S.-led coalition in fight for Syria's Raqqa (Reuters)
  • Goldman revamps electronic stock trading to catch rival (Reuters)
  • Maryland police officer slain in ambush, two suspects arrested (Reuters)
  • Apollo Global Management to Acquire Fresh Market (WSJ)


Overnight Media Digest

WSJ

- Venture capital firm Sequoia Capital said it parted ways with long-time partner Michael Goguen in the wake of allegations he sexually abused a woman and failed to follow through on a $40 million settlement. (http://on.wsj.com/24Zeqlj)

- Hewlett Packard Enterprise Co, having backed away from a key portion of the cloud computing-on-demand market, is expanding into cloud services to help companies analyze data such as photos, audio clips and comments on social media. (http://on.wsj.com/1M1n7p1)

- A television reporter and cameraman with the Australian Broadcasting Corp were briefly detained in Malaysia after attempting to interview Prime Minister Najib Razak while he campaigned ahead of a coming state election in the Borneo state of Sarawak. (http://on.wsj.com/24ZccTa)

- Blackstone Group LP is selling a portfolio of U.S. luxury hotels to the Chinese owner of New York's Waldorf Astoria, just months after buying it for $4 billion. (http://on.wsj.com/24Zcauv)

- Chinese smartphone maker Xiaomi Corp is betting on an e-commerce boom in India to help offset slowing sales at home. (http://on.wsj.com/24ZcdGL)

- A powerful car bomb hit a bustling business district in central Ankara Sunday night, killing at least 34 people and wounding 125 others, and showing the threats Turkey faces in its fight with Kurdish separatists and Islamic State militants based in neighboring Syria. (http://on.wsj.com/24ZdQEg)

- Bristol-Myers Squibb Co has sprinted to an early lead in the race to sell a class of cancer treatment by bucking the trend toward precision medicine and sticking to the mass-marketing approach in selling its drug, Opdivo. (http://on.wsj.com/1M1ounv)



FT

* China's Anbang Insurance Group has agreed to acquire Strategic Hotels and Resorts Inc for around $6.5 billion, a few months after private equity firm Blackstone Group LP took the company private.

* UK's Justice Secretary Michael Gove and Labour MP Gisela Stuart have been tasked to head the Vote Leave campaign, a campaign to take Britain out of the European Union.

* British finance minister George Osborne will announce further cuts to publ



NYT

- Democrats in the Senate said they would introduce two bills on Monday to give Puerto Rico broad powers to shed some of its $72 billion of bonds while also giving its public workers' pensions priority over the bonds. (http://nyti.ms/22ex8De)

- U.S. Federal Reserve officials will gather in Washington on Tuesday and Wednesday to debate whether a bumpy start to the year is now in the past, clearing the way for higher interest rates. (http://nyti.ms/1M1oJPx)

- Blackstone Group LP has agreed to sell Strategic Hotels and Resorts to Anbang Insurance Group, in a deal valued at $6.5 billion, according to a person with knowledge of the deal who was not authorized to comment. (http://nyti.ms/1M1oTGN)

- CBS's decision to expand the announcement of the N.C.A.A. men's basketball tournament field to a two-hour program backfired on Sunday when the full field was leaked and circulated online early in the show. (http://nyti.ms/1M1pSqu)



Canada

THE GLOBE AND MAIL

** More than two years after U.S. authorities began investigating Kinross Gold Corp for alleged corruption in Africa, the case remains unresolved, but details of the company's financial activities are starting to leak out.(http://bit.ly/1ppaxGs)

** Brazil's political crisis deepened on Sunday when opposition parties seized the occasion of nationwide anti-corruption demonstrations to push for a change in power. An estimated 1.8 million people took to the streets in peaceful protests across the country, demanding the resignation of President Dilma Rousseff.(http://bit.ly/1poNcEK)

** The federal government is fond of boasting about how its controls on weapons exports are among the strongest in the world, but Canadians are left largely in the dark over precisely what military and security equipment is being shipped to foreign customers - including those with poor human-rights records.(http://bit.ly/1ppaUkn)

NATIONAL POST

** The sudden resignation of longtime Royal Bank of Canada director Joao Pedro Reinhard, who faces a drug-related charge, should mitigate "reputational contagion" at Canada's largest bank, corporate governance experts say.(http://bit.ly/1RgIll1)

** As the Bank of Canada hunts down a candidate to become the first Canadian woman on a banknote, numismatists are pointing out that there's already been one. Princess Patricia, who died in 1974, was the wildly popular daughter of a Canadian Governor General whose portrait was chosen to grace a patriotic $1 note issued in the midst of the First World War. (http://bit.ly/1P7TDAz)



Britain

The Times

* The chief executive of Tesco, Dave Lewis, has warned that the retail sector could come under intolerable pressure unless George Osborne pledges to reform business rates. (http://thetim.es/1Ur9m4p)

* French President Francois Hollande has demanded that EDF press ahead with an 18 billion pound ($25.88 billion) reactor in Britain despite growing misgivings at home over the project.(http://thetim.es/1Ur9II6)

The Guardian

* British retail tycoon Philip Green could be asked to give up 280 mln pounds to save 13,000 British Home Stores staff from having their pensions cut. (http://bit.ly/1Ur7LM0)

* Advertising company WPP will reveal this week that its chief executive, Sir Martin Sorrell, has been handed shares worth 60 million pounds. (http://bit.ly/1Ur7VTp)

The Telegraph

* Be Heard, the new advertising group founded by former Aegis chief executive Peter Scott, is close to announcing the 20 million-pound takeover of the website and apps design agency MMT Digital. (http://bit.ly/1Ur86hK)

* Lombok, the upmarket furniture chain known for its Eastern-inspired dark teak beds and tables, is being put up for sale by the private equity buyer which rescued the retailer from near-collapse seven years ago. (http://bit.ly/1Ur8f4O)

Sky News

* Broadcasters and actors who use a loophole to avoid paying their fair share of income tax are to be targeted in next week's Budget. (http://bit.ly/1Ur8TPM)

* EDF 's chairman Jean-Bernard Levy has said he is "confident" that the 18 billion-pound Hinkley Point C nuclear power station will go ahead and it has the support of both the French and British governments. (http://bit.ly/1Ur965s)

The Independent

* The regulator of the Office for National Statistics needs its own IMF-style agency to police the quality of the ONS's output, according to a government-commissioned report by Sir Charles Bean. (http://ind.pn/1Ur8wog)

* British finance minister George Osborne is being pressed to exempt more small businesses from paying business rates before Wednesday's Budget. (http://ind.pn/1Ur8MDP)


http://www.zerohedge.com/news/2016-03-14/frontrunning-march-14
 

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#6
Central Bank Rally Fizzles: Equity Futures Lower As Attention Turns To "Hawkish Fed" Risk


Submitted by Tyler Durden on 03/14/2016 05:47 -0500


The biggest macro development over the weekend was China's latest "gloomy" economic update, in which industrial production, retail sales and lending figures all missed estimates, however now that we are back to central bank bailout mode, bad news is once again good news, and the Shanghai Comp soared +1.7% among the best performers in Asia on calls for further central bank stimulus while the new CSRC chief also vowed to intervene in stock markets if necessary. In other words, the worse the data in China, the better.

The same of course as true in Europe, where just as Draghi admitted that the 2016 inflation forecast plunged (as we warned in December) and the ECB would not hit its 2.0% inflation target by 2019....





... the ECB also unleashed a massive bond buying rally after Draghi said for the first time ever the ECB would monetize corporate bonds, in a move that has infuriated Germany, and confirms Europe's economy is weaker than ever before as otherwise it wouldn't need this unprecedented support by its central bank.

As a result, the MSCI Asia Pacific Index and the Stoxx Europe 600 Index were headed for their highest closes in two months.





As Bloomberg summarizes the global "deja vu all over again" situation, Central banks are being relied on to revive the global economy after a worsening growth outlook wiped almost $9 trillion off the value of equities worldwide this year through mid-February. The bulk of the stock-market losses have been clawed back, helped by monetary easing in China and last week’s announcement of unprecedented stimulus by the European Central Bank. The Bank of Japan, which adopted a negative interest rate in January, will conclude a policy review on Tuesday and a Federal Reserve meeting ends Wednesday.

“Central banks are going to be dominating market sentiment,” Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion, told Bloomberg Radio. “That could be enough for the risk rally to continue, but I think it is starting to run out of steam. The Fed is going to be front and center.”

And while Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally. Earlier today, Deutsche Bank doubled down on that call as well.

Elsehwere, WTI started the week lower after Iran said over the weekend it plans to boost output to 4MM b/d before joining other suppliers in seeking ways to balance marke, while Saudi crude output was little changed at 10.22mln bpd in Feb vs. 10.23mln in Jan. Not even the ongoing "imminent OPEC meeting" headline farce, where according to flashing read headlines the OPEC producer meeting is now "expected" to take place in April instead of March as repeatedly reported previously, has been enough to push oil higher today.

Market Wrap

  • S&P 500 futures down 0.1% to 2008
  • Stoxx 600 up 0.8% to 345
  • FTSE 100 up 0.5% to 6173
  • DAX up 1.6% to 9990
  • German 10Yr yield down 3bps to 0.25%
  • Italian 10Yr yield down 3bps to 1.3%
  • Spanish 10Yr yield down 2bps to 1.46%
  • MSCI Asia Pacific up 1% to 128
  • Nikkei 225 up 1.7% to 17234
  • Hang Seng up 1.2% to 20435
  • Shanghai Composite up 1.8% to 2859
  • S&P/ASX 200 up 0.4% to 5185
  • US 10-yr yield down 2bps to 1.96%
  • Dollar Index up 0.17% to 96.33
  • WTI Crude futures down 2.1% to $37.68
  • Brent Futures down 1.7% to $39.72
  • Gold spot up 0.4% to $1,256
  • Silver spot up 1.1% to $15.66
Top Global News via BBG

  • Anbang Expands U.S. Hotel Foray With Record $6.5 Billion Deal: Anbang Insurance’s $6.5b agreement to buy 16 U.S. luxury resorts and hotels from Blackstone marks a record transaction for Chinese buyers of American real estate
  • Brent Swings Near $40 as Falling U.S. Rigs Counter Iran Output: U.S. rig count drops 12th week to lowest since Dec. 2009
  • Danaher, Duke Energy, NextEra Energy to Join S&P 100: S&P 500 constituents DHR, DUK, NEE to replace Devon Energy, Anadarko Petroleum, Norfolk Southern in S&P 100 index after close of trading March 18
  • LSE, Deutsche Boerse Deal Could Be Announced Monday, Times Says
  • Morgan Stanley Says Bonds Set to Surge in 2016 Year of the Bull: U.S. 10-yr yield may fall to 1.45% by Sept. 30 report says
  • Airbnb to Let Neighbors Give Feedback on Hosts, ‘Party Houses’: A new tool will let neighbors weigh in with feedback on Airbnb properties nearby, Yasuyuki Tanabe, the head of Airbnb in Japan, said at a government panel in Tokyo on Monday
  • Disney Says ‘Zootopia’ Tops Weekend Box Office on Sales of $50m
  • Trump Switches Florida Rally to Ohio as Protests Shadow Events
  • Hillary Clinton Accuses Donald Trump of Stoking Violence to Win Votes
  • Carl Icahn Said in Talks With Son Brett to Succeed Him: NYP
  • Apollo Global Said to Near Deal to Buy Fresh Market: Reuters: Nearing a deal to acquire Fresh Market for more than $1.3b, Reuters reports, citing unidentified people familiar
  • Energy Transfer Equity Held Talks on Sunoco Sale: Reuters
* * *

Looking at regional markets, we start in Asia where equities tracked Friday's Wall St. gains where stock markets rose to the highest level since early January as they digested the ECB's aggressive measures. Nikkei 225 (+1.7%) advanced with index-giant Fast Retailing gaining nearly 5% as JPY weakness bolstered exporter names, while the largest increase in machine orders for 13 years further added to the optimism. ASX 200 (+0.4%) was led by telecoms and energy after crude posted a 4th consecutive weekly gain. Chinese markets outperformed despite weak China data in which industrial production, retail sales and lending figures all missed estimates, with the Shanghai Comp (+1.8%) among the best performers as the data supports calls for further measures, while the new CSRC chief also vowed to intervene in stock markets if necessary. 10yr JGBs traded higher with prices back above the 151.00 level amid relatively thin trade as the BoJ kicked off its 2-day policy meeting, in which they are expected to keep policy on hold.

Top Asian News

  • China Overseas Buys Citic’s Property Assets for $4.8 Billion: To buy the Chinese residential property assets held by Citic for about 31b yuan ($4.8b); China Overseas will sell 1.1b shares at HK$27.13 each to the Citic cos. as part of deal
  • China Burns Hedge Funds as $562 Million Yuan Bet Turns Worthless: Options on weaker yuan fail to pay out as PBOC intervenes
  • Offshore Yuan Drops as Zhou Says No Need for Major Economy Steps: Investors were expecting more support for growth, analyst says
  • Thailand Passes Korea as Top Nation for Mainland Visitors: Thailand and Japan are attracting more Chinese tourists as South Korea draws fewer
  • India Said to Need an Extra $3.7 Billion in Risk to Deficit Goal: Modi administration to ask parliament for more cash
  • Alibaba Said to Set Fees for Banks on Loan of Up to $4 Billion: Co. is offering 60 bps to lenders committing $200m and above to facility
In Europe, Monday has kicked off where Friday ended, with markets still feeling the full force of Draghi's actions last week as European equities and fixed income markets all reside in the green. Euro Stoxx (+1.2%) continue to gain today, with the ever-turbulent Italian banking sector among the best performers today, while divergence has been seen in commodities, with materials outperforming while energy remains one of the session's laggards. Bunds remain at elevated levels this morning, trading above the 162.00 level and amid no supply today, while this week is set to see supply fall to around EUR 16bIn from the EUR 18.2bIn that hit the market last week.

Top European News

  • German Divisions on Merkel Refugee Policy Laid Bare in Votes: Anti-immigration AfD party surges to record in three elections
  • Safran Shares Fall Most Since Feb. 8 After Margin Forecast: Sees flat adjusted recurring oper. margin 2016-20
  • Aryzta Shares Retreat on Forecast for ‘Erratic’ Revenue Growth: Said revenue missed its own forecasts and growth will be erratic over the next 18 months.
  • Turkey Vows Swift Retaliation After Bomb Kills 34; Lira Weakens: Turkish warplanes struck Kurdish militants in northern Iraq hours after a suicide car bomb killed at least 37 people in the capital, Ankara
  • Swiss Seen Holding Fire as Franc Resists ECB for a Second Time: Durvey shows most economists see SNB leaving rates unchanged
In currencies, it has been a very quiet start to the week, with range bound trade seen in the majors so far. We saw some early selling of AUD/USD and Cable, while EUR/USD drifted lower again, but this flow has been turned on its head as the USD index gives up on what has been a modest recovery. USD/JPY had tested 114.00 in the Asia session, but any hopes of retesting this will perhaps have been dashed in the wake of comments from Japan PM advisor Hamada who sees further BoJ easing unlikely near term with the JPY 'not too strong' at current levels. USD/CAD has been edging higher as Oil has taken a dip, but the upside has been contained well ahead of 1.3300 higher up.

Australia’s dollar fell 0.5 percent, pacing declines among the currencies of resource-exporting nations, after Chinese industrial output and retail sales data over the weekend added to signs of a slowdown in the world’s second-biggest economy. Malaysia’s ringgit lost 0.4 percent as a falling oil price dimmed prospects for Asia’s only major net exporter of crude. The yuan fell 0.16 percent in Hong Kong’s offshore market and was little changed in Shanghai.

Turkey’s lira weakened 0.5 percent after a suicide car bomb in Ankara killed at least 34 people, the capital’s third attack in five months. The rand slid 0.7 percent, leading losses among major currencies. South Africa’s Directorate for Priority Crime Investigation wants information from Finance Minister Gordhan on what he knew about a so-called rogue unit in the tax agency that investigated political leaders, the Sunday Independent newspaper reported, citing a letter sent by the police unit’s head to the minister’s lawyers.

The Egyptian central bank devalued its pound by almost 13 percent at an “exceptional” sale of dollars on Monday. The central bank said it sold $198.1 million to local lenders at 8.85 pounds per dollar. That compares with a previous exchange rate of 7.73 pounds.

In commodities, Brent and WTI started the session fairly flat and then fell roughly 1.7%. This comes as Saudi crude output was little changed at 10.22mln bpd in Feb vs. 10.23mln in Jan, and also after Iran said it plans to boost output to 4 million barrels a day before it will consider joining other suppliers in seeking ways to rebalance the global crude market.

Gold and other precious metals on the other hand have risen slightly, with gold still rising toward 1260.00/oz with the next notable resistance level at 1260.50.

Copper rose 0.3 percent in London, rebounding from earlier losses. Gold gained 0.5 percent, after retreating 1.8 percent on Friday. The precious metal is far from being out of favor, with money managers holding the biggest net-long position in related futures and options in more than a year, according to Commodity Futures Trading Commission data.

There is no tier 1 economic data in the US today.

Overnight Bulletin Summary from RanSquawk and Bloomberg

  • European equities start the week on the front foot as financial names lead the way higher in the wake of last week's ECB policy announcements
  • A very quiet start to the week, with range bound trade seen in the majors so far with the USD giving up on its initial modest recovery
  • Treasuries higher overnight, global equity markets rally; crude drops, China’s new securities regulator said it was too early for state rescue funds to leave market and vowed to step in “decisively” if needed to curb panic; this week brings FOMC rate decision on Wednesday, no hike expected.
  • Even though the short-term rates market is priced for unchanged rates at this week’s FOMC meeting, it’s still expected to react as it adjusts to the central bank’s updated Summary of Economic Projections (SEP), known as the “dots”
  • Another sign of how crucial buybacks are in propping up the bull market as it enters its eighth year -- S&P’s 500 Index constituents are poised to repurchase as much as $165 billion of stock this quarter, approaching a record reached in 2007
  • Oil fell from a three-month high as Iran plans to boost output by about a third to 4 million barrels a day before joining talks to freeze production. Futures dropped as much as 2.5% in New York
  • Dilma Rousseff’s future as president of Brazil was cast into further doubt as millions of protesters, wearied by scandal and recession, demonstrated peacefully for her ouster in some of the largest rallies in the country’s modern history
  • Chancellor Merkel faces an increasingly splintered political landscape after voters punished her party and lifted the anti-immigration Alternative for Germany to its best showing yet in three state elections dominated by the refugee crisis
  • Industrial production in the euro area jumped 2.1% in January from December, its strongest monthly performance in more than six years, boosted by energy and capital goods
  • Since hitting a 3 1/2-year low just a month ago, European banks have rebounded 28%, with Greece’s Eurobank Ergasias SA, Italy’s UniCredit SpA and Deutsche Bank AG among the top performers
  • Foreign buyers boosted their holdings of Turkey’s sovereign debt by the most in 19 months in February, finding it hard to resist the highest yields in emerging Europe, encouraged by a slowdown in inflation and the ECB stimulus outlook
  • No IG corporates priced Friday; weekly volume $44.595b, March $86.42b, YTD $380.67b; $800m HY priced Friday, $3.225b last week, $14.025b MTD
US Event Calendar

  • No events
Central Banks

  • TBA: Bank of Japan policy rate, est. -0.1% (prior -0.1%)
  • 3:00pm: Reserve Bank of New Zealand speaks in Auckland
  • 8:30pm: Reserve Bank of Australia meeting minutes
Jim Reid concludes the overnight wrap

2016 for European credit investors so far reminds me of Season 9 of Dallas which was completely wiped from existence and turned into Pam Ewing's bad dream in a plot devise to allow Bobby Ewing to return from the dead having been run down by a car at the end of Season 8. I remember crying at his death as a 10 year old just as I cried a few years earlier at JR Ewing being shot as my nickname at school was JR given my initials. I therefore felt his pain pretty hard. Anyway Draghi has put on his ten gallon hat and has helped write off a nightmare start to 2016 as a bad dream which investors have now awakened from.

