Archive - Apr 9, 2015 - Story

After the abysmal March payrolls number, there were expectations in the whisper forecast of today's initial claims that there would be a sizable jump in initial unemployment claims, one that may break the streak of 4 consecutive prints under 300K. It did not happen, and in fact the number which was released moments ago by the BLS indicated continued strength in the US labor market, where there was 281K initial claims in the past week, just under the 283K expected and higher than the revised 267K from last week. This is the lowest level for this average since June 3, 2000 when it was 281,500. The previous week's average was revised down by 250 from 285,500 to 285,250.

If there was any confusion whether Iran thought it had gotten the best of John Kerry and the Obama administration as a result of the non-deal April 2 "framework" announcement for some future possible deal, it can be swept away following a Reuters report that Iran will only sign a final nuclear accord with six world powers if all sanctions imposed over its disputed atomic work are lifted on the same day, President Hassan Rouhani said in a televised speech on Thursday.

The US had snow in the winter to "explain" why for the second year in a row Q1 GDP tumbled from 3% to around 0%; Europe, whose GDP unlike its market (the Stoxx 600 just hit a record high) will also miss lofty expectations for an economic recovery thanks to ECB money printing, may have a French air traffic controllers strike to blame the Q2 GDP miss for. Yesterday, the SNCTA union - France's largest - called the two-day strike in a dispute over working conditions. As BBC reports, later on Wednesday, the DGAC civil aviation authority asked airlines to halve scheduled flights on Thursday. The immediate result: hundreds of flights and thousands of passengers have been grounded.

"While Dudley clearly does not want stocks to decline a lot, he also wants to avoid meaningful increases... Also very apparent is that Dudley wants bond prices to go down – not a lot but clearly down." - Bank of America

• Greece pleads cash running out, told to hasten reforms (Reuters)
• ECB Cash Said Likely to Fall Short of Greek Request This Week (BBG)
• Chinese Stock Buying Frenzy Sweeps Into Hong  (WSJ)
• Shell’s $70 Billion BG Deal Meets Shareholder Skepticism (BBG)
• Yemen's Houthis seize provincial capital despite Saudi-led raids (Reuters)
• Iran Nuclear Deal Gives Syria’s Bashar al-Assad Reason to Worry (WSJ)
• Slow apps, low battery life limit appeal of Apple Watch (Reuters)
• Gilead’s $1,000 Pill Is Hard for States to Swallow (WSJ)
• The Oil Industry's $26 Billion Life Raft (BBG)

As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a "different story") a development that was met with yet another ultimatum by its "partner", the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.

A central bank official, according to The FT, said that Greece has repaid the €450m it owed the International Monetary Fund today. Bond yields have fallen across the Greek curve with 10Y GGBs now at 11.1% (down 70bps from Tuesday's highs). Greek stocks are not as impressed and are giving back their gains. Tsipras, on return from Moscow, explained Greece "was not a beggar...asking other countries to solve its problem," but as a senior Greek official earlier this week said that while it would be able to make Thursday’s IMF repayment, it will still exhaust its cash reserves very soon and "next month is a different matter." HSBC points out that the real crisis point looms on the 12th May and FinMin Varoufakis warns the "asymmetric union" that they "have learned nothing from economic history."

For an hour or so, terrible news was great news as the DAX dipped and ripped after February Industrial Production fell 0.3% (against expectations of a 0.6% rise) and even worserer, January's 'everything is awesome' +0.9% rise was revised massively lower to 0.0%... February was the biggest drop in German Industrial production since August (but of course now that Q€ is here, we are sure everything will be great going forward).