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R.T.M. ~ Frontrunning ~ 7th Ed., Vol.2 ~ Feb 15th - 19th

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#2
Shipping & Energy 02/14:

Another ‘Megaship’ Grounds in Europe
http://gcaptain.com/another-megaship-apl-vanda-aground-in-europe/

Kremlin Considers Privatizing Sovkomflot
http://gcaptain.com/kremlin-considers-privatizing-sovkomflot/

Libyan Navy Seizes Foreign Tanker
http://www.worldenergynews.com/news/libyan-navy-seizes-foreign-tanker-640585

Iran Oil Embargo – First Tankers Depart For Europe Since Sanctions End
http://gcaptain.com/iran-oil-embargo-first-tankers-depart-for-europe-since-sanctions-ended/

Berlin film 'Fire at Sea' shows horror of refugee crossings
http://www.reuters.com/article/film-us-filmfestival-berlin-fuocoammare-idUSKCN0VM0KE

Maersk Moves to Scrap Ships at Alang Shibreakers, Angering NGO
http://gcaptain.com/maersk-moves-to-scrap-ships-at-alang-shibreakers/

World Trade at Sea Has Hangover From Party That Never Happened
http://www.bloomberg.com/news/artic...a-has-hangover-from-party-that-never-happened

Baltic Dry Index Logs First Gain of 2016
http://gcaptain.com/baltic-dry-index-logs-first-gain-of-2016/

Rig Count Plunges Yet Again, Down Another 30
http://oilprice.com/Energy/Energy-General/Rig-Count-Plunges-Yet-Again-Down-Another-30.html

A Market Collapse Is On The Horizon
http://oilprice.com/Energy/Energy-General/A-Market-Collapse-Is-On-The-Horizon.html

Port of Oakland sets plan to shift cargo when terminal closes
https://www.ajot.com/news/port-of-oakland-sets-plan-to-shift-cargo-when-terminal-closes

US ports ill-prepared for new container weighing requirements
http://splash247.com/us-ports-ill-prepared-for-new-container-weighing-requirements/

Coast Guard Issues Guidance on the Polar Code
http://www.maritime-executive.com/article/coast-guard-issues-guidance-for-ice-navigators

U.S. Approves ConocoPhillips LNG Exports from Alaska
http://www.maritime-executive.com/article/us-approves-conocophillips-lng-exports-from-Alaska

Testing of Panama Canal Lock Repair Complete
http://www.maritime-executive.com/article/testing-of-panama-canal-lock-repair-complete

Death Ship Captain Back in Australia
http://www.maritime-executive.com/article/death-ship-captain-back-in-australia
 

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#3
Hell Week for the Global Economy Gives Signs of Things to Come
By: David Haggith
The developing Epocalypse will become the super-volcano of economic history, and this week revealed cracks in the surface that give hints of the eruption to come. It was a week of crumbling throughout global stock markets that has challenged records. Thursday, Hong Kong stocks suffered their worst start of a Chinese New Year since 1994 in a day of monkey business for the year of the monkey. Traders fled falling stocks and took cover in safe-haven investments, bringing the Hang Seng index down 742 points (3.9%).
 

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#4

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#5
Weekly Forex Review - 15th to the 19th of February
Forex Reviews


Published on Feb 13, 2016

15 Pairs and Markets Analysed this Week in the review: EURUSD, GBPUSD, AUDUSD ( 4 Hour ), NZDUSD ( 4 Hour ), USDJPY, USDCHF, Silver, Gold, AUDCAD, GBPAUD, AUDNZD ( 4 Hour ), GBPNZD, GBPCAD, EURAUD and EURCAD.

Areas highlighted in the review this week include potential opportunity zones, management points and targets.

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.
 

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#6
Positioning the World for Transition ~ with Bix Weir
FinanceAndLiberty.com


Published on Feb 14, 2016
Will Lehr of Perpetual Assets interviews Bix Weir of Road To Roota Full interview and article here: https://www.perpetualassets.com/news/...

This video was posted with permission from http://PerpetualAssets.com

FINANCE AND LIBERTY:
SUBSCRIBE (It's FREE!) for more ►http://bit.ly/Subscription-Link
Website ►http://FinanceAndLiberty.com
Like us on Facebook ►http://fb.com/FinanceAndLiberty
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Google Plus ►http://Gplus.to/FinanceLiberty
 

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#7
Deteriorating Faith
belangp


Published on Feb 14, 2016
The reason the dollar has not tanked (yet) and the cracks that are forming which will eventually lead to the inevitable outcome.
 

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#8
Bo Polny-Dollars & Bonds Not Safe Haven This Crash
Greg Hunter


Published on Feb 14, 2016
Financial analyst Bo Polny expects big losses in the bond market around the world. Polny explains, “How many countries are going to be happy about that? Now, you want to know why gold goes vertical? People are going to run from paper because the bonds that were safe havens in 2007 and the dollars that were safe havens in 2007, this time around, is the opposite. So, you don’t have safety in paper. You don’t have safety in the dollar. You don’t have safety in bonds this time. So, gold will be the asset class that everybody is going to run to.”

Is gold on the launching pad with the rocket boosters warming up? Polny says, “Yes, yes, there is very little time left. If you don’t act, and your money is in the stock and bond markets . . . a transfer of wealth is going to happen, and the date in October is not a crash. It’s something else. . . . Before all that happens, you are going to have markets collapse. We may have a little bounce in the markets, but that will be the final opportunity to get out. If people have not gotten out of their positions and done something with their stocks before the end of this month, February, it’s going to get ugly.”

Join Greg Hunter as he goes One-on-One with market cycle analyst Bo Polny of Gold2020Forecast.com.
All Links can be found at USAWatchdog.com: http://usawatchdog.com/stocks-cut-in-...
 

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#9
Frontrunning: February 15


Submitted by Tyler Durden on 02/15/2016 07:55 -0500

  • China’s Yuan Makes Largest Gain Since 2005 on PBOC Cue (WSJ)
  • Japan's Nikkei soars over 7%, for its biggest gain since 2008 (BBG)
  • Global shares rise as firmer Chinese yuan eases deflation fears (Reuters)
  • Banks' Surge Takes Europe's Stock Rally Into 2nd Day; HSBC Rises (BBG)
  • Oil extends rally on prospects OPEC could act to counter low prices (Reuters)
  • Europe's Higher-Yielding Bonds Benefit as Global Turmoil Eases (BBG)
  • Republicans gear up for Supreme Court battle after Scalia's death (Reuters)
  • Indian-American judge who could replace Scalia worked on controversial cases for business (Reuters)
  • ECB now officially everyone's "toxic bank": ECB in talks with Italy over buying bundles of bad loans (Reuters)
  • Soaring Chinese Imports From Hong Kong Renew Fake Trade Concerns (BBG)
  • Oil Speculators Shrug Off Huge Stockpiles to Bet on Price Climb (BBG)
  • SoftBank Announces $4.4 Billion Share Buyback (WSJ)
  • Record-setting cold chills U.S. Northeast on Valentine's Day (Reuters)
  • Chinese Banks May Need All the Help They Can Get (WSJ)
  • Brazil's 5,500 Bankruptcies in 2015 Signal Deeper Credit Crisis (BBG)
  • Gold Gets Thumped as Risk-On Mood, Surging Shares Erode Demand (BBG)
  • ECB's 'Whatever It Takes' May Be Too Much for German Top Court (BBG)
  • Athens may face a choice: Bail-out or bail-in? (Kathimerini)
  • Trump and Drudge for the win, again: Matt Drudge’s army is bigger than the RNC’s (Salon)


Overnight Media Digest

WSJ

- The U.S. Supreme Court vacancy left by Justice Antonin Scalia created one of the last major power struggles between President Barack Obama and congressional Republicans. Obama said he would fulfill his constitutional responsibilities to nominate a successor in the coming weeks. (on.wsj.com/1LoZgtR)

- The U.S. and Russia stepped up their efforts to cement a cease-fire in Syria as Turkey rebuffed appeals from world leaders for an immediate halt to shelling of American-backed Kurdish forces. (on.wsj.com/1R2Ay6S)

- China shares fell Monday, catching up with losses in markets around the world, as mainland markets reopened following the lengthy Lunar New Year holiday. The Shanghai Composite Index and the Shenzhen market were closed last week when worries about global growth and the health of banks sparked selling across the globe. (on.wsj.com/1mBEh0t)

- Japan's economy shrank again in the fourth quarter, the latest confirmation that Prime Minister Shinzo Abe's growth program is sputtering. The contraction, the fourth in seven quarters and could lead to calls for further monetary and fiscal stimulus. (on.wsj.com/1QBBEnj)



FT

HSBC Holdings Plc decided on Sunday to keep its headquarters in Britain, rejecting the option of shifting its centre of gravity back to its main profit-generating centre, Hong Kong, after a 10-month review.

UK's National Health Service (NHS) said it will invest more than one billion pounds a year by the end of the decade, in a drive to improve mental health services in the country.

Britain's push to win backing from its European partners for its wish list of EU reforms will go "right to the wire" at a summit this week, Foreign Secretary Philip Hammond said on Sunday.



NYT

- Prosecutors claim that the Porsche holding company misled investors in 2008 on its plan to take over Volkswagen , sending VW stock soaring. The criminal trial in Germany has shed new light on how a billionaire family acquired ultimate power at Volkswagen in the years leading up to the carmaker's emissions-cheating crisis. (http://nyti.ms/1KQku8M)

- Japan's economy shrank in the final three months of 2015, the government said on Monday, undergoing a more severe contraction than experts had expected amid signs that global growth was stalling. (http://nyti.ms/1KjYymM)

- HSBC Holdings Plc said on Sunday that it would keep its headquarters in Britain after announcing plans last year to review whether to move its home. The bank, which is based in London but generates more than half of its earnings in Asia, announced a formal review in April, citing increasing regulatory requirements and a tax that had hit banks based in Britain particularly hard. (http://nyti.ms/1Sr965Y)



Britain

The Times

UK Companies have reported their fastest growth for two years, but supermarkets and the oil and gas industries weighed heavily on an otherwise encouraging performance, according to an analysis by the Share Centre. (http://thetim.es/1WlSyut)

Karl Kohler, the chief executive of Tata Steel in Europe, will join thousands of steel workers marching in Brussels today to demand urgent action to save the industry. (http://thetim.es/1WlSzyy)

The Guardian

People facing mental health crises will be able to get community care 24 hours a day, seven days a week as part of the biggest transformation of NHS mental heath services in England for a generation, to be unveiled on Monday. (http://bit.ly/1WlSFWO)

Britain's banks are vulnerable to a global financial shock despite efforts to shore up their finances, according to John Vickers, who led the inquiry into the safety of UK banks following the 2008 financial crisis. (http://bit.ly/1WlSL0t)

The Telegraph

Asia's richest man, Li Ka-Shing, is among five suitors that are expected to make final bids for London City Airport this week to clinch a deal that could value the business at about 2 billion pounds ($2.9 billion). (http://bit.ly/1WlSOcH)

Sky News

Peter Bazalgette, the creator of Big Brother and one of Britain's most influential creative industries figures, is on the verge of passing an audition to become the next chairman of ITV Plc. (http://bit.ly/1TjATFF)

HSBC Holdings Plc has decided to keep its headquarters in UK, following speculation that the bank was considering a move to Hong Kong. (http://bit.ly/1WlUjrp)

The Independent

The GMB union will bring an army of nearly 640,000 workers to help the battle to keep Britain in the European Union, The Independent reveals. (http://ind.pn/1WlTrDh)

The board of French energy company EDF SA is expected to postpone a decision once again on whether to commit to the 18.6 billion-pound ($27 billion) Hinkley Point C project, which is at the heart of Prime Minister David Cameron's strategy to "keep the lights on" in Britain in the next decade. (http://ind.pn/1WlTv5P)


http://www.zerohedge.com/news/2016-02-15/frontrunning-february-15
 

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#10
Global Stocks Soar On Stimulus Hopes After Miserable Chinese, Japanese Data; Short Squeeze


Submitted by Tyler Durden on 02/15/2016 07:06 -0500

Bad news is once again good news... for stocks that is.