To give some context to this turnaround, in the CDS world iTraxx Europe tightened -17bps on Friday (-7bps Thursday) and 58bps off the 2016 wides to now be 10bps tighter on the year. Crossover was 50bps tighter Friday (-18bps Thursday), 178bps off the 2016 wides and 6bps tighter YTD. Even iTraxx Fin Senior has edged just tighter on the year after Friday's 17bps rally. Sub Fins are back to 'only' 15bps wider in 2016 after 34bps of tightening on Friday. In the more important cash market, EU iBoxx non-financial IG corporates (closest to the universe the ECB will potentially pick from) were 11bps tighter on Friday which was the best day since 2011 and in the top 10 of best days of the near 4300 business days since the Euro started in 1999. This index is now 5bps tighter on the year and 34bps off the wides in mid-February. This index is still historically quite wide and we'd still expect notable tightening as we discussed in our note published Friday morning (see the link at the bottom or in your mail boxes at around 5.30am Friday).

One of the things we discussed in our 2016 outlook was that although central banks have limited ability to influence economies in what is a near liquidity trap, we still thought they could move markets this year in spite of concerns they were running out of bullets. The rationale was that with inflation so low they had plenty of room to be aggressive. The ECB last week delivered on this and this week it's over to the BoJ (tomorrow) and the Fed (Wednesday). While the BoJ will likely take pause for breath after the controversial decision to move into negative rate territory last meeting, Kuroda's press conference will be widely anticipated. As will Yellen's after the FOMC will almost certainly stay put. Financial conditions have eased since the last meeting so we would expect the Fed to retain optionality to hike in June whilst acknowledging the fragilities around. Data dependency will likely be the key theme. Overall we still think 2017 will be more of a challenge for the economy and central bankers than in 2016 where inflation is still low enough for the plates to be spun a little more.

Speaking of challenges, China data is proving difficult for analysts to get their head round following a mixed set of releases over the weekend. The negative side of things saw both retail sales (down five-tenths to 10.2% yoy; vs. 11.0% expected) and industrial production (down seven-tenths to 5.4% yoy; vs. 5.6% expected) fall in February relative to the prior month, while growth of funds available for fixed asset investment was also noted as slowing. On the flip side the big surprise was a rebound in fixed asset investment, driven by the rise of property investment. Investment grew 10.2% yoy last month (vs. 9.3% expected) which was up two-tenths from January. DB’s Zhiwei Zhang also highlighted that other indicators in the property sector rebounded as well including the value of property sales, land sales and new housing starts – all of which is suggesting that the momentum in property investment may continue at least in the next few months.

Taking a look at our screens this morning it’s been a strong start for much of Asia this morning with bourses following the lead from those gains in Europe and Wall Street on Friday. It’s China which is leading the way however with the Shanghai Comp (+2.58%) and Shenzhen (+4.04%) both rallying into the midday break. Elsewhere, there’s gains also for the Nikkei (+1.79%), Hang Seng (+1.32%) and ASX (+0.34%). There’s been a big rally for credit markets also. ITraxx Aus and Asia indices are currently 10bps and 5bps tighter respectively. US equity index futures are flat currently, along with Oil. Asian currencies are generally outperforming while the Turkish Lira is a touch weaker following those disturbing reports yesterday of a blast in the Turkish capital of Ankara.

Also of note from the weekend were the German regional elections, where the big news is that of some signs of diminishing support for German Chancellor Merkel’s CDU party. Instead, it’s the rightwing populist forces which appear to have come out on top, with the anti-immigration Alternative for Germany (AfD) party in particular gaining notable support. As per the FT, Merkel’s CDU party has failed in its attempt to claw back the majority in the Baden-Wurttemberg and Rhineland-Palatinate while projections are also suggesting that the party will fail to garner enough votes to create a viable coalition in Saxony-Anhalt. With the refugee crisis in full debate and clearly a major factor in the results, it’s the AfD party which has made the most headway and is projected to win 24% of the vote in Saxony-Anhalt as well as exceeding expectations in Baden-Wurttemberg (15%) and Rhineland-Palatinate (12%). The party is currently projected to be presented in eight of Germany’s 16 regional assemblies. Given similar results in other parts of Europe (most recently in France with the National Front), political risks in Europe are still very much a factor to keep an eye on.

A quick recap of the rest of Friday’s news and price action. One market worth keeping an eye in the wake of the ECB is the new issue corporate market in Europe and, while quiet from an overall volume perspective on Friday, a small deal (€600m) from French auto component manufacturer Valeo caught the eye with the order book said to have closed above €7bn. Evidence then perhaps of what the presence of a new large potential IG bond buyer (in the ECB) can do for demand in the primary market now then.

So while credit markets caught the eye with those huge moves tighter, equity markets bounced back in style with big moves of their own, in stark contrast to the price action which concluded on Thursday. With financials driving the moves, the Stoxx 600 finished with a +2.62% gain to close at its highest level since late-January, while peripheral markets were the big outperformers with the IBEX and FTSE MIB up +3.69% and +4.80% respectively. Those gains also helped the S&P 500 finish up +1.64% with the month of March proving to be a fruitful one so far for the US equities (index has now closed higher on 8 of the 9 trading days). A recovery for Oil also (WTI +1.74%) did little to dampen the mood with the IEA even going as far as saying on Friday that prices may have ‘bottomed out’ and that ‘there may be light at the end of what has been a long, dark tunnel’.

Base metals had a good day too (Copper +1.64%, Zinc +2.07%, Nickel +0.86%) while unsurprisingly it was emerging market and commodity-sensitive currencies which led the way in the FX space. European sovereign bond markets staged an impressive rally also. 10y Bunds ended the session down over 3bps in yield at 0.269% (although are still higher than where they were pre-ECB) while in the periphery we saw a massive rally for similar maturity bonds in Italy (-13.3bps), Spain (-9.9bps) and Portugal (-21.3bps). Moves in the US Treasury market were more reflective of traditional risk-on mode with the benchmark 10y finishing up over 5bps higher in yield at 1.985% and the highest now since the 27th January. Fed fund futures crept up as a result too with the probability of a hike by the end of the year now at 77% (from 74%) – a notable swing from the lowly 11% priced in during the February lows.

There was little data to conclude the week and certainly not enough to impact the price action. In the US the import price index reading for February was a tad less deflationary than expected (-0.3% mom vs. -0.7% expected). Prior to this we learned that there was no change to the final February CPI reading for Germany at +0.4% mom and so confirming a leg lower in the YoY rate to 0.0% (from +0.5% in January). Elsewhere in Italy the January industrial production reading was a lot more robust that expected at +1.9% mom (vs. +0.7% expected), which lends some support to today’s wider Euro area figure.

http://www.zerohedge.com/news/2016-...utures-lower-attention-turns-hawkish-fed-risk
 

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#9
Asian Metals Market Update
By: Chintan Karnani, Insignia Consultants
At the beginning of the year, the internet media was filled with hyper bearish views on gold. Sell gold was the universal voice, Short sellers of gold where there everywhere. As gold started to rise, these short positions started getting converted into long positions. Movement in currency market, global uncertainty and US interest rate expectations have been the key drivers for gold so far in the first quarter of this year. The period between 15th March and end June will the real big test for gold bulls. Either the stratosphere or Marina’s trench (lowest point on earth).
 

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#11
All Eyes On The Fed: Key Events In The Coming Central Bank-Dominated Week


Submitted by Tyler Durden on 03/14/2016 08:49 -0400


Last week it was all about the ECB, which disappointed on hopes of further rate cuts (leading to the Thursday selloff) but delivered on the delayed realization that the ECB is now greenlighting a tsunami in buybacks (leading to the Friday market surge). This week it is once again all about central banks, only this time instead of stimulus, the risk is to the downside, with the BOJ expected to do nothing at all after the January NIRP fiasco, while the "data dependent" Fed will - if anything - hint at further hawkishness now that the S&P is back over 2,000.

Here are the key upcoming events, summarized by DB's Jim Reid:

  • It's a quiet start to the week today with the only data of note the Euro area industrial production print for January where following the regional readings we saw last week, expectations are for a robust rise.
  • Tuesday kicks off in Japan where we'll get the important BoJ meeting first thing (no change expected), with Kuroda due to speak after. The European session consists of the final February CPI print for France along with Q4 employment data for the Euro area. The US calendar finally kicks into gear tomorrow after a bit of a lull of late, with February retail sales (expected to be -0.1% mom at the headline, +0.2% mom at the core), February PPI (-0.1% mom headline decline expected), empire manufacturing, NAHB housing market index and January business inventories data all out.
  • Turning to Wednesday where the European session kicks off with UK employment data for January. That's before we turn to a bumper US session again with February CPI (headline expected at -0.2% mom, core +0.1% mom), building permits, housing starts, industrial and manufacturing production and finally the all important FOMC meeting conclusion.
  • Moving to Thursday where we're back in Japan again for the February trade numbers. In Europe on Thursday there's more Central Bank focus with the BoE decision, while data-wise the final revision to February CPI for the Euro area is due. In the US on Thursday we've got initial jobless claims, the Philly Fed business outlook, JOLTS job openings and the Conference Board's leading index for February.
  • We close out Friday with a quieter session for data. Euro area labour costs for Q4 and German PPI is due in the morning, before the flash March University of Michigan consumer sentiment survey draws to a close a busy week for the US
Away from the data we'll hear from the Fed's Dudley, Rosengrean and Bullard all on Friday at various stages. There's little in the way of ECB speak, but we do have UK Chancellor Osborne due to deliver his budget on Wednesday. We'll also hear from China Premier Li Keqiang on Wednesday who is due to conclude the NPC. Finally the US Presidential race continues with another 6 primary's due.

The key US events summarized in this handy table from BofA:





An the full G-5 weekly calendar courtesy of SocGen:



Source: DB, BofA, SocGen


http://www.zerohedge.com/news/2016-03-14/all-eyes-fed-key-events-coming-central-bank-dominated-week
 

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#12
RANsquawk Week Ahead - 14th March 2016
RAN squawk


Published on Mar 14, 2016
 

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#16
It’s All About DUST
By: Captain Hook
This one-way and short-term stretched rally in precious metals is all about DUST. (See here) It’s all about the insane behavior of hedgers and speculators watching what is a very overbought condition in the sector, and buying DUST to capitalize on the inevitable and pending correction that never comes. (i.e. because they continue to increase the open interest in DUST while driving the put / call ratio down, which is bullish because this is an inverse fund.)


Assets and Liabilities...
By: Bill Holter
It is this very simple core reason that gold (and silver) which are no one else's liability will be seen for what they truly are. Real money, the ultimate in real assets and no one else's liability! There is a very big difference between an asset and a liability, the world is about to "schooled" on this fact!


Gold Seeker Closing Report: Gold and Silver Fall About 1% by the Close
By: Chris Mullen, Gold-Seeker.com
Gold gained $10.76 to $1260.96 at about 6AM EST, but it then drifted back lower for most of the rest of trade and ended near its late session low of $1229.31 with a loss of 1.33%. Silver slipped to as low as $15.283 and ended with a loss of 0.91%.
 

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#17
Frontrunning: March 15


Submitted by Tyler Durden on 03/15/2016 07:16 -0400

  • Bank of Japan Holds Fire on Stimulus, Negative Rate Unchanged (BBG)
  • Donald Trump Aims for a Knockout in Tuesday Primaries (WSJ)
  • Global Stocks Fall on Commodities Decline, Ahead of Fed Meeting (WSJ)
  • Oil prices fall as clouds gather over supply picture (Reuters)
  • Many Shale Companies Are Unable to Ramp Up Oil Output (WSJ)
  • Valeant Slashes Guidance, stock crashes (WSJ)
  • Fed to sit tight on rates at March meet, hint at hikes to come (Reuters)
  • Big Money Gets On China's Lifeboats (BBG)
  • Republican Party gears up to fight Obama court nominee (Reuters)
  • BOJ Move Backfires as 0.001% Deposits Lure Cash of Fund Managers (BBG)
  • VW Whistle-Blower’s Suit Accuses Carmaker of Deleting Data (NYT)
  • Apple fight could escalate with demand for 'source code' (Reuters)
  • Near-Record Cash `Comfort' for Canada Oil Firms Amid Price Rout (BBG)
  • The Koch Brothers Have Started a New Family Office to Quietly Invest Their Fortune (BBG)
  • Stanley Fischer and Lael Brainard Are Battling for Yellen’s Soul (BBG)
  • Ex-Sequoia Partner Goguen Calls Sex-Abuse Suit Extortion (BBG)
  • State TV shows Russian troops in Syria packing up (Reuters)
  • Cost-Cutting Shale Drillers Limit Potential for Oil Rally (BBG)
  • U.S. Investors Have Capitulated on Europe at the Worst Possible Time (BBG)


Overnight Media Digest

WSJ

- Chinese insurance company Anbang Insurance Group Co lobbed in a roughly $13 billion bid for Starwood Hotels & Resorts Worldwide Inc, an effort to break up the hotelier's pending sale to Marriott International Inc and the latest sign of China's growing appetite for overseas takeovers. (http://on.wsj.com/1Rj9Xjd)

- North Korean leader Kim Jong Un claimed a key advance in ballistic missile technology and called for further missile and nuclear warhead tests "in a short time", the latest in a string of recent threats aimed at creating fear of war in the U.S. and South Korea. (http://on.wsj.com/1Rja1Q7)

- Sony Corp has reached an agreement with the estate of Michael Jackson for Sony to obtain ownership of Sony/ATV Music Publishing LLC by purchasing the estate's 50% stake. (http://on.wsj.com/1RigWPJ)

- Bottles of Honest laundry detergent say they don't contain SLS, a chemical that the consumer-products company says can irritate skin. But Earth Friendly Products LLC, the company that makes the detergent for Honest, dropped such marketing claims from its own website last year. (http://on.wsj.com/1RjaaDb)

- Avon Products Inc said Monday that it would eliminate around 2,500 jobs and move its corporate headquarters to the United Kingdom, the latest step in a years-long turnaround of the struggling beauty company. (http://on.wsj.com/1RjadPm)

- Goldman Sachs Group Inc's investment-management division said it would buy Honest Dollar, an online retirement-savings startup that is barely a year old, consisting of portfolios of low-cost exchange-traded funds to small companies, charging $8 to $10 an employee a month. Terms of the deal were not disclosed. (http://on.wsj.com/1RjahhZ)

- JPMorgan Chase & Co is trying to sell new securities that would pass along most of the credit risk on $1.9 billion in mortgages, in an attempt to revive a debt market that has been largely left to the government since the financial crisis. (http://on.wsj.com/1RjamCb)



FT

China's Anbang Insurance Group has challenged Marriott International Inc's merger with U.S. hotel operator Starwood with a $12.8 billion cash offer.

Russian President Vladimir Putin announced on Monday that "the main part" of Russian armed forces in Syria would start to withdraw.

Brussels is urging European banks to stay away from Russia's first sovereign bond issue, creating doubts about the viability of the offering.



NYT

- A fired Volkswagen AG employee in Michigan contends that employees erased electronic files as U.S. officials were investigating its emissions cheating. (http://nyti.ms/1RihVPN)

- China's Anbang Insurance Group hopes to expand its hotel empire with an unsolicited bid to acquire Starwood Hotels & Resorts Worldwide's, hoping to derail Starwood's $10.8 billion cash-and-stock merger with Marriott International Inc that is set to be considered by shareholders of both hotel operators this month. (http://nyti.ms/1QTxkTk)

- As China's economy slows after more than two decades of breakneck growth, strikes and labor protests have erupted across the country. Factories, mines and other businesses are withholding wages and benefits, laying off staff or shutting down altogether. Worried about their prospects in a gloomy job market, workers are fighting back with unusual ferocity. (http://nyti.ms/1Riin0C)

- Goldman Sachs Group Inc is adding a little robo to its investment management business, buying Honest Dollar, a digital retirement savings tool aimed at millions of small-business employees who do not have access to traditional employer-sponsored savings plans. (http://nyti.ms/1Riiwkt)

- The Obama administration is expected to withdraw its plan to permit oil and gas drilling off the southeast Atlantic coast, yielding to an outpouring of opposition from coastal communities from Virginia to Georgia but dashing the hopes and expectations of many of those states' top leaders. (http://nyti.ms/1QToghl)



Canada

THE GLOBE AND MAIL

** The largest shareholder in Postmedia Network Canada Corp is soliciting offers to sell its stake in the media company, signalling a potential shift in the ownership of Canada's biggest chain of newspapers. (http://bit.ly/1pk4Nx5)

** Federal prison authorities are under criminal investigation for possible illegal surveillance, The Globe and Mail has learned. The probe centres on Correctional Service Canada's use of a dragnet surveillance device inside a penitentiary. (http://bit.ly/1Uvs8rs)

NATIONAL POST

** London's city council has lambasted Bombardier Inc for "duping" the British capital into awarding it a train-signalling contract that it was incapable of delivering, creating "nothing short of a disaster" for the London Underground. (http://bit.ly/1UvsKNB)

** Low oil prices could cost Canada's federally owned mortgage insurer C$7 billion ($5.23 billion) a year in lost profits, though the organization's top executive said Monday the oil price collapse will not drain its capital to unsustainable levels. (http://bit.ly/1RiCUlI)

** Airfares are falling across the globe but that isn't affecting the financial performance of North America's airlines, according to a new report by the International Air Transport Association. (http://bit.ly/1V8KLSG)



Britain

The Times

The chief executive of Britain's biggest supermarket, Tesco Plc, has warned that the retail sector could come under intolerable pressure unless British finance minister George Osborne pledges to reform business rates. (http://thetim.es/1QS4WCv)

Shares of London Stock Exchange Group Plc hit a record high Monday as expectations grew that it will reveal the details of an agreed merger with Deutsche Boerse AG within days, valuing the combined group at more than 20 billion stg. (http://thetim.es/1V7QJmw)

The Guardian

Weaker growth and a deterioration in public finances will force the Treasury to make an additional 4 billion stg of savings by the end of the current parliament, British finance minister George Osborne has said. (http://bit.ly/1QWo135)

Fever-Tree, the supplier of premium tonic water and other carbonated mixers, is toasting a surge in profits after it won new business with Marks and Spencer Group Plc and British Airways. (http://bit.ly/1LndBg2)

The Telegraph

Supporters of Brexit are more likely to vote in the forthcoming referendum which could give the Leave campaign a decisive edge in the final result, a new Telegraph poll suggests. (http://bit.ly/250Ooya)

Iran has vowed to resist a move to cut oil production as its output soared by the largest monthly amount in nearly 20 years. (http://bit.ly/1UceKtk)

Sky News

Royal Bank of Scotland Group Plc is to cut around 550 jobs in the UK as it moves away from offering face-to-face advice to automated services. (http://bit.ly/1QTzzYb)

British people on low incomes will be eligible for a bonus of up to 1,200 stg over four years if they put money away in a new savings scheme, Prime Minister David Cameron has announced. (http://bit.ly/1Mjb01l)

The Independent

British Chancellor of the Exchequer George Osborne has been warned that he risks damaging the struggling UK economy with another round of spending cuts. (http://ind.pn/1QYVRo2)


http://www.zerohedge.com/news/2016-03-15/frontrunning-march-15
 

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#18
Bear Market Rally Fizzles: Global Stocks Down On BOJ Disappointment; Oil Slides For 2nd Day


Submitted by Tyler Durden on 03/15/2016 06:48 -0400


Was that it for the great February/March bear market rally?

