Archive - Apr 10, 2014

"Fear Of Missing Out" - that is the only way one can explain the irrational idiocy with which asset "managers" are scrambling to allocate other people's money into today's "historic" Greek (where unemployment just printed at 26.7%) return to the bond market, and which according to Greek PM Venizelos was eight times oversubscribed, or far more demand than for the Facebook IPO. Ironically, while we joked earlier this week, when the Greek 5Y was trading in the 6% range that the new bond would issue at 3%, we were not too far off on the final terms which were largely expected in the mid-5% range. Instead, Greece shocked everyone when it announced that the avalanche of lemmings had made it possible for Greece to issue debt at a sub-5% yield, and a 4.75% cash coupon! Here is the final term sheet.

• J.P. Morgan's Dimon Describes Year of Pain (WSJ)
• SAC Faces a Final Reckoning for 14 Years of Insider Scam (BBG)
• New Standards for $693 Trillion Swaps Market Increase Risk of Blowup (BBG)
• China says no major stimulus planned; March trade weak (Reuters)
• As we said in 2012 would happen: Record Europe Dividends Keep $3 Trillion From Factories (BBG)
• Blame it on the algo: Deutsche Bank Said to Find Improper Communication in FX Case (BBG)
• Coke Sticks to Its Strategy While Soda Sales Slide (WSJ)
• Ukraine’s Rust Belt Faces Ruin as Putin Threatens Imports (BBG)
• RBC Joins Goldman in Suing Clients After Singapore Crash  (BBG)
• U.S. House panel to look at aluminum prices, warehousing (Reuters)
• Brooklyn Apartment Rents Jump to a Record as Leases Surge (BBG)

The main overnight event, which we commented on previously, was China's trade data which was a disaster. March numbers turned out to be well below market consensus with exports falling 6.6% YoY (vs +4.8% expected) and imports falling 11.3% YoY (vs +3.9% expected). The underperformance of imports caused the trade balance to spike to $7.7bn (vs -$23bn in Feb). Pricing on the Greek 5-year syndicated bond is due later today, with the final size of the bond boosted to EUR 3bln from EUR 2.5bln as order books exceed EUR 20bln (equating to a rough bid/cover ratio of over 6) as the final yield is set at 4.75% (well below the 5.3% finance ministry target and well above our "the world is a bunch of idiots managing other people's money" 3% target). Ireland sold EUR 1bln in 10y bonds, marking the third successful return to the bond market since the bailout. Also of note, this morning saw the release of lower than expected French CPI data, underpinning fears of potential deflation in the Eurozone.

There's an all-out Global currency war being waged and yesterday the Dollar was the clear winner.