After a month and a half of markets unable to decide if they should buy or sell on ugly data, over the weekend, People’s Bank of China Governor Zhou Xiaochuan expressed faith in the economy, and said there is no basis for further Yuan devaluation, something the PBOC has consistently implied over the past year, despite two sharp devaluation episodes. That said, for Xiaochuan to break a very long silence, shows i) just how serious the threat of devaluation for China is and ii) how eager the PBOC also is to jawbone risk higher.

And while further devaluation is guaranteed, for now traders decided to take advantage of this verbal intervention and ignore the worst Japanese GDP data in over a year, when as reported last night, the country's economy contracted at a -1.4% annualized rate, far worse than expected -0.8%...





... as well as to ignore the worst Chinese trade data, with both exports and imports coming below the lowest Wall Street estimate, since August...







... when just days after the trade report the PBOC proceeded with its first devaluation. The data was so bad it managed to push the Shanghai Composite nearly into
the green after opening down nearly 3% on a delayed catch up to the rest
of the world selloff.

The result of all this terrible economic data: hopes for more stimulus around the globe, and mostly in Asia, with bank concerns (especially of Deutsche Bank) that more stimulus is not what the global financial system needs soundly ignored for now.

The following quotes summarizes the catalysts for today's move best:

"The Chinese market didn’t react as bad as we feared and with the weak export data there is some big hope that he central banks will react quite fast," John Plassard, senior equity-sales trader at Mirabaud Securities LLP in Geneva, told Bloomberg. "It’s a mix of hope of intervention from the Asian central bank, short squeeze and also a relief in some energy and banking sectors, the most shorted sectors."

And there are your catalysts for today's surge: hope of more central bank intervention and a global short squeeze.

So back to square one.

The immediate result was the biggest Yuan surge since 2005, climbing 1.2 percent from its Feb. 5 close to 6.4942 per dollar in Shanghai; the biggest jump in Japanese equities since October 2008 on the heels of the Nikkei's 7.2%, or 1,070 point jump; the biggest spike in the MSCI Asia Pacific Index since 2009, a continuation of Friday's rally in Europe with the Stoxx 600 up over 3% led by financials, and even WTI jumped nearly 2% to rise back over $30 this morning, despite being lower most of the session on renewed excess supply concerns now that Iranian tankers are en route to their destination.

Among the other oil price drivers overnight, was Iran sending its first oil cargos to offshore destination after the lifting of sanctions: South Korea imports from Iran reach 2-yr high as Saudi imports fall. Iran average oil exports at 1.3MM b/d; to climb to 1.5MM b/d by end of current Iranian year at March 20, to 2MM b/d soon after: Shana cites 1st VP Eshaq Jahangiri.

Just as important, China January crude imports fell 4.6% to 6.31m b/d, the lowest in 3 months, down from record in December, as even Chinese oil storage capacity fills up. Chinese oil product imports +13.3% at 2.66MM mt, exports +45% y/y 3.01MM mt.

While the US is closed for President's day, US equity futures are open until noon Central Time, and at last check were up 1.6%, or 29 points to 1,888, piggybacking on the global euphoria.

A quick recap of market closures in the US for Presidents Day:

  • NYSE Closed
  • CME Equity: Closes at 12:00 Central; Reopens at 17:00 Central
  • CME Interest Rates: Closes at 12:00 Central; Reopens at 17:00 Central
  • CME FX: Closes at 12:00 Central; Reopens at 17:00 Central
  • NYMEX: Closes at 12:00 Central; Reopens at 17:00 Central
For the recap of global markets, we start in Asia where stocks traded mostly higher following last Friday's gains in Wall St. where outperformance in financials and a resurgence in crude, which posted its largest one-day gain since 2009, lifted markets from last week's early turmoil. Nikkei 225 (+7.2%) outperformed, led by financials and energy, while ASX 200 (+1.64%) was supported by commodity-based sectors, which also followed from last week's 5.6% rally in gold prices. Mainland China bucked the trend with the Shanghai Comp (-0.63%) negative as it played catch up to last week's losses, with poor export trade data adding to its sombre tone. JGBs traded lower tracking T-notes as the increase in risk sentiment spurred outflows from safe haven assets.

Top Asia News

  • Yuan Rises Most Since 2005 as PBOC Voices Support, Raises Fixing
  • HSBC Keeps London Headquarters in Victory for U.K. Over Asia
  • China Bad-Loan Problem Not as Bad as Bass Makes Out, CICC Says
  • Airbus, Boeing Count on China as Southeast Asia Slows Down
  • Hong Kong Land Price Plunges Nearly 70% in Government Tender
  • Indonesia’s Jokowi Gets Traction After Tumultuous First Year
  • Toyota-Led Profit Gains at Risk as Carmakers Face Strong Yen
  • Record Wheat Forecast Spurs Investor Bets Price Rout Will Deepen
Looking at Europe, what we find is - literally - nothing but green:



Benchmark stock indexes of Italy, Spain and Germany rallied more than 2 percent. Putting that in context, all of these bourses lost more than 16 percent this year through Friday, becoming some of the world’s worst performers among 93 equity indexes tracked by Bloomberg.

The Euro Stoxx trades higher by over 3% this morning, with the financial sector the best performing. Of note, although financials outperform, banking heavyweights Deutsche Bank (+2.4%) and Commerzbank (+2.6%) have pared much of their gains from early in the session to underperform the main indices. Separately, the energy and materials sectors are the laggards in Europe today, with risk on sentiment failing to boost commodities. Elsewhere, Bunds have also fallen today given the turnaround in sentiment although remaining off their worst levels.

Top European News

  • VW’s Winterkorn Notified of U.S. Probe in 2014: Bild am Sonntag
  • Orange-Bouygues Telecom Talks Nearly Collapsed, Echos Says
  • HSBC Decides to Remain Headquartered in the U.K.
  • Carrefour Says French Offices Raided Feb. 9 by Anti-Fraud Body
  • ArcelorMittal Says European Steel Needs Defense Against China
  • Reckitt 4Q LFL Sales Growth, 2015 Adj. Oper. Profit Beats Ests.
In FX, the yuan climbed 1.2 percent from its Feb. 5 close to 6.4942 per dollar in Shanghai. People’s Bank of China chief Zhou said China’s balance of payments is good and capital outflows are normal, with the exchange rate basically stable against a basket of other currencies, according to an interview published Saturday in Caixin magazine. The comments marked an escalation in verbal support for Chinese markets, with Zhou having left most of the commentary over the past few months to deputies.

The yen retreated 0.6 percent to 113.94 per dollar, trimming this month’s advance to 6 percent. Japan’s GDP shrank an annualized 1.4 percent in the three months ended Dec. 31, following a revised 1.3 percent gain in the third quarter, official data show.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.2 percent as more positive sentiment dimmed the appeal of haven currencies like the yen, euro and the Swiss franc. The index has lost 0.9 percent this year as the case for further U.S. rate hikes in 2016 dims.

The Malaysian ringgit, Russian ruble and South African rand gained at least 0.4 percent, with a gauge of developing-nation currencies adding 0.2 percent, following 0.4 percent drop last week.

In commodities, West Texas Intermediate crude reversed losses, climbing to $29.86, after earlier falling as much as 1.7 percent. Iran loaded its first cargo to Europe since international sanctions ended, while Chinese crude imports in January fell almost 20 percent from a record in the previous month.

Copper rallied with other metals after China’s central bank chief stepped up efforts to restore stability to the nation’s currency and economy. The metal gained 1.8 percent in London, while nickel surged 4.4 percent.

In Europe's periphery, Portuguese bonds, which suffered the brunt of the selloff in riskier assets last week together with Greece, advanced for a second day. Portugal’s 10-year bond yield fell 22 basis points to 3.51 percent. Spain’s 10-year bond yield fell four basis points to 1.70 percent, leaving the spread to similar-maturity bunds at 143 basis points, after rising to 170 basis points on Feb. 11.

The cost of insuring corporate debt tumbled for a second day. The Markit iTraxx Europe Index of credit-default swaps on investment-grade companies dropped four basis points to 114 basis points. A measure of swaps on junk-rated businesses fell 21 basis points to 441 basis points. Indexes tied to swaps on financial companies’ senior and subordinated debt also dropped, largely erasing last week’s increases.

With US markets closed for Presidents' Day today it’s a quiet start to the week with no data due in the US and just the Euro area trade balance reading due this morning in the European session

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Equities kick off the week on the front-foot with particular outperformance in financials, while risk-on sentiment is in full swing.
  • Shanghai Comp. (-0.63%) played catch-up, consequently bucking the trend as the latest domestic trade data further highlighted the issues facing the nation's export sector.
  • Looking ahead participants will be keeping keen eye on comments from ECB President Draghi who is scheduled to speak at 1400GMT, while the US will be away from the market.
  • Negative rates to cut major Japan bank profits by 8 pct this year
  • Yuan Rises Most Since 2005 as PBOC Voices Support, Raises Fixing
  • HSBC Keeps London Headquarters in Victory for U.K. Over Asia
  • China Bad-Loan Problem Not as Bad as Bass Makes Out, CICC Says
  • Airbus, Boeing Count on China as Southeast Asia Slows Down
  • VW’s Winterkorn Notified of U.S. Probe in 2014: Bild am Sonntag
  • Orange-Bouygues Telecom Talks Nearly Collapsed, Echos Says
  • HSBC Decides to Remain Headquartered in the U.K.
As customery, DB's Jim Reid concludes the overnight event wrap

This weekend, PBoC Governor Zhou Xiaochuan broke a very long silence and spoke to Caixin financial magazine to suggest that capital controls are not needed and that neither is further exchange rate depreciation. The lack of central bank communication throughout the two bouts of weakening the currency in the last 6 months have been deafening so this at least shows some willingness to communicate on something that has been threatening to destabilise markets with the fear of a big devaluation hanging over the market. Clearly the market might still force the issue and some credibility may have already been eroded but at least these words are a welcome response.