After soaring by 200 S&P point from the February 11 lows, the S&P 500 appears to have finally hit a resistance at a point where GAAP P/E is now a frothy 23x, and where even Goldman says the S&P500 is overvalued based on conventional market valuation metrics. Perhaps it was the fundamentals finally catching up, or perhaps it was disappointment that the BOJ added nothing new to the stimulus menu, after last week's Draghi's bazooka, and coupled with the stunning announcement by China it was willing to launch a Tobin Tax, a move that confirms that under the surface China's capital flight is accelerating, overnight global markets and US equity futures have dropped while the yen jumped the most in a week.

What is surprising, is that not even a week after Draghi's bazooka, some are already concerned it won't be enough: "Monetary policy does not work without fiscal reform," Brett McGonegal, chief executive officer of Capital Link International, told Bloomberg TV. "You can keep the monetary stimulus going, but if you’re not changing anything and there’s no reform going on, you’re at this point where it’s not going to work."

Also notable is that oil has continued its decline for the second day, and at last check WTI was down $1, or over 2% - the lowest price in a week - as focus returns to the market oversupply, Russia signalling Iran won't join a production freeze (which means neither will Kuwait, and likely most other OPEC members) and today's API inventory data today which will forecasts another big inventory build at Cushing. As a result, there has been notable weakness among commodities, with currencies of resource-exporting nations sliding as copper and gold prices fell, while iron ore, last week's record highlight short squeeze, plunged the most in eight months.

"Market participants now appear to be paying greater attention to the current oversupply again," Commerzbank analyst Eugen Weinberg says in a note. "The primary focus is on Iran, which for understandable reasons is refusing at the current time to sign up to any agreement to cap production."

Adding more pressure on the rally, Bloomberg explains that while world equities have staged a comeback since reaching a two and a half-year low in mid-February, "so far there are few signs that monetary easing in China, Europe and Japan is pulling the global economy out of a slump. The BOJ’s decision to maintain policy was forecast by most economists and the authority said it’s prepared to ease further if needed to revive inflation expectations. The European Central Bank announced unprecedented stimulus last week, while the Federal Reserve will conclude a review on Wednesday and the Bank of England a day later."

“Monetary policy does not work without fiscal reform,” Brett McGonegal, chief executive officer of Capital Link International, told Bloomberg TV. “You can keep the monetary stimulus going, but if you’re not changing anything and there’s no reform going on, you’re at this point where it’s not going to work."

But as we wrote yesterday, the one event that will truly make or break the market is tomorrow's FOMC announcement: if Yellen turns overly hawkish and there is no major revision to the dots, or - don't even think it - the Fed shocks the market and hikes another 25 bps, then we go right back to square one, where the market was in December of 2015, terrified every time China sneezes.

Market snapshot:

  • S&P 500 futures down 0.6% to 1998
  • Stoxx 600 down 0.9% to 342
  • FTSE 100 down 0.6% to 6137
  • DAX down 0.3% to 9956
  • German 10Yr yield up 1bp to 0.29%
  • Italian 10Yr yield up 2bps to 1.32%
  • Spanish 10Yr yield up 3bps to 1.49%
  • S&P GSCI Index down 1.3% to 322.9
  • MSCI Asia Pacific down 0.9% to 127
  • Nikkei 225 down 0.7% to 17117
  • Hang Seng down 0.7% to 20289
  • Shanghai Composite up 0.2% to 2864
  • S&P/ASX 200 down 1.4% to 5111
  • US 10-yr yield down 2bps to 1.93%
  • Dollar Index up 0.1% to 96.72
  • WTI Crude futures down 2.7% to $36.18
  • Brent Futures down 2.9% to $38.38
  • Gold spot down 0.1% to $1,234
  • Silver spot up less than 0.1% to $15.35
Global Top News

  • Avon Plans to Move Headquarters to U.K. and Cut 2,500 Jobs: Will generate one-time expenses of ~$60m in 1Q, expects to generate savings of as much as $70m from the cuts by 2017
  • Kuroda Holds Fire on Stimulus as Japan Digests Negative Rate: BOJ kept the target for increasing the monetary base unchanged, and left benchmark rate at minus 0.1%
  • Apollo Said to Seek $700 Million for CLO Firm as New Rules Loom: New firm will issue collateralized loan obligations, as part of its effort to comply with rules designed to curb excessive risk-taking by managers of the vehicles, according to 2 people with knowledge
  • Sony Buys Jackson Stake in Music Venture for $750 Million: Co. exercised right to acquire partner’s stake
  • Brookfield, Qube Join Forces in A$9.1 Billion Asciano Bid: Former rival groups led by Brookfield Asset and Qube joined forces to buy Asciano in a A$9.05b ($6.8b) bid
  • U.S. Steel Vows to Escalate War on Imports If Duties Fall Short: CEO Longhi vows to file 201 case if final penalties fall short
  • Cliffs Natural Investors Sue for Being Shut Out of Debt Swap: Investors say Cliffs Natural has two classes of bondholders
  • U.S. Ethanol Glut Begins to Test Limits of Storage Capacity: Kinder Morgan rerouted deliveries away from Illinois terminal
  • Herbalife Spent $700,000 Protecting Its CEO From Threats in 2015: CEO faced threats to his well-being after Bill Ackman began accusing the company of being an illegal pyramid scheme
  • Outerwall Rises 9% Post-Mkt on Strategic Alternatives, Div Boost: Hires Morgan Stanley for strategic and financial alternatives
  • Question Looming Over Aubrey McClendon Crash May Go Unanswered
  • GM Offers Rentals to Lyft Drivers Accelerating Challenge to Uber
  • Trump Victories in Key Races Could Vanquish Kasich, Rubio
  • JPMorgan Said to Prepare to Sell $1.9b RMBS: WSJ: Expected to price residential mortgage-backed deal over next 2 weeks; would hold 90% of the deal, WSJ reports
  • Amazon Set to Launch Cloud Migration Service: WSJ: Thomas Publishing to transport data from own servers to Amazon’s data centers, WSJ reports
  • U.S Govt May Withdraw Plan for SE Atlantic Coast Drilling: NYT
Looking at regional markets, Asian stocks traded negative following Wall St.'s lacklustre lead amid weakness in commodities, while Japan reacted to the BoJ decision to keep the policy unchanged. Nikkei 225 (-0.7%) was pressured as JPY strengthened following the BoJ decision to leave policy unchanged while also dropping its reference regarding deeper cuts into negative territory. Energy and basic materials underperformed in the ASX 200 (-1.4%) after commodity prices declined. Shanghai Comp (+0.2%) completed the somber tone with materials underperforming, while the PBoC kept its liquidity injections reserved and weakened the reference rate. 10yr JGBs traded lower and fell below 151.00 amid a lack of demand and disappointment from a lack of BoJ action.

BoJ kept policy steady with the annual rise in monetary base at JPY 80trl and interest rates held at -0.10% as expected.

  • BoJ voted 8-1 to maintain monetary base and voted 7-2 to maintain its negative rate.
  • BoJ said that additional easing will happen if required but removed phrase regarding cutting interest rates deeper into negative territory if deemed necessary.
PBoC sets CNY mid-point at 6.5079 vs. close. 6.5015 (Prey. mid-point 6.4913), injects CNY 20bIn via 7-day reverse repo.

Top Asian News

  • Foxconn Said to Delay Sharp Deal for Clarity on Quarterly Result: Delaying finalization of its deal for Sharp to get a clear understanding of Sharp’s performance in the current qtr, increasing the chances an agreement won’t be reached this month, according to people familiar with the matter
  • China Said to Draft Currency Transaction Tax to Damp Speculation: Initial rate of levy may be kept at zero, people familiar said
  • Bangladesh Central Bank Chief Ready to Quit Over Cyber Heist: Atiur Rahman offers to resign
  • Singapore Developers Post Lowest New Home Sales in 14 Months: Builders sold 301 units in Feb., -7% m/m
  • Day of Reckoning Coming for India’s ‘Pigs With Lipstick’ Lenders: Central bank audit ending March 31 to uncover more bad debt
European markets follow on from Asia to see equities trade in the red this morning, with dampened sentiment apparent across asset classes. In terms of the session's laggard's, financials, material and energy names underperform , as the likes of Anglo American (-9.6%) and BHP Billiton (-5.8%) are among the worst performers in Europe. Despite the edginess in equities, fixed income have done their own thing for much of the morning, trading lower by around 20 ticks and around 161.50. Ultimately, price action could remain relatively rangebound as participants look ahead to today's tier 1 data releases which include US Retail Sales, PPI Final Demand, Empire Manufacturing and Business Inventories.

Top European News

  • Legal & General Full-Year Profit Rises on Retirement Revenue: 2015 oper. profit GBP1.46b vs est. GBP1.47b; Solvency II ratio was 169%, based on a surplus of GBP5.5b
  • Antofagasta Scraps Dividend as Metal Rout Erases Most Profit: Net income ex-some items fell to $5.5m from $422.4m yr earlier, dividend scrapped as interim payment exceeds 35% payout ratio
  • Sainsbury Joins Listed Supermarket Rivals Back in Growth Mode: For the first time since 2011, LFL sales are rising at Sainsbury, Tesco and Morrison; Sainsbury 4Q LFL sales rose 0.1%
  • Russia Begins Syria Withdrawal as Putin Puts Onus on Assad: Jets have started to return to Russia, Defense Ministry says
  • Traders Missing Rebound Yank Billions From European Stocks: U.S. traders withdraw money from euro-area ETF for fifth week
  • U.K. Bond Sales Seen Jumping Most Since 2009 as Osborne Thwarted: Median forecast from dealers is for GBP139b issuance
  • Italy Recovery From Recession Seen Continuing Slowly but Surely: Will extend the expansion that started last year, said 19 of 25 respondents in a Bloomberg survey published Tuesday
  • Campari Agrees to Acquire Grand Marnier for $760 Million: Bid of EU8,050/shr is 60% premium to closing price
In FX, the big move this morning was expected to have been USD/JPY, but the modest dip below 113.00 was modest given the BoJ's no change policy decision. 112.90 is the low seen here so far, and little aggressive interest to push lower from these levels seen in London. However, no such respite for GBP, which has been under the cosh since yesterday, after both NY and Tokyo sold moderate pullbacks but London more aggressively so . The latest Telegraph/ORB poll on the EU vote puts the leave camp in the lead at 49% vs 47%, but the selling began ahead of this. Cable is now in the mid 1.4100's, while EUR/GBP is eyeing a test of the double top at .7847. Elsewhere, the USD index has ripped higher, adding momentum to Cable losses, but EUR, AUD, NZD and CAD all losing out to a more modest degree. AUD support seen in the mid .7400's — now being tested, while USD/CAD is now close to 1.3400.

In commodities, WTI and Brent continue to slide during European trade as concerns of a global glut take hold of markets due to Iran not budging on the production freeze. Gold has rallied in the last couple of hours but it is yet to reach the highs at the beginning of the Asian sessions of 1238.13/oz. Base metals are retracing some of the moves seen yesterday after China hinted it will invest further in property sector with copper futures down nearly 1%.

After several days of quiet on the US macro front today we have a spike in data updates and the February retail sales report looks set to be the highlight where market expectations are for a -0.2% mom decline in the headline and +0.2% mom gain in the core and control group components. Also out today will be the NY Fed empire survey which is expected to remain consistent with the weakness in the manufacturing sector. The February PPI report will also be important and it’s worth keeping an eye on the healthcare subcomponent given it is used in the core PCE deflator. Also due out will be January business inventories and the March NAHB housing market index print. Away from this, tonight will see five more primaries in the US President race

Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equities trade lower across the board after taking the lead from Asia which saw the BoJ refrain from carrying out any additional easing
  • As such, the JPY remains firmer against its major counterparts, while GBP remains out of favour as London continues aggressive selling of the currency
  • Looking ahead, highlights include US Retail Sales, PPI Final Demand, Empire Manufacturing and Business Inventories
  • Treasuries rise in overnight trading while global equity markets, oil sell off after BOJ refrained from additional monetary easing as they await impact of the negative rate strategy adopted in January; FOMC begins two-day meeting today.
  • Deutsche Bank, whose debt plunged last month, is offering three-year notes in euros. The sale will test investor appetite for the bank’s debt following management efforts to allay concerns about capital levels
  • Britain is set to increase government-bond sales by the most since the financial crisis as a cooling economy and asset- sale delays hinder plans to balance the books. Gross issuance may jump 17% in the next fiscal year
  • The chances of a U.K. interest-rate cut are rising, the big risk on the horizon is June’s European Union referendum. A vote to leave the bloc could push Britain toward a recession and force the BOE to respond
  • Lenders are getting stingier when it comes to funding risky U.S. real estate developments, putting pressure on landlords in need of fresh funding to keep their projects afloat
  • German Chancellor Angela Merkel got her marching orders from voters to cut the flow of refugees. Now she needs Turkish President Recep Tayyip Erdogan to play along and help lift her out of a career-threatening jam
  • Russia said its forces have started leaving Syria after President Vladimir Putin ordered the military withdrawal in a surprise move that puts pressure on the regime of Bashar al-Assad and opposition groups to reach a peace deal
  • $8.3b IG corporates priced yesterday; MTD $94.72b, YTD $388.97b; $1.1b HY priced yesterday, $15.125b MTD
  • Sovereign 10Y bond yields mostly steady; European, Asian equity markets lower; U.S. equity- index futures drop. WTI crude oil, copper, gold fall
US Event Calendar

  • 8:30am: Retail Sales Advance, Feb. est. -0.2% (prior 0.2%)
    • Retail Sales Ex Auto, Feb., est. -0.2% (prior 0.1%)
    • Retail Sales Ex Auto and Gas, Feb., est. 0.2% (prior 0.4%)
    • Retail Sales Control Group, Feb., est. 0.2% (prior 0.6%)
  • 8:30am: PPI Final Demand m/m, Feb., est. -0.2% (prior 0.1%)
    • PPI Ex Food and Energy m/m, Feb., est. 0.1% (prior 0.4%)
    • PPI Ex Food, Energy, Trade m/m, Feb., est. 0.1% (prior 0.2%)
    • PPI Final Demand y/y, Feb., est. 0.1% (prior -0.2%)
    • PPI Ex Food and Energy y/y, Feb., est. 1.2% (prior 0.6%)
    • PPI Ex Food, Energy, Trade y/y, Feb. (prior 0.8%)
  • 8:30am: Empire Manufacturing, March, est. -10.5 (prior -16.64)
  • 10:00am: NAHB Housing Market Index, March, est. 59 (prior 58)
  • 10:00am: Business Inventories, Jan., est. 0% (prior 0.1%)
  • 4:00pm: Total Net TIC Flows, Jan. (prior -$114b)
    • Net Long-term TIC Flows, Jan. (prior -$29.4b)
DB's Jim Reid concludes the overnight wrap

So with the ECB ticked off, next on the central bank conveyor belt line was the BoJ this morning. Unlike what we saw from its European counterpart on Thursday, the BoJ has refrained from adding further stimulus this month. That means Japan’s new benchmark interest rate has been held at -0.1% and the annual purchases also maintained at ¥80tn a year. The decisions to hold fire on both were met with fairly convincing 7-2 and 8-1 respective majorities by BoJ board members. The bigger event now will be what Governor Kuroda chooses to say in his statement, the outcome of which we should know shortly.

Taking a look at the price action, an initial modest weakening in the Yen (touching 114.1) has given way to a decent bounce now, with the currency now +0.30% stronger on the day at 113.5. JGB yields are little changed relative to the moments prior to the decision, with the 10y currently up 2bps at -0.026%. The Nikkei is -0.89% and near its lows.

At this stage its worth putting some colour around the moves in Japanese assets since the BoJ cut rates into negative territory on January 29th. In that time (based on the intraday level just prior to the announcement and the current level this morning) the Nikkei is flat, while the Yen has strengthened over 4.5%, and 10y JGB’s are 24bps lower in yield (although have been more). In contrast, the S&P 500 and Stoxx 600 are +6.7% and +2.9% respectively, the USD index is -2%, the Euro -1.7% and 10y Treasury and Bund yields are unchanged and 12bps lower respectively. So clearly the effect has had a far greater impact on bond yields as opposed to Japanese equities, while the move for the Yen is perhaps the most curious of all.

Before we move on, a quick look at the rest of Asia this morning where it’s been a broadly weaker start on the whole. Along with those declines in Japan, the Hang Seng (-0.72%), Shanghai Comp (-1.13%), Kospi (-0.21%) and ASX (-1.30%) are all lower, while Aus and Asia credit indices are 5bps and 2bps wider respectively. Oil markets are off another percent or so which has helped US equity market futures turn negative this morning. Also of note this morning is news out of China where Bloomberg reports are suggesting that PBoC is in the process of drafting rules for a form of tax on FX transactions, in what’s said to be aimed at curbing currency speculation.

Moving on. Consolidation was the name of the game for markets yesterday and one which certainly reflected a ‘wait and see’ mode between the ECB and BoJ/Fed meetings. This was reflected by what was a fairly mundane session for US equity markets in particular where we saw the S&P 500 eventually close -0.13% (a rare decline this month) with the intraday high-to-low range a lowly 0.62% which is the smallest in 2016 so far. It’s amazing to see that the average range of the 49 trading days so far this year has been 1.73% and that 39 of those sessions have seen ranges of greater than 1%. Prior to this, European equities extended their gains with the Stoxx 600 closing +0.71%, although the post-ECB mammoth rally for European credit markets finally halted with iTraxx Main and Crossover closing 5bps and 9bps wider respectively. That said the indices are still 15bps and 47bps tighter than their pre-ECB levels. US credit also succumbed, with CDX IG over 2bps wider by the close of play.

