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One Minute Macro Update

Tyler Durden's picture


US:  Markets slightly positive this AM after data showed that consumer credit expanded by over $6.1B in December (v $2.4BE) and consumer credit balances expanded for the first time since August 2008.  Revolving credit rose $2.3B in December.  The question remains one of jobs.  Consumer electing to spend on holiday purchases for the first time since the crisis is a good sign, as is the makeup of the GDP gains we have seen which reflect an increasingly less timid consumer.  Without jobs growth, however, we are merely getting a more levered consumer after some debt retrenchment.  In the aftermath of a credit crisis – and possibly on the verge of a new one at the sovereign level – is that really such a good thing?
Europe:  Spreads continue to leak wider as the hope of an instantly unified Eurozone fades after reports that Friday’s meetings saw more discourse than unity.  Today EU President Van Rompuy is expected to give more detail regarding the talks.  Recall the main crux of the summit was energy and innovation, but the concern for investors was the lunch topic surrounding economic policy and the possibility of an expanding EFSF, both in scope and depth.  German Dec Industrial Production -1.5% v 0.2%E driven mostly by weather.  Irish press reporting that Irish banks receiving loans from the ECB via the Central Bank of Ireland are paying less than 3%, compared to the 5.8% Ireland is paying for its country level assistance.  This is a further example of the “upstreaming” of private problems to the federal level.  Portugal’s private placement cleared at 6.45% for the 5Y issuance yesterday.  Portuguese 5Y debt was trading at 6.31% on Friday before the issuance.  UK Treasury is set to increase the 2011 UK bank levy rate.  Italy NPLs rose 32% YoY per the Bank of Italy.  Italian press reporting that prosecutors will seek an immediate trial for PM Berlusconi. 
Asia:  China hiked rates 25bp for both of its benchmark rates.  The one year lending rate will now be 6.06% and the one year deposit rate will rise to 3%.  A spike in loan growth earlier this year combined with a rate spike around the “turn” period of the Chinese New Year caused some tightness in rates naturally, but apparently the PBOC is intent on slowing loan growth and avoiding a property bubble.  Japan's Economic Min Yosano stating that JGB rates not yet at levels requiring government intervention.  Korean press reporting that North and South Korea will hold talks today for the first time since November. 

From Brian Yelvington of Knight Capital


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Tue, 02/08/2011 - 09:08 | Link to Comment chistletoe
chistletoe's picture

gasoline, bitchez


from the weekly eia report:

"Total products supplied over the last four-week period has averaged 19.0 million barrels per day, up by 1.2 percent compared to the similar period last year."

"The average world  crude oil price on January 28, 2011 was $92.47 per barrel, ...$20.48 above a year ago."

Tue, 02/08/2011 - 09:08 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

I believe it.  While evicting my Tenant for non payment of rent I asked him why he did not pay his rent.  He said that he had to buy Christmas presents for his nieces and nephews.  He has 6 brothers and sisters, so I can just imagine how many nieces and nephews he has.

Wonder how his nieces and nephews will feel now their Uncle is out on the street because they got a nice trinket for Christmas.

Tue, 02/08/2011 - 09:08 | Link to Comment nudedude
nudedude's picture

More good news, a sign that the recovery is not a sham like ZH says it is. The jobs are always the last to come.

Tue, 02/08/2011 - 09:09 | Link to Comment Zero Govt
Zero Govt's picture

so consumers loaded their credit cards for XMas which will have the knock-on effect of having a crap March quarter having to pay off their balances. Every Ying has a Yang. Which also will impact the Dog-eat-Dog atmosphere amongst retailers cutting profits to the bone to fight for remaining sales. What appears 'good news' on the surface could bring on the worst this coming quarter... duck!!!

Tue, 02/08/2011 - 09:15 | Link to Comment Caviar Emptor
Caviar Emptor's picture

China tightening comes along side rising Brazilian CPI (even more than expected). 

Put that together with food revolutions and soaring commodities across the board and one has to ask: is this the beginning of the end of loose monetary policy? Is QE3 now in question, especially in light of yesterday's announcement of a dissenting governor who is vocal against it? 

Pressure is rising. 'Win Win' QE is now turning into "Lose Lose": more QE will bring on killer inflation, forcing China and others to tighten and slow their economies It's also provoking global instability especially in the Middle East and emerging world. And in the US its manifesting itself as biflation : rapid inflation while incomes, real estate and benefits deflate. 

Tue, 02/08/2011 - 10:03 | Link to Comment snowball777
snowball777's picture

Back in '83

a man came to me

and he told me

"Son, our way of life is done"

But I was only young

With an eye to the fields

speculators and yields

rotten to the core,

Monoculture whores

entered the bidding wars

from distant shores,

I don't wanna be in the land known as destitute and free,
With the grains of wrath blazing a path from sea to shining sea!

Oh the sinuous trails

of concrete and rails

and exhausted roars,

Population wars

setting our future course,

Is profit and greed

the only conceit

on a scale between

Mere prosperity

and inhumanity?

It may well be but,

I don't wanna be in the land known as destitute and free,
With the grains of wrath blazing a path from sea to shining sea!

Tue, 02/08/2011 - 10:26 | Link to Comment 99er
99er's picture


Back test of rising channel forming a Broadening Top.

Tue, 02/08/2011 - 13:08 | Link to Comment Yen Cross
Yen Cross's picture

I see that 25bps. Me likey blue man.

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