Following those comments, DB’s China Chief Economist Zhiwei Zhang highlighted that the most important statement was the acknowledgement from the Governor of a need for patience in balancing reform, growth and stability, as well the need to remain a responsible economic power. Zhiwei believes that the statement showed three important points. 1. The PBoC is still committed to FX policy reform from a dollar peg to a floating regime in the long term. 2. The global financial market volatility has likely closed the window for now. 3. The PBoC will likely stick to the dollar peg for now, and wait for the next window to float the currency. These conclusions have led Zhiwei to revise down the probability of a large RMB devaluation to 10% from 15%. Perhaps as a statement of intent from the PBoC, the CNY fix was set +0.3% stronger this morning and is currently trading over 1% firmer which, as it stands, is the biggest strengthening for the onshore currency since July 2005 (although it's clearly playing some catch up with the weakness in the US Dollar last week).

There’s also been some important data out of China for us to digest over the last couple of days. The first was the retail sales numbers where according to the Ministry of Commerce, sales were said to have risen +11.2% yoy over the Spring Festival Period, boosted in particular by a strong increase in box-office sales. While those numbers were seen as positive, the January trade numbers, released this morning, are less so. In Dollar terms exports were down a sharp 11.2% yoy in January (vs. -1.8% expected) from -1.4% in December. That was the biggest plunge since March. Imports also tumbled a lot more than expected (-18.8% yoy vs. -3.6% expected) with the trade surplus a shade higher as a result at $63.3bn (from $60.1bn). In CNY terms exports were also sharply lower (-6.6% yoy vs. +3.6% expected) although also outdone by a huge decline in CNY imports.

Open for the first time in ten days, bourses are trading lower in China this morning although the moves are more than likely reflecting the catch-up from markets elsewhere last week. The Shanghai Comp (-0.77%), CSI 300 (-0.65%) and Shenzhen (-0.41%) are all lower just after the midday break, although in fairness have pared earlier steeper falls (of up to 3%). The most eye catching moves have come in Japan again where the Nikkei and Topix have rallied +7.16% and +8.32% respectively. This has come despite a softer than expected Q4 GDP report for the economy (-0.4% qoq vs. -0.2% expected), adding some weight perhaps to the argument for further easing from the BoJ. Elsewhere the Hang Seng (+2.94%), Kospi (+1.48%) and ASX (+1.64%) are up, while credit markets in Asia have ripped tighter with iTraxx Aus and Asia indices 8-9bps lower.

The moves this morning follow an epic week for markets with some savage volatility and a major rebound on Friday. Just to put things in perspective though, the following list of asset performance shows Friday's rally first and then the overall performance in the week. Looking firstly at the sharp moves in equity markets: S&P 500 (+1.95%/-0.81%), Dow (+2.00%/-1.43%), Stoxx 600 (+2.91%/-4.41%), DAX (+2.45%/-3.43%), IBEX (+2.25%/-6.81%), Stoxx 600 Banks (+5.60%/-5.86%), S&P 500 Banks (+6.24%/-2.91%). Credit indices were subject to huge day-to-day swings also: iTraxx Senior Fins (-13.5bps/+6bps), iTraxx Sub Fins (-31bps/+18bps), Main (-7.5bps/+8bps), CDX IG (-2.6bps/+7bps). Meanwhile US HY energy spreads finished 26bps tighter on Friday but were +193bps wider on the week.

Moves were as equally impressive in commodity markets and highlighted by Gold (-0.70%/+5.50%) which had its strongest week since 2011. In Oil markets, despite the massive rally on Friday (the biggest since February 2009) following those WSJ headlines concerning potential production cuts on Thursday evening, WTI (+12.32%/-4.69%) still failed to stem a decline over the full five-days. Not to be outdone, there were some wild swings in rates markets too. 10y Bunds (+7.5bps/-3.4bps) actually traded to as low as 13bps on an intraday basis last week, while 10y Treasuries (+8.9bps/-8.8bps) were as low as 1.529% and traded within a 34bps range over the five-days.

It was that huge rally for Oil along with a rebound for financials which combined for what was a markedly better day all round for risk assets on Friday. With regards to the latter, a lot was made of the much better than expected results from Commerzbank, while news of JP Morgan’s Jamie Dimon purchasing $26m of his own bank’s stock also contributed to the better sentiment. Some chatter around the ECB also potentially being in talks with the Italian government about purchasing bad loans also gained some headlines, however as we highlighted on Friday this has the potential to open moral hazard, political, legal and logistical questions.

Also in focus on Friday was the latest US retail sales data. January sales were up a better than expected +0.2% mom (vs. +0.1%) last month while there was also beats for the ex auto (+0.1% mom vs. 0.0% expected) and ex auto and gas (+0.4% mom vs. +0.3% expected) prints. Meanwhile a strong gain for the GDP sensitive retail control component (+0.6% mom vs. +0.3% expected) resulted in the Atlanta Fed revising up their estimate for Q1 GDP growth to 2.7% from 2.5% - there’s quite the divergence now starting to emerge between this and economist forecasts.

The rest of the data was something of a mixed bag. The January import price index reading declined less than expected last month (-1.1% mom vs. -1.5% expected). Business inventories printed in line for December at +0.1% mom. Finally the first estimate for the University of Michigan consumer sentiment print showed a 1.3pt decline from January to 90.7 (vs. 92.3 expected) with both current conditions and expectations indices edging lower. Notably the 1y inflation expectation index was unchanged at 2.5% but 5-10y inflation expectations edged three-tenths lower to 2.4%, which is the lowest on record. In Europe the main data of note had been in the Q4 GDP numbers. The flash estimate for the Euro area showed no surprises however at +0.3% qoq (in-line) which was also the same for Germany (+0.3% qoq). Meanwhile the soft regional prints that we had witnessed result in a much softer than expected Euro area IP report for December (-1.0% mom vs. +0.3% expected).

Away from the data, the NY Fed President Dudley became the latest Fed official to acknowledge that ‘inflation is probably going to take a little bit longer to get back to our 2% objective’. On the much talked about negative-rates topic, Dudley was of the view that it is ‘extraordinarily premature’ to talk about such a move for the US right now and that ‘there are a lot of things that we would do long before we would really think about moving to negative interest rates’.

A quick recap on earnings where the season is beginning to wind down in the US. 381 S&P 500 companies have now reported their latest quarterly numbers with earnings beats standing at a robust 76% which is a tad better than the 74%, 75% and 73% we had seen for the prior 3 quarters, albeit with expectations beaten down in advance. There has been a bit of improvement in the top line numbers in recent reports too, putting the overall trend back in line with prior quarters. 48% have beaten revenue estimates which compares to 44%, 49% and 48% in the previous three quarters.


http://www.zerohedge.com/news/2016-...-miserable-chinese-japanese-data-short-squeez
 

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#12

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#13
Gold and Silver Market Morning: Feb-15-2016 -- China Pulls Gold Down!
By: Julian D. W. Phillips, Gold Forecaster
China has re-opened and New York is closed today. When the Chinese went on holiday at the end of the week before last the gold price was fixed in London’s pm at $1,150.35. Now they return to hear that gold actually hit $1,250+, $100 higher than when they left on holiday. On top of that, they were ready for a weaker Yuan, but return to find a huge trade surplus and a Yuan stronger by 1%. But the Chinese middle classes don’t move gold for such a small reason. It is more likely that while there will be a ‘shunt-effect’ in gold prices, gold investors there, need to get back in gear before their opinion on prices feeds through.
 

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#14
Shipping & Energy 02/15:

Sembcorp Marine Posts First Loss Since 2003 on Brazil Impact
http://washpost.bloomberg.com/Story?docId=1376-O2L0TG6KLVRI01-24C2559E6K2ELUC9PNRO917JVG

Baltic Dry Index Edges Up Again
http://gcaptain.com/baltic-dry-index-edges-up-again/

Peak Oil Review - Feb 16
http://www.resilience.org/stories/2016-02-15/peak-oil-review-2016-Feb-16

U.S. Banks Growing Hesitant To Loan Money To Energy Firms
http://oilprice.com/Energy/Energy-G...g-Hesitant-To-Loan-Money-To-Energy-Firms.html

UAE Offers India Free Oil To Ease Storage Woes
http://oilprice.com/Energy/Crude-Oil/UAE-Offers-India-Free-Oil-To-Ease-Storage-Woes.html

What's cooking inside the beltway: 5 things trucking needs to know
http://fleetowner.com/regulations/w...m=email&elq2=eb5e78341472447991a383d691c3ec63
 

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#17
SKU_Vlog_011: Is Banking the New Slavery?
smartknowledgeu


Published on Feb 15, 2016
in this new SKU_Vlog we discuss famed Russia author Leo Tolstoy's claims in 1800 that banking had become the new slavery and whether this could be the REAL source of conflict between Russia and all banker-sponsored States today. As well, we briefly discuss real dangers in the gold/silver markets after this recent large rise in USD price.

Referenced in this vlog:

War is a Racket, by Smedley Butler
https://www.youtube.com/watch?v=0tWqz...

Intro/ Outro Music: High Score by Teminite and Panda Eyes

Don't forget to come by and sign up for our free newsletter and check out our subscription services at
https://www.smartknowledgeu.com
 

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#21
CATASTROPHIC FINANCIAL EVENT IN 2016 | Andy Hoffman
FinanceAndLiberty.com


Published on Feb 15, 2016
IN THIS INTERVIEW
- No chance the world survives 2016 without a catastrophic financial event ►0:52
- Gold & silver starting to trade freely? ►3:14
- Stock market crash starting? ►6:48
- Fed to low rates by year end ►10:01
- Presidential election ►12:31
- Ahead: hyperinflation for First World nations ►15:30

GUEST: http://RoadToRoota.com
SPONSOR: http://SDBullion.com

FINANCE AND LIBERTY:
SUBSCRIBE (it's FREE!) to "Finance and Liberty" for more interviews and financial insight ►http://bit.ly/Subscription-Link
Website ► http://FinanceAndLiberty.com
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Follow us on Twitter ►http://twitter.com/Finance_Liberty
Google Plus ►http://Gplus.to/FinanceLiberty
Title and video graphics by Josiah Johnson Studios ►http://JosiahJohnsonStudios.com

DISCLAIMER: The financial and political opinions expressed in this interview are those of the guest and not necessarily of "Finance and Liberty" or its staff. Opinions expressed in this video do not constitute personalized investment advice and should not be relied on for making investment decisions.
 

