R.T.M. ~ Frontrunning ~ 8th Ed., Vol.2 ~ Feb 22nd - 26th

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MtM - Investor: Heal Thyself 02/20
http://www.marctomarket.com/2016/02/investor-heal-thyself.html

SA - Real time news 02/21
http://seekingalpha.com/market-news

TBP - 10 Sunday Reads 02/21
http://ritholtz.com/2016/02/sunday-reads-39/

Top clicks this week on Abnormal Returns 02/21
http://abnormalreturns.com/2016/02/21/top-clicks-this-week-on-abnormal-returns-323/

Naked Capitalism Links 02/21
http://www.nakedcapitalism.com/2016/02/links-22116.html

CR - Schedule for Week of February 21, 2016
Read more at http://www.calculatedriskblog.com/2...-of-february-21-2016.html#usbHgC90jTi57cgc.99

MtM - Dollar Bullish Speculators Still Hesitant 02/21
http://www.marctomarket.com/2016/02/dollar-bullish-speculators-still.html

 

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Shipping & Energy 02/21:

Baltic Dry Index Ends Week of Gains
http://gcaptain.com/baltic-dry-index-ends-week-of-gains/

Asia VLCC Rates Hold Steady after Near 4-week High
http://www.worldenergynews.com/news/asia-vlcc-rates-hold-steady-after-near-640885

As Iran Revives Oil to Europe, U.S. Insurer Says Tankers Covered
http://www.bloomberg.com/news/artic...il-to-europe-u-s-insurer-says-tankers-covered

Golden Ocean CEO On Weak Market: “We are in a very serious situation”
http://www.shippingherald.com/golden-ocean-ceo-on-weak-market-we-are-in-a-very-serious-situation/

Deepwater Sector In Deep Trouble
http://www.rigzone.com/news/oil_gas/a/143074/Deepwater_Sector_In_Deep_Trouble/?all=HG2

Lawsuit Filed Over Oklahoma’s ‘Fracking’ Earthquakes as Its Third Largest Quake Is Felt in 7 Other States
http://www.resilience.org/stories/2...third-largest-quake-is-felt-in-7-other-states

Gazprom Threatens To Cut Off Gas Supply To Kyrgyzstan
http://oilprice.com/Energy/Energy-General/Gazprom-Threatens-To-Cut-Off-Gas-Supply-To-Kyrgyzstan.html

Downward Trend For Bakken Oil Production Set To Continue
http://oilprice.com/Energy/Energy-G...or-Bakken-Oil-Production-Set-To-Continue.html

World Shipping Council slams AgTC claims
http://www.lloydslist.com/ll/sector/containers/article479302.ece

Bulk Shipping Hit by Perfect Economic Storm
http://www.maritime-executive.com/article/bulk-shipping-hit-by-perfect-economic-storm

 

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Oh No! Not the 100!
belangp

Published on Feb 20, 2016
A discussion about the opening salvos of the war on cash

 

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Marc Faber On Cashless Society Insanity And Why Wall Street Hates Gold
http://seekingalpha.com/article/3906256-marc-faber-cashless-society-insanity-wall-street-hates-gold

 

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Bill Holter-Negative Rates Guaranteed Loss-Buy Gold
Greg Hunter

Published on Feb 21, 2016
Don’t count on the Fed raising rates again. Financial writer Bill Holter says, “That’s true rocket science, no more rate hikes. Look what happened with just one rate hike. The wheels are coming off the car with just a quarter of a point hike.”

On gold, Holter says, “If you go back and look at it on a chart, gold and silver began their upward movement right about the time Japan started negative interest rates. The big scare was the Fed is going to tighten. The Fed is going to tighten, which is ridiculous. Even if they tighten 3% or 4%, which they can’t do because they would kill the economy, it’s still not competition for real money. You are looking at a currency that is debasing by that amount per year. Negative interest rates are telling you, you’ve got to get your money out of the banks because it’s a guaranteed loss.” Some of that money is finding its way into precious metals.

Join Greg Hunter as he goes One-on-One with financial expert Bill Holter of JSMineset.com.

All links mentioned can be found on USAWatchdog.com: http://usawatchdog.com/cash-ban-is-al...

 

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MARO ANALYTICS - 02 16 16 - US$ & THE GLOBAL "PEG PAIN TRADE" w/Charles Hugh Smith
GordonTLong

Published on Feb 21, 2016
See Macro Analytics Home Page for a full abstract of this video

LINK: http://www.gordontlong.com/Macro_Anal...

 

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How would you react? Charles Schwab CEO tells how he interviews job candidates over breakfast - and makes the restaurant mess up their order to test their reaction

• Walt Bettinger shows up early and promises a good tip for the mistake
• He said it's a way to see how prospective employees deal with adversity
• Bettinger wants to see what's in their 'heart' instead of their head

Read more: http://www.dailymail.co.uk/news/article-3457620/Charles-Schwab-CEO-Walt-Bettinger-tests-job-candidates-having-restaurant-mess-order.html#ixzz40u4HOMdJ
Follow us: @MailOnline on Twitter | DailyMail on Facebook

 

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Frontrunning: February 22

Submitted by Tyler Durden on 02/22/2016 07:48 -0500

• Futures sharply higher as oil extends gains (Reuters)
• Global Stocks Gain on Rising Commodities Prices, China (WSJ)
• Pound in freefall as Boris Johnson sparks Brexit fears (Telegraph)
• Pound Slides Most Since 2009 as Johnson Backs ‘Brexit’ Campaign (BBG)
• Donald Trump, Hillary Clinton Seize Leads for Their Parties’ Nominations (WSJ)
• Oil Glut Will Persist Into 2017 as IEA Sees Prices Capped (BBG)
• Japanese Seeking a Place to Stash Cash Start Snapping Up Safes (WSJ)
• San Bernardino victims to oppose Apple on iPhone encryption (Reuters)
• Apple Calls for Congress to Form Committee for Privacy Issues (BBG)
• Syrian Conflict’s Toll Pressures Allies (WSJ)
• Gold, Oil Go Their Separate Ways (WSJ)
• Europe’s Economy Strains as Global Slowdown Takes its Toll (BBG)
• Japan PMI Shows Manufacturing Weakened, Dragged By Drop In Exports To China (IBT)
• Republican Marco Rubio winning Wall Street fundraising race (Reuters)
• That Didn't Work as Planned: Mexico's Oil Monopoly Ends, Then Oil Tanks (BBG)
• China at the Heart of North Korea's Illicit Cash-Flow Funnel (BBG)
• Banks Keep Cutting Currency Traders as Volatility No Job Saver (BBG)
• Buffett's 'Woodstock of capitalism' goes global (Telegraph)
• HSBC Drops After First Quarterly Loss in More Than 5 Years (BBG)
• Emerging Markets Caught Between a Rock and Some Harsh Ratings (BBG)

Overnight Media Digest

WSJ

- Donald Trump and Hillary Clinton emerged from a weekend of voting as the clear leaders in the fight for their parties' presidential nominations, with smoother potential paths to victory than seemed likely a few weeks ago. (http://on.wsj.com/1oCNWG2)

- The persistent civil war in Syria is fueling discord inside the U.S.-led military coalition and raising concerns about the long-term costs of the conflict for Washington and its allies, said current and former U.S. officials. (http://on.wsj.com/1Rh7l8d)

- While some U.S. federal agencies have funded the development of nearly unbreakable encryption software, the others, especially in intelligence and law enforcement, fume over their inability to read protected messages when they have a court order.(http://on.wsj.com/1oCNZl9)

- Samsung Electronics Co released its latest flagship smartphone Sunday on the sidelines of the Mobile World Congress trade show in Barcelona, getting the backing of Facebook Chief Executive Mark Zuckerberg, who said the companies are teaming up to push virtual-reality features in phones and social networking.(http://on.wsj.com/24kJqMr)

- Days before North Korea's latest nuclear-bomb test, the Obama administration secretly agreed to talks to try to formally end the Korean War, dropping a longstanding condition that Pyongyang first take steps to curtail its nuclear arsenal. (on.wsj.com/1oCqFDT)

- A 45-year-old man suspected of killing six people and injuring two others in three attacks over the weekend in western Michigan was a driver for ride-sharing company Uber Technologies (http://on.wsj.com/20NvtCf)



FT

Swiss commodities trading group Trafigura will ship one of the first crude oil cargoes of benchmark West Texas Intermediate in the coming weeks to Israel, as the lift of the 40-year-old U.S. crude oil export ban allows the entry of American oil into the international market. (http://on.ft.com/1L48h0s)

After investors complained that top managers' pay at HSBC Holdings Plc looked high compared to rival banks, the bank cut it to 30 percent of salaries. The change is expected to be announced on Monday. (http://on.ft.com/1LBs7LE)

According to claims in a legal battle, Standard Chartered Plc bought a $100 million "dirty debt" despite knowing that the loan had been part of a multimillion-pound embezzlement scheme and the bank used it to ask for compensation from an African government.



NYT

- With competition continuing to heat up in the handset market, Samsung Electronics is relying heavily on virtual reality to help distinguish its smartphones, and on Sunday announced two new Galaxy smartphones along with Gear 360, a camera for recording virtual reality videos.(http://nyti.ms/1VymTFP)

- Though Apple is resisting U.S. government demand's to unlock an iPhone, it has repeatedly cooperated with court orders for access to online services like its iCloud and people familiar with how Apple's products and services work, it is simply a matter of technology and not hypocrisy.(http://nyti.ms/1OoZn8x)

- A growing number of companies are offering their employees digital tools to help improve their eating habits in hopes of increasing productivity, reducing sick days and cutting health care costs.(http://nyti.ms/1XHaEs5)

- At the University of Surrey, the world's top tech companies, including Samsung, and researchers are collaborating to offer mobile Internet speeds more than 100 times faster than anything now available.(http://nyti.ms/1QaTbGJ)



Canada

THE GLOBE AND MAIL

** Fentanyl has become the leading cause of opioid deaths in Ontario for the first time since Canada's prescription painkiller crisis began more than a decade ago, preliminary figures from Ontario's Office of the Chief Coroner show. (http://bit.ly/1XHGkgU)

** The federal government wants to improve the accuracy of its no-fly list and curb "false positives" by adding addresses, birth dates and social-insurance numbers to the security data it shares with airlines. Ottawa has been stung by a spate of complaints in recent months from airline passengers who have faced problems boarding flights because their names match those of people on the list. (http://bit.ly/1XHGll4)

NATIONAL POST

** Once Saskatchewan's poster boy for economic growth, Estevan is now the canary in the coalmine, the first city to feel the full impact of the plunging price of oil. Nowhere in Saskatchewan has the slowdown in the economy been more pronounced or rapid. (http://bit.ly/1XHGRQ1)

** Mike Duffy - a sitting senator, a former close ally of a prime minister - is entering the second-last phase of his trial on 31 charges of fraud, breach of trust and bribery for behaving in a way he insists was completely normal in the Senate of Canada. (http://bit.ly/1XHHCbH)



Britain

The Times

Break up BT to boost the economy, says Sky boss

Jeremy Darroch, the chief executive of Sky Plc, has warned that Britain risks falling further behind other countries on broadband speeds if Ofcom does not break up BT Group and foster an era of fibre investment. Ofcom will reveal its plan to overhaul the regulation of Britain's broadband infrastructure on Thursday amid a wider debate about whether BT's consumer business should be split from Openreach, the network division that connects broadband lines. The regulator is expected to present a range of options but looks unlikely to remove the threat of a BT break-up at this stage. (http://thetim.es/1oCGLNW)

The Guardian

Sainsbury's expected to ask for more time in Home Retail Group battle

Sainsbury's is expected to ask for an extension of the Tuesday deadline to table a firm bid for the owner of Argos following the emergence of a 1.4 billion pound rival offer from South African retail group Steinhoff International Holdings . The request for more time from the Takeover Panel would come from Sainsbury's with the agreement of Argos's parent, Home Retail Group Plc, and would likely propose 18 March, the same date for Steinhoff to make a firm bid. (http://bit.ly/1UgGY5e)

Volvo recalls 59,000 cars over software glitch

Volvo is recalling 59,000 cars over faulty software that can briefly shut down the engine, including more than 7,000 in the UK. The recall affects five-cylinder diesel models S60, V60, XC60, V70 and XC70 built from mid-2015. Owners of the Swedish cars are being sent letters directly, asking them to take their vehicles to their local dealership for a 30-minute no-fee fix. The cars are being recalled across 40 markets, but those affected have been sold mainly in Sweden, Britain and Germany. (http://bit.ly/1ouxYNf)

The Telegraph

Boris Johnson backs Brexit as he hails 'once-in-a-lifetime opportunity' to vote to leave EU

Boris Johnson says Britain has a "once in a lifetime opportunity" to vote to leave the European Union as a way of securing an entirely new relationship with Brussels based around the single market. Johnson calls for Britain to be "brave" and says that "there is only one way to get the change we need - and that is to vote to go". He says that "EU history shows that they only really listen to a population when it says No". (http://bit.ly/1LA0W3A)

RBS and Lloyds forecast to cut hundreds of branches

The Royal Bank of Scotland and Lloyds Banking Group are expected to announce further plans to cut costs when they publish their 2015 financial results this week, which analysts believe could result in the closure of more than 400 more branches in the coming years. (http://bit.ly/1PQDR0K)

Sky News

HSBC slashes Gulliver pension by 250,000 stg

The boss of HSBC Holdings Plc had his pension allowance slashed by 250,000 pounds last year in a move aimed at appeasing big investors in Europe's largest bank. HSBC will disclose on Monday that a cash sum handed to Stuart Gulliver in 2015 in lieu of a pension was cut from 625,000 pounds to 375,000 pounds. The move represents a decision by the bank to cut the awards from 50 percent of executives' base salaries to 30 percent, following shareholder complaints that they had been excessive. (http://bit.ly/1KxQD5q)

Passenger Jet Veers Off Runway In Birmingham

An aircraft with 98 passengers on board ended up on a grass verge after it went off the runway following its landing. The plane was making its way to the terminal at Birmingham Airport when it "manoeuvred" off the tarmac, said officials. (http://bit.ly/1WC3HY7)


http://www.zerohedge.com/news/2016-02-22/frontrunning-february-22

 

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Markets Surge On Chinese Debt Flood; Worst European PMI In Over A Year; Crashing Pound

Submitted by Tyler Durden on 02/22/2016 06:59 -0500

The overnight news was decidedly downcast, with first London mayor Boris Johnson voicing his support for Brexit leading to a collapse in the pound, validating our Saturday warning and then some, resulting in the biggest drop in cable in over a year over fears that the EU will lose one of its most critical members...

