Consumer Credit

"Sleepy" ECB Preview: What Every Bank Thinks Draghi Will Do Tomorrow

Tomorrow's ECB meeting "looks set to be sleepy" according to Saxo Bank's Mads Koefed as Draghi is largely cornered into confirmation he will do "whatever it takes" and some additional details on the corporate bond purchase plan. Most of the sell-side's research suggests the same, as Bloomberg notes, ECB will probably leave the door open for further cuts if needed; but any downside risk for the euro is seen limited, as Draghi stays on hold by reinforcing its dovish stance after the mix of easing measures announced in March with some defense of the efficiency of his policies after recent criticism by Germany.

Barron's Does It Again

Has there ever been a more ill-timed example of the curse of the Barron's cover than this?

"Someone Is Going To Be Very Wrong"

What is clear is that the Federal Reserve has gained control of asset markets by gaining control over investor behavior. “Are you afraid of a market crash? Yes. Are you doing anything about it? No.” Again, it’s back to fundamentals versus expectations. Someone is going to be very wrong.

Frontrunning: April 14

  • Global shares reach four-month high, forex hit by Singapore sting (Reuters)
  • Dollar Rally Hits Commodities as Europe Halts Global Stock Gains (BBG)
  • Currencies Across Asia Fall Sharply Against U.S. Dollar (WSJ)
  • IEA expects limited impact from oil output freeze at Doha (Reuters)
  • IEA Sees Oil Oversupply Almost Gone in Second Half on Shale Drop (BBG)
  • BofA Profit Declines 13% on Trading Slump, Energy Reserves (BBG)

Stocks To Reopen In The Green For 2016 After Crude, USDJPY Rebound

In the final day of the week, it has again been a story of currencies and commodities setting stock prices, however instead of yesterday's Yen surge which slammed the USDJPY as low as 107.67 and led to a global tumble in equities, and crude slide, today has been a mirror imoage after a modest FX short squeeze, which sent the Yen pair as high as 109.1, before easing back to the 108.80 range. This, coupled with a 3.5% bounce in WTI, which is back up to $38.54 and up 4.9% on the week as speculation has returned that Russia and OPEC members can reach a production freeze deal on April 17, led to a global stock rebound which will see the S&P open back in the green for 2016.

Consumer Credit Rises $17.2 Billion; Holding Of Federal Debt Hit New All Time High

After a near record drop in non-revolving (student and car) loans in December, many were wondering if this pipeline which has kept the US auto sector afloat would remain shut. We are happy to report that for two consecutive months, this all important funding pathway has now been unclogged and nonrevolving loans are back to their soaring self.

"There Is A Lot Of Fear In The Market" - Stocks, Futures Slide After Yen Soars

Two days after stocks slid in a coordinated risk-off session, and one day after a DOE estimate of US oil inventories sent US stocks surging while the failed Allergan-Pfizer deal unleashed torrential hopes of a biotech M&A spree leading to the single best day for the sector in 5 years, sentiment has again shifted, this time due to a violent surge in the Yen as the market keeps testing the resolve of the Japanese central bank to keep its currency weak, and so far finding it to be nonexistent.

Japan Stocks Plunge; Europe, U.S. Futures, Oil Lower Ahead Of Payrolls

For Japan, the post "Shanghai Summit" world is turning ugly, fast, because as a result of the sliding dollar, a key demand of China which has been delighted by the recent dovish words and actions of Janet Yellen, both Japan's and Europe's stock markets have been sacrificed at the whims of their suddenly soaring currencies. Which is why when Japanese stocks tumbled the most in 7 weeks, sinking 3.5%, to a one month low of 16,164 (after the Yen continued strengthening and the Tankan confidence index plunged to a 3 year low) it was anything but an April fool's joke to both local traders.

Frontrunning: March 8

  • Global Stocks Drop on Renewed Concerns About China (WSJ)
  • Iron Ore's Rally Stalls as Goldman to Citigroup Forecast Retreat (BBG)
  • EU and Turkey close to groundbreaking migrant deal (FT)
  • Carney's `Brexit' Stance Under Fire as BOE Accused of Bias (BBG)
  • Oil edges lower after Kuwait dents hopes for output freeze (Reuters)

Bears Exit Hibernation As Rally Fizzles On Dismal Chinese Trade Data; Commodities Slide; Gold Higher

Those algos who scrambled to paint yesterday's closing tape with that last second VIX slam sending the S&P back over 2,000, forgot one thing - the same thing that China also ignored - central bankers can not print trade, something we have repeated since 2011. The world got a harsh reminder of this last night when China reported the third largest drop in exports in history, which crashed by over 25%, the third biggest drop on record, and no, it was not just the base effect from last February's spike, as otherwise the combined January-February data would offset each other, instead it was a joint disaster, meaning one can't blame the Lunar New Year either.  In short, one can't really blame anything aside from the real culprit: despite all the lipstick that has been put on it, global trade is grinding to a halt.

Consumer Credit Growth Weakest Since March 2013

Against expectations of a $17 billion surge, US consumer credit grew at just $10.5 billion - the weakest and biggest miss since March 2013. The biggest driver of this disappointment was an actual contraction in revolving credit (down $1.1 billion) for the first time since Feb 2015. This is not what The Fed demands...

Futures Lower On Lack Of China Stimulus; Oil Squeeze Continues; Gold Spikes Ahead Of ECB

In the aftermath of last week's disappointing G-20 Shanghai summit, there was much riding on this weekend's start of the China's People's Congress, and specifically what if any stimulus announcement Beijing will make; sadly for stimulus addicts China mostly disappointed and after the unimaginative scope of growth proposals, it is hardly surprising that European stocks and US equity futures have taken a leg lower.

China's Panicked RRR Cut Leads To Feeble Stock Rebound; Gold Resumes Climb

After the G-20 ended in a wave of global disappointment, leading to the biggest Yuan devaluation in 8 weeks, and sending Chinese stocks into a tailspin on concerns the PBOC has forsaken its stock market as well as speculation the housing bubble is now sucking up excess liquidity which in turn pushed global market deep in the red to start the week, it was the PBOC's turn to scramble in a panicked reaction to sliding risk exactly one month after Japan unveiled its own desperation NIRP, and as reported before unexpectedly cut its Reserve Requirement Ratio by 0.5% to 17.0%, the first such cut in 2016 and the 5th since the start of 2015.

Baby Boomers Are Drowning In Loans: Debt Of Average 67-Year-Old Soared 169% In Past 12 Years

Americans in their 50s, 60s and 70s - the Baby Boom generation - are carrying unprecedented amounts of debt, a shift which according to the WSJ "reflects both the aging of the baby boomer generation and their greater likelihood of retaining mortgage, auto and student debt at much later ages than previous generations." While aggregate debt of Gen-Xers has admirably declined by 12% in the past 12 years, the aggregate debt of the average Baby Boomer has soared by an unprecedented 169%!