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Greek Deal On Monday "Not Possible" MNI Reports Despite Troika Attempt To Reconcile Differences

With the crucial May 12th €774mm Greek IMF payment looming (and thus even more critical May 11th deadline for the Eurogroup's decision to release around €7bn in additional funds to Greece), the much-discussed 'splintering' of the Troika (The Institutions as the Greeks would prefer we describe them) appears to be gradually un-splintering. Today's statement from the EU talks that the members of the Troika "share the same objective" may reassure some after the 'limbo' of serious disagreements between the European Commission and The IMF. However, with various 'red lines' remaining unaddressed, EU sources say a deal on Monday is not possible.

 



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As The 10 Year Selloff Accelerates, "All Eyes On The 2.27%/2.32% Support Zone"

For the chartists out there (and these days that would mean pretty much all momentum-igniting algos who are the only ones left trading these here "markets") the following note from SocGen explaining why if/when the 10Y selloff rises above 2.32% it may be a time to panic (and vice versa) is quite relevant now that the 10Y is just a few basis points away.



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Massive Fire Rages After Another Buffett-Owned Oiltrain Derails In North Dakota, Town Evacuated

Exactly two months after the latest Warren Buffett-owned BNSF train derailed near the spot where the Galena river meets the Mississippi, resulting in a huge fire and the evacuation of all homes in a one mile radius, moments ago another of Buffett's BNSF oil trains derailed, this time near the town of Heimdal, North Dakota, resulting in the same outcome.



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Crude Pumps (And Dumps) After DOE Show Biggest Inventory Draw In 8 Months

Confirming last night's API inventory data, DOE just reported a 3.882 million barrel drawdown in total crude inventories (considerably more than the 1.5mm bbbl draw expected). This is the biggest draw since early September. The initial spike took WTI Crude prices above $62.50 but that is fading now...



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Euro, Bunds, & DAX Have Given Up All Q€ 'Gains'

Paging Mario Draghi... This was not supposed to happen!!



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Swiss Stock Market Collapses Instantaneously On 5th Anniversary Of Flash-Crash

It's deja vu all over again...who are 'they' going to blame for this one?



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Greece Floats Surcharge On Withdrawals As ECB Considers Cuts To Liquidity Lifeline

Greece is set to introduce a surcharge on withdrawals and financial transactions in an effort to raise cash amid fractious negotiations with creditors. Meanwhile, the ECB is considering measures that will tighten the screws on the country's cash-strapped banking sector.



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On Flash Crash Anniversary Scapegoat Sarao Says "I Did Nothing Wrong Apart From Being Good At My Job"

While the rest of the world, or at least 1% of it, is enjoying the ongoing "wealth effect" propping up the increasingly more rickety "markets" built on the backs of $22 trillion in central bank assets, or more than the GDP of the US and Japan combined, earlier today Nav was fighting if not for his life then certainly his freedom when he told a London court he had done nothing wrong, the Flash Crash was not his fault, and was just good at his job. "I've not done anything wrong apart from being good at my job. How is this allowed to go on, man?" Sarao said at Westminster Magistrates' Court.



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California Adopts "Unprecedented" Restrictions On Water Use As Drought Worsens

California water regulators are getting worried. The state has now approved a set of sweeping conservation measures designed to cut water consuption by up to 36% in some areas to combat a severe drought that has now killed some 12 million trees and threatens to turn California into a modern day Dust Bowl.



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US Productivity Suffers First Consecutive Quarterly Plunge Since 1993

Well this cannot be good. US output per hour (for the non-farm businesses) - or non-Farm productivity - plunged 1.9% in Q1. This follows a 2.1% slump in Q4 2014 and is the first consecutive quarterly plunge since 1993. This was driven by a 0.2% decline in output as hours worked increased 1.7% with manufacturing productivity suffering a 1.1% drop in Q1 (driven by a 1.2% decline in output).



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ADP Employment Tumbles To 15 Month Lows As Manufacturing Jobs Plunge

Following March's dismal drop in the ADP Employment report (the biggest miss in 4 years) and missing for 3 straight months, April printed a very weak 169k (against notably lowere expectations of a 200k rise). Even worse, February and March was revised even lower. This is lower than the lowest economist estimate. Large companies were particularly weak with smaller businesses adding the bulk of the meager jobs print. The esteemed Mark Zandi blames this on "the fallout from the collapse of oil prices and the surging value of the dollar."



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Germanwings Co-Pilot May Have Tried To Crash Previous Flight

A new report from France's air accident investigation agency shows that Andreas Lubitz repeatedly put the outbound flight from Düsseldorf to Barcelona into an unexplained controlled descent on the same day he deliberately flew the inbound flight into the French Alps killing all 150 passangers.



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For HFTs It's All About FX: Trading Currencies Is Now Virtu's Biggest Source Of Revenue

Today, Virtu released its first public financials since going public, and our speculation has been proven correct: FX is now the largest revenue generator for VIRT, amounting to 28.4% of revenues in the quarter ended March 31, at $42.2 million, well above the $29.1 million generated from trading  America Equities and the $34.7 million from global commodities. In fact, as the chart below shows, on an LTM basis, FX is now not only the biggest revenue item for the world's dominant HFT firm at $131.1 million, but is also the fastest growing source of profit, rising 103% on a year over year basis!



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Frontrunning: May 6

  • ‘Flash Crash’ Overhaul Is Snarled in Red Tape (WSJ)
  • ECB Considers Tighter Noose on Greek Banks (BBG)
  • Dollar Falls as U.S. Data Cast Doubt on Fed Policy Tightening (BBG)
  • Market U-Turn Rams Hedge Funds (WSJ)
  • Greece makes 200 million euro IMF payment due Wednesday (Reuters)
  • Greek unemployment was 25.4 percent in February (Reuters)
  • J.P. Morgan’s Barista-Turned-Banker Sees Good Things Brewing (WSJ)


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Violent Moves Continue In European Bond Market; Equity Futures Rebound With Oil At Fresh 2015 Highs

This is how DB summarizes what has been the primary feature of capital markets this week - the huge move in European bond yields: "On April 17th, 10-year Bunds traded below 0.05% intra-day. Two and a half weeks later and yesterday saw bunds close around 1000% higher than those yield lows at 0.516% after rising +6.2bps on the day." Right out of the European open today, the government bond selloff accelerated with the 10Y Bund reaching as wide as 0.595% with the periphery following closely behind when at 9:30am CET sharp, just as the selloff seemed to be getting out of control, it reversed and out of nowhere and a furious buying wave pushed the Bund and most peripheral bonds unchanged or tighter on the day! Strange, to say the least. Also, illiquid.



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