... then followed by a surprising loss, the first in 5 years, by HSBC - the bank that makes money laundering for criminals around the globe a breeze - as revenue dropped and loans to oil and gas companies drove a jump in impairment charges, leading to a 5% drop in its share price, but more concerning is that HSBC said bad loan impairments and provisions soared 32% to $1.62BN driven by the oil and gas sector. In other words banks are concealing far more energy losses on their books than they have so far admitted.

Finally, we got yet another indication that the global slowdown is spreading to Europe, when first French composite PMI printed at 49.8 missing expectations, then Germany's PMI likewise missed at 50.2, which meant that the Markit composite Purchasing Managers Index for the euro zone fell to 52.7, the lowest since January 2015, from 53.6. In Germany, manufacturing took a hit from falling overseas demand, while the composite gauge for France signaled “sluggish” economic growth.

From the Markit Report:



The flash Markit Eurozone PMI fell from 53.6 in January to 52.7, the lowest since January of last year. The second consecutive monthly slowing in the rate of output expansion reflected a waning in growth of new orders for a third successive month, resulting in the smallest rise in new business for 12 months.



Backlogs of work were broadly unchanged as a result of the weaker increase in new work. With outstanding business stagnant, firms limited their hiring of new staff, leading to the weakest net increase in employment for five months.



Manufacturing output showed the smallest increase since December 2014, moving closer to stagnation amid a further faltering in growth of new orders and exports. Services fared better, though nevertheless saw growth weaken to the slowest since January of last year. Moreover, a sharp deterioration in optimism about future activity growth in the services sector points to further weakness in coming months

It wasn't just Europe: in China the MNI business indicator for February declined 2.4 pts to 49.9, matching the level seen in November in the process. Meanwhile in Japan and kicking off a busy day for PMI’s the flash February manufacturing print tumbled 2.1pts this month to a well below market 50.2 (vs. 52.0 expected) which was the lowest since June.

And yet, despite - or rather thanks to - this slew of negative news, global markets and US equity futures soared from the moments Japan opened (driven by the traditional BOJ-inspired spike in the USDJPY), and never looked back - in the process even breaking Europe's futures exchange Eurex, as traders focused on the record surge in Chinese loan creation, which as we reported last week will have hit $1 trillion in the first two months of 2016, which in turn pushed commodities and especially iron ore higher by 6.2%, back over $50, or $51.52 a dry ton specifically, the highest level since Oct. 27. The commodity has jumped 18 percent this year after plunging to $38.30 in December, the lowest in more than six years; the reason: Chinese corporations are taking advantage of the debt glut and doing what got them in trouble in the first place: stockpiling.

Helping lift the risk mood was the PBoC which provided CNY 169BN of funds under its Medium-term Lending Facility and the Finance Ministry announced a reduction of home transaction taxes, pushing the Shanghai Comp higher by 2.4%, the highest level in one month.

So propped up by the Chinese central bank and by a debt-spewing Chinese finance ministry, with further hopes a backsliding European economy will mean even more easing by Draghi, the risk on mood is back: "People are willing to take risk again,” Karl Goody, a private wealth manager at Shaw and Partners Ltd. in Sydney told Bloomberg. “People are looking at the selloff this year and saying: enough is enough, there’s been enough pain now."

As a result of today's commodity euphoria, the Stoxx 600 was led higher by miners and carmakers. BHP Billiton Ltd. and Rio Tinto Group jumped more than 5 percent, among the biggest gains in Britain’s FTSE 100 Index. Ironlcally, U.K. equities added 1.2 percent. The FTSE 100 this year is the best performer among major national measures in western Europe, helped by a weakening pound.

“While we still have some pretty big risks out there, the market has sold off so much it was about time we got a bounce back,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “We’ve seen a turnaround in the commodities sector. Some of the drag from China is also starting to ease. We have a bit further to go in this relief rally”

Futures on the Standard & Poor’s 500 Index expiring in March rose 1.2 percent, indicating equities will extend gains after posting their strongest weekly advance since November. Allergan Plc is among four S&P 500 members posting earnings on Monday. What is curious is that over the weekend the latest twist in the US Presidential campaign saw Donald Trump secure victory in the South Carolina Republican primary, beating Rubio and Cruz into second and third place respectively. And while Trump's steamrolling in the primaries has been said to be broadly negative for equities, so far US equity futures are up well over 1.0%.

Bottom line: Central Banks > Donald Trump, if only for today.

Where markets stand right now:

• S&P 500 futures up 1.2% to 1937
• Stoxx 600 up 1.6% to 332
• FTSE 100 up 1.2% to 6024
• DAX up 2% to 9574
• German 10Yr yieldunchanged at 0.2%
• Italian 10Yr yield down 3bps to 1.54%
• MSCI Asia Pacific up 0.7% to 120
• Nikkei 225 up 0.9% to 16111
• Hang Seng up 0.9% to 19464
• Shanghai Composite up 2.3% to 2927
• S&P/ASX 200 up 1% to 5001
• US 10-yr yield up 3bps to 1.78%
• Dollar Index up 0.65% to 97.23
• WTI Crude futures up 3.6% to $30.70
• Brent Futures up 3.2% to $34.07
• Gold spot down 1.8% to $1,204
• Silver spot down 2.3% to $15.00

Top Global News:

• Cameron to Make EU Case to Parliament as Johnson Backs ‘Brexit’: Possible Cameron successor among most popular U.K. politicians
• Pound Slides Most in a Year as Johnson Backs ‘Brexit’ Campaign: gauge of 6-mo. volatility climbs to highest since 2011
• Brent Oil Pares Losses as Russia Sees Output Talks Done by March: Futures up as much as 1.9% in London, paring 2-day, 4.3% slide
• For OPEC, Path From Oil Freeze to Output Cuts Isn’t Clear: Saudi Arabia is sending signals that its policy could change
• China Stocks Rise to Highest in Month Amid Regulator Reshuffle: Former chief of Agbank replaces Xiao Gang as CSRC chairman
• Yahoo Said to Start Approaching Possible Bidders Soon As Monday: Verizon, Comcast, AT&T likely to be among interested parties
• EFG to Buy BTG’s Swiss Private Bank in $1.34b Deal: Purchase will double assets under management for EFG
• PayPal Eyes Growth in New Alliances With Vodafone, America Movil: Mobile carriers are gateway to 740m potential customers
• HSBC Posts Surprise 4Q Loss; Dividend in Line With Est.: HSBC reported 4Q reported pretax loss $858m; est. $1.95b; HSBC’s Asia-Pacific Hiring Practices Being Probed by SEC: London-based bank says it’s cooperating with U.S. regulator on investigation

Looking at regional markets, we start in Asia where equities began the week on the front-foot with nearly all indices advancing, with China support measures and commodity gains lifting sentiment. Nikkei 225 (+0.9%) was driven higher by JPY weakness, while firm earnings underpinned the ASX 200 (+0.7%). Elsewhere, Shanghai Comp (+2.4%) was underpinned after the PBoC provided CNY 169bIn of funds under its Medium-term Lending Facility and the Finance Ministry announced a reduction of home transaction taxes, while China's materials sector outperforms on steel and iron ore gains, with the latter rising limit-up to its highest levels since October. 10yr JGBs continued on its recent uptrend despite the risk-on sentiment in the region, while 20yr yields printed fresh record lows amid thin trade as participants await tomorrow's 40yr auction and expectations of the BoJ to enter the market for the super long-end on Wednesday. As reported over the weekend, China replaced the head of its securities regulator and announced Shiyu as the new CSRC chief to replace Xiao Gang.

Asian Top News:

• Yuan Bears Who Beat Hedge Funds to the Trade See Pain Spreading: Walker of Asianomics predicts U.S. recession, Treasury rally
• DBS Profit Rises on Interest Income as Bad-Loan Ratio Holds: Fourth-quarter earnings jump 20% to beat analyst estimates
• In $39 Billion China Buyout Spree, Latest Offer Angers Investors: Jumei International’s going-private offer is less than 1/3 of IPO price
• Negative Rates Advocate Fujimaki Says BOJ’s Kuroda Got It Wrong: Bank of Japan can’t halt inflation once it takes hold, Fujimaki says
• China’s Debt Seen Rising Through 2019, Peaking at 283% of GDP: History points to financial crisis or slowdown, Goldman Sachs says
• BlackRock Is Betting on Japan Stocks as Other Foreigners Flee: Overseas investors have sold a net 2.24 trillion yen this year

After negotiations with his European counterparts, UK PM Cameron has agreed a package of changes to the UK's membership of the EU and has subsequently announced a referendum on June 23rd to vote on whether Britain should remain a part of the EU. The agreement will take effect immediately if the UK votes to remain in the EU. Mr Cameron had originally wanted a complete ban on migrants sending child benefit abroad but had to compromise after some eastern European states rejected that and also insisted that existing claimants should continue to receive the full payment.

London Mayor Boris Johnson announced he would join the campaign for Britain to exit the European Union. A recent Ipsos/MORI poll found that of all the politicians in the UK, only Boris Johnson was capable of affecting the outcome of the referendum, adding a potential 15% to the 'Leave' campaign if he backed it publicly. (Huffington Post/Guardian)

European Top News:

• Deutsche Telekom CEO Says Not Considering Sale of Dutch Unit: CEO Timotheus Hoettges speakss in interview on Bloomberg TV
• Bank of Ireland Sees Dividend Next Year as 2015 Profit Soars 30%: underlying pretax, ex. items, EU1.2b in line with ests
• AB Foods Raises FY Adj. EPS Outlook; 1H Primark Sales Miss Ests.: AB Foods now only sees “marginal decline” in FY adj. EPS, had seen “modest decline”
• Telepizza Prepares to List Shares in Spain, Expansion Says: Could be valued at ~EU1.2b or 15 times Ebitda
• Cortefiel Suspends IPO Plans on Political Uncertainty: Mundo: Newspaper cites unidentified people who took part in discussions
• Unibail-Rodamco Sells Office Building for EU330m: Doesn’t disclose the name of the buyer
• Corum CEO Tells Le Temps Swiss Watch Brand Has Become Profitable: CEO Davide Traxler cited in interview with Le Temps
• Sanofi Says FDA Accepts NDA for Glargine, Lixisenatide Combo: Says decision anticipated in August

In FX, GBP underperforms this morning, with the most notable news over the weekend all focussed around Brexit concerns. While many were looking out for details of the deal between the EU and UK, the more interesting news came when London Mayor and touted possible PM successor Boris Johnson announced that he would campaign in favour of leaving the EU. A recent Ipsos/MORI poll found that of all the politicians in the UK, only Johnson was capable of affecting the outcome of the referendum, adding a potential 15% to the 'Leave' campaign. As such GBP plummeted overnight and fell further as European participants arrived at their desks, with EUR/GBP firmly above 0.7800 and GBP/USD lower on the day by almost 2.5 points, close to 1.4150.

In commodities, WTI and Brent futures have seen renewed strength today in tandem with the continuing rhetoric regarding an OPEC deal, with Russia stating they have set a March 1st deadline for completing consultations. While sources reported that the Iraq oil minister informed ministers that although Iraq will not join Doha's MOU, they will not boost crude production level in next 4 months either. Separately, the risk-on sentiment alongside the strength in the USD-index which has made a firm break above notable resistance situated at 97.17, has seen significant pressure in the precious metal complex with Gold seeing losses of over USD 20.

Iraq Oil Minister states that they will support all efforts to control prices, adding that they are very much cooperative. (BBG) Additionally, sources reports said Iraq Oil Minister Adil Abd al-Mandi informed ministers that although Iraq will not join Doha's MOU they will not boost crude production level in next 4 months either.

On today's docket in the US we get the manufacturing print in the US this afternoon (expected at 52.5) along with the Chicago Fed national activity index expected at -0.10.

Bulletin Headline Summary from RanSquawk and Bloomberg

• Boris Johnson's Brexit announcement sees significant selling pressure filter through GBP.
• Risk-on sentiment in full swing with European equities kicking off the week on the front foot.
• Looking ahead, highlights include US manufacturing PM! and comments from ECB's Lautenschlager
• Treasury yields rise in overnight trading amid global equity markets rally, U.S. dollar strength as British PM Cameron will address the House of Commons today about the U.K. remaining in the European Union.
• The British pound weakened the most in a year against the dollar after London’s Conservative Mayor Boris Johnson said he’ll campaign for Britain’s exit from the EU, opposing Prime Minister David Cameron
• HSBC Holdings Plc posted an unexpected fourth-quarter loss, its first since at least 2009, as revenue dropped and loans to oil and gas companies drove a jump in impairment charges
• China’s stocks rose to the highest level in almost a month on speculation the new head of the nation’s securities regulator, Liu Shiyu, will take steps to boost the world’s second-largest equity market
• As banks around the world cut sales and trading jobs in an effort to reduce costs, the bloodletting in foreign exchange is proving to be among the deepest and most painful as the world’s 12 biggest banks have reduced foreign-exchange headcount by more than a quarter since 2010
• The world’s biggest banks last year generated the least revenue from fixed-income products since the 2008 financial crisis as businesses under-performed, clients pulled back from trading and assets lost value
• The global oil glut will persist into 2017, limiting any chance of a price rebound in the short term as the surplus takes even longer to clear than previously estimated, according to the International Energy Agency
• U.S. Treasury will auction $26b 2Y (Tuesday), $13b 2Y FRN and $34b 5Y (Wednesday), $28b 7Y (Thursday)
• $4.05b IG corporates priced Friday (YTD volume $225.5b) and no HY priced (YTD volume $11.125b)
• Sovereign 10Y bond yields mostly steady with Greece +12bp; European, Asian markets rally; U.S. equity- index futures rise. Crude oil and copper rally, gold falls

Key US Events:

• 8:30am: Chicago Fed Nat Activity Index, Jan., est. -.10 (prior -0.22)
• 9:45am: Markit US Manufacturing PMI, Feb P, est. 52.5 (prior 52.4)
• 11:30am: U.S. to sell $37b 3M bills, $30b 6M bills
• 1:00pm: NY Fed executive vice president Potter speaks in New York

DB's Jim Reid concludes the overnight wrap:

Since the news of the EU deal for the UK and associated referendum date announcement wires have been dominated by the response of Cameron’s fellow Conservative members, six of which have announced that they will campaign for ‘Out’ including London Mayor Boris Johnson. This is significant given the Mayor’s approval ratings and a big personality now in the ‘Out’ camp, although it remains to be seen just how much of an active role he will play in campaigning, possibly choosing to keep a low profile in light of his future Conservative Party leadership chances. The news comes after Justice Secretary Michael Gove announced himself that he will also campaign for Britain to leave too.

In any case, the weekend news has meant Sterling was the big mover when markets opened in Asia this morning. The Pound is currently down 0.85% versus the US Dollar and 0.68% against the Euro, although it has pared back losses of as much as 1% for both. FTSE 100 index futures are up +0.8% however.

Looking at the rest of markets this morning and specifically in Asia it’s generally been a fairly positive start. The Nikkei (+0.94%), Shanghai Comp (+2.49%), Hang Seng (+0.91%) and ASX (+0.98%) are all kicking off the week on the front foot, with the Kospi (-0.06%) the only index in the red. Supporting gains are a 1.5% bounce for Oil. The constructive start has also come despite some softish data this morning. In China the MNI business indicator for February declined 2.4pts to 49.9, matching the level seen in November in the process. Meanwhile in Japan and kicking off a busy day for PMI’s the flash February manufacturing print tumbled 2.1pts this month to a well below market 50.2 (vs. 52.0 expected) which was the lowest since June.

Meanwhile, US equity index futures are up half a percent this morning. Over the weekend the latest twist in the US Presidential campaign saw Donald Trump secure victory in the South Carolina Republican primary, beating Rubio and Cruz into second and third place respectively. Jeb Bush has since announced that he has suspended his campaign.

Quickly recapping what was a softish day for the most part on Friday, closing out a week of two halves. The optimism that was initially sparked on the back of those Saudi/Russia/Iran meetings concerning OPEC production freezes seemed to wane into the close of last week, with WTI wiping out the bulk of the week’s gains after dropping -3.67% on Friday and back below $30/bbl which was where it had kicked the week off. Brent (-3.70%) was down a similar amount on Friday which took it to -1.05% for the five days last week. A slightly higher than expected US CPI number (more shortly) also seemed to weigh on risk assets initially, although in fairness markets did bounce back by the close and it feels like we’ll need sustained run of better economic data to really swing Fed rate expectations from the lowly levels at the moment

After dipping as much as -0.8% in early trading, the S&P 500 closed unchanged by the close. That meant the index finished up +2.84% last week for its first weekly gain since January, although remember that this included two consecutive +1.65% daily gains on Tuesday and Wednesday before momentum faded away. It was a similar pattern for markets closer to home. The Stoxx 600 finished Friday -0.77% as a rough day for financials also played its part. That saw the index close up +4.47% last week although again with gains frontloaded. US credit was a tad softer on Friday with CDX IG 1.4bps wider meaning the index was 4bps tighter on the week. In Europe we saw Senior and Sub Fins finish 3bps and 5bps wider respectively on the day paring the five-day rebound to 5bps and 18bps tighter respectively. Main closed 3bps wider and was 5bps tighter on the week.

With regards to that data, headline CPI for the US in January came in higher than expected at 0.0% mom (vs. -0.1% expected) which saw the YoY rate lift to +1.4% from +0.7% although largely due to favorable base effects. Much of the focus was on a decent core print with the monthly reading of +0.3% mom also one-tenth ahead of expectations. That saw the YoY rate notch up to +2.2% which is the highest level now since June 2012 and continuing the strong momentum of late. It was noted that a big contributor to that was again rising shelter costs although other services were also said to play a part including medical costs, airfares and financial services. Treasury yields did initially move sharply higher post the data, with the benchmark 10y yield hitting 1.783% (up 7bps from the lows) before mirroring much of the move in equity markets to finish more or less unchanged at 1.745%.

Meanwhile, Cleveland Fed President Mester became the latest in the line of recent Fedspeakers. A voter this year and seen as a hawkish leaner, Mester joined Williams in saying that she wants to stay away from negative interest rates, while commenting that ‘policy is going to be moving gradually higher, not going backwards’ but that the actual path the Fed chooses to take ‘could very well turn out to be either less gradual or more gradual than what we anticipate it to be today’. With regards to her outlook, Mester noted that ‘my current expectation is that the US economy will work through this episode of market turbulence and the soft patch of economic data to regain its footing for moderate growth’ and that despite the volatility and various factors impacting markets this month, it would be ‘premature’ for her to materially change her outlook.

There was also some notable chatter out of the ECB to mention. In particular it was comments from Constancio which got our attention, with the ECB official highlighting that ‘in looking to what can be done if we decide to ease further, we’ll have to mitigate the effect on banks as other countries have done’. The comments lending further weight to the possibility that the ECB might be shifting away from outright deeper depo cuts and possibly instead to a tiered deposit rate system or LTRO’s. Meanwhile, ECB Governing Council member Visco made comments of his own on Friday, the most significant being that he does not see any reason why the ECB could not take on bad loans as collateral, but also commenting that there has not yet been any discussion on this.


http://www.zerohedge.com/news/2016-...d-worst-european-pmi-over-year-crashing-pound

 

[searcher]

MtM - Re-Emergence of Divergence Helps Stabilize Markets 02/21
http://www.marctomarket.com/2016/02/re-emergence-of-divergence-helps.html

MtM - Emerging Market Preview: Week Ahead 02/21
http://www.marctomarket.com/2016/02/emerging-market-preview-week-ahead_21.html

LT - Outlook for Week of February 22
https://lunatictrader.wordpress.com/2016/02/21/outlook-for-week-of-february-22/

SA - Real time news 02/22
http://seekingalpha.com/market-news

TRB - Hot Links: What Could Go Right? 02/22
http://thereformedbroker.com/2016/02/22/hot-links-what-could-go-right/

Tim Iacono - Monday Morning Links 02/22
http://timiacono.com/index.php/2016/02/22/monday-morning-links-189/

CWS - Morning News: February 22, 2016
http://www.crossingwallstreet.com/a...ed:+Crossingwallstreet+(Crossing+Wall+Street)

TCS - Initial Guidance | 22 February 2016
http://www.capitalspectator.com/initial-guidance-21-february-2016/

Naked Capitalism Links 02/22
http://www.nakedcapitalism.com/2016/02/links-22216.html

Ritholtz's Reads: Stock Picking and Trump's Win 02/22
http://www.bloombergview.com/articles/2016-02-22/ritholtz-s-reads-stock-picking-and-trump-s-win

MtM - Sterling is Pounded and Eurozone PMI Disappoints 02/22
http://www.marctomarket.com/2016/02/sterling-is-pounded-and-eurozone-pmi.html

SA - Wall Street Breakfast: Sterling Dives On Brexit Jitters 02/22
http://seekingalpha.com/article/3915166-wall-street-breakfast-sterling-dives-brexit-jitters

 

[searcher]

Gold and Silver Market Morning: Feb-22-2016 -- Two Global Gold Prices?
By: Julian D. W. Phillips, Gold Forecaster
So will there be two separate and very different gold prices across the world in the future? We discussed, in our newsletters, the developments both in and outside China in terms of the structure of the global gold markets being undertaken by the Chinese institutions. We see these as developing effective arbitrage operations, under their control. That means that the absorption of London’s liquidity in the gold market will accelerate.

 

[searcher]

RANsquawk week ahead - 22nd Feb 2016
RAN squawk

 

[searcher]

Shipping & Energy 02/22:

Tanker Captain Pleads Guilty to Felony Obstruction in ‘Magic Pipe’ Pollution Case
http://gcaptain.com/tanker-captain-pleads-guilty-to-felony-obstruction-in-magic-pipe-pollution-case/

ANALYSIS: Shipping, steel in dangerous deflationary dance
http://www.taipeitimes.com/News/biz/print/2016/02/23/2003639994

Qatar, Maersk and Shell join forces to develop LNG as marine fuel
http://energy.economictimes.indiati...forces-to-develop-lng-as-marine-fuel/51092599

UPDATE 2-First U.S. shale gas exports imminent as tanker docks at Sabine Pass
http://af.reuters.com/article/energyOilNews/idAFL3N1611XQ

Peak Oil Review - Feb 22
http://www.resilience.org/stories/2016-02-22/peak-oil-review-2016-Feb-22

Oil Prices Rally On IEA Report
http://oilprice.com/Energy/Energy-General/Oil-Prices-Rally-On-IEA-Report.html

ExxonMobil’s New Reserves Fall Short For First Time In 22 Years
http://oilprice.com/Energy/Energy-G...es-Fall-Short-For-First-Time-In-22-Years.html

Flickers of Improvement in Container Market
http://www.maritime-executive.com/article/flickers-of-improvement-in-container-market

U.S. Oil Exports Pick Up Pace
http://www.maritime-executive.com/article/us-oil-exports-pick-up-pace

 

[searcher]

Naked Capitalism 2:00PM Water Cooler 02/22
http://www.nakedcapitalism.com/2016/02/200pm-water-cooler-2222016.html

Abnormal Returns - Monday links: product proliferation 02/22
http://abnormalreturns.com/2016/02/22/monday-links-product-proliferation/

 

[searcher]

Gold Logs First Loss in Four Sessions; US Mint Bullion Coins Rise 02/22
http://www.coinnews.net/2016/02/22/gold-logs-first-loss-in-four-sessions-us-mint-bullion-coins-rise/

 

[searcher]

The Escalating War on Cash and What It Means For Metals
By: Clint Siegner
The war on cash is intensifying and bullion investors are wondering what the transition to a "cashless society" might mean. We'll cover that, but let's first recap why these organizations are, once again, allied together to the detriment of your ability to transact privately. The self-interest of bureaucrats is one factor. They don't like privacy. They dream of the day when they can access all of your spending with just a few keystrokes. The knowledge will help them more aggressively tax and regulate.


Gold Seeker Closing Report: Gold and Silver Fall Over 1%
By: Chris Mullen, Gold-Seeker.com
Gold fell $27.17 to $1202.13 on London before it bounced back higher in morning New York trade, but it still ended with a loss of 1.77%. Silver slipped to as low as $14.93 and ended with a loss of 1.3%.

