The rally that was sparked by yesterday's late-day FT report had all but fizzled overnight, replaced by more concerns about the state of the global economy when Austrialia's central bank surprised the world (just 9 of 29 analysts had expected this move) by becoming the 15th in a row to ease in 2015 (the list: Singapore, Europe, Switzerland, Denmark, Canada, India, Turkey, Egypt, Romania, Peru, Albania, Uzbekistan and Pakistan, Russia and now Australia), cutting the cash rate to an all-time low of 2.25%, and sparking more concerns about a global currency war or rather USD war against every other currency, when the USDJPY algos woke up again, and did everything they could to re-defend the critical 117.20 level in the USDJPY which has proven critical in supporting the market in recent weeks, once again using the Greek "softening tone" story as the basis for the ramp as Europe woke up, which in turn sent the DAX promptly to new all time highs, while the Athens stock market surged by 9% at last check.
Asian Markets In Turmoil - Weak Japanese Bond Auction; Surprise Aussie Rate Cut; India Holds Rates, Cuts Reserve RatioSubmitted by Tyler Durden on 02/03/2015 01:27 -0400
UPDATE: *INDIA'S CENTRAL BANK KEEPS BENCHMARK POLICY RATE AT 7.75%, CUTS SLR TO 21.5% OF NDTL FROM 22%
UPDATE: Dow Futs -80 points, S&P Futs -9pts
Following the 15th surprise rate cut of 2015 (Singapore, Europe, Switzerland, Denmark, Canada, India, Turkey, Egypt, Romania, Peru, Albania, Uzbekistan and Pakistan, Russia and now Australia), the Aussie Dollar has cratered to its lowest since May 2009 against the US Dollar at 0.7650 (and bond yields crashed by the most since 1997 to record lows). Aussie stocks kneejerked higher (on an extremely dovish RBA statement) but are fading (as are Chinese stocks). Perhaps even more concerningly indicative of the central banks losing control, following this morning's weak Japanese auction (or more properly expressed - BoJ monetization farce), USDJPY (under 117), Japanese stocks (down 350 points from US session highs), and JGBs (yields up 6-8bps) are all being sold.
During the fiscal year that ended on September 30, 2014, U.S. Special Operations forces (SOF) deployed to 133 countries - roughly 70% of the nations on the planet - according to Lieutenant Colonel Robert Bockholt, a public affairs officer with U.S. Special Operations Command (SOCOM). And this year could be a record-breaker, just 66 days into fiscal 2015 - America’s most elite troops had already set foot in 105 nations, approximately 80% of 2014’s total. Despite its massive scale and scope, this secret global war across much of the planet is unknown to most Americans…”We want to be everywhere,” said Votel at Geolnt...
Meet The Extreme Super Rich: A List Of The 80 People Who Own As Much As The World’s Poorest 3.6 BillionSubmitted by Tyler Durden on 01/28/2015 16:31 -0400
"Eighty people hold the same amount of wealth as the world’s 3.6 billion poorest people, according to an analysis just released from Oxfam. The report from the global anti-poverty organization finds that since 2009, the wealth of those 80 richest has doubled in nominal terms — while the wealth of the poorest 50 percent of the world’s population has fallen." There you have it. The reason the wealth of the richest has doubled since 2009, is because “it’s not a recession, it’s a robbery.” Central bank and government policy has done this, it is no accident.
While all the algos are programmed and set to scan today's FOMC statement for whether both "patient" and "considerable time" are still there (as it did last time when it supposedly sent a pseudo-hawkish message while telling Virtu and Getco to buy, buy, buy), the market is torn between the trends observed in recent days: on one hand finally succumbing to the adverse impact of USD strength, which overnight also saw the Singapore Dollar admit defeat in the ongoing currency wars, is crushing both revenues and EPS, as well as outlooks, for the bulk of US companies, even as millennials - long since given up on buying a house - allocate their meager savings to the annual incarnation of Apple's flagship product as seen in yesterday's record, blowout numbers by AAPL which is up 8% in the premarket and sending Nasdaq futures soaring compared to the stagnant DJIA or S&P. And then there is Europe where the mood is decidedly sour this morning, with Greece imploding on fears Tsipras really means business and concerns the Greek "virus" may spread to other peripheral nations whose bonds have also seen a lack of a bond bid this morning.