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#22
Here's Why (And How) The Government Will "Borrow" Your Retirement Savings


Submitted by Tyler Durden on 02/15/2016 21:35 -0500


Submitted by Simon Black via SovereignMan.com,

According to financial research firm ICI, total retirement assets in the Land of the Free now exceed $23 trillion.

$7.3 trillion of that is held in Individual Retirement Accounts (IRAs).

That’s an appetizing figure, especially for a government that just passed $19 trillion in debt and is in pressing need of new funding sources.

Even when you account for all federal assets (like national parks and aircraft carriers), the government’s “net financial position” according to its own accounting is negative $17.7 trillion.

And that number doesn’t include unfunded Social Security entitlements, which the government estimates is another $42 trillion.

The US national debt has increased by roughly $1 trillion annually over the past several years.

The Federal Reserve has conjured an astonishing amount of money out of thin air in order to buy a big chunk of that debt.

But even the Fed has limitations. According to its own weekly financial statement, the Fed’s solvency is at precariously low levels (with a capital base of just 0.8% of assets).

And on a mark-to-market basis, the Fed is already insolvent. So it’s foolish to think they can continue to print money forever and bail out the government without consequence.

The Chinese (and other foreigners) own a big slice of US debt as well.

But it’s just as foolish to expect them to continue bailing out America, especially when they have such large economic problems at home.

US taxpayers own the largest share of the debt, mostly through various trust funds of Social Security and Medicare.

But again, given the $42 trillion funding gap in these programs, it’s mathematically impossible for Social Security to continue funding the national debt.

This reality puts the US government in rough spot.

It’s not like government spending is going down anytime soon; it already takes nearly 100% of tax revenue just to pay mandatory entitlements like Social Security, and interest on the debt.

Plus the government itself estimates that the national debt will hit $30 trillion within ten years.

Bottom line, they need more money. Lots of it. And there is perhaps no easier pool of cash to ‘borrow’ than Americans’ retirement savings.

$7.3 trillion in US IRA accounts is too large for them to ignore.

And if you think it’s inconceivable for the government to borrow your retirement savings, just consider the following:


1) Borrowing retirement funds is becoming a popular tactic.

Forced loans have been a common tactic of bankrupt governments throughout history.

Plus there’s recent precedent all over the world; Hungary, France, Ireland, and Poland are among many governments that have resorted to ‘borrowing’ public and private pension funds.

2) The US government has already done this with federal pension funds.

During the multiple debt ceiling fiascos since 2011, the Treasury Department resorted to “extraordinary measures” at least twice in order to continue funding the government.

What exactly were these extraordinary measures?

They dipped into federal retirement funds and borrowed what they needed to tide them over.

In fact, the debt ceiling debacles were only resolved because the Treasury Department had fully depleted available retirement funds.

3) They’ve been paving the way to borrow your retirement savings for a long time.

Two years ago the government launched a new initiative to ‘help Americans save for retirement.’

It’s called MyRA. And the idea is for people to invest retirement savings ‘in the safety and security of US government bonds’.

Since then they’ve gone on a marketing offensive involving the President, Treasury Secretary, and other prominent politicians.

(Most recently Nancy Pelosi published an Op-Ed in the San Francisco Chronicle a few days ago promoting the program.)

They’ve also proposed a number of legislative reforms to ‘encourage’ American businesses to sign their employees up for MyRA.

Just last week, Congress introduced the “Making Your Retirement Accessible”, or MyRA Act, which would charge a penalty to employers whose workers don’t have a retirement account.

The proposed penalty is $100. Per worker. Per day.

Imagine a small business with, say, 10 employees who don’t have retirement accounts. The penalty to Uncle Sam would be a whopping $30,000 PER MONTH.

There’s a word for this. It’s called extortion.

Obviously when facing a $30,000 monthly penalty, an employer will pick the easiest option.

Given the absurd amount of government regulation on the rest of the financial industry, MyRA is the fastest choice.

This isn’t about fear or paranoia. It’s about facts.

And the reality is that the government in the Land of the Free is moving in the direction of borrowing more and more of your retirement savings.

If you still remain skeptical, remember that last year the government stole more from its citizens through Civil Asset Forfeiture than thieves in the private sector.

Or that just 45-days ago a new law went into effect authorizing the government to strip you of your passport if they believe in their sole discretion that you owe them too much tax.

No judge. No jury. No trial. They just confiscate your passport.


http://www.zerohedge.com/news/2016-...overnment-will-borrow-your-retirement-savings
 

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#23
Frontrunning: February 16


Submitted by Tyler Durden on 02/16/2016 07:40 -0500

  • Oil eases off highs after output freeze agreement (Reuters)
  • Saudis and Russia agree to oil output freeze, Iran still an obstacle (Reuters)
  • China Loses Control of the Economic Story Line (WSJ)
  • Obama starts work to pick Supreme Court justice amid political 'bluster' (Reuters)
  • The Never-Ending Story: Europe’s Banks Face a Frightening Future (BBG)
  • Apollo Global to buy security services company ADT for $7 billion (Reuters)
  • Anglo Hastens Retreat From Coal, Iron Ore as Losses Double (BBG)
  • Markets Putting Faith in QE4 (WSJ)
  • Technology stocks selloff may turn IPO chill into IPO freeze (Reuters)
  • Goldman Channels FDR's `Nothing to Fear' With Sell Gold Call (BBG)
  • Not in my backyard? Mainstream Scandinavia warily eyes record immigration (Reuters)
  • Japan’s Banks Brace for Bleeding in Core Business as Negative Rates Kick In (WSJ)
  • Wait Two Years for That $65 Million Gulfstream Personal Jet (BBG)
  • Gordon and Bud Did It. Did You? Insider Trading Gets a Rethink (BBG)
  • Hedge funder’s attack on renminbi draws scrutiny and doubt (FT)
  • Fallen Giants Block Path to S&P Bull Market as Amazon Slumps (BBG)
  • New York police probe assault claim against Eliot Spitzer; lawyer disputes (Reuters)


Overnight Media Digest

WSJ

- HSBC PLC 's decision to keep its headquarters in the U.K. rather than move to Hong Kong is prompting soul-searching in this former British colony about its perception on the world stage. (http://on.wsj.com/1PB9NpA)

- General Dynamics Corp, Britain's BAE Systems PLC , and Germany's Rheinmetall AG, are among those lining up for the right to replace Australia's armored vehicles and tanks. (http://on.wsj.com/1PB9BH6)

- Japan's SoftBank Group Corp on Monday moved to bolster its share price beaten down by worries about U.S. mobile subsidiary Sprint Corp, saying it would buy back up to 500 billion Yen, or as much as $4.4 billion, of shares, its biggest repurchase ever. (http://on.wsj.com/1PB9Wtc)

- Brazil's southernmost state halted the use of a mosquito larvicide that an Argentine doctors' group warns could be behind the recent surge of babies born with microcephaly. (http://on.wsj.com/1PBa1gt)



FT

UK phone network operator Vodafone Plc and John Malone's cable company Liberty Global Plc agreed on Monday to form a 19 billion euros ($21.23 billion) mobile-and-cable operator in the Netherlands.

The Bank of England has rejected criticism from John Vickers, the chief architect of the UK's banking reforms, by denying that it had gone soft on UK banks or watered down his recommended minimum capital levels for Britain's biggest lenders.

The world's top two oil exporters Saudi Arabia and Russia will hold talks on Tuesday, according to a person familiar with the matter, as producers try to tackle a glut that has pushed prices to their lowest in over a decade.



NYT

- Paragon Offshore Plc, which operates offshore drilling rigs from the Gulf of Mexico to the North Sea, filed for Chapter 11 bankruptcy protection. Over the last 16 months, about 60 oil and gas companies have filed for bankruptcy as commodity prices slide, and that figure is expected to double in the coming months if prices remain low. (http://nyti.ms/1PNQeIO)

- Turmoil in global markets is making the yen rise in value again. That has resulted in big hits to the Japanese stock market and has raised worries among economists that Prime Minister Shinzo Abe will not be able to deliver the economic growth his country needs to get back on track. (http://nyti.ms/1Tkti8n)

- Leo Van Munching Jr, whose stewardship of the importing company started by his father made the Dutch-brewed beer Heineken and its low-calorie sibling, Amstel Light, familiar brand names in the United States, passed away on Sunday. (http://nyti.ms/1mEhn8J)

- The multinational media and telecommunications conglomerate SoftBank said on Monday that it would buy back shares worth 500 billion yen ($4.36 billion), the biggest share repurchase it has ever made. (http://nyti.ms/1StTmiv)



Canada





Britain

The Times

The president of the European Central Bank rallied stock markets by pledging that it was "ready to do its part" to shore up the European economy from a rising tide of financial turmoil. (thetim.es/215xpYz)

Royal Dutch Shell reiterated its confidence in the North Sea oil industry as it sealed a 35 billion pound ($50.52 billion) acquisition of its rival BG Group and promised a rapid boost in output from Brazil. (thetim.es/1QhPCAx)

The Guardian

Mining giant Anglo American Plc's debt has been downgraded further into junk territory by Moody's, which cited a deterioration in commodities market conditions and doubts over how long it will take the company to reduce debt levels. (bit.ly/246aYFg)

Living standards in the UK have finally made up the ground lost as a result of the financial crash following the boost to incomes provided by rising employment and falling inflation, according to the Resolution Foundation. (bit.ly/1Lql2gD)

The Telegraph

Vodafone has agreed a deal with US cable giant Liberty Global to merge their Dutch operations. The UK mobile giant will pay Liberty, owned by billionaire John Malone, 1 billion euro ($1.12 billion) to "equalize ownership in the joint venture", according to a statement released on Monday night. (bit.ly/1Tk7nhO)

A botched set of negotiations on Britain's membership in the European Union could damage the eurozone, the European Central Bank president has warned. (bit.ly/1oF6Tr9)

Sky News

Supermarket chain Aldi will create 5,000 new jobs and open 80 new stores as part of its expansion plans in the UK. (bit.ly/20VDg6d)

Hornby shares have jumped by over a third after the company announced that it is parting company with Chief Executive Richard Ames. (bit.ly/1QEw3N8)

The Independent

HSBC could switch up to 1,000 jobs to Paris if Britain votes to exit the EU in the forthcoming referendum. (ind.pn/1SPXp9o)

http://www.zerohedge.com/news/2016-02-16/frontrunning-february-16
 

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#24
Market Euphoria Fizzles As USDJPY Resumes Slide; Crude Disappointed By Lack Of Production Cut


Submitted by Tyler Durden on 02/16/2016 06:52 -0500


One day after markets saw a violent return of optimism, which sent stocks around the globe and US equity futures soaring (the US was closed for President's Day) driven by terrible Japanese and Chinese economic data which in turn hinted at more central bank easing, animal spirits have cooled off despite some truly unprecedented Chinese credit numbers.

As we showed last night, in January Chinese bank loans soared by CNY2.5 trillion, far above the CNY1.9 trillion expected, but it was the largest debt aggregate, the TSF which soared by a record CNY3.4 trillion, or $52 billion, more than 50% higher than expected, suggesting it was not only Japan which had panicked at the end of January with NIRP - China was literally flooding its economy with debt to stimulate growth.



We doubt it will work, as increasingly more companies are now beyond the Minsky tipping point where they have to issue debt just to pay interest. With China debt/GDP already at a world (ex Japan) record 350%, it is only a matter of time before China suffers a dramatic event, one which reprices its $35 trillion in bank "assets" substantially lower.

And while S&P500 futures appeared close to breaching above the 1900 level overnight following another strong Asian session where the SHCOMP surged 3.3% on record Chinese loan data, Europe crippled the rally, for now, and despite a positive start which sold European stocks up 0.8%, sold off heading into mid-morning amid risk off sentiment (Euro Stoxx: -0.32%). This has stemmed from the weakness in financials with concerns surrounding the health of banking sector still not abated entirely. At last check Deutsche Bank stock was down nearly 5%.

Also, the market had clearly been waiting for good news from the "secret" Saudi-Russian oil summit. As reported previously, it did not get the news, and instead it got the opposite, when the two oil superpowers agreed to freeze production at record high levels. As a result WTI has slid back under $30 after nearly hitting $31 in the kneejerk reaction to the news.

"Markets need more than just a freeze in oil production, they need a cut,” said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf. “People are looking at policy makers, be it central banks or OPEC, for more reassurance because everything boils down to what will happen to global growth."

And that is indeed the bottom line, because even with China pumping out record amounts of debt to restart both domestic and local growth in what is increasingly a sign of desperation, growth just refuses to emerge.

Where global markets stand now

  • S&P 500 futures up 1.1% to 1880
  • Stoxx 600 down 0.7% to 320
  • FTSE 100 down 0.2% to 5815
  • DAX down 0.8% to 9134
  • German 10Yr yield up 1bp to 0.25%
  • Italian 10Yr yield up 1bp to 1.61%
  • Spanish 10Yr yield up 4bps to 1.74%
  • MSCI Asia Pacific up 1% to 119
  • Nikkei 225 up 0.2% to 16054
  • Hang Seng up 1.1% to 19122
  • Shanghai Composite up 3.3% to 2837
  • US 10-yr yield up less than 1bp to 1.76%
  • Dollar Index up 0.55% to 96.47
  • WTI Crude futures up 1% to $29.73
  • Brent Futures up 1.6% to $33.91
  • Gold spot up 0.2% to $1,211
  • Silver spot down less than 0.1% to $15.32
Top Global News

  • Saudi Arabia and Russia Agree Oil-Output Freeze in Qatar Talks: Ministers from Qatar, Venezuela also agreed to freeze; WTI Near $30 After Producers Agree Output Freeze
  • Vodafone, Liberty Global to Combine Dutch Mobile-Phone Business: Deal to create cost, revenue synergies of ~$3.9b
  • China Said to Weigh Cutting Minimum Bad-Loan Coverage Ratio: Some big banks said to have already used ratio of ~120% for their 2016 budgeting
  • Supreme Court Vacancy Opens Up Partisan Chasm Over Senate’s Role: Clinton, Sanders both say an Obama nominee deserves a vote
  • Berkshire Hathaway Buys 1.08m Shares of Phillips 66: Holds 75.6m shares after this week’s purchases
  • Pershing, Berkshire among those to file as 13F deadline approaches: Hedge fund also adds to stake in Alphabet, which owns Google
  • ‘Deadpool’ Delivers New Marvel Success to Fox With Record Debut: $135 million tally tops ‘Fifty Shades’ to set February record
  • Apollo Said to Near Acquisition of Security Firm ADT, WSJ Says: PE firm to announce deal as soon as Tuesday
  • Mondelez Cheese, Grocery Unit Up for Sale Next Month, Sunday Times Says: To go up for sale next month as part of $3b asset selloff
  • Boeing Near Decision to Self-Fund More F/A-18 Fighters: Reuters: Awaiting U.S. govt decision on order for 28 fighter jets from Kuwait
  • Daimler to Cut Over 1,200 Jobs at North Carolina Plants, WSJ Says: Truck unit layoffs to take effect Friday
We start our global equity round up as usual in Asia, where equity markets extended on yesterday's gains after quiet global newsflow and an energy resurgence kept sentiment upbeat. Nikkei 225 (+0.2%) extended on Monday's stellar performance, led by Telecoms after index heavyweight Softbank hit limit on an announcement of a JPY 500bIn share repurchase. Shanghai Comp (+2.5%) outperformed underpinned by record high financing and lending data, while energy names boosted the Hang Seng (+1.7%) after crude gained over 4% ahead of Russia-OPEC talks scheduled today. 10yr JGBs advanced despite the positive risk sentiment in stocks, supported by a well-received 20yr auction in while the BoJ are also expected to enter the market tomorrow.

As noted above, China's January credit creation was simply stunning, with Chinese New Yuan Loans CNY Y/Y 2510.0B vs. Exp. 1900.0B (Prey. 597.8B); highest on record; Aggregate Financing CNY Y/Y 3420.0B vs. Exp. 2200.0B (Prey. 1820.0B); highest on record; leading to a surge in Money Supply M2 Y/Y 14.00% vs. Exp. 13.50% (Prey. 13.30%)

Top Asian News

  • Chinese Premier Faults Regulators’ Handling of Stocks, Yuan Rout: Regulators didn’t respond actively to declines, some even have management problems
  • Mobius Says China’s Irrational Stock Market Is Creating Bargains: Hang Seng China Enterprises Index plunged 49% from May high through last week
  • China Said to Plan 400 Billion Yuan in Special Building Projects: Chief planning agency backs infrastructure projects to spur growth
  • SoftBank Adds $7.3 Billion After Announcing Record Buyback Plan
  • India Asks Vodafone to Pay Taxes or It May Face Asset Seizures: Vodafone should pay $2.1b tax bill, according to a letter sent to company
  • Sharp Board Said to Be Split as Talks Continue on Rival Offers: Foxconn, INCJ have each won support of at least 4 of Sharp’s 13 directors
In Europe, despite a positive start sold off heading into mid-morning amid risk off sentiment (Euro Stoxx: -0.32%). This has stemmed from the weakness in financials with concerns surrounding the health of banking sector still not abated entirely. Additionally, the energy complex has somewhat pulled off best levels following comments by the Qatari energy minister stating that an agreement has been made by Saudi, Qatar, Russia and Venezuela to hold output at January levels, however this is contingent on other major producers also agreeing. Downside was seen in the energy complex in the wake of this news given that January levels of OPEC oil production was 33m1n bpd, a record high, while some participants had been hoping for a cut from oil producing nations. The news was also interpreted negatively due to the deal being contingent on other major producers also agreeing, given that the likes of Iran were not present at the meeting. In turn, the risk-off sentiment also saw Bunds come off their worst levels while notable curve steepening has been observed.

Top European News

  • EDF Cuts Payout as It Sees Lower Power Prices Cutting Profit: Revenue to be ‘severely hit’ toward 2017-2018 by market drop
  • Airbus Raises 2015 Tally; Order Backlog Value Tops $1 Trillion: Now includes additional net 44 aircraft to last year’s order book
  • Anglo American to Exit Kumba Unit in Move Away From Iron Ore: Options for disposal include a spinoff of its 69.7% stake
  • VW Loses European Market Share to Fiat in Wake of Scandal: VW brand drops 4% as overall European car demand jumps 6.3%
  • Orange Says Bouygues Deal Needs More Time Amid Talks With Rivals: Talks for acquisition of smaller competitor to take weeks
In commodities, Brent for April settlement advanced as much as $2.16 to $35.55 a barrel before paring the gains. West Texas Intermediate rose 1 percent to $29.74 a barrel on the New York Mercantile Exchange. More than a year since the Organization of Petroleum Exporting Countries decided not to cut production to boost prices, oil remains about 70 percent below its 2014 peak. Supply still exceeds demand and record global oil stockpiles continue to swell, potentially pushing prices below $20 a barrel before the rout is over, Goldman Sachs Group Inc. said last week.

Qatar energy minister states an agreement has been made between Saudi Arabia, Russia, Venezuela and Qatar to hold output at January levels, however this is contingent on other major producers also agreeing. Of note, OPEC January production levels, were at a record high, while some participants had been hoping for a cut from oil production nations.

According to a senior source familiar with Iranian thinking, Iran would be willing to discuss over an oil output freeze once its production has reached pre-sanction levels. Of note, this is very similar to the recent rhetoric from Iran, consequently hinting that a cut in oil production is becoming increasingly unlikely.

Gold rose 0.4 percent in the spot market as demand for haven assets rebounded.

In FX, the yen advanced against all 16 of its major peers, climbing most versus the South Korean won and New Zealand dollar. It gained 0.5 percent to 127.19 per euro. The 19-member common currency strengthened 0.2 percent to $1.1177.

South Korea’s won dropped 0.7 percent to a two-week low as the central bank’s decision to keep the benchmark interest rate at a record-low 1.5 percent failed to quell speculation about a rate cut. Malaysia’s ringgit slid 0.6 percent, while Russia’s ruble slipped 0.5 percent. A gauge of emerging-market currencies lost 0.2 percent, halting two days of gains.

The yuan traded in the mainland weakened 0.3 percent a day after climbing the most in more than a decade, according to China Foreign Exchange Trade System prices. The currency surged on Monday as it caught up with declines in the greenback last week, when Chinese markets were shut for the Lunar New Year holidays. The People’s Bank of China set its daily reference rate little changed at 6.5130.

On today's calendar in the US we get the February Empire manufacturing print, followed later by this month’s NAHB housing market index reading. Fedspeak wise we’re due to hear from Harker (at 2pm GMT) who is due to deliver his 2016 economic forecast, followed later on by comments from the new Minneapolis Fed President Kashkari (at 3.30pm GMT). Earnings wise we’ve got 14 S&P 500 companies set to report.



