Bank of Japan

The 8 Major Problems The Next President Will Face

Dear Donald and Hillary: In around ten months, one of you will wake up as Mr. or Mrs. President. After the fabulous fun of post-inaugural balls, you will walk into the Oval Office on Saturday, January 22 and launch into your first 90 days in office.  To make your job just a little more manageable, what we would like to do is take you around the world and review some of the economic realities faced by our global partners. For many of them, those realities are not pretty. And you want this job why?

Yellen, Draghi, Kuroda: Deranged Lab Rats

It’s sad that “we the people” continue to allow deranged captured academics, under the complete command of the banking cabal, to control the destiny of our country. They have failed for 103 years, but we continue to bow down to these central bankers as if they knew what they were doing. They do know how to debase the currency, obfuscate true inflation, prop up financial markets through monetary manipulation, and generate prodigious amounts of propaganda and misinformation to coverup their true purposes. The people will sit idly by until these deranged rats destroy the world.

For Gold, "Tightening Isn't Frightening" Says HSBC

Gold has historically rallied for at least 100 trading days after the first hike by the FOMC, but as HSBC's Jim Steel explains, this time it could be longer. Steel sees three key reasons to remain bullish and forecasts USD1,300/oz this year (though warns that beyond that level, physical demand may weaken and help curb further rallies.)

Bank Of Japan Unleashes Yield Curve Chaos: JGBs Inverted At Short- And Long-End

You know you have 'tinkered' too much in the machincations of what dealers now call a "dead market" when the world's largest sovereign bond market is inverted at the short-end and the long-end. Simply put, bond investors reluctance to sell their holdings - amid negative-er and negative-er yields - means The BoJ runs the risk of being unable to meet its buying operations this week.

The New New 'Deal' - "Markets Are Too Important To Be Left To Investors"

In the same way that FDR had an existential political interest in generating inflation and preventing volatility in the US labor market, so does the US Executive branch today (regardless of what party holds the office) have an existential political interest in generating inflation and preventing volatility in the US capital markets. Transforming Wall Street into a political utility was an afterthought for FDR; today the relative importance of the labor markets and capital markets have completely switched positions. Today, the quote would be "markets are too important to be left to investors."

Why Currency Traders Are So Confused

"The FX market is confusing this year. More easing by the BoJ, the RBNZ, the Riksbank, the ECB and the Norges Bank, led to stronger currencies, despite delivering more than markets had expected in all cases. The market seems to be taking recent monetary policy easing as evidence that central banks are reaching their limits, as their forward guidance has sent mixed signals."

On Opex Day, It's All About The Dollar: Futures, Oil Levitate As USD Weakness Persists

It may be option expiration day (always leading to abnormal market activity) but it remains all about the weak dollar, which after crashing in the two days after the Fed's surprisingly dovish statement has put both the ECB and the BOJ in the very awkward position that shortly after both banks have drastically eased, the Euro and the Yen are now trading stronger relative to the dollar versus prior. As DB puts it, "the US Dollar has tumbled in a fairly impressive fashion since the FOMC on Wednesday with the Dollar spot index now down the most over a two-day period since 2009" which naturally hurts those countries who have been rushing to debase their own currencies against the USD.

Central Bankers' Embarrassment Of Stitches

Had central bankers simply taken to heart that well known idiom that cautions "a stitch in time saves nine" early on, they would not now be so frantically stitching such a gaping gash in the world economy. One thing is for certain. All of this quantitative pleasing has done little to lift the spirits of the world’s worker bees.

Bank Of Japan Intervenes In The Market To Smash Yen After Nikkei Crashes 700 Points

Nikkei futures rallied post-Fed into the Japaense open (despite weakness in USDJPY) and then when trade data struck (and exposed the utter failure of competitive devaluation), everything went into freefall. The Nikkei crashed 700 points and USDJPY plunged to its lowest since QQE2... and then  - on cue - "someone" started panic selling JPY...

Fed Mouthpiece Parses Timid Janet's Latest Pronouncement

"Federal Reserve officials reduced estimates of how much they expect to raise short-term interest rates in 2016 and beyond, nodding to lingering risks to the economic outlook posed by soft global economic growth and financial-market volatility."

All Eyes On Yellen: Futures Flat Ahead Of Fed Meeting Expected To Usher In More Rate Hikes

Today Janet Yellen and the FOMC will go back to square one and try to reset global expectations unleashed by the ill-fated December rate "policy mistake" hike, when at 2pm the Fed will announce assessment of the economy, even if not rate hike is expected today. Just like in December the Fed will be forced to telegraph that it is hiking rates as a signal of a strengthening US, and global, economy where "risks are balanced" and hope that the subsequent global reaction will not be a rerun of what happened in January and February when confusion about the Fed's intentions led to a global market rout.

Frontrunning: March 15

  • Bank of Japan Holds Fire on Stimulus, Negative Rate Unchanged (BBG)
  • Donald Trump Aims for a Knockout in Tuesday Primaries (WSJ)
  • Global Stocks Fall on Commodities Decline, Ahead of Fed Meeting (WSJ)
  • Oil prices fall as clouds gather over supply picture (Reuters)
  • Many Shale Companies Are Unable to Ramp Up Oil Output (WSJ)

Central Banks - The New Nukes?

You know something is strange when "the riskiest" country in the world is the nation whose central bank everyone is relying on to 'save the world' and "the safest" stock market in the world is from a nation whose neighbor is actively test-firing nuclear missiles? It appears activist central banks - following Draghi's "kitchen sink" - have become the new normal's 'nukes'.

Central Bank Rally Fizzles: Equity Futures Lower As Attention Turns To "Hawkish Fed" Risk

While Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally.