One Minute Macro Update: Waiting On Yen-tervention

Tyler Durden's picture

Overview: Markets mostly positive this morning with the exception of Asia, as the announcement of tomorrow’s G7 meeting on the financial situation in Japan soothed investors.

.: President Obama’s budget chief indicated that the administration has a willingness to compromise on Republican-favored budget cuts.  The House passed a new stopgap bill on Tuesday that extends the current budget again, this time to April 8th. The bill should come to a vote in the Senate today. February CPI figures this morning at +0.4%E MoM v +0.4%MoM prior. A release higher than expectations would not be a surprise considering recent increases in food and energy prices (though most of yesterday’s PPI jump can be chalked up to weather). This morning will also see initial jobless claims at 388KE v 397K prior and continuing claims data at 3750KE v 3771K prior. The Philly Fed business outlook index is expected to fall from February’s lofty 35.9 to 28.8E. Industrial production at +0.6%E MoM v -0.1% MoM.

Europe: Spain sold €3.22B in 10Y at 5.162% v 5.200% prior with b/c at 1.81x v 1.54x prior and €911MM in 20Y at 5.875% v 5.488% prior with b/c at 2.1x v 2.05x prior. Although yields did not show an increase, they do remain elevated beyond a sustainable funding level for the country.  Switzerland’s central bank kept its 3M LIBOR target rate at 25bp as the market anticipated, giving it more space to maneuver in the current financial turmoil. Libyan leader Qaddafi bombed a rebel headquarters in Benghazi, making a major blow against the anti-government forces. Today the U.N. will continue to debate its involvement in the conflict to save civilians.

Asia: Nuclear worries prevail in Japan and the Pacific. The G7 will meet tomorrow about Japan’s earthquake and yesterday’s record rise in the JPY. Discussions will likely revolve around JGB buying efforts and exchange rate intervention. BOJ typically targets the US/Europe overlap timeframe for intervention.  The Reserve Bank of India raised rates for the eighth time this year, moving the repurchase rate up 25bp to 6.75% amid inflation concerns and a national plan to lower taxes and increase spending. Chinese inflation may come in around 5.5% MoM, according to a PBoC official, v February’s 4.9%. Hong Kong’s unemployment rate came in at 3.6% for February v 3.7%E.

From Brian Yelvington at Knight Capital

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primefool's picture

So solly - no intervetion for you today - better find someone else to buy yer tresuries . No - what if the Chinese, Europeans and now the japanese are basically refusing the play the old game.

Any small child can understand that having a highly valued currency means you dont have to work as hard and can buy whatever you want. Thats a good thing - Right? Unh.hunh..

boooyaaaah's picture

If Japan is going to need to buy their way out of the mess.

Alternative enegry is what they will buy. Alternative to Nuclear---  LNG, oil exploration, off shore Cuba, off shore everywhere.

Not Green BS -- Kyoto is dead. When you have Tokyo browning out --- solar power becomes a cruel joke.

Then, if that is the Japanese game plan,  having a strong yen would make the purchace of real energy much easier. Also expect exploration into large scale geo thermal around the ring of fire.

This time instead of buying Rockeffeller Center and other "western" real estate

Japan will promote and use the strong yen for what is really needed

Brut force energy --- not sissy boy energy

oh_bama's picture

The BOJ is just stupid

In this situation, it requires heroic measures. they must come up with decisive, civilization scale QE to stop the panic and fight the disaster.

At least 1 quadrillion yen guys. 10^15 if you cannot count the 0s. Otherwise who will be BTFDing anymore? sigh..

johnQpublic's picture

massive intervention by the japanese makes the yen go up and the dollar go down

not sure i completely get that one

101 years and counting's picture

japan has been busy trying to weaken the Yen.  its not working.

primefool's picture

Consider that central banks are joined at the hip to their govts. Now then, in normal times, weak currency is good - keeps the sheeple from buying lots of junk from abroad. However, in times of turmoil, when the Govt may in fact need to buy massive amounts of food, energy etc from abroad - shlong is good. Econ 101.unh hunh.

Debtless's picture

Wasn't the few trillion yen in the past week not considered enough intervention already?

How big is this insatiable beast?

A Man without Qualities's picture

Who honestly believes that the G7 (all of whom are basically broke) getting together to announce strong vigilance or some other vague promise, is what caused markets to bounce nearly 3% since the sharp drop of last night?

terryg999's picture

Everything is OK!  At least we got Obama's March Madness picks in.


After that, everything is gravy

jmc8888's picture

Of course, because Obama is a post election republican. (hell he's more reagan than reagan)

He's all about supply side, budget cuts, and did you see the way he didn't march in Wisconsin?  What about all the other pure fascist crap in Indiana, Ohio, and Michigan.

He's not a democrat.  He's a fascist wall streeter.

Toots was a banker, which means he's mind fucked in favor of ALL banksters.

Fuck you Obama, you whore.  Fascist as the others, because gasp, both sides are right wing fascists. That's what fascism is.  Obama is it.  Boehner is it.  Even Ron Paul is it.

ANYONE that agrees it's better the let the people suffer, to pay off fraudulent debt, instead of wiping said debt out is as looney as Big Ben.

If Ron Paul wants to change his tune and say DESTROY THE FRAUD LOANS, and NOT THE PEOPLE, then I'd take him off that list, provided he didn't want to shut EVERYTHING down, and let people die by not doing anything because he is AFRAID of using his head to his all mighty fascist Austrain school of monetary non-thought.  I'd do it with anybody that 'got a clue'. But first they actually have to HAVE ONE. 

But whether printing or cutting, the main point is...keep honoring the debts...from ALL of these guys...from ALL of the so called sides.

BS.  The only politician worth electing, is the one that won't force you into paying off fraud. Won't force YOU to suffer for the BANKSTERS imbalances.

So far, the tea party is exactly what the banksters want, and their BEST friend is....NerObama.

Oh yes he is. Only fucking idiots don't see otherwise.

Snyder, Walker,  Christie, et al, are all bankster whores.  Some tea party movement.  They're worse than who you kicked out, and because you are #winning, NerObama, who also is a fascist, will join you and try to one up you sometimes in terms of cuts.

It's just a sick joke on us all at this point.  How people can't see they're being manipulated to serve the banksters interest form all the sides is beyond me. Here we can have Hank Paulson be the new Detroit 'fianancial MARTIAL LAW manager'..thanks Mr. Tea Party for putting me in your contracts...are void...hey you elected're not one anymore...these two suburbs....they're no longer exist....this is your home?...not want water to continue being a service you receive? tough..we need to pay off the banksters and you can just move. So on and so forth. Welcome to the Tea Party's American dream.

Only casting off the fraudulent debt will make us free.  Not this happy (w)horseshit.

Look at Ireland, only Sinn Fein has the balls to do what's neccesary(all forseeable btw) and look what the halfwits did, oh yeah, do the same as Fianna FAIL, and wrap shit in a new wrapper.  Same old IMF shit plan screwing Ireland over, new name.  What change did Ireland get? Nothing really.  Only way this NEW gov't MIGHT do the right thing (since they have no balls) is to put it to the people via referrendum, and let them use THEIR balls to destroy the banksters.  But again, since they already voted for SOMEONE to do JUST THAT, it's pretty fucking sad.  *which means unlike the tea party, they did put some people in who want to do something for the people*

Again, Obama, tea party, Ron Paul...all these people were put in to stop the banksters stealing, and are currently touted to be the Snake oil that cures us....but why did they earn this??  None of them want to get rid of the fraud.  They want to honor debt, even if it's fraud.   They want things to go down AND not to do anything about it...something ambiguous about imbalances, and nothing we can do about it, just sit back and die. (really idiot Paul? because you believe in the same New Age, Scientologist monetary the Keynesians do...just from another perspective...but equally KOOKY in the face of REALITY)

No there is a better way.  We don't have the money to pay off the fraud, especially with the world economy reeling from Japan.  The only way out, is Glass-Steagall. Full 1933 implementation including upon post 1999 'financial products'. Whoever doesn't want it, is a traitor.  Glass-Steagall or you're a fascist traitor.  It is as simple as that.  Does your congressman (left, right, center, tea) support Glass-STeagall? If not, they are a traitor.  Deal with it. By voting them favor of someone who WILL actually change things.


ipud's picture

Former National Lampoon CEO and accused ponzi-schemer plunges to his death!