 

[searcher]

The End Of The Debt Cycle | Steen Jakobsen
FinanceAndLiberty.com

Published on Feb 22, 2016
Full descriptions and comments at: http://www.peakprosperity.com/podcast...

As we've been watching closely, something is wrong with the big banks. Their shares have lost 25-33% of their market value since the beginning of the year. What's going on?

The turmoil seems greatest in Europe, where bank shares have fallen the hardest, and negative interest rates have appeared with increasingly frequency across member countries.

To make sense of it all, we've invited Steen Jakobsen back on, Chief Investment Officer of Saxo Bank, who can provide an eyes-on-the-ground perspective on the European banking system from his location in Copenhagen.

This video was posted with permission from http://PeakProsperity.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
Follow us on Twitter ►http://twitter.com/Finance_Liberty
Google Plus ►http://Gplus.to/FinanceLiberty

 

[searcher]

Bad News Is Good News For The Economy
Fabian4Liberty

Published on Feb 22, 2016
Thanks for watching

 

[searcher]

Frontrunning: February 23

Submitted by Tyler Durden on 02/23/2016 07:30 -0500

• Risk rally fades as stocks, oil slip back into the red (Reuters)
• Syrian govt. accepts halt to 'combat operations' in line with U.S.-Russian plan (Reuters)
• Earliest Chinese Data Signal Slowdown Hasn't Bottomed Out Yet (BBG)
• The Trickle of U.S. Oil Exports Is Already Shifting Global Power (BBG)
• Greek police remove migrants from Macedonian border as more land in Piraeus (Reuters)
• Clinton, Sanders race takes on angrier tone after Nevada (Reuters)
• London Whale’ Breaks Silence (WSJ)
• Once more, Vienna ranked world's nicest city and Baghdad worst (Reuters)
• Why Oil Producers Will Be Over a Barrel for a Long Time Yet (WSJ)
• Hunt for foreign assets pits Japan Inc vs China (Reuters)
• Uber Says Driver Suspected of Killing Six Had Clean Record and 4.7 Rating (BBG)
• British business bosses say exit from EU would hit economy and jobs (Reuters)
• Ticket to a Tax Audit: $1 Million (WSJ)
• BlackRock Warns Bond Traders They're Underestimating the Fed (BBG)
• Suffering Miners Narrow Down (WSJ)
• Home Depot Profit Tops Estimates as Housing Gains Spur Sales (BBG)
• Robots Are Reading Trader Chats to Stop Next Wave of Bank Fines (BBG)
• Apple, FBI Wage War of Words (WSJ)

Overnight Media Digest

WSJ

- An internal review at Valeant Pharmaceuticals International Inc. has raised questions about its accounting practices that will likely prompt the restatement of past financial results. (http://on.wsj.com/21lWKxM)

- Last month, Apple Inc. Chief Executive Tim Cook and Federal Bureau of Investigation Director James Comey faced off in a meeting to discuss how Washington and Silicon Valley could work together to combat terrorism. (http://on.wsj.com/1oympoy)

- Google is shuttering its comparison-shopping site for auto insurance, credit cards and mortgages after one year. (http://on.wsj.com/1TwmoNz)

- The nomination of Robert M. Califf, President Barack Obama's choice to head the Food and Drug Administration, cleared a key procedural hurdle in the Senate on Monday. (http://on.wsj.com/1TC3W7n)



FT

Sysco Corp, the largest U.S. food distributor, said it would buy London-based food distributor Brakes Group from Bain Capital Private Equity in a deal valued at about $3.1 billion to strengthen its presence in Europe.

British supermarket operator Sainsbury has been given more time to make a firm bid for Argos-owner Home Retail , after a possible higher rival offer from South African group Steinhoff International emerged on Friday. Home Retail said on Monday the Takeover Panel watchdog had extended Tuesday's deadline for Sainsbury to formalise its takeover proposal to March 18, the same date as for Steinhoff to make a firm bid or walk away.

Top global miner BHP Billiton slashed its interim dividend by 75 percent on Tuesday, cutting it for the first time since 1988 following a collapse in prices for oil, iron ore, coal and other raw materials.



NYT

- The U.S. Food and Drug Administration is investigating whether a faulty blood-testing device may have compromised the results of a clinical trial that led to the approval of Johnson & Johnson's manufactured anti-clotting drug Xarelto, that has been prescribed to millions of Americans since it arrived on the market in 2011.(http://nyti.ms/1XJrCpC)

- Elected officials of the Atlantic city lashed out at Gov. Chris Christie and other New Jersey officials on Monday, calling their plan to take more control of the city's finances and the power to renegotiate contracts with the police and fire departments, fascist and hypocritical.(http://nyti.ms/1oyrJs3)

- The U.S. economy continued a strong rebound last year, with unemployment falling by half since the depths of the 2008 recession, wages growing and consumer confidence at its highest point in a dozen years, a White House report said on Monday.(nyti.ms/1oEdHFG)

- While the F.B.I. is pursuing a narrow focus on creating an alternative operating system for just one phone, Apple is arguing its side as broadly as possible by framing the government's request as a larger discussion of privacy and civil liberties.(http://nyti.ms/1Q55AIZ)



Canada

THE GLOBE AND MAIL

** Canada's securities commissions imposed C$250 million ($182.02 million) in fines and compensation orders against wrongdoers last year, more than doubling the previous year's total as regulators moved more aggressively to try to deter criminals and assist fraud victims. (http://bit.ly/1p05wUe)

** The Canadian federal government is poised to give Alberta a badly-needed boost, about C$250 million in stabilization funding. Finance Minister Bill Morneau was expected to announce Tuesday that Ottawa will provide the funding under a rarely used program meant to help provinces hit by a sudden economic downturn. (http://bit.ly/1p05FXA)

NATIONAL POST

** Two market regulators have been urged to review whether enough information about Corus Entertainment Inc's proposed C$2.65 billion acquisition of Shaw Media Inc has been publicly disclosed to allow minority shareholders to make an informed decision, according to letters filed with the Ontario Securities Commission and the Toronto Stock Exchange late Friday. (http://bit.ly/1p02PBZ)

** The Ontario Chamber of Commerce says the province's businesses will need offset measures to help transition to the new Ontario Retirement Pension Plan. (http://bit.ly/1p05fR6)

** The Building and Land Development Association said there were 1,614 new homes bought in the Greater Toronto Area last month, 10 percent below the long-term average for the month and 22 per cent below results for January 2015. (http://bit.ly/1p05o70)



Britain

The Times

* Brexit puts jobs at risk, say 200 business chiefs

The bosses of more than a third of Britain's 100 largest companies are calling for the country to stay in the European Union, providing a boost to David Cameron as he fights to put his referendum campaign back on track. (http://thetim.es/1mTQUUE)

* Treasury broke rules to make watchdog change its forecast

The Office for Budget Responsibility changed its economic outlook after interference from the Treasury in a breach of rules designed to protect the independence of the fiscal watchdog. (http://thetim.es/1QWvvlK)

The Guardian

* HSBC 'taking too long to tackle financial crime'

HSBC Holdings Plc has admitted that an official monitor installed at the bank after a money-laundering scandal four years ago has raised "significant concerns" about the slow pace of change to its procedures to combat crime. (http://bit.ly/1QUgCRc)

* Brexit panic knocks pound to seven-year low

The pound tumbled to a seven-year low and the UK was warned its credit rating was at risk on Monday as the effect of Boris Johnson's backing for the Brexit campaign was felt in financial markets. (http://bit.ly/1QcvzBG)

The Telegraph

BHP Billiton slashes dividend after slumping to $5.67 bln loss

Mining giant BHP Billiton has endured its toughest 12 months since its creation in 2001, according to figures released on Monday night. The Anglo-Australian miner slashed its dividend for the first time in 15 years - from 62 cents to 16 cents - after slumping to a net loss of $5.67bn in the six months to Dec. 31. (http://bit.ly/1T2BBYp)

* Hackers target BAE Systems 100 times a year

Defence group BAE Systems Plc faces "serious and persistent" cyber attacks twice a week from hackers trying to steal the defence giant's secrets. The world's third-biggest arms group has revealed its computer-based defences are tested more than 100 times a year by what it believes are foreign government-backed hackers. (http://bit.ly/1KFqP7m)

Sky News

* Polls show companies back the UK staying in Europe

Two polls by business groups have bolstered David Cameron's case for staying in Europe after his EU reform deal split the Cabinet over the weekend. Surveys by the Institute of Directors and the manufacturers' organisation EEF found a majority of firms backed staying in the single market. (http://bit.ly/1SODW8F)

* UK PM's business advisers split on EU reform deal

Some of David Cameron's closest business advisers are refusing to endorse the European Union reform deal struck in Brussels last week. At least half a dozen of the 20 members of the Prime Minister's Business Advisory Group have declined to put their names to a letter being published on Tuesday which will argue that the UK's exit from the EU would "put the economy at risk". (http://bit.ly/1Orb9zn)


http://www.zerohedge.com/news/2016-02-23/frontrunning-february-23

 

[searcher]

Is The Short Squeeze Over? Global Rally Fizzles, Futures Lower

Submitted by Tyler Durden on 02/23/2016 07:01 -0500


Unlike Monday's global PMI deterioration (which sent markets around the globe soaring), there was little in terms of macroeconomic data overnight (German IFO earlier missed on expectations and business climate but beat on current assessment) so the "market made the news." These came most from the USDJPY which has continued to fall, sliding to 111.85 overnight, and dragging the Nikkei to a -0.4% drop.

Japan’s currency strengthened against all of its 16 major peers and gold rose for the first time in three days after the People’s Bank of China reduced the reference rate by more than some analysts forecast.

Many are now wondering what if anything the BOJ - a critical member of the "global central bank put" team - can do any more at this point to push the next leg higher in the USDJPY.

"It’s beginning to feel like the BOJ is completely stuck,” said Tetsuo Seshimo, a portfolio manager at Saison Asset Management Co. in Tokyo. "The yen had been trading at historically low levels that implied an endless amount of easing, but now doubts are emerging. It’s difficult to imagine any scenarios where the BOJ can take action."

Elsehwere in Asia, China's Shanghai Composite (-0.8%) retreated from a monthly high, as financials were pressured on outflow fears after the PBoC weakened the reference rate by the most since early January. Furthermore, now that the PBOC has limited tracking data on offshore or CNH intervention, it will be virtually impossible to quantify just how much intervention the PBOC has engaged in even after the fact, something which will certainly confuse traders and raise suspicions that China's capital outflow problem is greater than even the worst case scenario.

Emerging-market stocks retreated from a six-week high. BHP Billiton Ltd. led commodity producers lower after making a larger-than-expected cut to its dividend. Crude fell and industrial metals declined, with zinc slipping back after entering a bull market on Monday.

European strocks were weighted down by the previously reported first cut in BHP Billiton’s dividend in 15 years and a surprise loss posted by Standard Chartered Plc confirming that the global slowdown and tumbling prices for metals and oil are weighing on earnings. Britain’s referendum on its membership in the European Union is also raising currency-market risks across the continent, with the cost of options protecting against losses on the euro jumping.

Crude has generally drifted lower today although expect more headline-driven squeezes on headlines out of Houston where Saudi oil minister Ali al-Naimi will deliver the welcome and ministerial address to open day 2 of the IHS CERAWeek conference. In other oil data we also have API weekly inventory data today, with builds expected both nationally and at Cushing delivery hub in EIA data tomorrow.

But the biggest question on all traders' minds will be whether the bear market short squeeze that sent the S&P higher by 130 points in 6 days, is finally over - with most global market rolling over and with US equity futures unable to find their solid early morning footing, it may finally be time to cash out of the bear market rally which so many predicted, and which GSBank yesterday may have top-ticked with perfection.