With newsflow very light, it was Oil (a not too uncommon theme this year) which attracted the bulk of the headlines and ultimately dictated the price action for risk assets with WTI back below $38/bbl following a -3.43% decline yesterday. Much of this reflected stories emerging out of Iran with the country’s oil minister warning that the nation would not participate in an output freeze with other producers until they reached their production target of c.4m barrels a day, or roughly a third higher than current production levels. This follows the sanctions which were lifted on the country in January with the nation looking to ramp up output again to regain lost sales. Oil has risen nearly 50% from the intraday lows back in mid-February with the prospect of production freezes being a contributor in that rally. The WSJ touched on the possibility of these latest comments raising the risks that other countries involved in these talks (namely Saudi Arabia, Venezuela and Russia) may not follow through given the participation is contingent on Iran cooperating, however comments from Russia’s oil minister last night suggesting that Iran ‘may join us in the freeze with time’ and that ‘this is a normal, constructive position’ for them should abate major concerns for now.

One of the other interesting snippets from yesterday came from the European financials market and specifically UBS with the news that the Bank has issued Europe’s first coco bond since the huge sell-off which swept through the asset class in January. According to Bloomberg, the $1.5bn AT1 deal was said to have attracted $8bn of orders, with pricing also coming in tighter than the initial talk. Further evidence of the remarkable swing in sentiment that we’ve seen in the last six weeks or so.

Away from this there was little else to report yesterday. The only data of note was a robust industrial production print for the Euro area which bettered expectations at +2.1% mom (vs. +1.7% expected) in January which was the best monthly performance since 2009, with the data also helping support growth expectations for Europe. Meanwhile the ECB’s Villeroy spoke mid-morning and made mention to the need for the ECB to continue to adhere to its inflation mandate, highlighting the need for the target being essential for the ‘credibility of monetary policy’. Villeroy also noted that expanding purchases to corporate bonds is ‘a very significant signal for the real economy’.

Looking at the day ahead now, kicking off proceedings this morning will be France where we’ll receive the final revision to the February inflation report, followed later on by the Q4 employment report for the Euro area. This afternoon in the US is set to be a bumper session. The February retail sales report looks set to be the highlight where market expectations are for a -0.2% mom decline in the headline and +0.2% mom gain in the core and control group components. Also out today will be the NY Fed empire survey which is expected to remain consistent with the weakness in the manufacturing sector. The February PPI report will also be important and it’s worth keeping an eye on the healthcare subcomponent given it is used in the core PCE deflator. Also due out will be January business inventories and the March NAHB housing market index print. Away from this, tonight will see five more primaries in the US President race.


http://www.zerohedge.com/news/2016-...ks-down-boj-disappointment-oil-slides-2nd-day
 

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#19

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#20
RANsquawk Preview: April 2016 UK Budget and BoE Rate Decision
RAN squawk


Published on Mar 15, 2016
 

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#21

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#23
Global Stakes for the Brexit Vote
By: John Browne, Senior Economic Consultant at Euro Pacific Capital
On February 20th, UK Prime Minister David Cameron announced that the 'in/out EU referendum' he had promised in the campaign for the last parliamentary vote would finally take place on June 23rd. The outcome of the long-promised vote could have a tremendous impact not merely on the future of Mr. Cameron and his coalition but on the economic future of Great Britain and much of the world, including the European Union (EU) and the United States. It's arguable that the referendum will be the most significant vote the world will see between now and the U.S. presidential ballots in November.


An Open Letter to the Next President
By: John Mauldin
I have listened to most of the debates. Candidates on both sides of the aisle have made statements that under their presidency such and such a thing would happen. I sometimes wonder where they are getting their advice. Let me be clear: every candidate does this. And yes, some do it more than others. With all the political shooting from the hip that’s going on, I think it might be instructive for us to look at what the leaders, not just of the United States but of the whole world, are facing as they attempt to make decisions today.


Gold Seeker Closing Report: Gold and Silver Hold Near Unchanged Before Fed Day
By: Chris Mullen, Gold-Seeker.com
Gold fell $7.76 to $1225.84 in early Asian trade before it bounced back to $1237.37 in London, but it then drifted back lower in New York and ended with a loss of 0.02%. Silver slipped to as low as $15.192 and ended with a loss of 0.26%.
 

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#24
Michael Pento-Global Currency Depreciation Derby-Gold Big Winner
Greg Hunter


Published on Mar 15, 2016
Financial expert Michael Pento warns, “One thing you cannot fake, you cannot fake the amount of revenue that comes into the government’s coffers. That’s what’s available to service debt. That you cannot fake. When that amount of income diminishes, you are left with currency monetization--debt monetization. This is printing of your currency, counterfeiting your currency and buying debt. That’s where we are headed. That’s what happened in Georgia, Zimbabwe, Weimar Germany, Hungary, and it’s going to happen again. It’s not going to happen in some isolated banana republic or a small part of the developed world. It’s going to happen across the developed world. All of the major economies are going to fall into the same trap. It’s going to be a currency depreciation derby, and gold is going to be the big winner.”

Join Greg Hunter as he goes One-on-One with Michael Pento of Pento Portfolio Strategies.

All links can be found on USAWatchdog.com: http://usawatchdog.com/record-swings-...

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#25
Escape the Debtor's Trap Set by the Elite | David Quintieri
Reluctant Preppers


Published on Mar 15, 2016
You want to know where we are headed. David Quintieri, bestselling author of The Money GPS, joins Reluctant Preppers to spell out how we need look no farther than the real and present unraveling of debt-burdened countries to see the plight that is our future.

Quintieri connects the dots from runaway sovereign debt to collapses of currencies, from negative interest rates and deflation to hyperinflation, from personal debt to the modern reincarnation of debtor's prison, and how you can distill the truth you need to know - despite the smokescreen put out by the mainstream corporate media and propagated by government.

Stay tuned to find out what you can do to protect your family while there's still time!

Subscribe (it's FREE!) to Reluctant Preppers for more ► http://bit.ly/Subscribe-Free

Channel graphics by http://JosiahJohnsonStudios.com
Promotion by http://FinanceAndLiberty.com
 

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#26
Frontrunning: March 16


Submitted by Tyler Durden on 03/16/2016 07:31 -0400

  • Trump knocks Rubio out of race, Republicans in turmoil (Reuters)
  • Fed to Signal Worst Is Over, Hikes Coming: Decision-Day Guide (BBG)
  • Four Economists See a Surprise from the Fed This Week (BBG)
  • Global Stocks Muted Ahead of Fed Announcement (WSJ)
  • Stop-Trump Groups Make One Last Bet on Rubio, and Lose (BBG)
  • China's Li Seeks 'Win-Win' for Growth-Reform Plan Analysts Doubt (BBG)
  • President Obama to Announce Supreme Court Pick Wednesday Morning (WSJ)
  • Japan's major firms, in blow to Abenomics, offer smaller 2016 pay hikes (Reuters)
  • New Guard Rises in Saudi Arabia as Oil Crisis Forces Rethink (BBG)
  • London Stock Exchange, Deutsche Börse Agree to Merge, Creating $30 Billion Operator (WSJ)
  • Stiglitz to Abe: Don't Raise Japan's Sales Tax, Stimulate Growth (BBG)
  • Suicide bombing exposes divisions tearing at Turkey's stability (Reuters)
  • U.S. Bombing of Islamic State Fell to 8-Month Low in February (BBG)
  • Japan to throw away kitchen scales in overhaul of consumption data (Reuters)
  • Meet the DIY Quants Who Ditched Wall Street for the Desert (BBG)
  • BHP Billiton CEO Says Considering Possible Copper, Petroleum Acquisitions (WSJ)
  • Volkswagen Europe Market Share Continues Drop Amid Recalls (BBG)
  • North Korea Sentences U.S. Student to 15 Years Hard Labor (WSJ)
  • Chipotle Weighs Stepping Back From Some Food-Safety Changes (WSJ)


Overnight Media Digest

WSJ

- Valeant Pharmaceuticals International Inc, having struggled for months to reclaim investor favor, Tuesday offered a financial outlook worse than many feared, prompting an exodus from the stock that cut the market value of the company in half. (http://on.wsj.com/253rsyc)

- U.S. Federal Communications Commission Chairman Tom Wheeler is likely to circulate a draft order as soon as this week approving Charter Communications Inc's $55 billion deal to buy Time Warner Cable Inc with certain conditions, according to people familiar with the matter. (http://on.wsj.com/253rtlP)

- The Obama administration unveiled some of the most extensive changes in decades to rules on U.S.-Cuba trade, financial transactions and travel, including a provision that effectively lifts the long-standing ban on American tourists visiting the country. (http://on.wsj.com/253rvKt)

- Apple Inc is working to bolster its encryption so that it won't be able to decode user information stored in iCloud, according to people familiar with the matter. But Apple executives are wrestling with how to strengthen iCloud encryption without inconveniencing users. (http://on.wsj.com/253rBBX)

- Caesars Entertainment Corp and its private-equity owners engineered a series of deals that hurt the company's now-bankrupt operating unit and its creditors, resulting in potential damages of $3.6 billion to $5.1 billion, a court-appointed bankruptcy investigator concluded. (http://on.wsj.com/253rFkY)

- Sony Corp delayed the release of its PlayStation VR virtual-reality system by several months, giving competitors a half-year head start on a technology expected to create a major market. (http://on.wsj.com/253rIxk)

- Chipotle Mexican Grill Inc is considering stepping back from some of the food-safety changes it touted just a month ago in the wake of a series of disease outbreaks, according to people familiar with the matter. (http://on.wsj.com/253rNBa)



FT

* Lockheed Martin Corp CEO Marillyn Hewson said on Tuesday, that the company is near a technological breakthrough that could help U.S. fighter jets reach Mach 6, or six times the speed of sound.

* British Finance Minister George Osborne is said to admit that he has broken two out of the three fiscal rules that he had laid out in last year's election.

* German power firms E.ON, RWE and Vattenfall clashed with government members at a court hearing over the country's controversial decision to shut down all nuclear plants by 2022



NYT

- The Serious Fraud Office of Britain said on Tuesday that it had closed a long-running criminal investigation into the potential rigging of the foreign currency market without bringing any charges. (http://nyti.ms/1pnkofj)

- Anterra Capital, a venture capital firm focused on food and farming start-ups, plans to announce on Wednesday that it has closed its investment fund at $125 million. (http://nyti.ms/1pnlRlN)

- The New York Stock Exchange has completed an overhaul of its regulatory functions, naming Anthony Albanese, the former acting New York state financial industry regulator, as its chief regulatory officer. (http://nyti.ms/1pnlYOh)

- Volkswagen AG's in-house bank said on Tuesday that profit was likely to fall this year because the automaker's diesel emissions scandal would increase the interest the company must pay to raise money from financial markets. (http://nyti.ms/1pnmETD)



Canada

THE GLOBE AND MAIL

** The Royal Canadian Mounted Police has ruled out pursuing criminal investigations against 24 of 30 current and former senators whose expenses were flagged by Auditor-General Michael Ferguson after a two-year forensic audit of the Red Chamber, sources say. (http://bit.ly/1R2ndtg)

** More than C$16 billion ($11.97 billion) in value was wiped out Tuesday for drug manufacturer Valeant Pharmaceuticals International Inc, after it cut expectations for its growth and recovery. (http://bit.ly/1Uvz87A)

** M&M Meat Shops Ltd is changing its name to M&M Food Market and broadening its offerings as it tries to win back consumers to its frozen fare by persuading them to stock up for an entire meal and not just on meat. (http://bit.ly/1Lq4rzn)

NATIONAL POST

** Empire Co Ltd's extremely weak third quarter results, thanks to a sharp gross margin pullback in food retailing, is the result of a deterioration in its Western Canadian business.(http://bit.ly/22ltmYN)

** Amazon.com Inc has investors in the transportation sector rattled. The e-commerce giant appears to be making a big push into managing its freight transportation capacity internally, as opposed to outsourcing it. (http://bit.ly/1Pbs7Sx) ($1 = 1.3371 Canadian dollars)



Britain

The Times

UK's Serious Fraud Office suffered another blow to its reputation yesterday after it abandoned a high-profile investigation into the rigging of the $5 trillion-a-day global currency markets. (http://thetim.es/1pmT7JG)

J Sainsbury Plc posted its first increase in sales in more than two years and held its market share in a tough fourth quarter for Britain's struggling grocery sector. (http://thetim.es/1TMzfNh)

The Guardian

Royal Bank of Scotland Group Plc is cutting 448 investment banking jobs in the UK, moving two-thirds of them to India. (http://bit.ly/1XtLkFf)

The Sports Direct International Plc founder, Mike Ashley, is to be formally summonsed to appear before MPs to explain his company's treatment of its workers. (http://bit.ly/1Rk0vw8)

The Telegraph

Thousands of schools will be able to open for an average of an hour longer a day in an end to the "Victorian" tradition of the 3:30 p.m. bell, British Finance Minister George Osborne will announce as he puts education at the heart of his Budget speech. (http://bit.ly/1M6bld8)

Sir Martin Sorrell, founder and chief executive of advertising giant WPP Plc, will receive a 63 million stg pay cheque in one of the largest corporate payouts in history. (http://bit.ly/1nML7AO)

Sky News

British Infrastructure Club, which will seek to replicate the track record of leading state-backed investment funds, will be headed by Graeme Bevans, the architect of Canada Pension Plan Investment Board's (CPPIB) infrastructure wing. (http://bit.ly/1LoZg2x)

Eurostar has reported a 38 percent fall in annual profits as it counted the cost of disruptions during a year when it was hit by the migrant crisis as well as a drop-off in visitors to Paris after the terror attacks on the French capital. (http://bit.ly/1R1xLca)

The Independent

Russian President Vladimir Putin is willing to jettison President Bashar al-Assad as part of a deal to end the five-year conflict in Syria, Western powers believe. (http://ind.pn/1S2OjD0)

http://www.zerohedge.com/news/2016-03-16/frontrunning-march-16
 

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#27
All Eyes On Yellen: Futures Flat Ahead Of Fed Meeting Expected To Usher In More Rate Hikes


Submitted by Tyler Durden on 03/16/2016 06:50 -0400


Today Janet Yellen and the FOMC will go back to square one and try to reset global expectations unleashed by the ill-fated December rate "policy mistake" hike, when at 2pm the Fed will announce assessment of the economy (even if not rate hike is expected today) followed by Yellen press conference half an hour later. Just like in December the Fed will be forced to telegraph that it is hiking rates as a signal of a strengthening US, and global, economy where "risks are balanced" and hope that the subsequent global reaction will not be a rerun of what happened in January and February when confusion about the Fed's intentions led to a global market rout.

Just as important this time around is that as of yesterday, stocks have largely entered a buyback blackout period, meaning the biggest (and according to many, the only) marginal buyer of equities has been sidelined for the next month.

Financial markets are being swayed by divergent monetary policies in the world’s leading economies. Fed funds futures show the odds of a U.S. rate increase by the end of June have shot up to 54 percent from about 6 percent in the past month as data has indicated growthrecent has strengthened modestly and taken off the immediate risk of a recession off the table.



The U.S. currency will probably respond favorably to signals from the Fed, which will look to keep its options open, Alan Ruskin, Deutsche Bank AG’s global co-head of foreign-exchange research in New York, wrote in a research report. "This also means leaving the door wide open to a June hike, and even ajar to an April hike,” he wrote, saying the March payrolls report and global risk sentiment will be important deciding factors. “The market will see this as more hawkish than currently discounted.”

"We’re waiting for U.S. monetary policy so its difficult for investors to rush in and buy,” said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc. in Tokyo. “We need to see whether we’ll have one or two rate hikes this year, and whether the next one will come in June.”

As a result Fed officials are broadly expected to reduce the number of rate hikes they see in 2016 and leave the target range for the federal funds rate unchanged at 0.25 percent to 0.5 percent.

So as we await Yellen in a few hours, European stocks rose initially then took a modest leg lower following downbeat comments from the UBS CEO detailing that 2016 has remained a challenging year for the company while markets speculated about the Credit Suisse CFO dropping out of a Morgan Stanley conference. The sentiment has now breached into the broader European sphere with the likes of Deutsche Bank lower by 2.2% and European stocks in the red. Asian equities fell as Japan’s Topix extended Tuesday’s retreat from a five-week high, while China closed modestly higher after Premier Li Keqiang said that China isn’t headed for a hard landing and the government will ensure expansion hits targets.

Meanwhile, WTI has halted its 2-day slide after API data overnight showed U.S. crude stockpiles climbed last week around half expectations for today’s more definitive EIA data. The price extended gains gains after Qatar said it would host an April producers meeting where the topic would be what else, a production freeze, one which however would not include Iran; Brent recovers above $39, moving in parallel w/ WTI market.

"OPEC/non-OPEC is doing its best to keep the verbal intervention going, indicating a production freeze might be done without Iran’s participation,” said Ole Hansen, Saxo Bank head of commodity strategy. “Prices have also been helped by API data yesterday. We broke some technical levels and that attracted selling, but with the API data and renewed talk of an April mtg this has enabled prices to resume higher."

The dollar strengthened against most major currencies while US equity futures are broadly unchanged.

Market Snapshot

  • S&P 500 futures up 0.1% at 2008
  • Stoxx 600 down 0.1% to 340
  • FTSE 100 up 0.2% to 6154
  • DAX up 0.6% to 9997
  • German 10Yr yield down less than 1bp to 0.31%
  • Italian 10Yr yield down 2bps to 1.35%
  • Spanish 10Yr yield down 2bps to 1.5%
  • MSCI Asia Pacific down 0.6% to 126
  • Nikkei 225 down 0.8% to 16974
  • Hang Seng down 0.2% to 20258
  • Shanghai Composite up 0.2% to 2870
  • US 10-yr yield down 1bp to 1.96%
  • Dollar Index up 0.19% to 96.81
  • WTI Crude futures up 1.6% to $36.92
  • Brent Futures up 1.2% to $39.19
  • Gold spot up less than 0.1% to $1,233
  • Silver spot up less than 0.1% to $15.29
Top Global News

  • Oracle Cloud Growth Shows Promise as Company Tops Estimates: 3Q adj. EPS 64c, est. 62c; sales of key cloud-based products exceeded the co.’s outlook and Co-Chief CEO Safra Catz said growth rates could rise further
  • Trump, Clinton Tighten Grip as Kasich Wins Ohio; Rubio Drops Out: Trump lost Ohio to John Kasich, Florida Senator Marco Rubio suspended campaign after losing in home state; Rubio’s Disappointing Presidential Run Ends With Florida Defeat
  • Kasich Vows to ‘Go All the Way to Cleveland’ After Ohio Victory
  • LSE to Merge With German Rival to Create European Titan: LSE’s equity holders will own 45.6% of the enlarged group, while Deutsche Boerse stockholders will get the remaining 54.4%
  • Apple Takes Swing at U.S. Over Demand to Help Unlock IPhone: Apple said in a court filing Tuesday that forcing it to create software to degrade iPhone security features would inevitably endanger the privacy of hundreds of millions of people
  • Chipotle Forecasts First-Quarter Loss as Food Crisis Lingers: Sees 1Q loss at least $1-shr vs est. EPS 3c; Feb. comp sales down 26.1% vs est. down 23%
  • Most U.S. Dealmakers See Volume Drop This Year After Record 2015: Brunswick survey finds 70% expect N. America activity to fall
  • FCC May Circulate Draft Order Approving TWC, Charter Deal: WSJ: FCC Chairman Tom Wheeler likely to circulate draft order approving Charter Communications deal to buy Time Warner Cable with certain conditions, WSJ reports
  • Mitel Said in Talks to Buy Polycom: Reuters
Looking at regional markets, we start in Asia where stocks traded mixed following the lacklustre close from Wall St. with price-action muted as participants remained cautious ahead of today's FOMC decision. ASX 200 (+0.2%) saw choppy trade as financial and tech gains counter-balanced weakness in material names. Nikkei 225 (-0.8%) underperformed amid losses in financials and a firmer JPY post-BoJ policy decision, while Sharp shares declined around 10% as Foxconn continued to delay a deal agreement. Chinese markets were also indecisive amid a lack of catalysts to spur trade, with the Shanghai Comp (+0.2%) relatively flat. 10yr JGBs initially extended losses following yesterday's BoJ inaction although prices have rebounded from their worst levels, with the BoJ in the market for JPY 1.27tr1 of government debt ranging from 1yr-10yrs.