Bulletin Headline Summary

  • European equities shrug off the positive lead from Asian bourses as concerns continue surround the health of financial names.
  • Risk sentiment also dampened as Saudi Arabia, Qatar, Russia and Venezuela agree to freeze oil output at January levels, subsequently disappointing calls for an output cut.
  • Going forward participants will be looking out for US Empire Manufacturing and comments from Fed's Harker (Non-voter, Soft Dove) Kashkari (Non-voter-N/A) and Fed's Rosengren (Voter, Dove)
  • Treasury yield curve steeper as European equity markets mostly lower, oil rallies in overnight trading.
  • Saudi Arabia and Russia, the world’s two largest crude producers, agreed to freeze output after talks in Qatar. The freeze is conditional on other nation’s agreeing to participate, Russia’s Energy Ministry said in a statement
  • China’s broadest measure of new credit surged to a record as a seasonal lending binge coincided with a recovery in property prices. Aggregate financing rose to 3.42 trillion yuan ($525 billion) in January, according to a report from the PBOC
  • China’s cabinet has discussed lowering the ratio of provisions banks must set aside for bad loans, potentially easing a drag on earnings after soured debts at lenders climbed to the highest in a decade
  • The BOJ on Tuesday started charging 0.1% on a portion of the excess funds that financial institutions have in accounts at the central bank. The negative interest rate would have applied to ¥23.2 trillion ($203 billion) if the policy had been in place last month, the bank estimated
  • With the ECB president set to give his next policy announcement on March 10, traders are positioned for a monetary-easing bonanza judging from the pace at which euro- region bond yields are dropping to new lows
  • German investor confidence fell to its lowest level since October 2014 as equities plummeted amid slowing Chinese growth and concern over the profitability of euro-area lenders
  • Prime Minister David Cameron takes his case for an overhaul of the terms of Britain’s membership of the European Union to Brussels Tuesday as the French government digs in its heels over aspects of his reform agenda
  • U.K. inflation climbed to its highest in a year in January, driven by motor fuels, food and clothing. Consumer prices rose an annual 0.3% and core inflation slowed to 1.2%
  • No IG corporates priced Friday, $1b priced on the week (YTD volume $182.575b) and no HY priced Friday, nothing priced on the week (YTD volume $9.275b)
    Sovereign 10Y bond yields mixed; European stocks mostly lower, Asian markets rise; U.S. equity-index futures higher. Crude oil, copper and gold rally
US Event Calendar

  • 8:30am: Empire Manufacturing, Feb., est. -10.5 (prior -19.37)
  • 10:00am: NAHB Housing Market Index, Feb., est. 60 (prior 60)
  • 11:30am: U.S. to sell $37b 3M, $30b 6M bills
  • 4:00pm: Total Net TIC Flows, Dec. (prior -$3.2b)
  • Net Long-term TIC Flows, Dec. (prior $31.4b)
  • TBA: Mortgage Delinquencies, 4Q (prior 4.99%)
  • MBA Mortgage Foreclosures, 4Q (prior 1.88%)
Central Banks

  • 8:30am: Fed’s Harker speaks in Newark, Del.
  • 10:30am: Fed’s Kashkari speaks in Washington
  • 7:00pm: Fed’s Rosengren speaks in Waterville, Maine
DB's Jim Reid concludes the overnight event wrap

A fresh wave of optimism has swept through markets to start this week and it’s taken a double dose of soothing Central Bank rhetoric, along with further gains for Oil to get risk assets off to a flyer. With regards to the former and following on from PBoC Governor Zhou’s calming comments concerning China’s FX policy over the weekend, it was the turn of ECB President Draghi to weigh in with some reassuring comments of his own yesterday after speaking to European Parliament lawmakers.

Specifically, it was the ‘we will not hesitate to act’ comment which had markets and investors excited. Draghi referred to this in light of two key topics at the moment, that being the banking sector, and low energy prices and the associated read-through to inflation expectations. With regards to the latter, Draghi highlighted that at the March policy meeting ‘we will examine the strength of the pass-through of low imported inflation to domestic wage and price formation and to inflation expectations’. This was mentioned in conjunction to comments around Banks, saying that ‘in light of the recent financial turmoil, we will analyze the state of transmission of our monetary policy impulses by the financial system and in particular by banks’. Draghi concluded that if ‘either of these two factors entail downward risks to price stability’, then the ECB will not hesitate to act.

Perhaps unsurprisingly Draghi also made further comments aimed at dampening the recent concerns reverberating around European banks. The ECB President acknowledged that ‘the fall in bank equity prices was amplified by perceptions that banks may have to do more to adjust their business models to the lower growth/lower interest-rate environment and to the strengthened international regulatory framework that has been put in place since the crisis’. However, this was also followed up with the need to acknowledge that ‘the regulatory overhaul since the start of the crisis has laid the foundations for durably increasing the resilience not only of individual institutions but also of the financial system as a whole’ and that ‘perhaps most importantly, euro area banks have significantly strengthened their capital positions over the past few years’.

Bourses in Asia and specifically Japan held onto those big gains after we went to print yesterday, with the Topix (+8.02%) eventually closing up by the most since 2008. European equity markets started strongly and traded with a positive tone throughout. The end result was a sharp leg up for the Stoxx 600, eventually closing +2.99% and just outdoing the +2.91% gain made on Friday, with other core and peripheral bourses up similar amounts.

This morning in particular it’s been all about Oil with the complex extending gains which started on Friday, this time as headlines dominate the wires that Saudi Arabia, Qatar, Venezuela and Russia Oil Ministers are set to meet today in Doha. While the agenda is being kept private, the hope is that this could be a positive step forward for potential coordinated action around lower production levels for Opec and non-Opec members. In any case we’ve seen WTI rise +4.38% this morning and back towards $31/bbl, after being as low as $26 just last Thursday. Brent is up +3.89% to $34.69/bbl. One to keep an eye on as the day progresses.

Meanwhile there’s also been some China data for us to digest this morning. Aggregate financing in January has printed well above expectations at 3.42bn Yuan (vs. 2.2bn expected). Money supply growth has also strengthened, with M2 growth in particular +14.0% yoy (vs. +13.5% expected), having been at +13.3% in December. While on face value this would indicate some easing in credit conditions, seasonality may also be playing its part at this time of year.

This, combined with Draghi’s comments has helped markets in Asia build upon their strong start to the week. The Nikkei and Topix are currently up +0.72% and +0.90% respectively, while the Hang Seng (+1.33%), ASX (+1.37%) and Kospi (+1.40%) are also firmer. Its bourses in China which are leading gains however with the Shanghai Comp and CSI 300 currently +2.75% and +2.70% respectively. US equity market futures are up around half a percent while credit indices in Australia and Asia are both tighter. Meanwhile the onshore CNY has given up a little bit of yesterday’s strengthening, with the currency currently -0.28% weaker in early trading.

Wrapping up the price action yesterday. Along with the strong gains for equities, European credit markets extended the rally for a second day, led once again by moves for financials indices. ITraxx senior and sub fins closed 4.5bps and 13bps tighter respectively which helped Main (-3.5bps) and Crossover (-13.5bps) tighten further. The better tone for risk saw Gold tumble -2.32% yesterday and is down another 1% this morning which has taken it back below $1200. Other precious metals are also weaker while base metals were a bit more mixed yesterday.

Looking at today’s calendar, this morning in Europe the main data of note will firstly be the UK CPI/RPI/PPI docket for January, followed closely by the February German ZEW survey where current expectations are for a marked decline in both the current situation and expectations component. In the US this afternoon the February Empire manufacturing print is due, followed later by this month’s NAHB housing market index reading. Fedspeak wise we’re due to hear from Harker (at 2pm GMT) who is due to deliver his 2016 economic forecast, followed later on by comments from the new Minneapolis Fed President Kashkari (at 3.30pm GMT). Earnings wise we’ve got 14 S&P 500 companies set to report.

http://www.zerohedge.com/news/2016-...s-gains-usdjpy-resumes-slide-oil-disappointed
 

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#27
FWIW:

Guaranteed Retirement Income: An Interview with Barry James Dyke
FinanceAndLiberty.com


Published on Feb 16, 2016
Author and financial expert, Barry James Dyke, joins FTMDaily in this special interview, exposing one of Wall Street’s dirtiest secrets. He also discusses his latest book, Guaranteed Income: A Risk-Free Guide to Retirement.

This video was posted with permission from http://FollowTheMoney.com

FINANCE AND LIBERTY:
SUBSCRIBE (It's FREE!) for more ►http://bit.ly/Subscription-Link
Website ►http://FinanceAndLiberty.com
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#28
Russia, Saudi Arabia agree to freeze oil production
RT


Published on Feb 16, 2016
The world’s two biggest crude producers have agreed not to increase oil output, according to Qatar’s energy minister, quoted by Bloomberg. OPEC members, such as Venezuela and Nigeria, have been calling for an emergency meeting of the cartel to discuss crude prices that have fallen over 70 percent since 2014.

READ MORE: http://on.rt.com/74mf
 

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#29

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#33
‘We need to let oil market hit bottom, then you start over’ – Jim Rogers
RT


Published on Feb 16, 2016
The world’s two biggest crude producers say they won't increase oil output. Along with Russia and Saudi Arabia, Qatar and Venezuela have agreed to freeze production at January levels, according to Russia's Energy Ministry.

READ MORE: http://on.rt.com/74mf
 

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#37
Gold Soars as Wall Street Tastes Fear, Monthly Gold-Silver Stock Updates
By: Peter Spina, President, CEO of GoldSeek.com and SilverSeek.com
2016 is starting off with a bang! Wall Street is learning quickly that steady years of market gains can evaporate in weeks and that unchecked complacency can be costly without proper insurance. Fear has returned to the markets which is shocking many confused investors. They are starting to finally ask some serious questions about what is coming next.
 

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#38
James Turk-Paper Assets Evaporate in 2016 Leave Gold & Silver Standing
Greg Hunter


Published on Feb 16, 2016
Precious metals expert James Turk says that things may get so bad that not losing will be winning. Turk explains, “In the environment that we are in, if we come out on the other side of the valley in terms of our wealth as when we went into this period, we are going to be doing very, very well. I would expect a lot of wealth destruction. At the end of the day, the houses are still going to be there. The farmland is still going to be there. The timberland is still going to be there. The oil wells are still going to be there. The bars of gold and silver are still going to be there. It’s the paper assets that are going to evaporate, and I think paper currency power is going to evaporate along with those paper assets.”

Join Greg Hunter as he goes One-on-One with James Turk, founder of GoldMoney.com.

All links associated with this post can be found on USAWatchdog.com: http://usawatchdog.com/2016-reveals-b...
 