Where markets stand now:

• S&P 500 futures down 0.1% to 1933
• Stoxx 600 down 0.3% to 330.9
• FTSE 100 down 0.5% to 6008
• DAX down 0.7% to 9506
• German 10Yr yield up less than 1bp to 0.18%
• Italian 10Yr yield up 2bps to 1.54%
• Spanish 10Yr yieldunchanged at 1.65%
• S&P GSCI Index down 1% to 297.7
• MSCI Asia Pacific down less than 0.1% to 121
• Nikkei 225 down 0.4% to 16052
• Hang Seng down 0.3% to 19415
• Shanghai Composite down 0.8% to 2903
• S&P/ASX 200 down 0.4% to 4980
• US 10-yr yield up 2bps to 1.78%
• Dollar Index down 0.01% to 97.37
• WTI Crude futures down 0.6% to $33.22
• Brent Futures down 1.8% to $34.05
• Gold spot up 0.9% to $1,219
• Silver spot up 0.3% to $15.23

Global Top news

• United Technologies Says Obstacles Scuttled Honeywell Talks: Walked away from preliminary talks about a merger due in part to concerns that a deal wouldn’t win approval from antitrust authorities; Honeywell said to have offered $108 a share last wk
• Valeant Says It Will Restate Earnings After Board Review: Philidor accounting review showed $58m in rev. recognized in 2014 should have been booked in subsequent periods; sees change reducing 2014 GAAP EPS by ~10c, increasing 2015 GAAP EPS by ~9c
• German Business Sentiment Falls as Turmoil and China Sow Concern: The IFO institute’s business climate index dropped to 105.7 in Feb. from 107.3 in Jan., median est. decline to 106.8
• Boeing CEO Muilenburg Named Chairman as McNerney Exits Board: CEO Dennis Muilenburg was named chairman, succeeding former CEO Jim McNerney, who is stepping down as a director
• Bill Gates Sides With Government in Apple Clash, FT Says: Gates has sided with the U.S. govt. in a dispute over Apple’s refusal to break into a terrorist’s iPhone, breaking ranks with the industry in a face-off with law enforcement, FT reported
• Fitbit Forecasts Miss Estimates on Global Rollout of New Devices: Sees 1Q adj. EPS breakeven to 2c vs est. 23c; sees 1Q rev. $420.0m-$440.0m, est. $484.6m
• Brookfield, Qube Consider Joining Forces in Bid for Asciano: Groups led by Brookfield Asset and Qube Holdings are considering joining forces to buy Asciano, 2 groups discussing joint offer of A$9.28 per share in cash
• J&J Must Pay $72 Million Over Talc Tied to Woman’s Cancer: Company faces about 1,200 more suits over talc products
• Goldman Sachs, HSBC Back Cameron Push to Keep Britain in the EU: 36 FTSE companies sign letter that backs remaining in bloc
• OPEC Doesn’t Know How It Can ‘Live Together’ With Shale Oil: Production freeze will be re-evaluated after 3-4 months
• Drug Spending Slowed in 2015 After Discounts, CVS Health Says: Drug costs for its plans grew 5% in 2015 vs 11.8% in 2014
• Syrian Cease-Fire to Begin Feb. 27, U.S. and Russia Announce

Looking at regional markets, we start in Asia equities failed to take the impetus from Wall Street gains, with sentiment in the region dampened on a reversal in energy and caution regarding China. ASX 200 (-0.4%) and Nikkei 225 (-0.4%) pared early gains as appetite for risk deteriorated amid a pull-back in energy, with the latter also pressured by JPY appreciation. Chinese markets underperformed with the Shanghai Comp (-0.8%) retreating from a monthly high, as financials were pressured on outflow fears after the PBoC weakened the reference rate by the most since early January, where continued similar action by the PBoC triggered widespread uncertainty and a global stock slump. 10yr JGBs initially tracked the gains in UST's, with the dampened risk-off sentiment supporting safe-havens, while today's 40yr auction saw increased demand as participants search for positive yields. However, heading into the European open gains were pared amid a sell-off in USTs. PBoC set the CNY mid-point at 6.5273 vs. last close. 6.5230 (Prey. mid-point 6.5165); this represents the biggest weakening of the reference rate by the PBoC in 6 weeks. (RTRS)

Asian top news

• Honda Shakes Up Ranks as Recalls Persist After CEO Switch: Chairman and eight other top Honda executives are retiring
• Top Macro Hedge Fund Sees Monetary Easing as Boon for Stocks: PruLev Global says more central bank easings may boost developed market indexes
• Noble Group Warns of Loss After Additional $1.2 Billion Charges: About half of $1.2 billion charge taken on long- term contracts
• Earliest Chinese Data Signal Slowdown Hasn’t Bottomed Out Yet: Private gauges of manufacturing and services fell to new lows, a reading of business confidence slipped, and interest in small and medium sized businesses deteriorated, the readings show.
• China Reform Said to Near Joining $43 Billion Syngenta Purchase: State-run fund in discussions to join ChemChina’s record deal
• Singapore Lawyers Warn of 1998-Like Pain as Debt Defaults Spread: ‘A while before any significant recovery’ Rajah & Tann Singapore says
• Kuroda Hints at Shift in Thinking on Monetary Policy’s Power: Unprecedented stimulus program failed to achieve Bank of Japan’s inflation target
• China’s New Securities Chief Said to Urge Strict Supervision: Liu Shiyu said to request checks on market manipulation after replacing Xiao Gang as CSRC chairman

European equities kicked off the session in a similar manner to Asian equities, opening with losses and being weighed on by the energy and material sectors although with much of the losses being pared throughout the morning (Euro Stoxx: -0.2%). The day has so far seen some retracement from much of yesterday's moves, with risk off sentiment dictating play today. In terms of stock specific news, two of the most notable earnings of the day were particularly downbeat, with BHP Billiton (-3.0%) and Standard Chartered (-4.0%) both among the worst performers in Europe.

Elsewhere, fixed income has seen a choppy session so far, with Bunds largely shrugging off the miss on expectation in German IFO German IFO Business Climate (105.7 vs. Exp. 106.8). Of note, as European participants arrived at their desks this morning, softness was seen in US 10yr T-notes due to two large sellers, one of 30k contracts and one of 5k contracts.

European top news

• BHP Cuts Dividend for First Time in 15 Years on Profit Drop: Cuts interim div. to 16c/shr from 62c y/y, payout had been forecast to drop to 31c; 1H underlying profit fell to $412m at its continuing operations from $4.9b yr earlier
• Standard Chartered Plunges on Surprise Annual Loss, Revenue Miss: 2015 pretax loss $1.5b, down from profit of $4.2b y/y; FY adj. pretax $834m, missed ests. of $1.37b; loan impairments almost double to $4b, highest ever
• Swiss Re Quarterly Profit Beats Estimates; Names New CEO: Christian Mumenthaler will take over as CEO as of July 1; 4Q net income $938m; est. $916m
• InterContinental to Pay Out $1.5b After Hotel Sales: Special div. will be paid in 2Q, takes funds returns since 2003 to $12b
• U.K. Bank Rules Won’t Revert to Pre-Crisis Days on ‘Brexit:’ Prudential Regulation Authority’s Andrew Bailey says there won’t be a “bonfire of regulations”
• Danone Forecasts Profitability to Improve on Yogurt Turnaround: 2015 LFL sales to rise 3% to 5% with “solid” margin advancement
• JPMorgan’s ‘London Whale’ Surfaces to Say ’12 Loss Not His Fault: Bruno Iksil comments on losses in former unit in letter

In FX, the USD/JPY has stolen the limelight with another move through 112.00 although in more orderly trade this time around, with some reluctance seen to push too aggressively towards the recent 110.99 lows. A busy morning for EUR/USD though, with some early calls that parity is still a view firmly held. Alongside a soft business climate index in the German IFO survey, we saw a push on 1.1000, with some large buy orders filled through the figure, though more seen through to 1.0950. Tight trade seen elsewhere, with AUD digging despite some fresh, but modest weakness in stocks. EUR/CHF now pushing lower also, dipping below 1.0950 to reflect the heavy risk and EUR tones. Oil prices steady, but coming off better levels — as with the related currencies.

In commodities, WTI and Brent futures fell throughout the European session with the commodities seeing continued volatility as participants wait to see what, if any, deal can be agreed regarding a freeze in global production. Additionally, participants will be keeping a keen eye out for the latest API crude inventory report.

The Bloomberg Commodities Index fell as much as 0.6 percent, weighed down by weaker oil and base metals prices. Oil traded near $33 a barrel after the International Energy Agency said a global surplus will persist into next year and limit any chance of a short-term price rebound. While supply and demand will be aligned next year, large accumulated stockpiles will slow the pace of recovery in prices, the IEA said in its medium-term report. April futures in New York slid 2.3 percent to $32.63.

Zinc retreated 1.2 percent to $1,759 a metric ton on the London Metal Exchange, falling from its highest close in four months. Copper, lead and nickel fell at least 0.5 percent. Gold led precious metals higher, gaining 0.9 percent to $1,219.03 an ounce as investor holdings in exchange-traded funds jump to the highest in almost a year.

On the US calendar attention will be focused on the February consumer confidence print where the consensus is for a near 1pt decline to 97.2. We’ll also get more housing market data with January existing home sales and the December S&P/Case-Shiller house price index, while the February Richmond Fed manufacturing activity index print is also expected. There’s nothing in the way of Fedspeak today however it’ll be worth keeping an eye on the BoE where Governor Carney is due to speak to lawmakers this morning (10am GMT) on the outlook for the UK economy and monetary policy. The ECB’s Nouy is also due to speak this afternoon at a DB conference I'll be attending.

Bulletin Headline Summary from Bloomberg and RanSquawk

• European equities take the impetus from the weak lead in Asian bourses amid weakness in energy and material names, while BHP Billiton and Standard Chartered are among the worst performers on the back of poor earnings.
• EUR takes a hit following soft German IFO readings alongside bearish calls from the likes of BNP Paribas and Deutsche Bank citing ECB action next month.
• Looking ahead, highlights include US S&P/Case Shiller index, Existing Home Sales as well as comments from Fed's Kashkari, Fischer and BoE's Haldane
• Treasuries lower with global equity markets and oil; week’s U.S. auctions begin today with $26b 2Y notes, WI yield 0.775%, compares with 0.86% awarded in Jan., lowest 2Y auction stop since November.
• The yen gained and gold climbed after China cut the yuan’s fixing by the most in six weeks, spurring demand for havens. European stocks and emerging markets fell while oil declined with copper
• Britain’s referendum on its membership in the European Union isn’t just a threat to the pound. It’s raising currency- market risks across the continent
• Mark Carney said the Bank of England isn’t making a judgment on the consequences of Britain’s referendum on its European Union membership
• Chief executive officers from HSBC Holdings Plc to Goldman Sachs International were among the business leaders to endorse Prime Minister David Cameron’s campaign to keep Britain in the European Union
• German business confidence fell for a third month in a sign that companies in Europe’s largest economy are growing more concerned as slowing global growth roils financial markets
• BlackRock Inc., the world’s biggest money manager, is warning bond investors they’re not prepared for the Federal Reserve to raise interest rates
• Microsoft co-founder Bill Gates has sided with the U.S. government in a dispute over Apple’s refusal to break into a terrorist’s iPhone, breaking ranks with the industry in a face-off with law enforcement, the Financial Times reported
• The U.S. and Russia announced that a partial cease-fire in Syria will start Feb. 27, reviving hopes for a solution to a five-year war that’s killed 260,000 people and created a refugee crisis straining Europe’s borders
• $18.75b IG corporates priced yesterday (YTD volume $244.25b) and no HY priced (YTD volume $11.125b)
• Sovereign 10Y bond yields mostly steady; European, Asian markets drop; U.S. equity- index futures lower. Crude oil and copper fall, gold rises

US Event Calendar

• 8:30am: Fed’s Fischer speaks in Houston
• 9:00am: S&P/Case-Shiller US HPI m/m, Dec. (prior 0.87%)
  • S&P/CaseShiller 20-City Index NSA, Dec., est. 183.07 (prior 182.86)
  • S&P/CS 20 City m/m SA, Dec., est. 0.85% (prior 0.94%)
  • S&P/CS Composite-20 y/y, Dec., est. 5.8% (prior 5.83%)
  • S&P/Case-Shiller US HPI NSA, Dec. (prior 175.71)
  • S&P/Case-Shiller US HPI y/y, Dec. (prior 5.35%)
• 10:00am: Consumer Confidence Index, Feb., est. 97.2 (prior 98.1)
• 10:00am: Richmond Fed Mfg Index, Feb., est. 2 (prior 2)
• 10:00am: Existing Home Sales, Jan., est. 5.32m (prior 5.46m); Existing Home Sales m/m, Jan., est. -2.5% (prior 14.7%)
• 1:00pm: U.S. to sell $26b 2Y notes

DB's Jim Reid completes the overnight wrap

While Sterling had a day to forget yesterday, it was EM and commodity sensitive currencies which ranked among the day’s best performers after Oil and industrial metals climbed sharply higher. Indeed it was the Russian Ruble (+2.27%), Brazilian Real (+1.98%), Colombian Peso (+1.40%), South African Rand (+1.37%), Chilean Peso (+1.28%) and Australian Dollar (+1.11%) which benefited, as Oil surged higher with the new WTI April contract finishing up +5.17% on the day at $33.39/bbl (we should highlight that this contract had closed at $31.75/bbl on Friday, while the old March contract which expired yesterday rallied 6.2% to $31.48/bbl). The focus appeared to be on some supportive commentary out of the IEA, with the agency forecasting for US shale-oil production to fall by 600k barrels a day in 2016 and 200k barrels a day in 2017 and also suggesting that oil prices should come under upward pressure from next year. It’s worth reminding that we’ve seen a number of temporary bounces like this so far this year and in reality Oil has been in a late $20s to mid $30s range since early January. That said, overall sentiment feels improved and that’s helping risk assets.

That was evidenced yesterday where we saw equity markets globally kick the week off on the front foot. In Europe a rally for commodity sensitive names helped the Stoxx 600 close up +1.67% while the peripherals were more impressive with the IBEX and FTSE MIB +2.35% and +3.52% respectively. That helped the S&P 500 get off to a strong start with the index holding onto gains impressively as the session wore on, eventually finishing +1.45%. Along with that move for Oil, Aluminium (+1.61%), Copper (+1.58%) and Zinc (+2.09%) were all up sharply too while Iron Ore rallied over 6% to close above $50/tn for the first time since October. The VIX finished over 5% lower and closed below 20 for the first time in three weeks, while credit markets had a strong day too with CDX IG and Main both finishing 5bps tighter. A sign of the better sentiment was also reflected in another strong day for primary issuance with nearly $19bn said to have priced in US IG alone which according to Bloomberg is the biggest start to a week since May last year.