BoJ Governor Kuroda said will ease on all 3 dimensions if necessary and added there is still a possibility of further rate cuts if additional easing is judged to be appropriate. Kuroda added he cannot say now which tools would be utilised if they decided to ease further and said it was theoretically possible to reduce rates when asked if BoJ could lower rates to -0.5%.

China's Premier Li said downward pressures on the economy continue to expand, but added he is fully confident in long-term growth prospects. Premier Li also stated that China find new jobs for workers in over capacity sectors and that China is willing to spend more than planned for re-employment.

Asia Top News

  • Kuroda Says Minus 0.5% Rate Is Theoretically Possible for Japan: Governor says BOJ has quite a lot of room to cut key interest rate further
  • Asia Hedge Funds Had Worst-Ever Start to Year, Eurekahedge Says: Returns are also the worst among major global regions
  • China’s Li Outlines Dual Growth-Reform Plan as Challenges Mount: Chinese premier says economic reforms and development are not in conflict
  • Singapore Wireless Battle Heats Up as Entrant Taps Goldman, DBS: MyRepublic enlists banks to help raise S$250m
  • BlackRock’s India Venture Buys Long Bonds as Rate Cut Room Seen: Quarter-point RBI rate cut more or less priced in, fund says
In Europe, equities initially kicked off the session in the green today, benefitting from upside in the energy and materials sector (Euro Stoxx: 0.0%). However, stocks were then dragged lower by the SMI (-0.2%) amid softness in UBS (-3.0%) and Credit Suisse (-4.6%) following downbeat comments from the UBS CEO detailing that 2016 has remained a challenging year for the Co. while markets also speculate about the Credit Suisse CFO dropping out of a Morgan Stanley conference, although the Co. have denied to comment on such speculation. Nevertheless, the sentiment has now breached into the broader European sphere with the likes of Deutsche Bank lower by 2.2% and European stocks in the red.

European Top News

  • Volkswagen Europe Market Share Continues Drop Amid Recalls: Volkswagen’s brands accounted for 24% of new auto registrations in Feb. vs. 25.4% y/y; industrywide European car sales jumped 14% in February to 1.09m vehicles
  • Munich Re Continues Share Buybacks Amid Lower Profit Outlook: Plans to repurchase EU1b of its stock before 2017 shareholder meeting; targets EU2.3b-EU2.8b FY profit after EU3.1b in 2015
  • BMW CEO’s Strategy Puts Focus on Electric, Luxury Vehicles: Plans to roll out more electric cars and add self-driving features faster than rivals, also roll out more sport- utility vehicles; targets "slight’’ rise in 2016 pretax profit, revenue
  • Bilfinger Scraps Payout as Widening Losses Pile on Pressure: Won’t pay a div. for 2015; net losses widened almost 7-fold
  • Zodiac Shares Tumble After Profit Forecast Cut an Eighth Time: Current operating income in the year ending Aug. 31 will “come in close to” the amount reported last year
  • Osborne Seeks Low-Cost Vote Winners as Budget Tightens Austerity: Schools in England to be freed from local- authority control, school days will lengthen under GBP1.5b package of measures designed to improve education standards
In FX, it has been mostly a morning of consolidation in Europe today, with the FOMC ahead keeping most players on the side-lines for now.

The Bloomberg Dollar Spot Index rose 0.2 percent, climbing for a third day on bets the Fed will reaffirm its commitment to raising interest rates. The U.S. currency will probably respond favorably to signals from the Fed, which will look to keep its options open, Alan Ruskin, Deutsche Bank AG’s global co-head of foreign-exchange research in New York, wrote in a research report. "This also means leaving the door wide open to a June hike, and even ajar to an April hike,” he wrote, saying the March payrolls report and global risk sentiment will be important deciding factors. “The market will see this as more hawkish than currently discounted.”

The yen retreated 0.5 percent to 113.70 per dollar, after strengthening 0.6 percent on Tuesday as the Bank of Japan kept its policy rate at minus 0.1 percent at a review. The central bank has quite a lot of room to cut the key rate further and theoretically it could go to minus 0.5 percent, Governor Haruhiko Kuroda told parliament on Wednesday.

China’s yuan was headed for its biggest three-day loss since January as the central bank lowered its daily fixing for the currency amid concern a potential tax on foreign-exchange transactions will hurt investor sentiment. It slipped 0.14 percent from Tuesday’s close. Indonesia’s rupiah slumped 0.7 percent before a central bank policy meeting on Thursday at which interest rates are forecast to be cut.

In commodities, oil prices were boosted today as producers agreed to meet in April, WTI rose USD 0.50/bbl and a smaller than expected build in the APIs. West Texas Intermediate crude climbed 1.3 percent to $36.82 a barrel, after sliding 5.6 percent over the past two days as Iran indicated it won’t be joining other major producers in freezing output. It’s tumbled 38 percent since the middle of last year.

U.S. crude inventories increased by 3.2 million barrels last week, according to a Bloomberg survey ahead of government data Wednesday, with a report from the American Petroleum Institute said to indicate an increase of 1.5 million barrels. Total SA Chief Executive Officer Patrick Pouyanne sees the oil market back in balance during 2016, he said in an interview with Le Progres newspaper.

Copper was little changed in London, while nickel added 0.2 percent. Gold for immediate delivery fell 0.1 percent to $1,231 an ounce, set for the lowest close in two weeks. It’s still up 16 percent for the year.

"Gold has pulled back over the last few days, which was long overdue after an otherwise continuous rally since the start of 2016," Jordan Eliseo, Sydney-based chief economist at trader Australian Bullion Co., said in an e-mail. “All eyes will be on the Fed meeting, and any clues as to potential pace of monetary tightening throughout 2016."

Bulletin Headline Summary from Bloomberg and RanSquawk

  • Softness in banking names has dragged European equities in the red amid downbeat comments from the UBS CEO and reports of the Credit Suisse CFO dropping out of a conference
  • FX markets have seen a morning of consolidation in Europe today, with the FOMC ahead keeping most players on the side-lines for now.
    Looking ahead, highlights include FOMC Rate Decision, UK Budget US Housing Starts, US Industrial Production, New Zealand GDP
  • Treasuries little changed in overnight trading, global equity markets mixed before today’s FOMC rate decision and updated SEP at 2pm ET to be followed by Yellen presser at 2:30pm ET.
  • Treasuries are the world’s worst-performing bonds over the past month on speculation the Federal Reserve will signal it’s sticking to its plan to raise interest rates -- even if it delays the moves
  • The Bank of Japan has quite a lot of room to cut its key interest rate further and theoretically it could go to minus 0.5 percent, Governor Haruhiko Kuroda said in parliament; Japan’s regional banks are shifting their investments toward riskier assets abroad or outside of fixed income as yields below zero erode the appeal of Japanese government bonds
  • Oil producers from OPEC and beyond are finalizing a plan to discuss freezing output at a meeting in Qatar in mid-April, the latest move in a campaign by financially-stricken crude exporters to shift the dynamics of an over-supplied market
  • If Saudi Arabia and Russia were to pull off a diplomatic coup and persuade producers all over the world to join their oil-output freeze, it would have little impact on the global surplus
  • U.K. unemployment held at its lowest rate for a decade and wage growth ticked higher as the labor market continued to improve
  • Donald Trump’s road to securing the Republican presidential nomination got longer while Hillary Clinton’s got shorter as the split decision on Trump in two critical states in Tuesday’s voting increased the possibility of a chaotic Republican national convention
  • $8.81b IG corporates priced yesterday; WTD $17.11b, MTD $103.53b, YTD $397.78b; $350m HY priced yesterday, $6.65b MTD, $21.5b YTD
US Event Calendar

  • 7:00am: MBA Mortgage Applications, March 11 (prior 0.2%)
  • 8:30am: Housing Starts, Feb., est. 1.150m (prior 1.099m)
    • Housing Starts, Feb., est. 4.6% (prior -3.8%)
    • Building Permits, Feb., est. 1.200m (prior 1.202m)
    • Building Permits, Feb., est. -0.2% (prior -0.2%)
  • 8:30am: CPI m/m, Feb., est. -0.2% (prior 0%)
    • CPI Ex Food and Energy, Feb., est. 0.2% (prior 0.3%)
    • CPI y/y, Feb., est. 0.9% (prior 1.4%)
    • CPI Ex Food and Energy y/y, Feb., est. 2.2% (prior 2.2%)
    • CPI Index NSA, Feb., est. 236.873 (prior 236.916)
    • CPI Core Index, Feb., est. 245.595 (prior 245.232)
    • Real Avg Weekly Earnings y/y, Feb. (prior 1.2%, revised 1.1%)
  • 9:15am: Industrial Production m/m, Feb., est. -0.3% (prior 0.9%)
  • Capacity Utilization, Feb., est. 76.9% (prior 77.1%)
  • Manufacturing (SIC) Production, Feb., est. 0.1% (prior 0.5%)
Central Banks

  • 2:00pm: FOMC Rate Decision (Lower Bound), est. 0.25% (prior 0.25%)
  • FOMC Rate Decision (Upper Bound), est. 0.5% (prior 0.5%)
  • 2:30pm: Fed’s Yellen holds news conference
DB's Jim Reid concludes the overnight wrap

Today is one of those days to get the pulses racing as we hear the latest from the Fed after their FOMC. The probability of a June hike has gone up to 54% (from 2% at the lows last month) and the Fed are probably going to be in a more confident mood than they were at the end of January. For reference as to prevailing conditions we've tracked where important assets were the day before the Dec and Jan meetings and where they are now. The S&P 500 was 2,043, 1,904 and 2,016 now. 10y Treasuries were 2.267%, 1.995%, and 1.956% now. WTI Oil has gone from $37.35/bbl to $31.45/bbl to $36.86/bbl now. US IG spreads from 165bps to 190bps to 175bps now. US HY from 688bps to 766bps to 663bps now. Finally the 5y5y inflation swap forward has gone from 2.145% down to 1.920% and back to 1.952% now. So if you looked at current vs Dec the world appears fairly calm. However the volatility in between needs to be acknowledged.

As a prelude to today’s main event, DB’s Peter Hooper expects the Fed to be very much in wait and see mode but also see risks as close to balanced and a rate hike by June as likely if economic and financial conditions develop along the lines they are expecting. Economic data on the whole has been improved since January (yesterday’s retail sales data aside – which we go into below) which should allow the FOMC to sound a bit more upbeat. Wage inflation indicators are pointing to a small net acceleration on balance, while the price inflation picture, although still mixed, is also moving in the right direction. US financial conditions, after deteriorating sharply earlier this year, have returned most of the way to their end-2015 levels in recent weeks. Peter thinks that on balance, the BoJ and ECB actions will not restrain the Fed. Clearly a lot of the focus will also be on the dot plots which will likely be revised down with the median number of rate hikes this year reduced from four to three. It’s also possible we see the longer-term neutral dot move down from 3.5% to 3.25%. All this at 6.00pm GMT tonight.

Price action and activity this week leading into the meeting, has been very subdued. Yesterday was another lower than average volume day (by over 25%) for the S&P 500 with the index closing -0.18% and a second consecutive small daily loss, with the intraday range of 0.53% taking over from Monday as the smallest this year. Prior to this we’d seen European equities snap two days of strong gains (Stoxx 600 closing -1.10%), but it was credit markets which were the under-performers again. Itraxx Main was 4bps wider by the close of play and combined with the weak day on Monday (+5bps), has now given up close to half of the post ECB gains. Crossover was 11bps wider also, while financials also had a rough day (iTraxx senior and sub fins +5bps and +15bps respectively) despite the FT reporting that yesterday was the biggest supply day for new financials issuance in Europe in 15 months. US credit markets had a weak day too with CDX IG ended 4bps wider also.

Another weak day for commodity markets more than played its part with WTI (-2.26%) extending its poor start to the weak and going below $37/bbl in the process, seemingly on the Iran news we touched on yesterday. Base metals were also soft (Aluminium -1.46%, Zinc -2.35%) while Iron Ore tumbled 4.81% and has now plummeted an impressive 17% from those highs made just over a week ago. Also weighing on sentiment (and most notably the healthcare sector) was the latest news from the big North American drug developer and distributor Valeant. As well as slashing full year profit guidance for the second time in just five months, prospects of a technical default on its $30bn debt load was also raised unless the company can negotiate an extension on its 10-K report. That saw the shares close down -51.49% yesterday while the bonds were also hammered. The longest dated 2025 bonds were down over 10pts and are trading around 77c, while bonds due in just two years were down over 7pts and quoted around 91c. A big deal given the sheer quantum of debt and the fact that the company is the 4th largest US HY corporate issuer.

This morning in Asia we’ve seen markets generally follow the lead from the US and Europe yesterday with pre-FOMC caution in full display. Despite a bit of a rebound for Oil, the Nikkei (-0.75%), Hang Seng (-0.14%) and ASX (-0.15%) are all down. China is a bit more mixed with the Shanghai Comp (+0.31%) in positive territory after the midday break, but with the Shenzhen (-0.63%) lower. Credit indices in Asia and Australia are a tad wider. Meanwhile there’s been some further comments from Bank of Japan Governor Kuroda, who, when questioned this morning has indicated that ‘an additional rate cut to -0.5% is possible, in theory’.

Elsewhere the other main news overnight is the latest on the US President race where Hilary Clinton is one step closer to securing the Democratic nomination with victories in Florida, Ohio and North Carolina over Sanders. In the Republican race, Trump has secured victory in the important Florida vote as well as Illinois and North Carolina. Kasich has secured Ohio, while Rubio has now announced that he is ending his campaign.

A quick recap of that US data now. Retail sales last month were a little better than expected (with the exception of the control group component), but it was the material downward revisions to the January readings which most disappointed. In February the headline (-0.1% mom vs. -0.2% expected) and core (+0.3% mom vs. +0.2% expected) both beat, however there was a six-tenth downward revision and five-tenth downward revision to the respective January prints to -0.4% mom and -0.1% mom respectively. The control group component came in flat last month (vs. +0.2% expected) while the January reading was also taken down four-tenths to +0.2% - the most concerning given its input into GDP. That gives a very different read to retail sales so far this year, while the Atlanta Fed downgraded their Q1 GDP forecast for this year to 1.9% from 2.2% previously on the back of the data.

Elsewhere, the rest of the data was a bit of a mixed bag. Headline PPI last month was in line following a -0.2% mom decline, while the core was also as expected at +0.1% mom. The big positive surprise came from this month’s empire manufacturing print which saw a robust 17pt rise to +0.6 (vs. -10.5 expected) and the highest since July 2015. Business inventories nudged up +0.1% mom in January (vs. 0.0% expected) and finally the NAHB housing market index remained unchanged this month at 58.

Treasury yields did actually rise post the data, although were little changed by the close of play with the 10y benchmark hovering around 1.970%. Sovereign bond yields in Europe had previously crept higher while some of the sharper moves were reserved for currencies. Commodity-sensitive currencies were the big underperformers, while Sterling tumbled over 1% as investors reacted to the latest Brexit referendum poll and today’s looming Budget. On the former, an ORB poll conducted for the Telegraph newspaper showed that voting is tight, but the number of votes for the leave campaign slightly outweighed the stay campaign at 49% vs. 47%. However interestingly the same poll also showed that, accounting for the likelihood of voting being taken into account, the leave campaign actually rose to 52% versus 45% to remain.

Taking a look at the day ahead now then, where this morning in Europe the bulk of the attention will be on the UK where we will first receive the latest employment report (no change in the unemployment rate expected) followed thereafter by the release of the Budget. This afternoon in the US, its another busy session with the most notable release being the February CPI report where currently expectations are running for -0.2% mom at the headline and +0.2% mom at the core. February housing starts and building permits data is due at the same time, before the February industrial production (-0.3% mom expected), capacity utilization and manufacturing data is released. Of course this is all before the main event tonight with the conclusion of the March FOMC meeting, the outcome of which we will know at 6.00pm GMT with Fed Chair Yellen due to speak shortly after.

http://www.zerohedge.com/news/2016-...c-announcement-expected-usher-more-rate-hikes
 

searcher

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#28
MtM - Before the FOMC, Another Look at the ECB's Actions 03/15
http://www.marctomarket.com/2016/03/before-fomc-another-look-at-ecbs-actions.html

MtM - Anticipation of Osborne's Budget Weighs on Sterling 03/15
http://www.marctomarket.com/2016/03/anticipation-of-osbornes-budget-weighs.html

SA - Real time news 03/16
http://seekingalpha.com/market-news

CWS - Morning News: March 16, 2016
http://www.crossingwallstreet.com/a...ed:+Crossingwallstreet+(Crossing+Wall+Street)

TCS - Initial Guidance | 16 March 2016
http://www.capitalspectator.com/initial-guidance-16-march-2016/

Naked Capitalism Links 03/16
http://www.nakedcapitalism.com/2016/03/links-31616.html

MtM - Dollar Firm Ahead of the FOMC, UK Budget Looms 03/16
http://www.marctomarket.com/2016/03/dollar-firm-ahead-of-fomc-uk-budget.html

SA - Wall Street Breakfast: Wave Of Exchange Consolidation Continues 03/16
http://seekingalpha.com/article/3958818-wall-street-breakfast-wave-exchange-consolidation-continues
 

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#29
First-Time House Hunters Lose Out in Busy Buying Season
Steady job growth, low mortgage rates and record apartment rents are turning millennials into homebuyers — if they can find a house. Robust demand is being outweighed by a persistent lack of lower-priced supply that’s poised to limit transactions and worsen an affordability crunch for young people. [Full Story]

Related Stories
 

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#32
Egon von Greyerz: “THE WAR ON CASH IS REAL!”
By: Gordon T. Long
Egon says that approximately less than half a percent of assets are invested in Gold today by the people and that most of them do not own any Gold whatsoever. Even with the risky stock market in recent months we have not seen a significant increase in the purchase of Gold as an investment itself. However the increase in Gold purchases is linked more closely to the retail market for public use.


Gold Seeker Closing Report: Gold and Silver Gain Over 2%
By: Chris Mullen, Gold-Seeker.com
Gold edged up to $1235.09 in Asia before it dropped back to $1227.01 in early New York trade, but it then shot higher after today’s fed announcement and ended near its late session high of $1262.87 with a gain of 2.25%. Silver jumped to as high as $15.639 and ended with a gain of 2.23%.
 

