Australia

Buying Of Bonds And Stocks Continues In Event-Free Overnight Session

The complete implosion in volume and vol, not to mention bond yields continues, and appears to have spilled over into events newsflow where overnight virtually nothing happened, or at least such is the algos' complete disregard for any real time headlines that as bond yields dropped to fresh record lows in many countries and the US 10Y sliding to a 2.3% handle, confused US equity futures have recouped almost all their losses from yesterday despite a USDJPY carry trade which has once again dropped to the 101.5 level, and are set for new record highs. Perhaps they are just waiting for today's downward revision in Q1 GDP to a negative print before blasting off on their way to Jeremy Grantham's 2,200 bubble peak after which Bernanke's Frankenstein market will finally, mercifully die.

GoldCore's picture

With China's push for an international physical exchange, physical demand will begin to have a stronger influence, thereby ending gold manipulation. This will allow gold to rise to a more appropriate price given the scale of macroeconomic, systemic, geo-political and monetary risks of today.

Kyle Bass On China's "Contraction" And "The Fed's Worst Nightmare"

With the Fed tapering and both China “I don't think the markets are discounting what’s really happening in China,” and Japan’s currencies likely to weaken, the net impact on the U.S. will be deflationary, Kyle Bass warned in a recent presentation. That trend will be accelerated by the improvement in the balance of trade for the U.S., which had its current account deficit shrink due to increased hydrocarbon production. Bass warns, the crucial moment will come when the U.S. reports a sub-6% unemployment rate, meeting the target it has set for normalizing its monetary policy by ending QE and raising rates. He predicted that will come in July. That will be the Fed’s “worst nightmare,” he said. Raising rates would stifle growth and recreate unemployment problems, which would be disastrous politically, according to Bass.

JPMorgan Lied To Fed, Did Not Report Losing Trades Whistleblower Charges

Long before Virtu was forced to pull its IPO due to the backlash against HFT frontrunners in party due to being stupid enough to post its perfect trading record of 1 trading day loss in 5 years which could only be the result of a grossly rigged market, we pointed out that another entity, one having little in common with your garden variety HFT parasite, namely JPMorgan, had a 2013 trading record which could be summed up on one word only: perfection. Yet while one could simply attribute the same kind of market rigging to JPM as one can (and should) to the average hi-freak, it seems there may be more here than meets the eye so used to seeing manipulation everywhere it looks. According to Australia's Sydney Morning Herald, "a technical support person who worked for JP Morgan in Australia claims the bank regularly misled its New York parent and the US Federal Reserve by failing to report losing trades."

China's "Strike First" Anti-Terrorist Policy Fails Again - Explosion Hits China's Xinjiang Region, Multiple Deaths

It appears yet again that China's "strike first" anti-terrorism policy has failed as explosions have rocked Urumqi, the capital city of China's unrest-plagued Xinjiang Uyghur Autonomous region, killing (and injuring) multiple (but unknown) people. Social media suggests 2 SUVs entered the crowded market in the center of the city ploughing down onlookers, throwing explosives from the cars, before a blast was heard. One witness noted that the cars were painted with "uighur" language slogans. Flames and heavy smoke were seen nearby, police are on the scene and the 2 SUVs are being removed. There is no official death or injury count as of yet.

Futures Taking Their Time Before The "Turbo Tuesday" Ramp

Not much going on tonight, except for the non-coupy martial law announcement in Thailand where the government is said to still be in charge of everything except for martial law decisions taken by the army of course, which in turn is in charge of everything else apparently including the central bank which intervened so extensively in the market, the Baht was barely changed at one point. There was also news of explosions and clashes in Benghazi but as everyone knows, what difference does Libya make at this, or any other, point. Additionally overnight there were reports that the cities of Slavyansk and Kramatorsk in east Ukraine were being shelled by the Ukraine army but that too barely registered as bullish for the USDJPY (which in now traditional fashion ramped during the US day session then sold off during Asia hours).

Frontrunning: May 19

  • Qatar Bank: Deutsche Bank to raise $11 bln with help from Qatar (Reuters)
  • AstraZeneca rejects Pfizer's take-it-or-leave-it offer (Reuters)
  • China Home-Price Growth Slowdown Spreads as Sellers Discount (BBG)
  • The new face of NSA: Mike Rogers (Reuters)
  • Putin orders troops near Ukraine to return home (AP)
  • Wall of Worry Rebuilt as Nasdaq Rout Sends Cash to High (Nasdaq)
  • Bank of England's Mark Carney highlights housing market's risk to UK economy (Guardian)
  • Greek Selloff Shows Rush for Exit Recalling Crisis (BBG)
  • Anti-austerity Greek radicals ahead in Athens local election (AFP)

Guest Post: The Myth Of Over-Population

The world is overpopulated. The street are clogged, traffic is in a snarl, and people are living – both figuratively and literally – right on top of each other. There’s hardly enough room to swing a cat these days, right? Wrong.

If You Eat, Drink, & Smoke, These Are The Worst Places To Live In The World

While the golden beaches and bronzed beauties may attract the world's eaters, drinkers, and smokers to Australia's shores, Melbourne and Sydney are the most expensive place in the world to partake of these life necessities. Close behind is that other paradise... Caracas, Venezuela. But if all you want to do is eat... the socialist safe haven of Venezuela is not where you want to end up as a loaf of bread costs on average over $11. It hasn't always been that way... the cost of eating, drinking, and smoking in Caracas has soared almost 400% in the last 10 years.

Frontrunning: May 16

  • Bank of England sees 'no housing bubble' (Independent)
  • ‘If the euro falls, Europe falls’ (FT)
  • India's pro-business Modi storms to historic election win (Reuters)
  • Global Growth Worries Climb (WSJ)
  • Bitcoin Foundation hit by resignations over new director (Reuters)
  • Blackstone Goes All In After the Flop (WSJ)
  • SAC's Steinberg loses bid for insider trading acquittal (Reuters)
  • Beats Satan: Republicans Paint Reid as Bogeyman in 2014 Senate Races (BBG)
  • Tech Firms, Small Startups Object to Paying for Internet 'Fast Lanes' (WSJ) - but they just provide liquidity
  • U.S. Warns Russia of Sanctions as Ukraine Troops Advance (BBG)
  • Major U.S. hedge funds sold 'momentum' Internet names in first-quarter (Reuters)

Yen Carry Slide Drags Futures To Lows

The perfectly expected if completely irrational overnight ramp in various Yen carry pairs tried, and failed, and both the USDJPY and EURJPY were tumbling to overnight lows as we go to print. This is happening despite a rout in India in which Narendra Modi's opposition block is poised for the biggest Indian election win in 30 years, with his BJP party currently leading in 332 of 543 seat - an outcome that is seen as very pro business (and seemingly pro asset bubbles: the INR soared and the Sensex was up as much as 6% in intraday trading before paring virtually all gains following what many say was RBI intervention). And while the Nikkei (down 200 points) did not help the mood this move was mostly in response to yesterday's US selling, which means as usual the culprit for lack of algo risk-taking overnight has been the Yen carry, which moments ago hit intraday lows, and is increasingly flirting with the 101 level (after which double digits, and Abe's second resignation, come very quickly).