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One Minute Macro Summary: Perfect Time For A Summit

Tyler Durden's picture



Overview: Markets positive again this morning as investors eagerly await news out of the EU summit.

U.S.: Today will see the release of durable goods orders for February at +1.2%E MoM v +2.7% prior and +2.0%E v -3.6% prior, excluding transportation. Initial jobless claims are expected to move somewhat lower than last week at 383KE v 385K prior. Continuing claims are estimated to move similarly at 3,700KE v 3,706K prior. The U.S. tax code may see changes as several Republican Congressman are taking up the matter as announced yesterday. Much attention is focused on the tax deferral of repatriated profits, a $1T sum.

Europe: Portugal’s failure to reach an agreement on austerity measures yesterday and the subsequent resignation of PM Socrates has taken the country one step closer to accepting an international bailout. However, any such aid is severely limited by the hobbled constraints of the EFSF and the lack of (good)will between payer and payee countries. SOVX bounced off of 182bp overnight and has since retraced to 172bp, making the Portuguese election another "buy the rumor, sell the fact" trade for the Euro sovereign crisis. These latest events put more pressure on the widely anticipated EU summit today and tomorrow. With talk regarding Collective Action Clauses (CACs) coming from Merkel, the EMU could be starting to get its discussions on the right path. NPV reductions will be necessary for at least some periphery countries, and the sooner they begin, the less onerous they will be. Moody’s announced a downgrade on thirty of Spain’s smaller banks due to sovereign financial pressures and weak banks. Recall that Moody’s lowered Spain’s sovereign debt rating one notch to Aa2 on March 10th. The ISM’s Purchasing Managers Index showed mixed results in manufacturing and services. Euro zone PMI came in at 57.7 v 58.3E for manufacturing and 56.9 v 56.3E for services. The French PMI preliminary report showed an increase to 56.6 v 56.0E in manufacturing and 60.7 v 59.5E in services. The German report also showed 60.9 v 62.0E in manufacturing and 60.1 v 58.4E in services. Italian consumer confidence for March decreased slightly to 105.2 v 106.4 prior. UK retail sales grew 1.2% YoY v 2.5%E and fell 1.0% MoM v -0.6%E. Dutch GDP grew 0.6% QoQ v 0.6%E. Irish GDP contracted 1.6% QoQ v a revised +0.6% prior and decreased 0.7% YoY v a revised -0.3% prior

Asia: The BOJ said today that the efforts involved in the earthquake rebuilding may overcome the GDP contraction associated with the original damage. In a review of its recent monetary policy, the PBoC reported that it intends to use quantitative tools less and focus on interest rates and other pricing tools instead. Hong Kong’s trade deficit widened 56.9% to 25.1B v 16.0B prior as imports grew 25.2% v 19.0% prior and exports shrank 24.9% v 27.6% prior. The central bank of the Philippines increased the overnight borrowing rate to 4.25% from 4.0%, an all-time low, joining other Asian central banks in their recent actions to ward off inflation. Japanese inflation numbers due out today with headline CPI estimated to remain flat YoY. Excluding fresh food, estimates are pegged at -0.3% YoY v -0.2% prior.

From Brian Yelvington of Knight Capital


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Thu, 03/24/2011 - 08:12 | 1094464 Thomas
Thomas's picture

Not about bailing out Portugal, just Eurobanks.

Thu, 03/24/2011 - 08:18 | 1094487 SilverIsKing
SilverIsKing's picture

"The BOJ said today that the efforts involved in the earthquake rebuilding may overcome the GDP contraction associated with the original damage."

Great News!  Let's have another earthquake!  All in favor say 'aye'.

Thu, 03/24/2011 - 09:20 | 1094738 snowball777
snowball777's picture

'Focus' on rates all you want you slant-eyed fuckwits; you've got next to no wiggle room!


Thu, 03/24/2011 - 08:19 | 1094491 trendybull459
trendybull459's picture

The World is gone under the water,so,the last submarine and big ship left hanging thoose who left,the newspaper on submarine issue statement:Regardless Armagedon Cataclism happend with all world population,we are very bullish on ourselfs and markets futures,Vivat FED which succeed in bringing humanity under the water,Positive,Positive,Positive...

Then had follow strong shoot which made explode submarine and ship,the Russian Spece craft came from nowhere:"Bastards,it was not enough you sent all our bears to be sharks under water,you still continue the same software lowaded into your programm Bully Gulli,now shut up and enjoi piecfull rest!" Babah,tararah---bulbs,cratering water and Bear silence

"For now world people,you get get out of water and start new life,FED is diminished and flushed away"

Spaceship Odysey novel

Thu, 03/24/2011 - 08:32 | 1094529 TexDenim
TexDenim's picture

Portugal is all headlines but no substance. A single strong US bank could bail out all of Portugal in a heartbeat. It's Spain that's the issue, and Spain is a lot healthier than Portugal.

Thu, 03/24/2011 - 08:37 | 1094546 SilverIsKing
SilverIsKing's picture

"Portugal is all headlines but no substance. A single strong US bank could bail out all of Portugal in a heartbeat. It's Spain that's the issue, and Spain is a lot healthier than Portugal."

A single strong US bank?  Name one.

Thu, 03/24/2011 - 08:48 | 1094586 kaiten
kaiten's picture


Thu, 03/24/2011 - 08:49 | 1094594 TexDenim
TexDenim's picture

Touche!! That is the danger of hyperbole. I apologize. What I meant is that Portugal is very, very small, and the only reason we pay attention to it is because it is a sovereign state.

Thu, 03/24/2011 - 08:55 | 1094622 John Law Lives
John Law Lives's picture

Pure BS.  Spain's unemployment rate was over 20% at the end of 2010.

Thu, 03/24/2011 - 08:46 | 1094578 99er
Thu, 03/24/2011 - 09:22 | 1094744 snowball777
snowball777's picture

99er, you are my true hopium dealer, and I love you, man. If it wasn't for your crayons, I would have covered by now.

Thu, 03/24/2011 - 09:22 | 1094745 disabledvet
disabledvet's picture

"Socrates has resigned."  Who do you give the money to?  The Lisbon dog catcher?  I hear he's "really busy right now...

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