One Minute Macro Update

US: Markets down this morning today. Yesterday saw several significant releases, with housing starts at 596K, well ahead of consensus estimates at 539K. PPI rose 0.8% MoM, in line with expectations while industrial production decreased 0.1% v 0.5%E. Fed minutes from the January 25-26 meeting expressed continued disappointment in labor market conditions. FOMC reaffirmed QE2 despite dissent, but did not comment on future actions after the purchases. Overall, the Fed was more optimistic citing an increase in household spending late in 2010. Fed Policymakers also noted that long-term inflation expectations are stable as they had at the December meeting although this month they acknowledged rising commodity prices. Today’s CPI release is expected to show weak inflation numbers with consensus estimates at +0.3% MoM.

Europe: Spain’s latest bond auction was weaker than expected, resulting in the sale of €2.47bn 19Y at 5.200% v 5.446% prior with b/c at 1.54x v 1.67x prior, and €997mm 36Y at 5.957% v 4.801% prior with b/c  at 1.5x v 1.99x prior. The Irish Times reported that Irish banks are issuing bonds to themselves, using the government’s guarantee to borrow from the ECB at low rates. The practice allows the banks to avoid emergency borrowing from the Irish Central Bank.  Local Portuguese press reporting that Portugal is being pressured by Germany to accept a bailout.  ECB’s overnight loan facility spiked up to €15.8B overnight, versus €1.2B prior.  This print is the highest since June 2009.

Asia:  Asian stocks rose along the news of improved corporate earnings worldwide. Singapore raised its 2011 consumer prices and export expectations to as much as +4.0% and +10.0%, respectively, after GDP grew 14.5% in 2010. The country looks to tighten monetary policy due to the rise in the inflation forecast despite a likely slowdown in growth in 2011.  Taiwanese GDP also showed a significant gain for 4Q10, increasing 6.92% YoY v 6.40%E.  China January FDI YoY 23.4% v 17.2%E.

From Brian Yelvington of Knight Capital

Comments

[99er]

Russell 2000 Futures

Big Picture    http://99ercharts.blogspot.com/2011/02/tf_17.html

Zoomed-in    http://99ercharts.blogspot.com/2011/02/tf_7525.html

Should be a fun day!

[Cursive]

Today’s CPI release is expected to show weak inflation numbers with consensus estimates at +0.3% MoM.

3.6% annualized is "weak" inflation growth when we have no hiring?

[HedgeFundLIVE]

All I can say about this all is, the market is delusional, delusional, and did i say, delusional?: http://www.hedgefundlive.com/blog/10-reasons-i-am-delusional-not-the-market