"Equities Will Be Devastated" Crispin Odey Warns, Looming Recession Will Be "Remembered For 100 Years"Submitted by Tyler Durden on 01/27/2015 23:12 -0400
"I think equity markets will get devastated," warns famed $12bn AUM hedge fund manager Crispin Odey in his latest letter to investors. Having been one of the biggest bulls of this particular central bank artificial-bull cycle, his dramatic bearish tilt (as we discussed what he thinks are the biggest risks underpriced by the market previously), is notable. Finally, Odey fears major economies are entering a recession that will be "remembered in a hundred years," adding that the "bearish opportunity" to short stocks looks as great as it was in 2007-2009.
Non-bombastic, non-insulting simply straight-forward look at next week's key events and data. If you are so inclined...
Following the deaths of 36 bankers last year, 2015 has got off to an inauspicious start with the reported suicide of Chris Van Eeghen - the 4th ABN Amro banker suicide in the last few years. As Quotenet reports, the death of Van Eghen - the head of ABN's corporate finance and capital markets -"startled" friends and colleagues as the 42-year-old "had a great reputation" at work, came from an "illustrious family," and enjoyed national fame briefly as the boyfriend of a famous actress/model. As one colleague noted, "he was always cheerful, good mood, and apparently he had everything your heart desired. He never sat in the pit, never was down, so I was extremely surprised. I can not understand." Most believe that the suicide is not related to his work at the bank, but a former colleague had noticed that on his Facebook recently changed its job title to "former." Chris leaves behind a son - who had recently been cleared of cancer.
I have told you the US dollar was going up for months. Some mocked me. Others insulted me. So what? I tell you the dollar's bull market remains intact.
“No stock-market crash announced bad times. The depression rather made its presence felt with the serial crashes of dozens of commodity markets. To the affected producers and consumers, the declines were immediate and newsworthy, but they failed to seize the national attention. Certainly, they made no deep impression at the Federal Reserve.” - 1921 or 2015?
- Saudi Arabia’s New King Probably Will Not Change Current Oil Policy (BBG)
- Saudi King’s Death Clouds Already Tense Relationship With U.S. (WSJ)
- Oil Pares Gains as New Saudi King Says Policies Stable (BBG)
- Kuroda Says BOJ to Mull Fresh Options in Case of More Easing (BBG)
- U.S. pulls more staff from Yemen embassy amid deepening crisis (Reuters)
- Putin Said to Shrink Inner Circle as Hawks Beat Billionaires (BBG)
- A Few Savvy Investors Had Swiss Central Bank Figured Out (WSJ)
With less than two hours until the ECB unveils its first official quantitative easing program, the markets appear to be in a unchanged daze. Well, not all markets: the Japanese bond market overnight suffered its worst sell off in months on a jump in volume, although for context this means the 10Year dropping from 0.25% to 0.32%. Whether this is a hint of the "sell the news" that may follow Draghi's announcement is unclear, although Europe has seen comparable weakness across its bond space as well and the US 10 Year has sold off all the way to 1.91%, which is impressive considering it was trading under 1.80% just a few days ago. Stocks for now are largely unchanged with futures barely budging and tracking the USDJPY which after rising above 118 again overnight, has seen active selling ever since the close of the Japanese session.
Curency wars are zero-sum. Interest rate race is not.
Laugh if you want to. Cry if you want to, but the bull market for the US dollar has legs and life.
- Obama Targets Income Gap in Address That Shapes 2016 Election (BBG)
- Republicans Reject Obama’s Main Economic Proposals (WSJ)
- Senate’s Shelby Says White House Bank Tax Is Dead on Arrival (BBG)
- Is Dollar Next? Investors Reassess After Swiss Shock: Currencies (BBG)
- Bank of Japan Cuts Price Forecast, Maintains Record Stimulus (BBG)
- Pound Weakens After BOE Policy Makers Drop Call to Raise Rates (BBG)
- Putin not flinching on Ukraine despite economic crisis (Reuters)
- Indonesia will not make public full preliminary AirAsia crash report (Reuters)
- Party Hasn't Stopped for Russians at Davos Even With Ukraine Sanctions (BBG)