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#39
Frontrunning: February 17


Submitted by Tyler Durden on 02/17/2016 07:43 -0500

  • Futures rise as oil gains hold steady (Reuters)
  • China promises economic stability as G20, parliament loom (Reuters)
  • Obama scolds Senate Republicans for Supreme Court threat (Reuters)
  • China Deploys Missiles on Disputed South China Sea Island (WSJ)
  • China Ramps Up Rhetoric, Plans New Steps to Juice Up Economy (BBG)
  • China Loses Control of the Economic Story Line (WSJ)
  • Banks are still the weak links in the economic chain (FT)
  • The Great Iron-Ore Flood Claims Anglo as Biggest Victim (BBG)
  • Apple CEO opposes court order to help FBI unlock iPhone (Reuters)
  • Ferrari Jumps After Soros Emerges Among Top 10 Shareholders (BBG)
  • Wall Street Girds for Commercial-Property Debt It Must Invest In (BBG)
  • The eurozone can’t survive another banking crisis (MW)
  • Glencore Wins Vote of Confidence After Signing Refinancing (BBG)
  • Japan Shelves Plan to Let Pension Fund Directly Invest in Stocks (WSJ)
  • Japan automaker unions' underwhelming pay demands challenge Abenomics (Reuters)
  • Negative rate not having intended effect (Nikkei)
  • Minimum Wage Hikes Aren't All Bad News for Wal-Mart (BBG)
  • Lost in translation: Wal-Mart stumbles hard in Brazil (Reuters)
  • Slowing Trade Flows Jolt Asia’s Exporting Nations (WSJ)
  • Greenlight Capital Exited Micron Stake in Fourth Quarter (WSJ)
  • Can a Reality TV Show Help Cut America's Power Bill? (BBG)
  • Big Media’s Fortunes Wane as Cable Operators Prosper (WSJ)


Overnight Media Digest

WSJ

- President Barack Obama said he seeks an 'indisputably' qualified successor to Justice Antonin Scalia, while administration officials indicated he wants a Supreme Court nominee who can attract some Republican support. (http://on.wsj.com/1QkclMs)

- Valuations of companies such as Viacom and Walt Disney are under pressure, as cable operators including Comcast and Cablevision hold steady amid cord-cutting fears. (http://on.wsj.com/1Qkcrng)

- Saudi Arabia and Russia said they would cap production if major producers followed suit, but oil prices fell as Iran balked and investors looked for more concrete action to reduce a global glut. (http://on.wsj.com/1QkcteW)

- The Dodd-Frank Act didn't go far enough; more needs to be done to end the risks posed by banks that have grown too big to fail, Minneapolis Fed chief Neel Kashkari said. (http://on.wsj.com/1QkctLQ)

- China has positioned surface-to-air missiles on a disputed island in the South China Sea in one of the most aggressive military steps so far by Beijing in a burgeoning standoff with Washington. (http://on.wsj.com/1ontAQd)



FT

Anglo American said on Tuesday it plans to sell its iron ore, coal and nickel units as part of a sweeping strategic overhaul to cope with a commodities rout that has triggered a fight for survival even among heavyweight miners.

Daimler AG Chief Executive Dieter Zetsche's contract was extended by three years on Tuesday, setting the stage for a younger generation of automotive managers to succeed him.

British lender Metro Bank Plc <IPO-METRO.L> is cutting the price of its initial public offering by about 17 percent, following the recent sell-off across the banking sector, investors in the UK bank were told on Tuesday night.



NYT

- Saudi Arabia, Russia, Venezuela and Qatar agreed to hold production steady, a move intended to bolster energy prices. But they will proceed only if others join. The plan indicates how deeply prices have fallen, as Russia and Saudi Arabia have previously resisted tempering production.(nyti.ms/20YpYWK)

- A newly declassified report by the National Security Agency's inspector general suggests that the government is receiving far less data from Americans' international Internet communications than privacy advocates have long suspected. (nyti.ms/1KoNy7r)

- European Union authorities on Tuesday stepped up efforts to reduce reliance on Russian natural gas as the two sides face off over a litany of geopolitical disputes, from the conflict in Ukraine to the civil war in Syria. (nyti.ms/1onlw1Z)

- Teams of government lawyers, the FBI and Homeland Security are trying to recover assets the United States says were stolen by foreign officials. (nyti.ms/1mGwAWG)



Canada

THE GLOBE AND MAIL

** Investment by automakers in Canada doubled last year from 2014 levels, but the country failed to win any of the three new assembly plants that were announced for North America. (bit.ly/1R7Fbwn)

** Finance Minister Bill Morneau says balancing the books is now a long-term goal, providing further evidence that the Liberal government is backing away from its pledge to erase the deficit before the next election. (bit.ly/1Q0Y3OR)

** The British Columbia government used its balanced budget on Tuesday as leverage to wrestle with the country's hottest real estate market, introducing tax incentives designed to spur housing construction. (bit.ly/1SRIETq)

NATIONAL POST

** After a bizarre appointment snafu that blew up a normally secretive process, Ontario finally has a permanent ombudsman in Paul Dube, who will formally assume the role on April 1. (bit.ly/1PEXdFW)

** Hundreds of maple syrup producers braved snow and freezing rain in Quebec City on Tuesday to march on the National Assembly in protest against a new government report that they say, if implemented, will ruin their industry. (bit.ly/1Q10PDx)



Britain

The Times

- Vodafone Group Plc's decision to go double Dutch by combining its mobile network in the Netherlands with Liberty Global's cable network Ziggo has prompted fevered speculation that it could be a forerunner for a full merger. (http://thetim.es/2496kpP)

- Politicians outraged by Mike Ashley's refusal to appear before parliament may get the chance to grill the founder of Sports Direct International Plc over the running of his sports fashion company. The entrepreneur is reported to have offered to meet MPs and answer any questions about working conditions at the retailer's headquarters and giant warehouse facility. (http://thetim.es/2498Ooe)

The Guardian

- The price of an average home in Britain rose 18,000 pounds ($25,729.20) last year, according to government figures that also revealed sharp regional differences in the housing market. The 6.7 percent pace of growth was slower than the 9 percent rise recorded in 2014, but far exceeded increases in wages or general inflation. (http://bit.ly/2496EVO)

The Telegraph

- UK inflation crept up by 0.3 percent in the year to January, from 0.2 percent in December, rising for a third month in a row. But economists said cuts to energy bills and the recent oil price rout were likely to keep inflation "close to zero" in the coming months. (http://bit.ly/2496RIt)

- India has warned Vodafone Group Plc it may seize the telecoms giant's assets in the country if it does not pay a disputed 142 billion rupees ($2.07 billion) tax bill. Vodafone received a letter from the deputy commissioner of income tax in India earlier this month that warned of potential action in the event of non-payment. (http://bit.ly/2496Zrm)

Sky News

- Documents sent to shareholders disclose that the value of B-shares allocated to roughly 70 current and former Metro Bank executives will convert into ordinary shares worth just over 18 million pounds after market turmoil forced bosses to slash the price of the lender's forthcoming listing. (http://bit.ly/2497aDg)

- French energy giant EDF will extend the life of four of its eight UK nuclear power plants - safeguarding 3,000 jobs in the process. Heysham 1 and Hartlepool will continue to generate power for an additional five years - up until 2024, while Heysham 2 and Torness will see their life extended by seven years to 2030. (http://bit.ly/2497hhX)

The Independent

- Ikea has been accused of avoiding up to 1 billion euros ($1.11 billion) in corporate taxes between 2009 and 2014, according to a report by Green Party ministers in the European Parliament. (http://ind.pn/2497wcN)


http://www.zerohedge.com/news/2016-02-17/frontrunning-february-17
 

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#40
S&P Futures Storm Above 1900, Europe Jumps Despite Gloomy Asian Session


Submitted by Tyler Durden on 02/17/2016 06:54 -0500


It has been a morning session of two halves.

In Asia, the mood was somber, and stocks fell with the Shanghai Composite (+1.1%) outperforming on another late session binge-fest by the National Team, and the Nikkei 225 (-1.4%), Hang Seng -1%, Kospi -0.2%, ASX -0.6%, Sensex -0.4% and the South Korean Won all down following news of the biggest Chinese Yuan devaluation in five weeks.





The European session, on the other hand was a different matter and after the USDJPY slid as low as 113.35 at the European open, it then proceeded to soar 100 pips and push European stocks (Stoxx 600 +1.7%) and US equity futures up with it, with the ES trading above 1900 as of this posting, adding to the best 2-day rally in the S&P in five months.

Shares in Europe also rose as companies including Credit Agricole SA and Schneider Electric SE reported better-than-estimated results.

Among the key corporate news, Glencore Plc pushed a gauge of commodity stocks higher, advancing 8.6 percent after the Swiss trader said it won new loan commitments from banks to replace an existing $8.45 billion revolving credit facility. Its bonds also gained. Total SA dropped 1.7 percent after a shareholder sold a stake at a discount. ABN Amro Group NV bucked the banking industry trend, sliding 2.2 percent after its quarterly profit missed analysts’ projections as regulatory costs rose.

Some observations were optimistic, such as this one by Justin Urquhart Stewart, co-founder of Seven Investment Management in London: "I’d love to think this is the start of a lasting rebound but it’s too early to tell. Any gains have been pretty fragile and short-lived lately, even though earnings haven’t been all that bad and economic figures have been quite supportive."

Others less so, such as this UBS technical analyst note: "We see Europe starting our suggested multi-week corrective/volatile rebound into later 1Q/early 2Q before resuming its underlying bear trend into deeper summer on the back of the recent break down in small and mid-caps. After the undershooting in banks, we expect a bounce in the Euro Stoxx 50 to remain capped at 3050 to best case 3200. On the sector front, a bounce should be led by autos, chemicals, industry, energy and miners, whereas a rebound in financials should sooner or later lose momentum."

But ultimately it all remains about oil, which after sliding to $29 yesterday after the disappointing summit between Russia and Saudi Arabia, has rebounded on hope that today's follow up meeting between Iran, Iraq and Venezuela may provide something actionable. It won't, as the following tweet from a WSJ correspondent indicates, and instead the stage for the fingerpoint is now set.

Gulf OPEC Official: “If Iran rejects the proposal, we cannot be blamed for not trying. The ball is in their court now."

— Summer Said (@summer_said) February 17, 2016



Focusing on regional markets, we start in Asia where stocks shrugged off Wall St. gains to trade negative with energy losses weighing bourses. Nikkei 225 (-1.4%) underperformed on JPY strength, while the biggest decline in machine orders in over a year also added to the gloom. ASX 200 (-0.6%) saw energy names heavily pressured after crude retreated back below the USD 30/bbl level, while Woodside Petroleum shares also dragged the sector lower following a 99% decline in profits. Elsewhere, the Shanghai Comp (+1.1%) fluctuated between gains and losses after an early upbeat tone following reports of increased funds for infrastructure spending and officials also discussing a reduction in bad loan provision ratios, was counter-balanced by a somewhat reserved PBoC liquidity operation. Finally, 10yr JGBs saw spillover selling from T-Notes where large corporate issuances and firm US stock momentum weighed on US paper while the BoJ's presence in the market today was for a relatively modest amount. Japanese PM Abe adviser Honda says the BoJ may increase stimulus at the March meeting and that the tax hike should be delayed until 2019.

