Archive - Apr 1, 2015 - Story

Following last night's pump'n'dump after API inventories exceeded expectations (5.2mm vs 4.2mm exp.), WTI crude prices have dropped to almost a $46 handle and recovered as chatter of "no deal" from Switzerland picks up. DOE reports a 4.766mm barrel build, greater than expected, for the 12th week in a row - the longest streak since records began in 1982. Crude prices are however surging as production dropped wekk-over-week for only the 2nd time this year...

A combination of Greek default fears rising (safety reach) and considerably weaker than expected data (moar easing) has sparked a $20 surge in gold prices this morning, back above $1200...

US Manufacturing PMI beat expectations, printing 55.7 up from 55.3 prior to its highest since Oct 2014, once again flying in the face of the collapse in US hard-data-base macro. More in line with the underlying reality, Feb Construction Spending dropped for the 3rd month of the last 4 and March ISM Manufacturing tumbled to 51.5, missing expectations of 52.5, to its lowest since May 2013. Under the covers, it is even uglier with the lowest New Orders since Jan 2014 as US Manufacturing data has missed 5 of the last 7 months and dropped for 5 months in a row - which hasn't happened since 2008.

Update: GREECE GOVT DENIES PLAN TO DELAY APRIL 9 IMF PAYMENT: REUTERS

For now the algos can't decide if Greece is joking about making the payment or joking about not making the payment.

"The country seems to be on the verge of total collapse," the UN says, citing civilian deaths and children in "desperate need." Meanwhile, Saudi and Houthi troops are engaged in "heavy" border clashes as the coalition continues its bombing raids.

It's business as usual in Washington. President Obama has just signed another Executive Order declaring a National Emergency to deal with cyber threats:

*OBAMA ORDER CREATES NEW AUTHORITY TO RESPOND TO CYBER THREATS TO BE USED IN 'TARGETED MANNER'
*OBAMA ORDER ALLOWS SANCTIONS FOR CYBER THREATS

This new authority, yet another layer of government oversight, we are sure is for your own protection and in Obama's words will "augment work to fight cyber threats." All your internet is belong to us...

30Y yields are back below 2.50% - the lowest level since last Thursday's yield-ramp (following consecutive weak auctions) - as ADP data showed a lot less exuberant escape-velocity-ness than expected. The entire bond complex is seeing yields tumble post-ADP, extendionb the drop from the overnight session which did not bounce back like stocks...

After missing expectations in a dismally weak February print, March turned out even worse. Despite Mark Zandi's reassurances that Feb was a weather-related blip, March ADP employment change was a mere 189k (against expectations of 225k) dropping to its lowest since January 2014. Large business hiring was the worst, adding a mere 19k. Zandi said in Feb that "jobs growth is strong but slowing," but now it appears weak and accelerating lower. And the now recurring punchline: manufacturing jobs -1,000.

"The time may have come to seek a solution to the drop in liquidity that is a side effect of the BOJ's large-scale JGB purchases," BofAML says.

• Oil holds around $55 as Iran nuclear talks drag on (Reuters)
• Bob Diamond’s African Banking Venture Runs Into Problems (WSJ)
• Iran Nuclear Talks Resume With Lavrov Saying Deal at Hand (BBG)
• Wal-Mart Ratchets Up Pressure on Suppliers to Cut Prices (WSJ)
• Renegades of Junk: The Rise and Fall of the Drexel Empire (BBG)
• Explosion at Yemen factory kills at least 25: residents, medics (Reuters)
• Macerich Rejects Simon Property’s $16.8 Billion Takeover Bid (WSJ)
• Reckoning Arrives for Cash-Strapped Oil Firms Amid Bank Squeeze (BBG)

It has been another whiplash, rollercoaster, illiquid session which saw US equity futures tumble early overnight driven by a bout of USDJPY and Nikkei selling, only to regain all losses as European, and BIS, traders walked in, and promptly BTFD. In fact at last check, it was as if all the fireworks that took place just a few short hours ago and sent the ES as low as 2037, and below what has become the key support level, the 50-DMA never happened.