Archive - Mar 27, 2014

And so the various estimates of Q4 GDP have made an almost full circle: starting at 3.22% in the first forecast, plunging to 2.38% in the second, and finally settling at 2.63%, a miss from the expected 2.7%. This is down from 4.1% recorded in Q3 which however as everyone knows by now was purely due to a unprecedented, record inventory build up.

Initial jobless claims dropped 10k this week to 311k - the lowest in 4 months - offering little bad-news-is-good-news hope for renewed un-tapering to pump stocks back up. Illinois, New York, and Pennsylvania (all weather-related) saw the biggest drops in claims in the prior week. Continuing claims also fell 53k to 2.82 million, its lowest in 3 months.

Gazprom must really be demanding payment on overdue Ukraine invoices which is the only way we can explain the unprecedented speed with which the IMF has managed to cobble together a makeshift bailout package of up to $27 billion - the bulk of which will naturally go to Russia - which has just made Ukraine its latest vassal state. There are of course, conditions: "Approval is “expected in April, following the authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilize the economy and create conditions for sustained growth,” IMF mission chief Nikolay Gueorguiev said in the statement. Disbursement may start next month, he said at a news conference in Kiev." And then comes the hyperinflation: "Monetary policy will target domestic price stability while maintaining a flexible exchange rate. This will help eliminate external imbalances, improve competitiveness, support exports and growth, and facilitate the gradual rebuilding of international reserves. The NBU plans to introduce an inflation targeting framework over the next twelve months to firmly anchor inflation expectations"...  Very high inflation targeting.

The moment of truth is arriving...

• BOE to Sign Agreement With China on Yuan Clearing Next Week (BBG)
• U.S. law firm plans to bring suit against Boeing, Malaysia Airlines (Reuters)
• Citigroup Fraud Stings Mexico Star as Medina-Mora Chased (BBG)
• Fraternity Chief Feared for Son as Hazings Spurred JPMorgan Snub (BBG)
• UBS suspends six more forex traders (FT)
• Goodbye CSCO Q1 EPS: China to strengthen Internet security after U.S. spying report (Reuters)
• Good luck: Spain Banks With $55 Billion of Property Seek Deals (BBG)
• Citic Pacific Said to Plan About $4 Billion Public Offering (BBG)
• Yahoo Japan to buy eAccess from SoftBank for $3.2 billion (Reuters)
• "Whatever it takes" to talk down the Euro: Euro, peripheral bond yields fall on ECB easing debate (Reuters)

Why is Citigroup not like any of the top four banks, including JPM, WFC, USB or BAC?   

Let the fun begin.

After tumbling overnight to just around 101.80, the USDJPY managed to stage a remarkable levitating comeback, rising all the way to 102.3, which in turn succeeded in closing the Nikkei 225 at the highs, up 1% after tumbling in early trade. The Shanghai Composite was not quite as lucky and as fear continue to weigh about a collapse in China's credit pipeline, the SHCOMP was down more than 0.8% while the PBOC withdreww even more net liquidity via repos than it did last week, at CNY 98 billion vs CNY 48 billion. That said, this morning will be the fifth consecutive overnight levitation in futures, which likely will once more surge right into the US market open to intraday highs, at which point slowy at first, then rapidly, fade again as the pattern has seemingly been set into algo random access memory. Which in a market devoid of human traders is all that matters.