In Europe, European equities started the session off on the front-foot with a slew of earnings reports and a paring of yesterday's losses enough to out-muscle underperformance in energy names amid the latest OPEC/Non-OPEC¬related headlines. Furthermore, financials have also been dealt a helping hand by stellar earnings from Credit Agricole (+11.1%) and elsewhere to the downside, utilities are seen softer in the wake of RWE suspending their dividend for ordinary shares. From a fixed income perspective, Bunds trade modestly higher with no real sustained direction as participants awaited supply from both the UK and Germany for much of the morning, which was technically uncovered when auctioned. Portugal spent the European morning wider to the German benchmark as has often been the case over the past few week. Elsewhere in the periphery, concerns continue to linger for Spain as to whether or not the nation would be able to obtain a definitive outcome if they were to hold a fresh round of elections.

In FX, much of the focus has been on GBP this morning, with the backdrop of the EU renegotiations added to by the UK employment report. The jobless rate was unchanged at 5.1% which caused and immediate hit on the Pound, led by Cable. Earlier in the day, we saw losses through 1.4250 limited to 1.4242, held up by some strong bids at these levels, which then formed the basis of a sharp turnaround as the rest of the numbers proved very healthy. Claims fell by a much larger than expected 14.8k and once digested, saw Cable taking out 1.4300 and pushing the GBP to session highs against the rest of its major counterparts. Elsewhere, early stock market jitters saw USD/JPY dipping below 113.50, but as sentiment eased, we saw a slow grind back to 114.00 and above, but the Asia highs ahead of 114.40 cap for now. Oil prices moving higher despite ongoing wrangling over the production freeze (Iran), and this has given CAD some relief to send the spot rate back towards 1.3800.

In commodities, energy markets traded relatively unchanged through most of the session as participants await further headlines regarding any success/breakdown in negotiations regarding a co-orindated production freeze. However, in the lead up to the beginning of the 1030GMT meeting between Qatar, Venezuela, Iraq and Iran WTI and Brent futures both saw a bid, with the former heading higher, towards the USD 30/bbl level, although with no fundamental catalyst immediately behind the move. In terms of metals markets, Gold traded higher overnight amid weakness in Asia-Pac stocks and a pull-back in the USD, however, prices have since retreated from their best levels alongside the upside seen in European equities.

* * *

Bulletin Headline Summary from RanSqawk and Bloomberg

  • FX markets have seen USD/JPY and GBP/USD retrace earlier losses with both heading into US crossover seeing a bid, as participants shrug off mixed UK employment release and sentiment strengthens through the European morning
  • While Asian equities failed to benefit from the positive Wall St close, European equities have traded higher this morning, benefitting from stock specific news as well as an uptick in sentiment
  • Today's highlight is the release of the FOMC Minutes, while participants will also be looking out for US housing starts, building permits, industrial production and API Crude Oil Inventories
  • Treasury yields little changed as European equities and oil rally during overnight trading; Fed minutes to Jan. 26-27 meeting to be released at 2pm ET.
  • The yuan posted the biggest two-day decline in more than a month as the central bank’s fixing for the currency tracked an overnight advance in the dollar and official media voiced concern that capital outflows will increase
  • China’s unprecedented jump in new loans at the start of 2016 is fueling concern that excessive credit growth is piling up risks in the nation’s financial system. The increase could pressure the country’s credit rating, S&P said Tuesday
  • China is stepping up support for the economy by ramping up spending and considering new measures to boost bank lending. The nation’s chief planning agency is making more money available to local governments
  • The BOJ should act preemptively to change the deflationary mindset in Japan and this action could come as soon as March, said Etsuro Honda, an adviser to Prime Minister Shinzo Abe
  • Wall Street firms are readying themselves for a provision of the 2010 Dodd-Frank law that takes effect in December that forces banks to keep a stake in the commercial-property loans they package into securities and sell off to investors
  • Syria’s five-year war has turned into a tangled web of proxy conflicts between global and regional powers, with a growing risk that some of them could clash directly. Right now the most dangerous flashpoint is between Russia and NATO member Turkey
  • Apple rejected a court order to help the Justice Department unlock an iPhone used by one of the shooters in a terrorist attack in California, accusing the U.S. government of “overreach” that will set a dangerous precedent
  • $23.425b IG corporates priced yesterday (YTD volume $206b) and $350m priced yesterday (YTD volume $9.625b)
  • Sovereign 10Y bond yields little changed; European stocks higher, Asian markets drop; U.S. equity-index futures higher. Crude oil, copper and gold rally
US Event Calendar

  • 7:00am: MBA Mortgage Applications, Feb. 12 (prior 9.3%)
  • 8:30am: Housing Starts, Jan., est 1.173m (prior 1.149m)
    • Housing Starts m/m Jan., est. 2.0% (prior -2.5%)
    • Building Permits, Jan., est. 1.2m (prior 1.232m, revised 1.204m)
    • Building Permits m/m, Jan., est. -0.3% (prior -3.9%, revised 6.1%)
  • 8:30am: PPI Final Demand m/m, Jan., est. -0.2% (prior -0.2%)
    • PPI Ex Food and Energy m/m, Jan., est. 0.1% (prior 0.1%, revised 0.2%)
    • PPI Ex Food, Energy, Trade m/m, Jan., est. 0.1% (prior 0.2%)
    • PPI Final Demand y/y, Jan., est. -0.6% (prior -1%)
    • PPI Ex Food and Energy y/y, Jan., est. 0.4% (prior 0.3%)
    • PPI Ex Food, Energy, Trade y/y, Jan. (prior 0.3%)
  • 9:15am: Industrial Production m/m, Jan., est. 0.4% (prior -0.4%)
    • Capacity Utilization, Jan., est. 76.7% (prior 76.5%)
    • Manufacturing (SIC) Production, Jan., est. 0.2% (prior -0.1%)
  • TBA: Consumer Price Index benchmark revisions
  • TBA: Mortgage Delinquencies, 4Q (prior 4.99%)
  • Mortgage Foreclosures, 4Q (prior 1.88%)
Central Banks

  • 2:00pm: FOMC Minutes, Jan. 26-27
  • 7:30pm: Fed’s Bullard speaks in St. Louis


DB's Jim Reid concludes the overnight wrap

While the rally in Europe succumbed to a bit of fatigue yesterday with the Stoxx 600 closing with -0.43% after a day of whippy price action, the US reopened after Monday's holiday with a fairly positive tone to build on the momentum generated from the end of last week, culminating with the S&P 500 closing with a +1.65% gain. Much of the focus however was on oil markets and specifically the meeting between Saudi Arabia and Russia. The initial headlines appeared positive and saw WTI spike as high as $31.50/bbl before disappointment set in that actually there was little fundamental change from the meeting and instead realization set in that talks had moved from cuts to a freeze in production. WTI closed -1.36% on the day at $29.04/bbl.

In terms of the details, it emerged that Saudi Arabia and Russia, along with Venezuela and Qatar had agreed to freeze current production at January levels. As our Commodity strategy colleagues highlighted yesterday in their note, the Russia Oil Ministry stated that this freeze would only take effect if other producers participate, without specifying how many or which countries would be required to join the agreement. While a credible agreement to hold production flat by all OPEC members at the January level would be quite meaningful in tightening forward expectations of market balance, a lot of this would hinge on the need for the inclusion of Iran and Iraq. Talks are expected to continue in Tehran today but expectation levels are low given that Iran has publicly stated that it will restore production to pre-sanctions levels regardless of price.

A silver lining is that the talks are overall a positive step forward for sentiment in advance of the scheduled June OPEC meeting. Clearly though there is the need for negotiations to progress to achieve any sort of coordinated agreement in production cuts between OPEC and non-OPEC members however.

Glancing at our screens this morning it appears that weakness in energy names following the news yesterday is to blame for a broadly weaker start in Asia this morning. Bourses in Japan in particular have seen the greatest losses with the Nikkei currently -1.88%. Elsewhere the Hang Seng (-0.50%), Kospi (-0.27%) and ASX (-0.57%) are also in the red as we go to print, while Chinese bourses (Shanghai Comp +0.31%) have just nudged back into positive territory. Oil markets are actually about half a percent firmer while US equity index futures are unchanged.

Away from the focus on Oil yesterday there was also some data and Fedspeak for us to digest. With regards to the former first of all there was a notable downturn in this month’s German ZEW survey. The current situations index plunged 7.4pts to a below-market 52.3 (vs. 55.0 expected) which is the lowest in 12 months and clearly a reflection of the European banks, global growth and China woes which have played their part this year. The expectations survey fared little better, tumbling 9.2pts to 1.0 (vs. 0 expected). In the UK meanwhile the January CPI print was lower than expected at -0.8% mom (vs. -0.7% expected). That said the YoY rate did nudge up one-tenth to +0.3% with the core sitting at +1.2%. In the US we saw the February Empire manufacturing survey continue to remain weak this month at -16.6 (vs. -10.0) despite improving nearly 3pts from January. Meanwhile the NAHB housing market index declined 3pts to 58 which came as a slight surprise with consensus expectations having been at 60, although it still remains close to its cyclical high.

In terms of the Fedspeak, Philadelphia Fed President Harker (non-voter) provided a fairly cautious overview of the US economy. Harker opined that ‘it might prove prudent to wait until the inflation data are stronger before we undertake a second rate hike’ and that ‘I am approaching near-term policy a bit more cautiously than I did a few months ago’. Harker did highlight that his overall view of the US economy is upbeat, but that risks to his outlook are very much tilted to the downside. New Minneapolis Fed President Kashkari also made some interesting comments yesterday. The former US Treasury official was fairly up front with his views on US Banks, saying that ‘the biggest banks are still too big to fail and continue to pose a significant risk to our economy’. He remarked that ‘now is the right time for Congress to consider going further than Dodd-Frank with bold, transformational solutions to solve this problem once and for all’.

Recapping the rest of the price action yesterday, Gold extended its move lower for a third day, finishing -0.73% at $1200. US Treasury yields were a smidgen higher with the benchmark 10y in particular up 2.4bps to 1.773%. European credit indices and financials in particular were a touch wider, while US indices finished 1bp tighter although the real news was in the primary market with the new issue market in the US reopening with a bang. Indeed over $23bn of deals were said to have been raised yesterday in the second busiest day of the year, led by a bumper nine-part $12bn deal for Apple while IBM and Toyota Motor Corp were also out with sizeable deals of their own. Despite the volatility in credit markets of late, clearly demand hasn’t waned too much with the order book for Apple in particular said to have reached $28bn.

Taking a look at today’s calendar now, the only data of note in the European session this morning will again come from the UK where we get the latest employment report where focus will be on the December unemployment and weekly earnings prints in particular. This afternoon in the US we’ll see the January housing starts and building permits data. Last month’s PPI print will also be worth keeping an eye on before we get the January IP report where expectations are currently running for +0.4% mom. Capacity utilization and manufacturing production data is also due before we get the January FOMC minutes this evening (7pm GMT) although as we’ve since heard from Fed Chair Yellen at her semi-annual testimony so the minutes will now look a little outdated. There’s no Fedspeak due today while earnings wise we’ve got 13 S&P 500 companies set to report.


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