Glancing at our screens this morning, after bourses in Asia had initially moved higher reflecting those gains on Wall Street last night, the rally has faded as markets head into the midday break. Not helping is a retreat for Oil with WTI down 1.5% while the news that the PBoC has weakened the CNY fix by the most (0.17%) since January 7th seems also to be weighing on sentiment. Bourses in China are leading the weakness with the Shanghai Comp and CSI 300 -1.26% and -1.27% respectively. Elsewhere the Nikkei (-0.31%), Hang Seng (-0.54%), Kospi (-0.28%) and ASX (-0.47%) are also down after initially opening up stronger. US equity market index futures are also pointing to a softer start, while Gold (+0.95%) and the Yen (+0.53%) are the ones benefiting from the weaker tone.

Moving on. Along with the better day for risk yesterday, European rates markets were a tad stronger too reflecting what was a fairly softish set of European PMI’s. The flash February Euro area composite was down 0.9pts and more than expected this month to 52.7 (vs. 53.3 expected), the second consecutive monthly decline and lowest in 13 months. This was primarily driven by the manufacturing print which fell 1.3pts to 51.0 (vs. 52.0 expected), although services was also slightly lower (-0.6pts to 53.0; 53.4 expected). Regionally it was the weakness in Germany which stood out with the manufacturing print down 2.1pts to 50.2 (vs. 51.9 expected), marking a 15-month low. The French composite also dipped below 50 following a drag from the services reading. Our European Economists highlighted in a note yesterday that the flash PMI’s suggest a sharp monthly fall (1.4pts) on average in the composite PMI of Italy, Spain and Ireland. They also note that the composite PMI for the Euro area is now consistent with +0.3% qoq growth and in line with their slightly lower outlook for H1 2016, but also raises the risk of a more material slowdown. Clearly the data also adds more fuel to the fire for the ECB to deliver next month.

Meanwhile, over in the US yesterday there was similar softness in the flash manufacturing PMI there, which declined 1.4pts to 51.0 (vs. 52.4 expected) and the lowest since October 2012. That said there was better news to come out of the Chicago Fed manufacturing activity index which was up over half a point to 0.28 (vs. -0.05 expected) in January.

Looking at the day ahead now, the focus shortly after we go to print this morning will be on Germany where the final revision to Q4 GDP is due (no change expected at +0.3% qoq). Shortly after this we’ll get a number of confidence indicator readings out of France before we return to Germany again with the IFO survey data for February. Interest in the US this afternoon is likely to be centered on the February consumer confidence print where the consensus is for a near 1pt decline to 97.2. We’ll also get more housing market data with January existing home sales and the December S&P/Case-Shiller house price index, while the February Richmond Fed manufacturing activity index print is also expected. There’s nothing in the way of Fedspeak today however it’ll be worth keeping an eye on the BoE where Governor Carney is due to speak to lawmakers this morning (10am GMT) on the outlook for the UK economy and monetary policy. The ECB’s Nouy is also due to speak this afternoon at a DB conference I'll be attending.


http://www.zerohedge.com/news/2016-02-23/short-squeeze-over-global-rally-fizzles-futures-lower

 

[searcher]

MtM - Thoughts about the Price Action 02/22
http://www.marctomarket.com/2016/02/thoughts-about-price-action.html

SA - Real time news 02/23
http://seekingalpha.com/market-news

Tim Iacono - Tuesday Morning Links 02/23
http://timiacono.com/index.php/2016/02/23/tuesday-morning-links-202/

TRB - Hot Links: Stupid But Effective 02/23
http://thereformedbroker.com/2016/02/23/hot-links-stupid-but-effective/

Ritholtz's Reads: Peak Hedge Fund? 02/23
http://www.bloombergview.com/articles/2016-02-23/ritholtz-s-reads-peak-hedge-fund

CWS - Morning News: February 23, 2016
http://www.crossingwallstreet.com/a...d:+Crossingwallstreet+(Crossing+Wall+Street)\

TCS - Initial Guidance | 23 February 2016
http://www.capitalspectator.com/initial-guidance-23-february-2016/

Naked Capitalism Links 02/23
http://www.nakedcapitalism.com/2016/02/links-22316.html

DB - Opening Bell: 2.23.16
http://dealbreaker.com/2016/02/opening-bell-2-23-16/

MtM - Euro and Sterling are Sold into Upticks, Yen Firms Further 02/23
http://www.marctomarket.com/2016/02/euro-and-sterling-are-sold-into-upticks.html

SA - Wall Street Breakfast: Stocks Waver As Oil Link Grows Stronger 02/23
http://seekingalpha.com/article/3919196-wall-street-breakfast-stocks-waver-oil-link-grows-stronger

 

[searcher]

Gold and Silver Market Morning: Feb-23-2016
By: Julian D. W. Phillips, Gold Forecaster
We still don’t believe that the gold price is reflecting these purchases. If these had happened over a week we would have opined that they were extremely good weeks of gold purchases. So we ask, “Is this an institution like Paulson’s funds buying back holding sold in the last quarter or another aggressive U.S. fund. Or it could be a Chinese institution stocking up its holdings held outside China?”

 

[Argent Dragon]

Gold Holdings Surge Most Since 2010 as Investors Seek Haven
The rush into gold in 2016 is gathering pace as investors seeking a haven boosted holdings to the highest level since March. [Full Story]

Related Stories

• WSJ: Japanese Are Snapping Up Safes as Negative Rates Bite
• El-Erian: Market Calm May Be Only a Brief Reprieve
• Gun Maker Seeks Dismissal of Lawsuit Over Newtown Shooting
• Parisis: Investors Should Keep Their Money in Dollar-Based Assets

 

[searcher]

Naked Capitalism 2:00PM Water Cooler 02/23
http://www.nakedcapitalism.com/2016/02/200pm-water-cooler-2232016.html

Abnormal Returns - Tuesday links: the digital life 02/23
http://abnormalreturns.com/2016/02/23/tuesday-links-the-digital-life/

 

[searcher]

Recession 2016: In Some States, A Very Deep Economic Downturn Has Already Arrived
http://theeconomiccollapseblog.com/...ry-deep-economic-downturn-has-already-arrived

 

[searcher]

Gold, Silver Futures Bounce 02/23
http://www.coinnews.net/2016/02/23/gold-silver-futures-bounce/

 

[searcher]

SKU_Vlog_012: Are Deutsche Bank's Problems Just the Beginning?
smartknowledgeu

Published on Feb 23, 2016
Today, we discuss if the well-documented problems that Deutsche Bank are currently facing is just the beginning of a much larger systemic liquidity problem within the global banking system.

 

[searcher]

Michael Snyder-Real Economic Activity Grinding To a Halt
Greg Hunter

Published on Feb 23, 2016
Financial writer and book author Michael Snyder contends, “The Baltic Dry Index dropped below 300 for the first time ever. We did not even see that during the 2008 Great Recession and financial crisis. I didn’t know the Baltic Dry Index could go that low. We are seeing exports decline dramatically in South Korea. New numbers for Japan came out . . . their exports were down 12% year over year. Exports in China have been falling month, after month, after month. U.S. exports were down 7% for the last monthly figure we had. India’s exports are down. This is happening all over the world. Real economic activity is grinding to a halt.”

Either way, Snyder thinks we get “global financial collapse” and “World War III” but does not know which one comes first. Snyder says, “We already have the global economy grinding to a halt, but if we get WWIII, that just accelerates things greatly. It’s the chicken or the egg, whichever comes first, but without a doubt, we are moving into a time described as a perfect storm.”

On precious metals, Snyder says, “I think silver will absolutely skyrocket in the years ahead. We like gold, but absolutely love silver.”

Join Greg Hunter as he goes One-on-One with Michael Snyder, creator of TheEconomicCollapseBlog.com.

All links can be found on USAWatchdo0g.com: http://usawatchdog.com/perfect-storm-...

 

[searcher]

Asian Metals Market Update
By: Chintan Karnani, Insignia Consultants
Short term investment sentiment for gold in India and across Asia is bullish. Retail gold demand in India will rise as the week progresses and into March. In India there is massive speculation that prices in India will rise to Rs.35000/ten grams (current price is around Rs.29500/ten grams) in the next three months. However the direction of gold prices after the release of US February nonfarm payrolls will be interesting. Till the release of the release of US February nonfarm payrolls on 4th March, gold prices could trade in a wider $1180 and $1315 range

 

[searcher]

The FAILURE of FIAT MONEY | Rob Kirby
FinanceAndLiberty.com

Published on Feb 23, 2016
IN THIS INTERVIEW:
- Gold and silver manipulation is bullish for gold ►0:46
- Physical precious metal supply is tight and getting tighter ►5:53
- Negative interest rates is what happens when you have sociopaths in control ►13:18
- World economic collapse ►16:06
- How to be protected from what's coming ►26:18

GUEST: http://KirbyAnalytics.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
Like us on Facebook ►http://fb.com/FinanceAndLiberty
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.

 

[searcher]

Frontrunning: February 24

Submitted by Tyler Durden on 02/24/2016 07:37 -0500

• Shares fall with oil prices, yen in demand (Reuters)
• Trump's third straight win has rivals looking for answers (Reuters)
• How Marco Rubio Blunted Ted Cruz—and Boosted Donald Trump (BBG)
• Donald Trump Seals GOP Front-Runner Status With Nevada Win (WSJ)
• Fischer says no Fed plan to move to negative interest rates (Reuters)
• Lew Says Don't Expect `Crisis Response' From Group of 20 Meeting (BBG)
• Solid support for Apple in iPhone encryption fight (Reuters)
• This Year’s Biggest IPO Is a Blank Check for the Oil Business (WSJ)
• Another Oil Crash Is Coming, and There May Be No Recovery (BBG)
• Goldman Sachs Banker Who Had Ties to 1MDB Leaves Bank (WSJ)
• Chesapeake Energy shares tumble after company's loss widens, unveils drastic capex cuts (MW)
• French special forces waging 'secret war' in Libya (Reuters)
• China Inc.’s Nuclear-Power Push (WSJ)
• How Low Could Pound Go in a `Brexit'? Economists See 1985 Levels (BBG)
• Chesapeake to Cover $500 Million Debt Tab as Asset Sales Swell (BBG)
• AIG Says Goodbye to Guy Who Knew Where the Bodies Were Buried (BBG)

Overnight Media Digest

WSJ

- Honeywell International Inc kept the pressure on rival United Technologies Corp to engage in merger talks, saying there were no major regulatory obstacles to a combination of the two industrial conglomerates (http://on.wsj.com/1oFa9mR)

- Western Digital Corp said a Chinese company backed out of a $3.78 billion deal to invest in the disk drive maker, citing a decision by U.S. authorities to investigate the transaction on national security grounds. (http://on.wsj.com/21cBzkY)

- Same-day delivery startup Deliv Inc. is getting a funding boost from an unlikely source: United Parcel Service Inc. (http://on.wsj.com/1R06nuE)

- The chief executive of leading Canadian oil producer Suncor Energy Inc said on Tuesday that his company will increase output even if crude prices weaken further, while vowing it will emerge stronger than ever from the current commodity industry downturn.(http://on.wsj.com/1OtyqAO)



FT

Deutsche Boerse and the London Stock Exchange are making a third attempt at a merger that would create a European trading powerhouse that could better compete against U.S. rivals encroaching on their turf.

British luxury carmaker Aston Martin said it chose St. Athan in Wales as its second manufacturing site for the new crossover DBX car as part of its 200 million pound ($280.32 million) investment in new products and facilities.

Mars Inc has recalled chocolate bars and other products in 55 countries, mainly in Europe, due to choking risk after a piece of plastic was found in a Snickers bar in Germany.



