One Minute Macro Update

US: Markets down for a second day this morning.  Look forward to the release of initial jobless claims this morning which may provide some additional insight into last week’s unemployment numbers.  NYSE shares rallied yesterday off of Deutsche Boerse AG’s announcement of its negotiations to buy the exchange, which would make it the country’s largest market for derivatives.  While speaking in front of the House Budget Committee yesterday, Fed Chairman Ben Bernanke reminded Congress that the Fed is not solely responsible for the U.S.’s overwhelming deficit.   He defended QE2 but hinted that there is a limit to its effectiveness.  The chairman acknowledged that fiscal adjustments "occur at some point."  On a related note, today will see the release of the U.S.’s monthly budget deficit.

EUR: Periphery spreads wider in Europe led by Portugal.  Bloomberg reported that the ECB may have bought 5Y Portuguese sovs.  German Bundesbank President Axel Weber declined to comment on his future although reports contend that he will not take the post of ECB chief.  UK manufacturing made a surprise decline of 4.4% YoY in December v +5.4%E YoY.  Meanwhile, French and Italian industrial production both came in well ahead of estimates with gains of 7.0% YoY v 5.7%E and 5.4% YoY v 4.5%E, respectively.  Ireland’s main opposition party and likely next controlling party, announced yesterday that it would not impose haircuts on Irish bank senior bondholders.  Portugal’s CPI (EU Harmonized) in January rose +3.6% YoY v December’s +2.4% YoY.  Ireland’s CPI (EU Harmonized) in January rose +0.2% YoY v 0.1%E and December’s -0.2%.

Asia: Chinese news sources quoted analysts that expect the PBOC will raise interest rates at least two more times this year. In the midst of rising inflation, MPC member Li Dakoui affirmed that the PBOC will continue to adjust its monetary policy gradually.  A senior IMF official warned of the Japanese bank undercapitalization in the context of continued economic sluggishness worldwide and loans close to or in default.

From Brian Yelvington of Knight Capital

Comments

[jus_lite_reading]

TD- "Markets down for a second day this morning..." Did you realize that no matter what- a giant asteroid, Yellowstone blowing its lid, even Armageddon, can't prevent "the markets" from closing "green." Who cares what they open so long as they close green so the sheeple can look and say, "recovery!"

[99er]

ES

A Wolfe Wave target of 1292 may be in the cards. Two charts: last night's set-up and this morning's progress.

Set-up: http://99ercharts.blogspot.com/2011/02/es_6539.html

Progress: http://99ercharts.blogspot.com/2011/02/es_10.html

http://www.zerohedge.com/forum/99er-charts-0

[Dr. Dre]

Uncle bens' put may be fighting with mr Wolfe's search for equilibrium. My sense is something big and hairy will be required to correct an overbought mr market.

[youngman]

If I was Bernanke yesterday...I would have put my feet up on the desk in front of me....lit a big Cuban cigar..and said..." we are broke"....and enjoyed my last smoke..

[lunaticfringe]

The UE print was due to the weather. When that cold snap was over, employers posted "help wanted" signs everywhere. Many were offering sign up bonuses and free Iphones.The RECOVERY is ON bitchezz.

[Johnny Lawrence]

The cold weather caused Abercrombie to lay off the shirtless employees they keep at the entrance.

[NoClueSneaker]

 Can someone make an vague estimation how much of those 5Y Portugal Bonds ECB just bought? Thx.

[HedgeFundLIVE]

near term, the catalyst for moving up is simply greed. Either I am right and we will test 1300 in the coming days or I am wrong and we are in a fever driven hyper bull cycle that refuses to be broken: http://www.hedgefundlive.com/blog/thursday-market-expectations-reasons-why-the-market-doesnt-go-down-for-now

[topcallingtroll]

Yep it would be par for the course that when i finally reverse my topcall for the market that the market finally corrects.