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One Minute Macro Update
US: Futures pointing downward this AM following a lack of further emphasis on QE and policy from the Fed yesterday. Further concerns regarding the new political forces from within the Fed and on the legislative side of things have caused some of the QE euphoria to wane, though we still believe that the front end policy rate increases that are priced in for 2011 seem misplaced. Municipal ETFs continue to get hammered on the curve, as well as experiencing a modicum of spread widening in the credits.
Europe: Ahead of tomorrow’s Spanish auction (10Y and 15Y), Moody’s placed Spain on review for possible downgrade. Portugal managed a sale of €500MM of 3M bills yielding 3.403% (+159bp from prior) with a bid/cover of 1.9x (versus 2.2x prior). Moody’s estimates that Spain will need €170B in funding next year at the treasury level, €30B in regional funding, and €90B for the banking sector. We expect, as with the other periphery countries, that the estimates will be increased in the future as the full extent of the Spanish sub-sovereign and banking sectors are realized. Sov moves are rather muted considering the moves ahead of the EC meeting – and perhaps more importantly, the CDS rolls. Merkel stating that any future bailouts will have to be unanimous. Riksbank hiked 25bp.
Asia: PBOC survey indicating that 50% of bankers anticipate a policy rate hike in 1Q11 while 75% see property prices as too high, 45% see the economy as overheating, and over 60% see inflation increasing in 1Q11. BOJ Tankan manufacturing sentiment worsened for the first time in two years. The Australian reporting that the Australian Retail Association says that almost half of all shop owners see weaker conditions versus one year ago.
Via Brian Yelvington of Knight Capital
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That Hang Seng got crushed last night -455
(-2%)
http://www.sgxniftydowfutureslive.com/index_files/DOWFUTURES.htm
Think we will close "GREEN" ?
More than likely
Two big POMO's in a row 15th, 16th and a mini on the 17th...plus lots of bearish news...
..... and don't forget Raymond James "Tailrunning" with their cut of BBY this morning.
GBPCHF at a new all-time low looking for sub-1.5....unemployment up from 7.7% to 7.9%
Unemployment rates going up again...is that allowed?
POMO power for the rest of the week. Watch out. Shit will levitate.
usa futes down? A temporary aberration.
in other news, weebles wobble but they don't fall down.
I love how these countries are accepting what ever rates now. They must be confident the EU (France and Germany) will bail them out. The payout when these come due is going to be a whopper.
New rule, if you think the market's going to fall, Bernanke will make it rally harder than you've ever seen before.
After watching all the roaches scurry out of the SPY last night at the close, it is literally a wonder that we are not down much, much further on the S&P futures this morning. It was such a clear sell signal last night that I am almost started putting out ads on Craigslist to sell my furniture, and I would have done that if, instead, I had not fallen asleep on my couch listening to the sound of concerns rising about whether or not the continent of Europe might just slip below the surface of the Atlantic ocean this morning [which I presume would have been bad for the S&P also...although I suppose it could have been positive as the criminal syndicate known as Wall Street might arbitrage rents on the loss of housing units in the wake of Europe sinking].
Even now there is yet another amazing counter trend rally going on the in theEuro [for about the last 2 hours]. Watching the EUR/USD cross has become almost a sick fascination of mine because there, as much as any other place on the planet, you see the syndicate working desperately to hold together counter intuitive price movements because, of course, the entire rally in the S&P that the criminal syndicate has made for us is built upon a depreciating US dollar...which has never really made me feel all that great about the S&P rally. In fact, it makes me feel all low self-esteemy.
But who am I to suggest that a continent that just might slip under the surface of the Atlantic Ocean might not be a great long for an hour or two more? Who am I to say that we should be down on the S&P futures if the proper amount of pixie dust and unicorn dew has been inserted into the SPY in the meantime...and for a couple more hours...or a couple minutes more?
As usual, once we get news of inflation from a
strong CPI, or problems in Europe from a downgrade of Spain debt, the
first item sold in a panic is gold, silver, and oil.
Only about 20 trading days left until January 14.
Gold needs to rise about $13.10 a day to reach $1,650, otherwise, General Jim is history.