NYT

- The Justice Department is demanding Apple's help to unlock at least nine iPhones nationwide, in addition to the phone used by one of the San Bernardino, California attackers. (http://nyti.ms/1p2HNTm)

- Saudi Arabia's petroleum minister on Tuesday ruled out the possibility that a recently announced oil production freeze by several countries might lead to cuts to reverse the plunge in oil prices. (http://nyti.ms/1QZZDNk)

- More than a year after defective Takata airbags led to recalls and at least two fatalities, company officials in Japan presented falsified test data about a new component's design to Honda, their largest customer, according to internal documents.(http://nyti.ms/1RmcZpO)

- Viacom announced on Tuesday that it was pursuing a deal to sell a minority stake in its Paramount Pictures film and television studio after being approached by several strategic investors.(http://nyti.ms/1KJ09T9)



Canada

THE GLOBE AND MAIL

** Shoppers Drug Mart Corp, Canada's biggest drugstore chain, is exploring the possibility of getting into medical-marijuana sales in a move that would dramatically alter the landscape of the new industry, bringing one of the country's best-known retailers into the business if the strategy went ahead. (http://bit.ly/1LFfQWs)

** Canada's spy agencies have tracked 180 Canadians who are engaged with terrorist organizations abroad, while another 60 have returned home. (http://bit.ly/1STm9gM)

** The Liberal government will introduce climate legislation on Wednesday, and on Thursday it will unveil detailed regulations for its long-promised cap-and-trade regime that aims to hit an aggressive 2020 greenhouse gas emissions target.(http://bit.ly/1Qc1xKY)

NATIONAL POST

** Finance Minister Bill Morneau's federal budget in March is set to include C$1 billion ($723 million) in targeted relief for oil-producing provinces that are coping with a severe economic downturn. (http://bit.ly/1TyAkGI)

** Fares on an express train from downtown Toronto to Pearson international airport are being slashed by more than half because of lower-than-expected ridership. Since Union-Pearson Express launched in June, the one-way fare was decried by many as too expensive. (http://bit.ly/1WInaGx)



Britain

The Times

* Time Inc, the owner of world-famous magazines including Time, People, Sports Illustrated and Fortune, is understood to be exploring a bid for the core businesses of Yahoo Inc (http://thetim.es/1PXuTyQ)

* The London Stock Exchange Group PLC confirmed yesterday that it is in talks with a German rival over a 20 billion pounds ($27.99 billion) merger to create one of the largest market operators. Shares in the FTSE 100 company closed up by more than 13 per cent as investors bet on a possible bidding war for the LSE, which has had detailed negotiations with the Frankfurt-based Deutsche Börse. (http://thetim.es/1TxPYlP)

The Guardian

* Britain is setting a dangerous precedent by undermining human rights and contributing to a worldwide "culture of impunity", Amnesty International has said in its annual report on the state of human rights. Plans to scrap the Human Rights Act, the UK's absence from EU refugee resettlement schemes, proposed new spying laws and the alleged downgrading of human rights as a Foreign Office priority in favour of commercial deals are all cited by the group as evidence of a trend. (http://bit.ly/1QwSDXJ)

* George Osborne's pension overhaul could trigger the next major wave of mis-selling claims, according to a report by the public spending watchdog. The National Audit Office has highlighted concerns that freedoms introduced last April, which allowed pensioners to cash in their savings, could lead to widespread exploitation. (http://bit.ly/1S02dHR)

The Telegraph

* London's greatest strength is its access to the single market of the European Union, according to the capital's business leaders. 95 percent of bosses polled by the Confederation of British Industry (CBI) and real estate firm CBRE said that London's access to European markets was its biggest strength. The surveyed business leaders represented companies with around 471,000 employees. (http://bit.ly/1oFUqDU)

* Britain must stay in the European Union so it can protect itself from "grave security threats" caused by Isil and Russia, some the country's most senior former military commanders say. In a letter to The Telegraph, 13 former Armed Forces chiefs say that they "believe strongly that it is in our national interest to remain an EU member". (http://bit.ly/1ozSegv)

Sky News

* The maker of Mars and Snickers has recalled chocolate bars in 55 countries after pieces of plastic were found in its products. In the UK, Mars Funsize and Milky Way Funsize bars, Snickers Miniatures, some variety packs and Celebrations boxes with best before dates ranging from 8 May 2016 and 2 October 2016 are affected by the recall, and should not be eaten. (http://bit.ly/1QvPhEi)

* Johnson & Johnson has been ordered to pay $72 mln to the family of a woman whose death from ovarian cancer was linked to the company's talc-based baby powder.(http://bit.ly/1ozZdpP)

The Independent

* Britain is a deeply Eurosceptic country but voters are still likely to decide to remain in the European Union when forced to choose in June's referendum, the most representative polling on the issue so far has found. In research highlighting the dilemma for the Leave campaign, the National Centre for Social Research found that two-thirds of the electorate were unhappy with Britain's current membership terms. (http://ind.pn/1RZSUrx)

* Scotland's budget will be protected for the first six years after the devolution of major new tax and welfare powers from Westminster, under a historic deal agreed by the Scottish and UK Governments following almost a year of negotiations. The agreement, which was announced simultaneously in Edinburgh by Scotland's First Minister Nicola Sturgeon and in London by the Chancellor George Osborne, will require both governments to observe a transitional period lasting until March 2022, during which time the Scottish Parliament's budget cannot be cut. (http://ind.pn/1KIwYQ6)

http://www.zerohedge.com/news/2016-02-24/frontrunning-february-24

 

[searcher]

The Selling Is Back: S&P Futures Tumble Below 1,900; Sterling Crashes, Gold Soars

Submitted by Tyler Durden on 02/24/2016 07:40 -0500


While the prevailing dour (or perhaps sour) overnight mood was a continuation of the weak oil theme which started yesterday after Iran said the production freeze proposed by Saudi and Russia as "ridiculous", and Saudi oil minister Al-Naimi said that Saudi won't cut supply and that high-cost producers need to either "lower costs, borrow cash or liquidate” (ideally the latter), risk sentiment was further dented when BOJ Governor Kuroda says he won’t target FX rates or stocks, which is clearly nonsense, and further spooked Japanese asset prices (Nikkei -0.85), while sending JGB yields to fresh record lows as follows: 10-year at -0.055%, 20-year at 0.600%, 30-year at 0.915% and 40-year at 1.035%.

As Bloomberg adds, with the introduction of negative-rate policy, investors particularly banks are investing excess cash in govt bonds yielding more than zero, says Hideo Suzuki, chief manager, forex and financial products trading at Mitsubishi UFJ Trust & Banking, in an interview; says there’s a sense among investors that unless they buy positive-yielding debt now, they won’t be able to purchase them. Well there are always positive yielding US Treasurys, though maybe not for much longer.

Going back to oil, it seems that finally the headline chasing algos have run out of steam: "the Saudi comments stating the obvious that the output deal was really not a deal” is weighing on prices, says Global Risk Management oil risk manager Michael Poulsen, with API also pulling prices lower. It’s "maybe an overreaction to things that were clear days ago, so might be some bargain hunters cashing in their chips."

"Once again we are seeing lower oil prices halting the emerging confidence in global markets," added Ole Hansen, head of commodity strategy at Saxo Bank A/S. "Lower oil prices continue to raise concerns about EM growth, a credit event among weak oil producers and selling from sovereign wealth funds."

So with the marketwide short squeeze now officially over, global selling of stocks has resumed, dragging down everything from banks to commodity producers as well as emerging markets, while in the US S&P futures have tumbled back down to, or rather just below, the psychological support level of 1900 (and below DeMark's breach level) driven by another day of tumbling USDJPY, but also by the latest surge higher in gold - something which according to Goldman which has by now been stopped out of its gold "short" means systemic risk is once again rising.

Indeed, the bullish euphoria that had gripped markets as recently as Monday is all gone: "It will take some time before market sentiment does turn,” Kerry Craig, global market strategist at JPMorgan Asset Management, told Bloomberg TV in Melbourne. “It’s still very pessimistic. Most investors are very risk averse. You need catalysts or triggers such as an oil price stabilization, clarity about what the Fed is actually going to do and what we see happening with the Chinese currency and economic data."

How much changes in just 48 hours based on nothing but HFT algo stop hunting price action and a confirmation of what everyone already knew: that there will be no oil production cuts.

While the rest of the risk moves have seen the now all too familiar correlations (Treasuries in Europe and US surging as stocks tumble), another notable plunge has taken place in cable which continues to sell on Brexit fears and overnight dropped below 1.3900. Effectively Boris Johnson has had a more favorable impact on the British currency than a few hundred billion in BOE QE - the local stock market should be cheering on Brexit.

Oh, we almost forgot the key event of the night: Trump's juggernaut in Nevada virtually assures him the GOP presidential nomination barring some calamity. The market is desperately trying to explain to itself if this is bullish or bearish for risk.

In summary: European shares dropped the most in two weeks and U.S. stock-index futures also sank. Crude fell through $31 a barrel in New York, after sliding last session, when Iran’s oil minister derided a plan forged by Saudi Arabia and Russia to lock production at January levels. The Russian ruble retreated with Malaysia’s ringgit and the pound weakened below $1.40 for the first time since 2009 on concern the U.K. may exit the European Union. The cost of insuring investment-grade corporate debt rose for the first time in three days, while Treasuries and the yen advanced.

Where markets stand now:

• S&P 500 futures down 0.8% to 1900
• Stoxx 600 down 2.2% to 320
• FTSE 100 down 1.6% to 5867
• DAX down 2.5% to 9182
• German 10Yr yield down 4bps to 0.14%
• Italian 10Yr yield down less than 1bp to 1.53%
• MSCI Asia Pacific down 0.9% to 119
• Nikkei 225 down 0.8% to 15916
• Hang Seng down 1.1% to 19192
• Shanghai Composite up 0.9% to 2929
• US 10-yr yield down 3bps to 1.69%
• Dollar Index up 0.22% to 97.7
• WTI Crude futures down 3.1% to $30.89
• Brent Futures down 2.2% to $32.55
• Gold spot up 0.6% to $1,233
• Silver spot down less than 0.1% to $15.29

Global Top News

• Hong Kong Forecasts Slowing Economic Growth as Tourism Slumps: Economy may expand by 1% to 2% in 2016, slower than 2.4% gain last year
• This Is Why Kyle Bass Is Wrong on China Collapse, Says CICC: China International Capital questions parallels between Japan in 1990, China now
• Goldman’s Ex-Southeast Asia Chairman Leissner Leaves Firm: Tim Leissner helped build the investment bank’s Malaysia business
• Asia Hedge Funds Top Rankings as Jiang Pounces in Panicky Market: Performance by Segantii, Sylebra, Greenwoods, Tybourne shows industry matured in Asia
• Steven Cohen’s Point72 Said to Add Ai Yoshino as Trader in Asia: Yoshino most recently worked for Mitsubishi UFJ Securities as equity sales trader
• Wanda to Announce ‘Major Deal’ This Week, Chairman Wang Says: Chinese conglomerate has been on an acquisition spree this year
• Fortescue CFO Sees $1 Billion Firepower to Further Reduce Debt: Cutting debt remains company’s strategic focus, CFO Stephen Pearce says
• Chinese Coal Miners Said to Lobby Government for Price Floor: A request to Premier Li Keqiang was made in January in Shanxi

Looking at regional markets, Asian equities traded lower following the negative close on Wall St. driven by the decline in oil prices after the Saudi Oil Minister dismissed a production cut, while the latest API figures showed a significant build of 7.1mIn bbls. ASX 200 (-2.16%) and Nikkei 225 (-0.85%) were pressured from the open with the latter back below 16000, while sentiment in Australia was further dampened by several poor earnings results from the likes of Fortescue, BHP and Wesfarmers. Chinese markets also conformed to the negative tone, with casino losses leading the declines in Hong Kong, while the Shanghai Comp (+0.88%) saw relatively subdued price action amid a lack of any significant catalyst and the PBoC remaining relatively neutral on the CNY reference rate. 10yr JGBs traded higher (10yr yield reached record low of -0.04%) amid weakness in riskier assets while the BoJ also entered the market for JPY 1.26tr1 of government debt.

Asian Top News

• Hong Kong Forecasts Slowing Economic Growth as Tourism Slumps: Economy may expand by 1% to 2% in 2016, slower than 2.4% gain last year
• This Is Why Kyle Bass Is Wrong on China Collapse, Says CICC: China International Capital questions parallels between Japan in 1990, China now
• Goldman’s Ex-Southeast Asia Chairman Leissner Leaves Firm: Tim Leissner helped build the investment bank’s Malaysia business
• Asia Hedge Funds Top Rankings as Jiang Pounces in Panicky Market: Performance by Segantii, Sylebra, Greenwoods, Tybourne shows industry matured in Asia
• Steven Cohen’s Point72 Said to Add Ai Yoshino as Trader in Asia: Yoshino most recently worked for Mitsubishi UFJ Securities as equity sales trader
• Wanda to Announce ‘Major Deal’ This Week, Chairman Wang Says: Chinese conglomerate has been on an acquisition spree this year
• Fortescue CFO Sees $1 Billion Firepower to Further Reduce Debt: Cutting debt remains company’s strategic focus, CFO Stephen Pearce says
• Chinese Coal Miners Said to Lobby Government for Price Floor: A request to Premier Li Keqiang was made in January in Shanxi

In Europe, equities can be seen suffering once again this morning, with Euro Stoxx drifting lower throughout the morning (-1.9%), taking the impetus from a lacklustre Asian session and with the usual suspects of energy, materials and financial sectors weighing on the indices. Given the aforementioned underperformance, high profile material names BHP Billiton (-7.2%), Glencore (-5.8%) and Anglo American (-6.1%) are all among the worst performers in Europe, while Standard Chartered (-5.2%) have also seen a continuation of weakness after yesterday's earnings.