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#33
Frontrunning: March 17


Submitted by Tyler Durden on 03/17/2016 07:43 -0400

  • Global Stocks Slip Following Fed’s Cautious Tone (WSJ)
  • Oil rallies towards $41, near 2016 high, on producer meeting (Reuters)
  • Hamptons luxury home sales soften as Wall Street weakness takes a toll (Reuters)
  • Obama picks centrist high court nominee; Republicans unmoved (Reuters)
  • Allies See Challenges for Hillary Clinton in a General Election Campaign (WSJ)
  • China’s Looming Currency Crisis (WSJ)
  • China's biggest metals trader under pressure to cut staff amid reforms (BBG)
  • Oil Investors See $7.4 Billion Vanish as Dividends Are Targeted (BBG)
  • Bond Vigilantes So Yesterday as Budget Brigade Seeks More Debt (BBG)
  • Austria’s highest court proclaims asylum cap illegal (New Europe)
  • Wall Street's Awful Quarter Is Hitting Goldman Sachs, Too (BBG)
  • SEC Signals It Could Curb Use of Adjusted Earnings Figures (WSJ)
  • Boom Times for Fracking's Toxic Wastewater Come to a Shaky End (BBG)
  • Shell, Saudi Aramco Plan to Break Up Motiva Partnership (WSJ)
  • China Mobile 2015 Profit Misses Estimates, Shares Decline (BBG)
  • China's Exporters Struggle as Yuan Swings Disrupt Business (BBG)


Overnight Media Digest

WSJ

- William Ackman's Pershing Square Capital Management LP is selling down his biggest investment as a disastrous bet on Valeant Pharmaceuticals International Inc tears a hole in its portfolio. The activist investor said his hedge fund sold 20 million shares in Mondelez International Inc after the market closed, which would yield $834 million at current prices. (http://on.wsj.com/1S5mN84)

- Republicans on Wednesday didn't budge in their refusal to consider Judge Merrick Garland, President Barack Obama's choice for the Supreme Court, before this fall's elections. Following this, the GOP's strategy could shift dramatically. (http://on.wsj.com/1S5mQAC)

- It is just the start of the U.S. mosquito season, but companies that make bug repellent are already running factories near capacity as they anticipate surging demand in response to the spread of the Zika virus. (http://on.wsj.com/1S5nkGQ)

- Peabody Energy Corp warned Wednesday that it could go bankrupt, signaling the end of an era for listed U.S. corporate coal companies, even as their mines continue to fuel a big chunk of the country's power stations. (http://on.wsj.com/1S5mV7q)

- A sales consultant who said he paid bribes on behalf of aircraft maker Embraer SA told Brazilian prosecutors that he believes the company's top managers, including Chief Executive Frederico Curado, knew of the illicit payments, which were tied to the sale of military aircraft to the Dominican Republic. (http://on.wsj.com/1S5n2zY)

- Novartis AG has faced a problem in getting doctors to prescribe its heart-failure pill, Entresto, since winning regulatory approval for it in July. The drug had $21 million in sales in the six months following its launch, a fraction of the $126 million expected by industry analysts. (http://on.wsj.com/1S5na2r)



FT

* British Finance Minister George Osborne handed tax sweeteners to voters and small businesses but warned the economy would grow more slowly than previously forecast.

* The U.S. Federal Reserve held interest rates unchanged and cut back its interest rate forecasts to two quarter-point rises this year.

* The European Union and Turkey are set to collide over a refugee deal after Donald Tusk, the European Council president, backed Cyprus' demands to weaken a promise to unfreeze parts of Turkey's EU membership negotiations.



NYT

- House lawmakers tangled on Wednesday with Richard Cordray, director of the Consumer Financial Protection Bureau, accusing it of overstepping its bounds in overseeing areas as various as payday loans, mandatory arbitration clauses and discrimination in the auto market. (http://nyti.ms/1SUR2ke)

- Founders Fund, the venture capital firm co-founded by the billionaire Peter Thiel, has raised more than $1 billion for its latest investment fund, a person with knowledge of the matter said Wednesday. (http://nyti.ms/1SUR6k8)

- Pershing Square Capital Management, William Ackman's $12 billion hedge fund, sold 20 million shares in food and beverage company Mondelez International Inc. (http://nyti.ms/1SURb7b)

- In a budget meant to appeal to voters before a looming referendum, Britain's chancellor of the Exchequer, George Osborne, on Wednesday mainly offered tax breaks, while warning the public against the risks of opting to quit the European Union. (http://nyti.ms/1SURgba)



Canada

THE GLOBE AND MAIL

** The federal government has brought in advisers, including an American investment bank, to help analyze the feasibility of a $1 billion aid package to aerospace giant Bombardier Inc . (http://bit.ly/1ppah9J)

** After a lengthy regulatory process, a final decision on Pacific NorthWest LNG's proposed liquefied natural gas export terminal on British Columbia's coast looks set to be referred to the federal cabinet because of its impact on Canada's greenhouse gas emissions. (http://bit.ly/1R0aBoU)

NATIONAL POST

** The former CEO of a Canadian firm that specialized in the treatment of contaminated soil was convicted on Wednesday of conspiring to pay kickbacks and committing major fraud against the United States, the U.S. Department of Justice said. (http://bit.ly/1UBXIDH)

** As the dust settled from Tuesday's devastating 50 percent selloff in Valeant Pharmaceuticals International Inc's shares, analysts scrambled to reassess the prospects for the company's stock going forward. And if they were divided before, they are even more so now. (http://bit.ly/1Pdv0CD)

** Canada's exporters appear to be finally delivering the goods. Not only are the country's manufacturers revving up sales volume, but they are doing it in record numbers, according to the latest numbers for January - with food products, vehicles and auto parts driving much of the gain. (http://bit.ly/1pLhtxi)



Britain

The Times

The U.S. Federal Reserve surprised markets on Wednesday by scaling back expectations on the number of rate rises this year from four to two as it highlighted global risks to the U.S. economy. (http://thetim.es/22nvnE3)

Barclays is being sued by the former boss of Tullett Prebon, Terry Smith, over accusations that the bank failed to transfer hundreds of thousands pounds of the financier's money into his investment fund so that he missed out on a more than doubling in its value.(http://thetim.es/1VdJb1E)

The Guardian

British finance minister George Osborne's attempt to woo voters ahead of Britain's EU referendum has come under intense scrutiny after he used a range of accounting devices to disguise a looming 56 billion pound ($79.78 billion) "black hole" in the government's finances and deliver a promised surplus by the end of the decade.(http://bit.ly/1RloG3p)

Supermarket chain Asda has confirmed plans to cut up to 500 jobs in stores and 250 at its head office in Leeds. (http://bit.ly/1RlfIDq)

The Telegraph

U.S.-based Peabody Energy is on the verge of bankruptcy as the commodity crash claims its biggest victim, crippled by fierce competition from cheap gas and a radical policy shift by China. (http://bit.ly/1WrKSqX)

Drug maker Vectura is buying peer Skyepharma in a 441 million pound ($628.29 million) deal. (http://bit.ly/1QZ9sOk)

Sky News

British taxpayers could lose more than 20 billion pounds($28.49 billion) if George Osborne presses ahead with the sale of the government's remaining stake in Royal Bank of Scotland, according to an official forecast published on Wednesday. (http://bit.ly/1pp1Wmz)

NS Intressenter is in advanced discussions about acquiring PriceRunner from the American internet tycoon Barry Diller, and Wall Street sources say a deal worth close to $100 million could be announced within days, according to Sky News.(http://bit.ly/1RnwtaN)

The Independent

London Stock Exchange has agreed its 21.6 billion pounds ($30.77 billion) merger with Deutsche Boerse, saying the combination would create the largest financial exchange business in the world, able to counter U.S. rivals which could still try to break up their party. (http://ind.pn/1UAMC1M)



http://www.zerohedge.com/news/2016-03-17/frontrunning-march-17
 

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#34
Another Fed "Policy Error"? Dollar And Yields Tumble, Stocks Slide, Gold Jumps


Submitted by Tyler Durden on 03/17/2016 07:04 -0400

Yesterday when summarizing the Fed's action we said that in its latest dovish announcement which has sent the USD to a five month low, the Fed clearly sided with China which desperately wants a weaker dollar to which it is pegged (reflected promptly in the Yuan's stronger fixing overnight) at the expense of Europe and Japan, both of which want the USD much stronger.

ECB, BOJ don't want a weak dollar; China does not want a strong dollar
Fed sides with China for now

— zerohedge (@zerohedge) March 16, 2016



This morning the global markets got a rude reminder that at the end of the day it is all about currency devaluation and competitive debasement - even if it means appeasing China in the process - when the plunge in the dollar,, much to Goldman's ongoing embarrassment, extended overnight as seen in the chart below.





This has led the USDJPY slide to just over 111 while the EURUSD was surging over 1.13 as of this moment, and in the process undoing all the recent easing by both the ECB and the ECB; furthermore an expected 25 bps rate cut by the Norway Central Bank, not only did not weaken the NOK but in fact sent it surging against the EUR, indicating that even when central bank decisions are fully priced in, few can actually trade the reaction and the implication of such moves.

Worse, after briefly spiking in the aftermath of the Fed's decision overnight European sovereign and US Treasury yields have tumbled, commodities and especially gold have soared, and as of moments ago, European stocks hit their lows on the day now that the European currency is surging, leading to this:

  • EUROPEAN STOCKS EXTEND DROP; STOXX 600 DOWN 1.4%
And since these are all the telltale signs of yet another Fed policy error, it was only a matter of time before the move also hit the Fed's favorite asset class - equities, and sure enough, after posting modest gains overnight, US index futures have seen a sharp reversal lower, and from up 0.3% were down -0.3% at last check, as suddenly the market appears to be getting cold feet not only about the Fed's decision to slam the Dollar at the expense of the Euro and the Yen, but also going back to that all important question which Yellen was unable to answer: has the Fed lost its credibility?

While risk assets are suddenly airpocketing, dollar-denominated oil, copper and zinc all jumped by more than 2 percent, with Brent trading above $40 a barrel, which means we can expect a rewriting of the narrative that higher gas prices are actually good for consumers, even if it also means that marginal shale production is likely to start coming back on line any moment.

And the cherry on top may have come when moments ago industrial bellwether Caterpillar slashed guidance, and now expects non-GAAP Q1 EPS of $0.65-$0.70 per share, about 25% below consensus estimates of 95 cents.

All of the above, this had led to sudden repricing of risk, which has seen equity futures stumble, and the ES is now down 10 points to 2,007, roughly where it was when the Fed unveiled its dovish surprise. Was that it for the Fed's intervention halflife? We don't know, but we expect much confusion today over whether even the Fed has now run out of dovish ammunition.

This is where we stand currently

  • S&P 500 futures down 0.5% to 2006
  • Stoxx 600 down 1.4% to 336
  • FTSE 100 down 0.7% to 613
  • DAX down 1.7% to 9816
  • German 10Yr yield down 7bps to 0.24%
  • MSCI Asia Pacific up 2.1% to 129
  • US 10-yr yield down 5bps to 1.86%
  • Dollar Index down 0.82% to 95.1
  • WTI Crude futures up 1.6% to $39.08
  • Brent Futures up 1.4% to $40.09
  • Gold spot up 0.6% to $1,270
  • Silver spot up 0.2% to $15.65
Top Global News

  • Witty to Step Down After Tumultuous Tenure as Glaxo Chief: CEO Andrew Witty plans to step down in 2017 after almost a decade, board to begin search for a successor
  • Rio Tinto Appoints Copper Chief Jacques CEO to Succeed Walsh: Copper boss Jacques replaces iron man Sam Walsh in July
  • FedEx Raises Floor of Full-Year Forecast After Cutting Costs: Now sees FY16 adj. EPS $10.70-$10.90, saw $10.40- $10.90, est. $10.56; 3Q adj. EPS $2.51, est. $2.34
  • Pershing Square Falls 26% Year Through March 15 on Valeant: Cut its stake in Mondelez to 5.6%
  • Toshiba Said to Face U.S. Probe Over Westinghouse Accounting: Justice Department, SEC reviewing conduct in Toshiba report
  • VW Said in Talks With U.S. Over Two Funds to Pay for Pollution: In talks to establish national remediation fund and a separate one for California as punishment for pollution from its cars after co. cheated on diesel- emissions tests, said people familiar with the matter
  • Fed Softens Rate-Rise Urgency as Risks Abroad Cloud Outlook: FOMC cites global concerns twice as Yellen highlights in Q&A
  • American Pilots Concerned by CEO Meeting on ‘Toxic’ Culture: COO Robert Isom named to deal with pilot contract concerns
  • Goldman Seen Succumbing Too as Wall Street Suffers Awful Quarter: Its trading revenue may slide 17%, Credit Suisse analysts say
  • New York’s Plaza Hotel Said for Sale in Foreclosure Auction: Billionaire Reuben brothers said to foreclose on mortgage
  • Oil Investors See $7.4b Vanish as Dividends Are Targeted: Conoco, Kinder resort to cuts “deplored” by shareholders
  • March Madness Puts Time Warner’s Big Bet on Sports to the Test: NCAA men’s championship game to air on TBS for first time
  • Valeant Lenders Said to Mull New Terms in Default Talks, Reuters Says: Lender’s demands include higher interest payments, pledge to pay a larger amount of bank loans from any Valeant asset sales proceeds
  • Amazon Said to Eye Office Depot’s Corporate Business Unit, NYP Report: May use some of Office Depot’s corporate accounts to jump-start its new office supply business
  • Canada to Announce Bombardier Aid Decision Within Weeks, Reuters Says: Govt has finished studying co.’s request for $1b in aid
Looking at global equity markets, Asia stocks traded mostly higher in the wake of the FOMC. ASX 200 (+1.0%) was led by energy and basic materials after commodity prices benefited from USD weakness post-FOMC, while oil prices were also underpinned following yesterday's lower than expected DoE inventory build. Nikkei 225 (-0.2%) initially surged on the prospects of lower US rates for longer, but then shrugged off majority of gains as JPY strengthened, while the Shanghai Comp (+1.2%) conformed to the picture with the PBoC also said to be gauging banks for Medium-term Lending requirements. 10yr JGBs initially tracked T-notes higher following the Fed dovishness, however JGBs pared advances after a weaker 20yr bond auction result in which b/c, tail in price and lowest accepted price all disappointed.

Top Asian News

  • Li & Fung 2015 Earnings Top Estimates as New Clients Boost Sales: FY net $421m, est. $405.3m, sales down 2.4% to $18.8b
  • Billionaire Li’s CK Hutchison Profit Edges Above Estimates: FY adj. net HK$31.2b; est. HK$30.9b, profit helped by earnings from Europe telecom operations
  • China Mobile 2015 Profit Misses Estimates, Shares Reverse Gain: Govt request to lower mobile phone rates erodes profit
  • Mr. Yen Called the Rally, Now Sees Gain Toward Intervention Zone: Ex-MOF Sakakibara correctly predicted advance
  • Toshiba Gets $5.9 Billion Deal to Sell Medical Unit to Canon: Deal will be funded by existing cash and borrowings, Canon said, day after unsuccessful bidder Fujifilm questioned Toshiba about the sale
  • Escape From Negative Japan Rates Wrecked by Record Hedging Costs: Swap premium for yen holders reaches record 102.5 bps
  • Yuan Falls to 15-Month Low Versus Basket as Fixing Lags Dollar: Reference rate shows China doesn’t want excessive gains, DBS says
  • TPG Sees Opportunity in $131 Billion India Distressed Assets: Co. would like to triple India investments in 3 yrs
In Europe, this morning has seen focus fall on the fallout from the Fed rate decision and press conference yesterday and as such, has seen much of the price action continue on from US and Asian hours. Bunds have seen significant upside during European trade, with the June future residing above 162.00 and the German curve showing many of the characteristics as its US counterparts with the curve flattening amid expectations for a shallower rate path going forward.

In tandem with this, European equities saw initial upside at the open in the wake of the dovishly interpreted Fed announcement. However stocks came off their best levels by mid-morning to see Euro Stoxx reside relatively flat as some analysts begin to focus on recent central bank commentary which appears to be relatively downbeat for global growth prospects as highlighted by the Fed statement and UK budget yesterday and the SNB and Norges Bank today.

Top European News

  • Lufthansa Says Eurowings Price Cuts to Curb Profit Gains in 2016: Oper. profit will advance only “slightly” in 2016 amid deterioration in yields as Eurowings adds flights in long-haul market, where Lufthansa traditionally makes most of its money, and competition from low-cost rivals intensifies in Europe
  • LafargeHolcim Sees Demand Growing After 2015 Profit Falls: Says overall demand to rise 2% to 4% in 2016, co. says it has made progress towards asset sales target; 2015 adj. operating Ebitda fell 10.7% to CHF5.75b vs est. CHF5.73b
  • Swiss Keep Franc Intervention Threat Alive as Rates Left on Hold: SNB holds deposit rate at minus 0.75% as forecast by economist, repeats pledge to intervene in FX markets
  • Norway Cuts Rates and Signals More Easing Ahead Amid Oil Plunge: Overnight deposit rate was lowered by 25bps to 0.50%
  • HeidelbergCement Boosts Dividend Amid Expected 2016 Growth: Raises div. 73% to EU1.30/share, sees “moderate” improvement in 2016 profit
  • Gulf Keystone Tumbles to Seven-Year Low as Future in Doubt: Kurdistan-focused oil company faces “material uncertainties”
  • Bank of England Has Nowhere to Go With ‘Brexit’ in Limelight: Key rate will be kept at record low 0.5%, economists predict
In FX, early European flow has seen a continuation of the USD fallout from the Fed adjustment in rate hike projections for 2016. Commodities and their related currencies have benefited the most , notably USD/CAD, which is has torn through a series of support levels including 1.3000 to hit 1.2941. WTI is now looking to a move through $40.0, and the CAD seems to have pre-empted this to a degree, but near term stagnation in the Oil price sees some consolidation back around 1.3000 for now. AUD/USD took out .7600 in Asia, having previously contained the upside, but since then we have gone on to hit .7650. EUR/USD has had an easy ride on the upside and has traded to just shy of 1.1300, while EUR/GBP gains stalling at .7900 to allow for a Cable extension through 1.4300 , but lacking momentum here. USD/JPY is the one we are all watching from current levels, having taken out 112.00 to put 111.00 (double bottom) under threat. 111.45 is the low here so far, but now major pullback to note in the current climate.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, sank 0.9 percent at 10:18 a.m. in London, after losing 1.1 percent in the last session.

“Currency reaction suggests market expectations for the Fed’s rate outlook were slightly more bullish,” Hiroshi Kurihara, chief U.S. economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “The dollar’s been sluggish despite some positive signs over growth, hinting that it’s sensitive to negative news and that its advance may not be strong even as a rate hike approaches.”

The yen strengthened 0.8 percent versus the dollar, while the British pound rose 0.3 percent and Switzerland’s franc gained 0.4 percent. The Bank of England is forecast to leave interest rates unchanged on Thursday and maintain current stimulus levels, while the Swiss National Bank stuck with its ultra-loose monetary policy. The Norwegian krone appreciated 1.1 percent after a cut in borrowing costs.

