Abu Dhabi

Global Stocks Soar, Pound Surges Most Since 2008 As Brexit Odds Tumble

Global equities rallied and the pound strengthened the most since 2008, soaring by 300 pips since the Friday close as polls signaled the campaign for the U.K to stay in the European Union was gaining momentum. Haven assets including the yen, U.S. Treasuries and gold slumped. The Stoxx Europe 600 Index surged by the most since February as the MSCI Asia Pacific Index advanced with S&P 500 futures.  Haven assets including the yen, U.S. Treasuries and gold slumped.

Global Stocks Rebound As Brexit Odds Decline Following Tragic Death Of UK Lawmaker

While it may very well not last and all of yesterday's gains could evaporate instantly if the Brexit vote is set to take place as scheduled, all 10 industry groups in the MSCI All-Country World Index advanced, with the index rising 0.7% trimming the week’s drop 1.6%. The Stoxx Europe 600 Index rose 1.4%. Futures on the S&P 500 were little changed, after equities Thursday snapped their longest losing streak since February. . Oil rose, paring its biggest weekly decline in more than two months. Bond yields around the globe fell.

Goldman Fundraising For Failed Malaysian Wealth Fund Probed By NY Bank Regulator

The New York bank regulator has asked Goldman Sachs to "swiftly report" on its internal review of more than $6 billion in bond sales for 1MDB, Malaysia's failed sovereign wealth fund. In a letter, the New York bank regulator also asked Goldman to provide an overview, by June 14, of every investigation in the U.S. and abroad into its work for the fund. This is bad new for Mr. Kimora Lee.

Saudi Arabia To Tax Millions Of Foreign Residents To Raise Cash

Although oil has rebounded off the recent lows, the Saudi budget remains stretched and in an attempt to help raise revenues in the short term (and transition away from dependency on oil in the longer term), the government is weighing an income tax on expat workers. There are nine million foreigners living and working in Saudi Arabia said Mufrej Al-Haqbani, the country's labor minister, and Finance Minister Assaf said that there are no plans to tax Saudi nationals.

Frontrunning: June 6

  • Yellen faces fine balance on Fed rate hike after job growth tumbles (Reuters)
  • Oil Advances as Abu Dhabi Sees $60 Crude on Shrinking Surplus (BBG)
  • China to submit 'negative list' for U.S. investment treaty talks next week (Reuters)
  • Buoyed by attacks on Trump, Clinton heads into pivotal week (Reuters)
  • Clinton's IT aide keeps email server shrouded in mystery (The Hill)

Futures Flat Following Friday's Jobs Fiasco: All Eyes On Yellen Again

Every ugly jobs report has a silver lining, and sure enough following Friday's disastrous jobs report, global mining and energy companies rallied alongside commodities after the jobs data crushed speculation the Fed would raise interest rates this month.  “The disappointing U.S. jobs report on Friday means that a summer Fed rate hike is off the table,” said Jens Pedersen, a commodities analyst at Danske Bank. “That has reversed the upwards trend in the dollar, supporting commodities on a broader basis. The market will look for confirmation in Yellen’s speech later today.”

Next Time Someone Says Nothing Is Made In The USA Anymore, Show Them This

Who says nothing is made in the USA anymore? Certainly not the well-heeled denizens of the State Department’s diplomatic corps. And they should know. That’s because they’re stationed on the frontlines of the ongoing battle to preserve Uncle Sam’s dominant market share of the global weapons trade.

Gas-Guzzlers Take Over The Roads Again

SUVs in Europe and US now top sales of every other car and China SUV purchases have soared. "Consumers are thinking that a period of plentiful oil supply is here to stay" says Christof Ruhl, head of research at the Abu Dhabi Investment Authority. All we can say to this is that just as with the last financial crisis, cheap oil is there until its not, and vehicle manufacturers have demand for all of those trucks and SUVs until another crisis hits and they find themselves back in need of a bailout for over committing to those product lines.

Futures Fade Early Bounce, Slide In Illiquid Tape As Yen Rises, Oil Drops

Government bonds rose and the yen strengthened as investors weighed the timing of the Federal Reserve’s next increase in interest rates and the outlook for inflation. Commodities slid, led by metals, while stocks in Europe declined. Treasury 30-year yields fell for a third day. The yen rose from near this month’s low. Futures on the S&P 500 also declined after initially jumping higher in thinly traded, illiquid tape.

Malaysian Ringgit Tumbles After 1MDB Default Raises Spectre Of Sovereign Failure

Update: after widening by 2bps earlier, Malaysia CDS is now +4 at 167bps and starting to move as macro "analysts" finally catch up on the entire story and comprehend the implications.

Malaysian CDS rose to near 3-month highs and the Ringgit has spiked over 300 pips - back near recent lows - after the Malaysian slushfund government investment fund 1MDB is reportedly in default. This is exactly the scenario we laid out last week that initially sent the currency lower and CDS higher, as the Abu Dhabi sovereign wealth fund has by all appearances started a potential waterfall default on Malaysian sovereign debt (due to cross-default triggers at the sovereign).

Knave Dave's picture

Irrational market exuberance hits its zenith after Doha talks fail as oil prices rise, instead of fall, because of minor Kuwait oil strike, then stay up after the strike fails within a day, then rise more when Saudis promise to retaliate with more production and stay up when Russians promise to retailiate with still more production.

Malaysia CDS Spike After Abu Dhabi Puts Scandal-Ridden 1MDB In Default

The dispute between an Abu Dhabi sovereign fund and Malaysia’s troubled state fund 1MDB over more than $1bn in missing payments hit a crescendo on Monday when the Emirates investment vehicle said its Malaysian counterpart was “in default” on an agreement between the two and terminated the deal.  Promptly thereafter, Malaysia 5 year CDS spiked by 11 bps, the most since March 21, to 163 bps as the market starts to quietly ask whether this ongoing scandal may just drag down the entire Malaysian state.

Frontrunning: April 13

  • China trade surprise gives stocks a lift (Reuters)
  • JPMorgan profit hurt by drop in investment banking revenue (Reuters)
  • About 40,000 Verizon workers launch strike (Reuters)
  • Regulators Set to Reject Some Big Banks’ ‘Living Wills’ (WSJ)
  • More Startups Are Getting Lower Valuations Than Joining the Billion-Dollar Club (BBG)
  • Closures and court cases leave Turkey's media increasingly muzzled (Reuters)

Manhattan's Real Estate Woes Get Worse: No Demand In Building Where Ackman Splurged $90 Million

Luxury real estate developer Extell Development Co can’t sell luxury condos at what may be New York's premier ultra luxury destination, the One57 tower, which it is attributing it to the fact that there is an abundant supply of condos already on the market. As a reminder, One57 is where Bill Ackman paid $91.5 million in April 2015 for a condo (which he hoped to flip), just a few months before Valeant, and his fund, suffered staggering losses. Perhaps that should have been the tell.