Archive - Mar 31, 2015

As the following update of CNBC's perhaps most popular (if least watched, lagging even Mad Money) day breaking segment, SquawkBox, the show that features Joe Kernen, Becky Quick  and Andrew Ross Sorkin just suffered its worst quarterly Nielsen rating in the show's history.

While we doubt that the ECB will, of its own volition, elect to scale back PSPP out of a highly uncharacteristic respect for sanity and prudence, there are a variety of factors which could lead to a forced taper. Some market participants are already betting that the ECB scales back purchases by the end of the calendar year.

De-dollarization accelerates...

Shortly after the US equity mnarkets closed, headlines crossed from Switzerland seemingly confirming "no deal" with Iran...P5+1 MINISTERS PLAN TO LEAVE LAUSANNE IN MORNING but that was quickly watered down with a warning that Iran has until dawn to agree to the deal. This sent WTI up modestly and then API Crude inventories, which were expected to rise 4.2mm barrels, printed 5.2mm barrels - the 12th weekly rise in a row. Crude was slow to react but after a brief fade, shot higher... then dumped...

According to the most recent earmarked gold data reported by the Fed, in the month of February another 10 tons of gold departed the NY Fed, following 20 tons in the month before, which if one assumes is merely the delayed relocation of gold previously demanded for delivery, has crossed the Atlantic and is now to be found in Frankfurt. This means that for the first time in the 21st century, the total gold tonnage held at the NY Fed is now under 6000 tons, or 5,989.5 to be precise.

Stranger things have happened...

"Saudi leaders have said that if troops do go in, they won't leave until they have degraded the Houthis' ability to fight. The Houthis are apt guerrillas. A fight on the ground could prove bloody and lengthy," CNN notes. Unfortunately, it now appears that this “bloody and lengthy” conflict just got a little closer to becoming reality as Reuters reports that Houthi rebels have gained access to a military base at the Bab el-Mandeb Strait, the 4th largest oil-shipping chokepoint in the world.

The Long US Dollar, Short US Treasuries trades were the 'most crowded' earlier this year and while both have derisked modestly from record highs, this week saw the net speculative position in EURUSD futures surge more negative and has never been shorter. Along similar 'strong dollar' lines, as Bloomberg reports, net long positions in Gold have dropped to their lowest since Dec 2013 and outright Gold short positions rose for the seventh week in a row to the highest since data began in 2006.

It was not only the annual growth rate of only 7.9%, matching the lowest since the European debt bubble burst in 2010, but also the sequential rate of price drops, at -0.9% - the biggest monthly drop in three years, or since January 2012 - that will once again be a subject for concern of housing watchers. Because should the price decline resume its acceleration without any emerging tailwinds to prop up the local housing market, then there will surely be some severe fallout such as this peak housing bubble example, in which as Curbed reported last week, a run down shack which listed for $799,000 sold for 50% more, or $1.2 million a few weeks later!

Houthi rebels have reportedly entered the military base at the stratgeic Bab el-Mandeb Strait, according to Reuters. This is the 4th largest oil-shipping chokepoint in the world... Oil has pushed modestly higher on the news but remains driven more by the headlines from Switzerland...

While we wait to see which “well capitalized” bank will be the next to crumble under the weight of mountainous writedowns occasioned by the sudden souring of “riskless” assets, we get to read the DuesselHyp post-mortem, which shows that the bank was effectively AIG’d by Eurex.

"The utterances of the Yellen/Zhou duo who kicked off yesterday’s rip make absolutely clear why the central bankers will never stop stimulating. They have embraced a spurious “inflation deficiency” doctrine, and have thereby, in effect, lashed themselves to the wheel of a doomsday machine."

Venezuela, Argentina, and... China? are the 3 best performing stock markets in March in USD terms (with Ukraine close behind). It is the Greeks that have borne the brunt of global derisking through The Ides, Athens Stock Index down over 15% and the worst-performing stock market in the world for March. Year-to-date, Russia joins the 3 amigos at the top of the list (up almost 11% in USD terms) and Ukraine remains the clear laggard, down almost 33% in USD terms. The best performing global stock market in 2015 in local currency terms is... Denmark!?

Someone pull the plug stat!!