European Top News

• Draghi Has Two Weeks to Map ECB Plan That Won’t Let You Down: When ECB policy makers meet from March 9-10, they’ll consider whether negative interest rates and EU60b a month of debt purchases is enough to revive consumer prices
• Bayer Names Werner Baumann to Succeed Marijn Dekkers as CEO: Named chief strategy and portfolio officer Werner Baumann to succeed CEO Marijn Dekkers after April shareholders meeting
• Airbus Profit Gains 1.6% on A350 Ramp-Up, Break-Even on A380: 2015 Ebit before one-offs EU4.1b, est. EU4.38b; figures held back by higher development spending; cranks up production after order rush for new jets; says 2016 earnings set to be stable
• Peugeot Promises New Profit Plan With Restructuring Complete: To resume paying a dividend, 1st since 2011, from this year’s earnings, 5% oper. margin was more than double 2018 target
• Delta Lloyd Shares Surge After Rights Offer Cut to $715m: Bowed to investor pressure and cut the size of a rights offer to EU650m; said in Nov. aimed to raise as much as EU1b
• Man Group Declines After Profits Fall on Performance Fees Drop: FY adj. pretax fell to $400m vs $481m y/y, est. $455m
• How Low Could Pound Go in a ‘Brexit’? Economists See 1985 Levels: 29 of 34 economists see drop to $1.35 or below on leave vote; GBP already at seven-year low as EU campaign heats up

In FX, it has been a busy morning and certainly so if you are GBP trader with a brief respite in Cable through 1.4000 quickly followed up by heavy selling, talking the pair down below 1.3900, the lowest level since the 2009 crisis. The focus is already on the 2009 lows just under 1.3500. EUR/GBP has been pushed higher, and we are nearing the .7900 level here despite moderate losses in EUR/USD, which has traded below the previous session lows — to just under 1.0975. More bids seen to 1.0950. USD/JPY is lower, but cross/JPY likely to be seeing more of the flow — the spot rate holding off the Tuesday base as yet. GBP/JPY is through 156.00, EUR/JPY 123.00. The oil related currencies are all softer along with WTI and Brent, but no panic moves like we saw earlier in the year. Even, so USD/CAD is back through 1.3800.

Lower crude prices dragged on the currencies of oil exporters Russia and Malaysia. The ruble dropped 2.5 percent and the ringgit fell 0.6 percent. The Bloomberg Dollar Spot Index added 0.2 percent. Japan’s yen climbed versus all of its major counterparts, strengthening 0.3 percent to 111.81 per dollar.

China’s yuan fell for a fourth day as the People’s Bank of China set its reference rate at the lowest level in almost three weeks. Figures from the nation’s foreign-exchange regulator released Tuesday afternoon showed banks net sold overseas currencies to their clients for a seventh straight month in January. The yuan weakened 0.13 percent to 6.5359 against dollar, according to China Foreign Exchange Trade System prices. The central bank cut the reference rate by 0.04 percent to 6.5302 following a 0.17 percent reduction on Tuesday.

In commodities, it remains all about oil, as WTI futures slid as much as 3.3 percent in New York, below $31 once again this time on the April contract. Saudi Arabia’s proposal to cap output at January levels puts “unrealistic demands” on Iran, Oil Minister Bijan Namdar Zanganeh said Tuesday, according to the ministry’s news agency Shana. Ali Al-Naimi, his counterpart from Saudi Arabia, said at a conference in Houston that high-cost producers should bear the burden of reducing the current surplus and reaffirmed the kingdom’s commitment to last week’s accord.

Crude is down 17 percent this year on speculation a global glut will persist amid the outlook for increased shipments from Iran and brimming U.S. supplies, which are at the highest level in more than eight decades. The nation’s stockpiles expanded by 7.1 million barrels last week, the industry-funded American Petroleum Institute was said to report Tuesday.

Copper led losses in industrial metals on concerns that rising stockpiles in China signal continued weak demand in the world’s biggest consumer. Inventories in warehouses tracked by the Shanghai Futures Exchange have more than doubled to a record since the end of August, bourse data show. Copper for delivery in three months slid 1 percent in London.

On the US calendar there will be some focus on the flash services (expected to nudge up 0.3pts to 53.5) and composite PMI’s for February, while January new home sales data is also due out. The latest Fedspeakers due up will be Lacker who is set to talk on monetary policy and growth, as well as Kaplan later this evening who is due to talk on current economic conditions and monetary policy.

Bulletin Headline Summary from Bloomberg and RanSquawk

• European equities take the impetus from the weak Asia lead with the usual suspects (Financial, Material and Energy) leading the region lower.
• GBP yet again underperforms amid the continuous concerns surrounding a potential Brexit with GBP/USD printing fresh 7-yr lows.
• Looking ahead highlights include US services PMI, DoE crude inventories reports as well as comments from Fed's Lacker, Bullard, Kaplan and BoE's Cunliffe
• Treasuries higher overnight as global equity markets and commodities, ex-precious metals, resume selloff; U.S. auctions continue today with $34b 5Y notes, WI yield 1.17%, compares with 1.496% awarded in January.
• A British exit from the European Union would be so devastating for the pound that 29 out of 34 economists in a Bloomberg survey see it sinking to $1.35 or below within a week of a vote to leave -- levels last seen in 1985.
• China scrapped limits on the amount of funds that foreign institutional investors can put into its interbank bond market, the latest step to lure capital from abroad as outflows weigh on the yuan
• China International Capital Corp’s economists published a rebuttal of hedge-fund manager Bass’s assessment where he stated that China’s banking system may see losses of more than four times those suffered by U.S. lenders during the 2008 credit crisis
• U.S. Treasury Secretary Jacob J. Lew downplayed expectations for an emergency response to global market turbulence when Group of 20 finance chiefs and central bankers meet this week in China
• JPMorgan’s investment bank said revenue from sales and trading has tumbled about 20% this year, providing an early gauge of the pain inflicted on Wall Street’s biggest firms by the global market rout battering investors
• Donald Trump’s dominating victory in the Nevada caucuses pushes him further out ahead of his nearest competitors for the Republican presidential nomination, giving his unorthodox candidacy a major boost heading into Super Tuesday contests next week
• $11.15b IG corporates priced yesterday (YTD volume $255.4b) and $250m HY priced (YTD volume $11.375b)
• Sovereign 10Y bond yields mostly steady; European, Asian markets drop; U.S. equity- index futures lower. Crude oil and copper fall, gold rises

US Event Calendar

• 7:00am: MBA Mortgage Applications, Feb. 19 (prior 8.2%)
• 8:00am: Fed’s Lacker speaks in Baltimore
• 9:45am: Markit US Services PMI, Feb. P, est. 53.5 (prior 53.2); Markit US Composite PMI, Feb. P (prior 53.2)
• 10:00am: New Home Sales, Jan., est. 520k (prior 544k)
• 1:00pm: U.S. to sell $34b 5Y notes; New Home Sales m/m, Jan., est. -4.4% (prior 10.8%)
• 1:15pm: Fed’s Kaplan speaks in Dallas
• 7:00pm: Fed’s Bullard speaks in New York

DB's Jim Reid concludes the overnight wrap

Markets have been soft over the last 24 hours not helped by China's weaker Yuan fix yesterday and a 4.5% drop in oil. While the fix was little changed this morning (set 0.04% weaker) a further tumble for Oil overnight (now approaching $31/bbl) has kept risk assets firmly on the back foot in Asia this morning. The Nikkei (-1.36%), Hang Seng (-1.60%), ASX (-2.26%) and Shanghai Comp (-0.62%) in particular are all in the red, while credit indices are also a tad weaker. Not helping sentiment is the latest MNI consumer sentiment reading out of China, with the February reading declining 3.6pts to 111.3 and to a four-month low.

The latest twist in the Oil saga yesterday came about as headlines out of both Saudi Arabia and Iran hit the wires. The former’s Oil Minister, Ali al-Naimi, did initially say that freezing output at current levels is the beginning of a process and that high inventory levels will probably decline in due time if we can get all the major producers to agree to not add additional barrels. It was a follow up to this comment which appeared to spook the market however, with al-Naimi warning that ‘this is not the same as cutting production’ and that ‘that’s not going to happen’, while also suggesting that ‘there is less trust then normal’ between nations. Chatter from Iran’s Oil Minister Zanganeh didn’t help, saying that the Saudi-Russia freeze plan is ‘ridiculous’ and that the proposal puts ‘unrealistic demands’ on Iran. ConocoPhillips CEO seemingly summed up the confidence at a corporate level, saying that Oil companies ‘have to prepare for the worst case’ and that you ‘can’t count on a Saudi freeze working’.

Combined with the already dampened sentiment after the CNY fix, it was a broadly weaker day across equity markets yesterday. In Europe we saw the Stoxx 600 close -1.22%, DAX -1.64% and FTSE MIB -1.95%. A softish German IFO survey did little to help with the expectations component in particular down 3.5pts to 98.8 and the lowest since late 2012.

Across the pond the S&P 500 (-1.25%) finished near enough at its lows for the day with a rough session for financials following some bleak but perhaps unsurprising comments about difficult trading conditions so far this year from JP Morgan not helping. Credit markets appeared to largely ignore the intraday volatility in Oil with Main finishing half a basis point tighter and sub-fins also outperforming (5bps tighter). US credit did weaken slightly into the close with CDX IG finishing 2bps wider although a second consecutive high volume session in the primary market kept sentiment relatively upbeat.

Elsewhere, Treasury yields tracked the move lower with Oil with the closing level of 1.723% for the 10y (-3bps) masking what was a pretty big high-to-low swing after yields had crept up over 1.812% prior to the latest headlines. Gold (+1.51%) and the Yen (+0.73%) were the beneficiaries from the broader risk selloff, while Sterling was another sharp leg lower against both the Dollar (-0.90% to $1.402) and Euro (-0.82% to €1.273) and has in fact dipped below $1.40 during the Asia session this morning. Moves have also come following comments from the BoE’s Carney yesterday who said that the BoE has ‘considerable room’ should additional stimulus be required.

Away from the focus on Oil markets yesterday, the US data was something of a sideshow although the fall in consumer confidence did turn a few heads. The February print declined a fairly sharp 5.6pts to 92.2 (vs. 97.2 expected) which was the lowest since July last year with the expectations component down 6.4pts and to the lowest since February 2014. Elsewhere the Richmond Fed manufacturing index reading unexpectedly declined 6pts this month to -4 after the consensus had been for no change. Existing home sales were up in January by +0.4% mom (vs. -2.5% expected) while the S&P/Case-Shiller home price index was a smidgen behind market at +0.80% mom for December (vs. +0.85% expected).

Yesterday’s Fedspeak offered some interesting contrasting comments. Kansas City Fed President George argued that a potential March move ‘absolutely should be on the table’ and that ‘at this point I would not say that the data have suggested there has been a fundamental shift in the outlook’. Dallas Fed President Kaplan was a lot more dovish in his comments to the FT saying that ‘in order to reach our inflation objective we may need to be more patient than we previously might have thought’ and that ‘if that means we take an extended period of time where we stop and don’t move, that may also be necessary’. Speaking overnight meanwhile, Fed Vice-Chair Fischer probably sat somewhere in the middle of his colleague’s comments, saying that ‘if the recent financial market developments lead to a sustained tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the US’. At the same time however, Fischer also opined that ‘we have seen similar periods of volatility in recent years…that have left little visible imprint on the economy, and it is still early to judge the ramifications’.

Running over today’s calendar, this morning in Europe the only data of note is out of France where we’ll receive the latest consumer confidence print and the UK where CBI reported sales data is due. In the US this afternoon there will be some focus on the flash services (expected to nudge up 0.3pts to 53.5) and composite PMI’s for February, while January new home sales data is also due out. The latest Fedspeakers due up will be Lacker (at 1pm GMT) who is set to talk on monetary policy and growth, as well as Kaplan later this evening (at 6.15pm GMT) who is due to talk on current economic conditions and monetary policy. Away from this the EC’s Tusk and Juncker are due to speak in EU Parliament this afternoon on the outcome of the EU summit with Brexit expected to be a hot topic. The BoE’s Cunliffe is also due to speak tonight.


http://www.zerohedge.com/news/2016-...mble-1900-support-sterling-crashes-gold-soars

 

[searcher]

SA - Real time news 02/24
http://seekingalpha.com/market-news

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Tim Iacono - Wednesday Morning Links 02/24
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CWS - Morning News: February 24, 2016
http://www.crossingwallstreet.com/a...ed:+Crossingwallstreet+(Crossing+Wall+Street)

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MtM - Market Anxiety Heightened, Oil and Stocks Head Lower, Sterling Can't Catch a Bid 02/24
http://www.marctomarket.com/2016/02/market-anxiety-heightened-oil-and.html

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[searcher]

Gold and Silver Market Morning: Feb-24-2016 -- Big move about to happen!
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The gold price made a surge at the LBMA price setting and appears to have started a strong move upwards. If this continues we could see the strong move go much higher. The Technical picture has moved to the critical point where one expected a strong move, either way! Because the surge was at the LBMA price setting, where we expect the largest volumes of the day to be traded, it does appear that a strong move higher is underway.

 

[Argent Dragon]

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Fabian4Liberty

Published on Feb 24, 2016

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