In commodities, WTI and Brent continue to rally after yesterday's FOMC comments with WTI close to testing the USD 40/bbl level. Gold also benefited from the FOMC reaching highs of USD 1267.60/oz while platinum and palladium are also appreciating respectively . In base metals Zinc advanced for the first time this week amid global production fell for a second month, while copper and iron ore prices were bolstered with the latter gaining over 4% amid the heightened risk sentiment. However, analysts at Jinrui futures did highlight that the market is waiting to see signs of Chinese demand given the increase in inventories and slowing physical trade.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities fail to sustain opening gains as weakness in financials and the downbeat outlook for global growth prospects grips investor sentiment
  • Early European FX flow has seen a continuation of the USD fallout from the Fed adjustment in rate hike projections for 2016
  • Looking ahead, highlights include the BoE rate decision, US weekly jobs, Philadelphia Fed Business Outlook, JOLTS, and EIA Nat. Gas Storage Change
Treasuries rally overnight, global equity markets mostly lower and commodities rally after more a dovish FOMC statement and SEP than foreseen; today’s economic data includes jobless claims, JOLTS Job Openings.

Bank of England will announce their latest decision today together with minutes of their discussions. Investors are pricing in 20% chance they will cut benchmark interest rate this year

The Bank of Japan’s negative interest rate policy is making it more expensive for domestic banks to hedge dollar investments, threatening to slow their escape from negative rates into U.S. currency debt

Even with a 25% drop in the yen’s value, Japanese export volumes are basically unchanged from where they were when Prime Minister Shinzo Abe took office

Norway’s central bank cut its benchmark interest rate 25 basis points to a record low 0.50% and signaled it’s prepared to ease policy further to ward off a recession in western Europe’s biggest crude oil producer

Switzerland’s central bank held interest rates at a record low and repeated its pledge to intervene in currency markets, a threat President Thomas Jordan has used to keep the franc from strengthening

As Wall Street leaders warn publicly about this quarter’s plunging revenue from trading and deals, Goldman Sachs has provided no guidance. The mystery isn’t whether it is getting hit too -- it’s how hard

$2.5b IG corporates priced yesterday; WTD $19.61b, MTD $106.03b, YTD $400.28b; $665m HY priced yesterday, MTD 13 deals for $7.315b, YTD 38 deals for $22.165b

Sovereign 10Y bond yields lower; European, Asian equity markets mostly lower; U.S. equity- index futures steady. WTI crude oil, copper, gold rise

US Event Calendar

  • 8:30am: Current Account Balance, 4Q, est. -$118b (prior -$124.1b)
  • 8:30am: Philadelphia Fed Business Outlook, March, est. -1.5 (prior -2.8)
  • 8:30am: Initial Jobless Claims, March 12, est. 268k (prior 259k); Continuing Claims, March 5, est. 2.235m (est. 2.225m)
  • 9:45am: Bloomberg Economic Expectations, March (prior 42.5); Bloomberg Consumer Comfort, March 13 (prior 43.8)
  • 10:00am: JOLTS Job Openings, Jan., est. 5.5m (prior 5.607m)
  • 10:00am: Leading Index, Feb., est. 0.2% (prior -0.2%)
Central Banks

  • 8:00am: Bank of England bank rate, est. 0.5% (prior 0.5%)
DB's Jim Reid concludes the overnight wrap

Although we saw the Fed closer align its rates expectations with those of the market, the market pushed Fed Funds expectations back even further with the probability of a June hike taken down to 38% (from 54%). Yellen made mention in her press conference of the April meeting being ‘live’ – which is unlikely to be surprising given her preference for optionality – although the market clearly sees that as an even longer shot now with the probability down to 8% this morning, after being at 25% just 24 hours ago.

Away from the Fed, it’s worth adding that Oil (+5.83%) rebounded hard yesterday (and is up further this morning) and in turn wiped out the heavy losses from Monday and Tuesday. That more than played its part in the price action for risk assets with the surge coming on reports that Saudi Arabia and other oil exporters will limit output levels even if Iran refuses to cooperate. According to the WSJ, Qatar have been reported as saying that they will host a meeting on April 17th for both OPEC and non-OPEC members to discuss such measures, although we highlight that this date has appeared to be pushed back on a number of occasions now.

Looking at the latest in Asia, aside from a drop in the Nikkei (-0.73%) with the stronger Yen weighing on markets there, bourses elsewhere are trading with broad based gains with the Hang Seng (+1.02%), Shanghai Comp (+0.88%), Kospi (+0.70%) and ASX (+0.96%) all up strongly. Credit indices are performing strongly too with the iTraxx Aus and Asia indices 5bps and 4bps tighter respectively. Asia FX is also posting some solid gains, while the Aussie Dollar is up over half a percent following an unexpected fall in the unemployment rate data this morning.

Back to yesterday and a quick recap of the economic data. As noted earlier, core inflation for the US in February was up a slightly better than expected +0.3% mom last month (vs. +0.2% expected) which has helped to nudge the YoY rate up one-tenth to +2.3% and the highest now in five years. Headline inflation was as expected at -0.2% mom last month, with the YoY rate down four-tenths to +1.0%. Elsewhere we saw industrial production disappoint with a -0.5% mom decline in February and more than expected (-0.3% expected) with utilities and mining output both contributing to the slump. Capacity utilization was down four-tenths to 76.7% (vs. 76.9% expected) although there was some better news in the latest manufacturing production data which showed a better than expected +0.2% mom gain last month (vs. +0.1% expected). Elsewhere, last month’s housing starts data showed a robust +5.2% mom increase (vs. +4.6% expected) although permits slipped -3.1% mom (vs. -0.2% expected).

In Europe yesterday price action was pretty benign which was of little surprise ahead of the Fed. The Stoxx 600 (+0.04%) closed barely unchanged while credit indices were flat to slightly wider (iTraxx sub fins being the notable underperformer, closing 10bps wider). Notable during the European session however was the €24bn of primary bonds issuance which priced in Europe which was the biggest volume day in two years and the week-to-date volume so far the second busiest YTD.

Looking at the day ahead now, this morning in Europe the notable data to be released will be the final revision to the February CPI report for the Euro area (no change to -0.2% yoy headline expected) along with the January trade balance. While the dataflow is light, there’s no shortage of central bank meetings however with the BoE, SNB and Norges Bank all due to announce their latest policy decisions – the latter the only one where the market is expecting a change with a 25bps cut to the deposit rate expected (to 0.5%). This afternoon in the US it’s another reasonably busy afternoon of data. The Philly Fed business outlook for March will be closely watched, while we’ll also receive employment data in the form of initial jobless claims and JOLTS job openings for January. The Conference Board’s February leading indicator will also be released.

http://www.zerohedge.com/news/2016-...lar-and-yields-tumble-stocks-slide-gold-jumps
 

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#35
MtM - Brexit, Cyprus and the EU Summit 03/16
http://www.marctomarket.com/2016/03/brexit-cyprus-and-eu-summit.html

MtM - Fed Pulls Back to Two Hikes, Dollar Drops and Stocks Rally 03/16
http://www.marctomarket.com/2016/03/fed-pulls-back-to-two-hikes-dollar.html

MtM - Dollar Drop Extends Post-Fed, Stocks, Bonds and Commodities Rally 03/17
http://www.marctomarket.com/2016/03/dollar-drop-extends-post-fed-stocks.html

SA - Real time news 03/17
http://seekingalpha.com/market-news

TRB - Hot Links: Vol Silenced 03/17
http://thereformedbroker.com/2016/03/17/hot-links-vol-silenced/

CWS - Morning News: March 17, 2016
http://www.crossingwallstreet.com/a...ed:+Crossingwallstreet+(Crossing+Wall+Street)

TBP - 10 Thursday AM Reads 03/17
http://ritholtz.com/2016/03/thursday-am-reads-13/

Naked Capitalism Links 03/17
http://www.nakedcapitalism.com/2016/03/links-31716.html

TCS - Initial Guidance | 17 March 2016
http://www.capitalspectator.com/initial-guidance-17-march-2016/

MtM - Great Graphic: Dollar Index Retracement, Too Soon To Say Top is In 03/17
http://www.marctomarket.com/2016/03/great-graphic-dollar-index-retracement.html

SA - Wall Street Breakfast: Futures Slide After Fed Propels Stocks To 2016 High 03/17
http://seekingalpha.com/article/395...st-futures-slide-fed-propels-stocks-2016-high
 

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#36

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#38
Five reasons a Trump presidency could be good for gold
By: Peter Diekmeyer
The campaign rhetoric so far indicates that a Trump-led Republican administration would implement “big government conservatism,” policies, financed by increased borrowing and money printing. This would put upwards pressure on gold prices. A YouGov poll [1] released yesterday indicates that Donald Trump’s support among Republicans as their nominee for president, has risen above 50%.


Gold Seeker Closing Report: Gold Ends Slightly Lower While Silver Gains Nearly 2%
By: Chris Mullen, Gold-Seeker.com
Gold saw slight losses in Asia before it rose to as high as $1270.88 in London, but it then drifted back lower in New York and ended with a loss of 0.33%. Silver surged to as high as $16.031 before it also edged back lower in the last few hours of trade, but it still ended with a gain of 1.79%.
 

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#39
Frontrunning: March 18


Submitted by Tyler Durden on 03/18/2016 07:47 -0400


  • Dow's Freakish Bounce Makes Investors Whole, Can't Erase Doubts (BBG)
  • R.I.P. Dollar Rally as Dovish Fed Spurs Worst Slump Since 2011 (BBG)
  • Global Currencies Soar, Defying Central Bankers (WSJ)
  • Oil hits 2016 high above $42 on production and demand outlook (Reuters)
  • The U.S. Is Exporting Its Oil Everywhere (BBG)
  • Hillary Clinton’s Allies Launch Plan to Undercut Donald Trump Now (WSJ)
  • Sanders calls notion he should quit Democratic race 'absurd' (Reuters)
  • Turns Out a 'Lie' Lurked Beneath the Bookends of the BRICS (BBG)
  • Valeant Jitters Infect Specialty Drug Sector (WSJ)
  • Subprime auto loans come under scrutiny (FT)
  • ECB Urges Italy Banks Planning M&A to Target Strong Capital (BBG)
  • Senators say they might confirm Obama's high court pick after election (Reuters)
  • Aubrey McClendon Left His Biggest Backer With Billions to Lose (BBG)
  • BlueCrest Money Manager John McNiff Said to Leave Hedge Fund (BBG)
  • Toshiba says it may write down nuclear business, U.S. units probed (Reuters)
  • Defiant North Korea fires ballistic missile into sea (Reuters)
  • Ex-Porsche Executives Acquitted of Market Manipulation in Volkswagen Bid (WSJ)
  • U.S. sees new Chinese activity around South China Sea shoal (Reuters)


Overnight Media Digest

WSJ

- Efforts by many of the world's central banks to weaken their currencies are failing, raising concerns about whether policy makers are losing the ability to wield control over financial markets. This was the case again in Japan on Thursday, when the dollar fell 1.1 percent against yen. (http://on.wsj.com/1Ua8DpS)

- TransCanada Corp, the company behind the controversial Keystone XL oil pipeline project, agreed to buy Columbia Pipeline Group Inc for $10.2 billion. (http://on.wsj.com/1Ua8Idi)

- Lear Corp, one of the world's biggest auto suppliers is pressing the United Auto Workers to agree to lower wages in exchange for relocating jobs from Mexico back to Detroit. (http://on.wsj.com/1Ua8K4W)

- WiseTech Global Ltd, a software company launched out of a Sydney basement in the 1990s, said it had lodged a prospectus with the Australia's securities regulator for an initial public offering that could see it list with a market value of more than 1 billion Australian dollars ($765.50 million) after raising A$100 million-A$220 million. (http://on.wsj.com/1Ua8NNW)

- JPMorgan Chase & Co said its board authorized the repurchase of an additional $1.88 billion of the New York bank's stock through the end of the second quarter. (http://on.wsj.com/1UaaJWR)

- Since announcing plans to sell a minority stake in its Paramount Pictures studio three weeks ago, Viacom Inc said it has received interest from three dozen companies, even as Paramount is experiencing a particularly weak quarter at the box office. (http://on.wsj.com/1UaaMC5)



FT

* SNP will not match Osborne's tax cut for higher earners. (http://bit.ly/1RpGOmz)

* Disgraced former FIFA president Blatter paid $3.7 mln salary. (http://bit.ly/1RpGR1E)

* Google to sell robot maker Boston Dynamics. (http://bit.ly/1RpHict)

Overview

* Scottish National Party leader Nicole Sturgeon has said Scotland will not match British Finance Minister George Osborne's tax cut for higher earners.

* Soccer's ruling body, FIFA, said it paid disgraced former president Sepp Blatter 3.63 million Swiss francs ($3.75 million)last year, publishing his salary for the first time under new governance regulations.

* Alphabet Inc, the new holding company for Google, has put Boston Dynamics, part of its robotics division, up for sale.



NYT

- A Citigroup report on 20 nations said pension obligations, much of them unfunded, amounted to nearly twice the countries' total national debt. (http://nyti.ms/1R2bBtV)

- After failing to obtain approval for its Keystone XL oil sands pipeline, TransCanada Corp said on Thursday that it would buy the Columbia Pipeline Group for $10.2 billion. (http://nyti.ms/1R2ccM2)

- Abengoa SA's global ambitions are now the source of its troubles as it tries to avoid what would be the largest bankruptcy in Spanish corporate history. (http://nyti.ms/1R2bzlF)

- Gustavo Martinez, the chief executive of the advertising agency J. Walter Thompson, who was accused last week of racist and sexist behavior in a lawsuit that raised questions about the culture of Madison Avenue, has resigned. (http://nyti.ms/1R2bFKc)



Canada

THE GLOBE AND MAIL

** TransCanada Corp is buying Houston-based Columbia Pipeline Group Inc for $10.2 billion in cash to give it a major position in a massive shale gas region in the U.S. Northeast, where it has faced a competitive threat.(http://bit.ly/1Rptmio)

** Suncor Energy Inc is shedding more staff to prepare for lean times in the oil industry to last longer, even as crude prices climb above $40 a barrel for the first time in three-and-a-half months. (http://bit.ly/1Mr6bmA)

** The Liberal government's decision to quietly allow an exemption for seasonal temporary foreign workers is prompting calls from other sectors of the economy that also want restrictions lifted on access to foreign low-skilled labour.(http://bit.ly/1S7LznV)

NATIONAL POST

** Quebec plans to begin rolling back healthcare taxes while avoiding a deficit for a second year in a row, a rare feat among Canadian provinces struggling with slumping commodity prices and bloated balance sheets. (http://bit.ly/1pxZT09)

** The co-founders of Gluskin Sheff + Associates Inc are locked in an ugly legal battle with the company, claiming it owes them a staggering $185 million in post-retirement entitlements. (http://bit.ly/1Rp1ZFs)



Britain

The Times

Andrew Witty is to step down as chief executive of GlaxoSmithKline next year after more than three decades at one of Britain's biggest companies. (http://thetim.es/1TRXklJ)

Rio Tinto CEO Sam Walsh will retire in July and will be succeeded by the company's copper and coal division head, Jean-Sébastien Jacques.(http://thetim.es/1Mc1kuT)

The Guardian

Investors expect Sainsbury's to offer as much as 1.5 billion pounds for Argos on Friday, as the supermarket considers trumping a rival South African bid for the catalogue shop ahead of a 5 p.m. deadline. (http://bit.ly/1Z6sfKy)

The French government has promised a financial bailout for cash-strapped energy group EDF so that it can proceed with the 18 billion pounds plan to build the first nuclear reactors in Britain for 20 years. (http://bit.ly/1VfEnsC)

The Telegraph

The Bank of England has warned that a vote on the UK's membership in the European Union poses risks to economic growth, in a move that sees the central bank become increasingly active in the political debate. (http://bit.ly/1UjcW1D)

The Guardian will cut 250 jobs as it seeks to staunch heavy losses, raising the threat of its first-ever compulsory redundancies. (http://bit.ly/1RRG2PM)

Sky News

Phoenix, the 'zombie' life insurance group, is preparing to launch a takeover bid for Deutsche Bank AG's British insurance unit, Abbey Life, that would accelerate industry consolidation amid sweeping regulatory changes. (http://bit.ly/22nMgBR)

BT Group is to hire Simon Lowth as its new finance chief, handing the former BG executive a rapid return to the top ranks of British business following the oil company's takeover. (http://bit.ly/1R0Wzo9)

The Independent

Coca-Cola has said the British government's plan to introduce a tax on sugar will not reduce obesity and was the wrong way to address the issue. (http://ind.pn/1Mb5X8s)

Austerity is to be extended into the next decade in Chancellor George Osborne's 2016 budget, according to analysis by the Institute for Fiscal Studies. (http://ind.pn/1U9O7G1)


http://www.zerohedge.com/news/2016-03-18/frontrunning-march-18
 

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#40
On Opex Day, It's All About The Dollar: Futures, Oil Levitate As USD Weakness Persists


Submitted by Tyler Durden on 03/18/2016 06:52 -0400


It may be option expiration day (always leading to abnormal market activity) but it remains all about the weak dollar, which after crashing in the two days after the Fed's surprisingly dovish statement has put both the ECB and the BOJ in the very awkward position that shortly after both banks have drastically eased, the Euro and the Yen are now trading stronger relative to the dollar versus prior.

As DB puts it, "the US Dollar has tumbled in a fairly impressive fashion since the FOMC on Wednesday with the Dollar spot index now down the most over a two-day period since 2009" which naturally hurts those countries who have been rushing to debase their own currencies against the USD.

For now this is felt most acutely in Japan, where the Nikkei continues to tumble, tracking every move in the USDJPY. "There’s concern for exporters,” said Nobuyuki Fujimoto, a senior market analyst at SBI Securities Co. “If the yen’s trading around 114 to the dollar, then companies will expect profits next fiscal year, but when it’s 110, most exporters will post losses." Worse, after last night's record plunge in the 10Y JGB yield (more shortly), the Japanese curve is now inverted and the BOJ will have to cut rates at least once more in the immediate future, in the process also forcing additional Yen weakness.

Europe will soon realize the same, because as Bloomberg writes, ECB bond buying backstop or no, following a 12% rebound since a low last month, the Stoxx Europe 600 Index is trading near its highest valuation of the year even as analysts keep slashing profit estimates for European companies. which is odd considering the same is taking place in the US and the strong dollar is blamed.

The flipside, of course, is that the weak dollar has provided a relief trade for commodities, and has pushed crude back up over $40/barrell (a price above which US shale production will soon return), and sending commodity metals to multi month highs. The combination of the weak dollar and higher commodities have pushed up the beaten down energy sector, although it remains to be seen if this will translate into actual earnings gains. The Fed "has provided a strong boost for commodities," said Niv Dagan, executive director at Peak Asset Management LLC in Melbourne. “The fact that U.S. interest rates won’t rise any time soon - and we’ve seen the ECB announce additional stimulus and the Bank of Japan moving to negative interest rates - does provide that additional confidence to the market."



