One Minute Macro Summary - Brief Nuclear Relief

Tyler Durden's picture

Overview: Futures positive this morning as Japan’s nuclear crisis made a step forward and U.N. allies took control of Libya’s airspace.

U.S.: Existing home sales will be released today set at -4.7%E MoM v +2.7% prior. The estimated decline considers the significant rise in January versus the pending sales in that month. LIBOR-OIS has widened out to 16.9bp (+5bp on the year).

Europe: Portugal’s government will present its fiscal austerity plans to Parliament today. Portuguese PM Socrates has warned of his resignation if the plan does not get passed while the main opposition party which has reached majority position has shown no support for the cost-cutting. The potential political turmoil will make a foreign bailout likely. Sunday’s German regional election in Saxony-Anhalt, showed less support for Chancellor Merkel’s CDU party which lost ground in the victory. Its lead in the region’s coalition will likely remain the same, but foreshadows a greater potential upset in the next round of election on March 27. Germany projected a tax revenue increase of almost 10% in February and kept estimates of GDP growth at +2.3%. Greece’s current account deficit increased in January to €2786MM v €1890MM in December, showing still weak efforts towards fiscal discipline.  The EU meetings on bailout measures will focus on Thursday and Friday, but some EU finance ministers are set to meet today.  Market is priced for success as SOVXWE has tightened in all the way back to 165bp.

MENA: U.N. allies began airstrikes on Libya this weekend, taking control of the country’s airspace and stopping Qaddafi’s advance on rebel outposts. Meanwhile, Syria and Yemen continue to see social unrest, adding to upward pressure on oil prices.

Asia: Japan managed to gain control of two of six nuclear reactors, but the situation still remains dangerous despite the accomplishment.  The G7 intervened in foreign exchange markets last Friday in attempts to calm the tormented yen.   France’s finance minister announced that there is no set schedule for further intervention. Taiwan’s export orders grew only 5.33% YoY v 13.7%E YoY, the lowest growth in 16 months, owing to the drop off in Japanese demand due to the earthquake and a simultaneous softening demand in China.

From Brian Yelvington at Knight Capital

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primefool's picture

The Yen move last week was extraordinary. The "explanations" that the main stream offered up - as they have to within 60 seconds of any market move - of " repatriation" etc etc - sounded like hogwash to me. All rationalizations and brain-dead art-history majors writing headlines for Monkey-Watch. Ignore it - you'll be better for it.

The only thing that usually explains these relentless one sided moves is ....... hedge funds being liquidated....margin calls. I bet a lot of the hedge fund geese were flocking to the Long Japanese Equities/Short Yen trade. There is even an ETF that does this - a sure indication of a crowded trade.

Dont feel too sorry for the leaders of these hedge funds though. As we noe know - hedge fund managers are rennaissance men/ poets - a total loss only brings out the best poetry as they unload their pitiful little pretensions to philosophy/literature - on their hapless investors . Before moving on to even bigger funds. It is indeed poetic - this seamless dance of the Treasury/Fed/HedgeFunds and the TBTFs. Its like a perfectly orchestrated Kabuki dance.

zaphod's picture

So what, the +$100T in debt is still there. It's never going away......

primefool's picture

You have to keep in mind the mindset of these mostly Ivy League hedgies. OK - imagine you are at a weeding in the Hamptons and are a 32 year old male - Ivy all the way. Now - who has the advantage in attracting the single women - the brand manager at P&G or the hedgie who was all over the news lat week about losing $10 Bil - with his poetic/ agonized final letter - I mean - No contest .. Right?

johny2's picture

Dollar 0.02777

MaxVernon's picture

Interesting chart on radiation doses:

Urban Redneck's picture

At least the PR machines didn’t just recycle the “fat finger” story they tried to pedal to the masses in August 2007.  4% USD/JPY is the sound of the conductor losing control of the orchestra (again).  Institutions can make margin calls to the little hedge fund rascals, but loans large enough to require syndication, are executed under fixed terms (e.g. the Institution is holding the bag, unless it has a handy derivative with a solvent counterparty).  Look for the central banksters to reopen the drive-by windows in the coming months to many additional forms on newly irradiated toxic bank paper.

divide_by_zero's picture

Good news all around;

Car dealers already raising Japanese car prices

Nuke plant workers flee as smoke and radiation increase