Archive - Jan 6, 2015

Will there be capitulation in Oil?

A day after the funeral of a colleague killed in an ambush last month fueled tensions between the force and the city's mayor and led to another day when thousands of policemen turned their back on New York mayor Bill de Blasio, two NYC policemen were shot and wounded on Monday night, officials said,  According to Reuters, the officers, part of a plainclothes unit, were shot outside a Chinese restaurant in the Bronx district as they tracked two suspects to an armed robbery, New York Police Commissioner William Bratton told a news conference early on Tuesday. The officers were transported to St. Barnabas Hospital and were expected to survive. Both were listed in stable condition: one, aged 30, was shot in the arm and lower back. The second man, aged 38, had chest and arm wounds. A massive manhunt is taking place for the suspects, described as 25- to 30-year-old Hispanic males, who are still at large. The organization COP SHOT (Citizens Outraged at Police Being Shot) is offering a $10,000 cash reward for information leading to their arrest and conviction.

• Average 10-year yield of U.S., Japan and Germany dropped below 1% for the first time ever: Free Money in Bond Markets Shows Global Economy Still Struggling (BBG)
• Brent falls below $52 as oil hits new five and a half year lows (Reuters)
• China Fast-Tracks $1 Trillion in Projects to Spur Growth (BBG)
• Saudi Arabia Raises Price of Main Oil Grade for Asian Buyers (BBG)
• Oilfield Writedowns Loom as Crude Slump Guts Drilling Values (BBG)
• Biggest Oil-Rig Drop Since 2009 Spells Tough Year Ahead (BBG)
• CIA says its inspector general is resigning at end of month (Reuters)
• Pipeline IPOs Climb on Demand for Returns Immune to Oil (BBG)
• Natural Gas No Savior for Investors Seeking Oil Refuge (BBG)
• Euro zone economy ended 2014 in poor shape (Reuters)

Same slide, different day, as the crude crash continues, with both WTI and Brent tumbling to multi-year highs, below $49 and $52 respectively. This happened despite the news overnight that China is accelerating 300 infrastructure projects valued at 7 trillion yuan ($1.1 trillion) this year, suggesting that China will focus more on fiscal policy than monetary easing, which in turn led to much confusion in the SHCOMP, which fluctuated up and down for the day several times before finally closing unchanged. There was no confusion about the stops slamming USDJPY, and its Nikkei225 derivative which tumbled 3%, sending Japanese Treasury yields to fresh record lows. Record low yields were also seen in Germany, Austria, Belgium, Netherlands, Finland, France (and many other places), which in turn forced the US 10 Year to finally dip back under 2.00%. In fact, taken together, the average 10Y bond yield of the U.S., Japan and Germany has dropped below 1% for the first time ever, according to Citi.

At the start of the New Year, there are increasing signs that the recovery seen in property prices in many cities in western countries -- namely New York and other U.S. cities, and Dublin, London and other UK cities -- is beginning to peter out ...