The MSCI Asia Pacific excluding Japan Index is back to where it was in December, having rebounded 15 percent since hitting a four-year low in January. U.S. crude retreated, after soaring 11 percent in the last two days, and copper traded near a four-month high. South Korea’s won posted its biggest two-day gain since 2010 versus the dollar and the yen traded near a 16-month high. Ten-year bond yields sank to all-time lows in Japan and Taiwan.

In short, for now the "central bank accord" profiled yesterday is working, to give the impression that inflation is returning when really all the CBs have done is agree to weaken the dollar for the time being so as to not offset each other's currency devaluation efforst.

Elsewhere, Chinese stocks jumped another 1.7%, bringing its weekly gain to 5.2% and closing just shy of 3,000 after data showed the Chinese housing bubble is accelerating, with prices increasing in the most cities since March 2014.

Market Wrap

  • S&P 500 futures up 0.2% to 2035
  • Stoxx 600 up 0.2% to 341
  • FTSE 100 up 0.3% to 6221
  • DAX up 0.3% to 9917
  • German 10Yr yield down 3bps to 0.21%
  • Italian 10Yr yield down 3bps to 1.24%
  • Spanish 10Yr yield down 2bps to 1.41%
  • S&P GSCI Index down 0.3% to 336.8
  • MSCI Asia Pacific up 0.1% to 129
  • Nikkei 225 down 1.2% to 16725
  • Hang Seng up 0.8% to 20672
  • Shanghai Composite up 1.7% to 2955
  • S&P/ASX 200 up 0.3% to 5183
  • US 10-yr yield down 3bps to 1.87%
  • Dollar Index up 0.28% to 95.03
  • WTI Crude futures down 0.2% to $40.11
  • Brent Futures down 0.5% to $41.34
  • Gold spot down 0.2% to $1,255
  • Silver spot up 0.7% to $16.02
Top Global News

  • TransCanada Locks in Growth With $10.2 Billion Pipeline Deal: Will pay $25.50 a share, representing a 10.9% premium to Columbia’s closing price on March 16, will also assume ~$2.8b of debt; will fund the purchase with proceeds from asset sales and a C$4.2b offering of new shares; is its biggest-ever deal
  • TransCanada Bought a Power Plant Only to Sell It Six Weeks Later
  • Adobe Beats Estimates as Demand Surges for Cloud Services: 1Q adj. EPS 66c, est. 61c; 1Q rev. $1.38b, est. $1.34b.
  • Pearson Moves to Reassure Staff That Valeant Isn’t Going Broke: CEO Mike Pearson took a step to reassure his employees on Wed., saying in a memo to workers that the co. won’t go bankrupt, apologizing for recent turmoil, shrs down 51% Tues.
  • Ackman’s Horror Week Gets Worse as Valeant Fall Threatens Rating: Standard & Poor’s warned it might cut Pershing Square’s credit rating to the cusp of junk-bond status
  • Apple Prepares to Unveil Smaller IPhone With Narrower Ambitions: Analysts see Apple selling 15 million lower-end devices a year
  • Apple Embraced by Bond Buyers While Others Left Out in the Cold
  • JPMorgan Boosts Buyback by $1.88 Billion With Fed’s Blessing: Would be on top of the $6.4b in buybacks approved by regulators in last year’s capital plan
  • CFTC Brought in to Police Murky Market for Biofuel Credits: Refiners spent at least $1b on ethanol credits in 2015
  • Fed That Can’t Go It Alone Pulls Carpet From Under Bond Yields: Treasury 10-year yields see biggest weekly drop since Jan. 29; shallower rate path consistent with global backdrop: Barclays
  • Dow’s Freakish Bounce Makes Investors Whole, Can’t Erase Doubts: Crude rally, patient Fed boost benchmark by 12% since Feb. 11
  • Lockheed’s GPS Satellites Face New Delays Over a Cracked Part: Flawed capacitors from Harris Corp. may add 3 months to delays
  • Viacom Gets Interest From 3 Dozen Cos. on Paramount Stake: WSJ: Players “include some Asian interests,” WSJ cites CEO Philippe Dauman in an interview.
  • Facebook, Twitter in Race to Win Right to Stream Live TV: NYP: Facebook, Twitter approached programmers about a deal for rights to stream conventional TV programming: New York Post
  • Orix Said to Plan $1b on Acquisitions Via U.S. PE Firm: Reuters: Plans to spend $1b over 3-5 yrs on acquisitions via a private equity firm it has set up in the U.S., Reuters reports
  • Twitter to Shut TweetDeck for Windows on April 15: VentureBeat
Looking at regional markets, we as usual start in Asia where stocks traded mostly higher following a strong US lead where DJIA and S&P 500 closed in positive territory YTD after continued USD weakness boosted the commodity complex.

ASX 200 (+0.3%) coat-tailed on the commodity advance in which iron ore gained around 5% and WTI rose above USD 40/bbl to its highest since Dec. Nikkei 225 (-1.25%) underperformed after JPY continued to strengthen against USD to the detriment of local exporter competitiveness.

The Shanghai Composite Index advanced 1.7 percent and was up 5.2 percent
for the week, its best performance in four months. New-home prices
gained in 47 Chinese cities in February, compared with 38 in January,
according to a government report; also helping was the PBoC which upped its liquidity injections as not a day passes any more with some central bank engaging in drastic asset price reflating easing.

Hong Kong’s Hang Seng Index
rose to a two-month high. Tencent Holdings Ltd. jumped as much as 4.5
percent as investment in social networking and games helped Asia’s
biggest Internet company post a better-than-expected 45 percent jump in
quarterly sales.

10yr JGBs traded higher amid the risk-averse sentiment seen in Japanese stocks, with firm bids seen in afternoon trade after strong results from the BoJ's JPY 1.26tr1 JGB purchasing operations which saw 10yr and 20yr yields decline to new record lows, while the BoJ were also said to purchase government debt under repo agreements for the 1st time in 5 years.

BoJ minutes from January 28th-29th policy meeting stated that negative rates were desirable to reach price goal and that underlying inflation trend is steadily progressing. BoJ minutes also stated that negative rates are to permit additional easing in 3 dimensions and that BoJ offered 2 options which were to expand QQE or adopt QQE with negative rates.

Asian Top News

  • Yuan Strengthens After PBOC Raises Fixing by Most Since November: Dollar declines to 5-mo. low following Fed comments
  • China Overseas Land Profit Advances 22% as Property Values Rise: Profit attributable to shareholders rose to HK$33.3b ($4.3b) last year, from HK$27.2b in 2014
  • Emerging-Market Stocks Near Bull Market After Fed Turns Dovish: Rally will probably last for next 3 mos., CBA’s Ji says
  • BOJ Minutes Show No Talk of More QQE Before Adopting Minus Rate: BOJ voted 5-4 on rate, one opponent of policy is leaving board
  • Default Jitters Calm for Indian Lenders on $12 Billion Boost: RBI allowed banks to treat some balance sheet items as equity
  • Leissner’s Work With Indonesia Financier Drew Goldman Scrutiny: Bank ended work on Newmont copper deal after in- house review
  • Indonesia Group Seeks $1 Billion for Newmont Copper Asset: Financing would include $750m loan, rest in mezzanine
In Europe, equities have kicked off the final session of the week in a tentative fashion, with major indices relatively flat amid light news flow . In terms of a sector breakdown, energy names are once again among the underperformers, with the commodity complex coming under modest pressure as WTI futures reside around the USD 40/bbl level. Bunds have continued their move higher this morning, on track to end the week over a point higher, with today's price action bolstered by dovish rhetoric from ECB's Praet and Draghi.

European Top News

  • UBS Bonus Pool Surges 14%, as Other Lenders Cut Compensation: Bonus pool swelled to CHF3.5b from CHF3.06b; CEO Ermotti received bonus of 11.5 million francs, up 37%
  • Praet Says ECB Rates Can Still Fall If Shocks Worsen Outlook: Central bank’s chief economist says recovery remains fragile
  • Generali Fourth-Quarter Profit Rises on Higher Operating Income: Net income rose to EU304m from EU81m million yr earlier
  • Former Porsche Executives Acquitted in Stuttgart Trial: Former Porsche CEO Wendelin Wiedeking and ex-CFO Holger Haerter were acquitted of charges they manipulated shares of Volkswagen in 2008 in a failed bid to buy the carmaker
  • Sunrise Gains After Germany’s Freenet Takes Stake in Carrier: Gained as much as 9.8% after Freenet agreed to buy a 23.8% stake
  • EDF Said to Plan Approval of Hinkley Point Nuclear Plant by May: Still plans to make the final decision to go ahead with an GBP18b nuclear power plant in the U.K. before its AGM in May
  • trategists Now See Virtually No Europe Stock Gains in 2016: Newest forecasts see weakest year since 2011 for region
In FX, it has so far been a very quiet session in Europe this morning, but with some notable volatility — against the USD — a welcome period of consolidation playing through across the board. The USD index has attempted a modest recovery of sorts, regaining some ground against GBP, where Cable has dipped back into the low 1.4400's after the rejection of 1.4500. EUR/USD has drifted down into the mid 1.1200's, but the commodity currencies have conceded lesser ground as risk sentiment has stabilised again.

In this respect, we have seen some basing out in spot and cross JPY rates also, but USD/JPY especially, is looking fragile above 111.00, though a move back to 112.00 would settle nerves . Little on the data slate until North American comes in; Michigan sentiment in the US and CPI in Canada are stand out, while Fed speakers Dudley, Rosengren and Bullard all make an appearance later today. NOK towards the better levels seen in the wake of the rate cut yesterday, but CHF trade very tight after the SNB provided the familiar rhetoric.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, gained 0.2 percent following a two-day slide of more than 2 percent that drove it to an eight-month low. The Fed cited weaker global growth and turmoil in financial markets for its decision to reduce the number of interest-rate increases forecast for 2016.

In commodities, WTI prices have started to consolidated around the USD 40/bbl after reaching highs of USD 40.55/bbl, and Brent has also slightly fallen of its recent highs and currently resides at USD 41.17/bbl. In addition to the dollar’s decline, crude was supported this week by data showing U.S. output fell to the lowest level since November 2014 as well as a planned freeze on production by countries including Saudi Arabia and Russia.

Gold prices have started to retrace after recent strengthening following the FOMC with the 1250.00/oz level firmly in its sights. Copper prices have erased recent gains after a recent rally over the last week and Iron Ore prices increase slightly on the session after continued improvement in the Chinese property sector. The Bloomberg Commodity Index held near a three-month high.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities have started the session off on a tentative footing with newsflow and data very much on the quiet side after what has been another busy week in the market
  • The USD index has attempted a modest recovery of sorts, regaining some ground against GBP, where Cable has dipped back into the low 1.4400's after the rejection of 1.4500
  • Looking ahead, highlight Include Canadian CPI, US U. of Mich. Sentiment, Fed's Dudley, Bullard and Rosengren
  • Treasuries higher in overnight trading, global equity markets mixed and oil drops; today’s economic calendar brings U. of Michigan Sentiment and three Fed speakers.
  • Policy makers across the world are acting in ways that suggest there may have been more to last month’s Group of 20 meeting in Shanghai than mere platitudes about promoting global economic growth. That’s led some analysts to conclude that there is indeed a secret Shanghai Accord
  • European Union leaders risked a showdown with Turkey over efforts to create a legal migration route to end the chaotic crossings of the Aegean Sea, as pressure from countries including Cyprus led the EU to retreat from earlier sweeteners
  • UBS, which cut its securities unit to focus on wealth management, raised its bonus pool by 14% in 2015, to 3.5 billion francs ($3.6 billion) from 3.06 billion francs, leaving it the only major European lender to award bankers with higher compensation
  • The ECB still has room to cut interest rates should the euro area’s economic recovery falter, Executive Board member Peter Praet said
  • Deutsche Boerse AG and London Stock Exchange Group Plc want to create a European trading champion. They just don’t want regulators to think it’s too big to fail
  • Investors at home and abroad can’t get enough 10-year Japanese government bonds, driving the yield to an unprecedented minus 0.135%
  • The yuan headed for the biggest two-day gain in a month after China’s central bank raised its reference rate by the most since November following a decline in the dollar. The PBOC boosted its fixing by 0.51% to 6.4628 against the greenback
  • $10.775b IG corporates priced yesterday; weekly volume $30.385b, March $116.805b, YTD $411.055b
  • No HY priced yesterday, MTD 13 deals for $7.315b, YTD 38 deals for $22.165b
  • BofAML Corporate Master Index OAS 2bp lower yesterday at +178, -32bp MTD, +0bp YTD; T1Y range 221/129
  • BofAML High Yield Master II OAS 12bp lower yesterday at +682, -53bp MTD, -12bp YTD; T1Y range 887/438
  • Sovereign 10Y bond yields lower; European, Asian equity markets mixed; U.S. equity- index futures rise. WTI crude oil, copper, gold fall
US Event Calendar

  • 10:00am: U. of Mich. Sentiment, March P, est. 92.2 (prior 91.7)
    • Current Conditions, March P, est. 106.8 (prior 106.8)
    • Expectations, March P est. 82.5 (prior 81.9)
    • 1 Yr Inflation, March P (prior 2.5%)
    • 5-10 Yr Inflation, Mar P (prior 2.5)
Central Banks

  • 9:00am: Fed’s Dudley speaks in New York
  • 11:00am: Fed’s Rosengren speaks in New York
  • 2:30pm: Fed’s Bullard speaks in Frankfurt
DB's Jim Reid concludes the overnight wrap

Twenty-four hours on and there’s been little stopping the positive sentiment feeding its way through risk assets. With a dovish Fed to thank for that, yesterday saw the Dow (+0.90%) close in positive territory (+0.32%) for the first time in 2016. As a reminder it was down as much as -10% on the year during the February lows. The S&P 500 (+0.66%) had also joined the positive YTD club briefly but just failed to hold onto the stronger earlier gains by the end of play, while it was another strong session for US credit with CDX IG closing 2bps tighter. European equity markets were a little softer (the firmer Euro to blame) but, and playing catch-up, European credit markets were in rally mode with iTraxx Main and Crossover 6bps and 16bps tighter respectively.

Meanwhile the US Dollar has tumbled in a fairly impressive fashion since the FOMC on Wednesday with the Dollar spot index now down the most over a two-day period since 2009. It is emerging market currencies which have been the biggest beneficiaries of that, while yesterday also marked a landmark day for Oil as we saw WTI (+4.52%) close above $40/bbl for the first time in 2016. It’s now up a fairly remarkable +54% from the intraday lows of last month.

Doing little to hurt matters was further evidence of an improving US manufacturing sector yesterday. Indeed, on the back of a much better than expected improvement in the NY Fed empire manufacturing survey earlier this week, yesterday’s Philly Fed manufacturing survey showed the headline business conditions index rising an impressive 15.2pts to 12.4 (vs. -1.5 expected) and the best print since February last year. The details of the survey were encouraging also with new orders in particular a standout with the monthly increase the most since 2005, while shipments and employment also improved. All-in-all the data is certainly an encouraging sign for hopes of further improvement in this month’s ISM manufacturing reading which we’ll get two weeks today.

So in the past 8 days we’ve seen the ECB, BoJ and Fed meetings come and go and we can add the BoE, SNB and Norges Bank to that list after their respective policy meetings yesterday. Of the latter three the only change was a 25bps cut from the Norges Bank (as expected) to a record low 0.5% with plenty of signs that the Bank may be prepared to ease further later in the year. Despite only two of those six central banks actually having loosened policy, there’s no doubt that it’s been a decidedly dovish period. In the Fed’s case we’ve seen expectations for tightening scaled back, while the remainder appear to either be on hold in the near term or weighing the prospects for potential future easing later in the year. It’s worth taking a look at what the above action/lack of action has done for asset prices lately. Covering the period in the moments prior to the ECB last Thursday up to last night’s closing prices, the biggest impact has been in credit markets which is unsurprising given the news of potential corporate-bond buying from the ECB. In Europe we’ve seen Main and Crossover tighten 16bps and 53bps respectively, while US cash credit spreads have also performed very well with IG and HY 11bps and 75bps tighter respectively. Interestingly European equities are virtually unchanged with the Stoxx 600 -0.1% in that time. The S&P 500 is +2.6% however, driven by the last two days of gains. The USD index is 2.7% weaker, while the Euro (+3.0%) has failed to stick to the immediate post-ECB weakening script. Oil has rallied a robust +5.2%, Gold is +0.7% while moves in sovereign bond markets are perhaps most interesting. That’s more due to the lack of change in yields in the time period than anything substantial with 10y Treasuries just 2bps higher in yield, 10y Bund yields 1bp higher and 10y BTP yields (as a proxy for peripherals) 10bps lower. Clearly the volatility in between for all assets has to be acknowledged however.

Glancing at our screens this morning, bourses in Asia are closing the week on a high note generally and following much of the lead again from Wall Street last night. There are gains for the Hang Seng (+0.62%), Shanghai Comp (+1.88%), Kospi (+0.18%) and ASX (+0.33%), although bourses in Japan are weaker again have been weighed down by an appreciating Yen. The Nikkei is currently -1.28%. The other notable news this morning is out of China where the PBoC has strengthened the Yuan fix by the most since November (+0.51%) following those moves in the US Dollar yesterday. Elsewhere, Oil is continuing to hold those big gains, while credit markets in Australia and Asia are a couple of basis points tighter. The lone data has come out of China where property prices have continued to firm in February, gaining in 47 cities compared to 38 cities in January.

Moving on. With regards to the remainder of yesterday’s data, initial jobless claims printed at 265k for last week (vs. 268k expected) which was up a modest 7k on the prior week. There was further labour market data in the form of JOLTS job openings covering the month of January which came in slightly ahead of consensus at 5.54m (vs. 5.50m expected). Both the hiring and quits rates were reported as declining. Finally the Conference Board’s leading index was up a less than expected +0.1% mom in February (vs. +0.2% expected). Meanwhile in Europe the only data of note was the final revision to the February CPI report for the Euro area which was confirmed at -0.2% yoy at the headline, but revised up one-tenth at the core to +0.8% yoy.

Over at the BoE, as expected we saw no change in policy after a unanimous confirmation vote of 9-0. The bulk of the minutes showed little in the way of new information with domestic consumption reported as being robust and that the near term outlook for inflation was little changed since the inflation report last month. More interesting were the comments around the upcoming June Brexit referendum. The minutes made mention to there appearing to be ‘increased uncertainty surrounding the forthcoming referendum’ and that ‘uncertainty is likely to have been a significant driver of the decline in sterling’. The minutes also noted that ‘it may also delay some spending decisions and depress growth of aggregate demand in the near term’.

Looking at the day ahead now and what is a slightly lighter calendar relative to that of recent days. This morning in Europe the only data of note are the February PPI data for Germany and Q4 wage data out of France. In the US this afternoon the lone release will be the first read of this month’s University of Michigan consumer sentiment survey, where current consensus is for no change to current conditions but a modest pickup in expectations. Today will also see the first Fedspeak post FOMC so it’ll be worth keeping an eye on the individual comments from Dudley (due 1pm GMT), Rosengren (due 3pm GMT) and Bullard (due 7pm GMT).


http://www.zerohedge.com/news/2016-...ar-futures-oil-levitate-usd-weakness-persists