World military expenditures rose to $1.7 trillion in 2015, an increase of about 1% from last year. According to SIPRI, this was the first increase in global military spending since 2011. Unsurprisingly, the United States earned the top spot by a ridiculous margin, spending a gargantuan $596 billion in 2015 (for which the military industrial complex - the recipient of the funds - is eternally grateful). The US is followed by China, and Saudi Arabia who spent an estimated $215 billion and $87.2 billion respectively.
Crude Jumps After DOE Confirms Biggest Oil Inventory Draw Since January; Cushing, Gasoline, Distillates RiseSubmitted by Tyler Durden on 04/06/2016 10:43 -0400
Following yesterday's API data, which showed the biggest draw of 2016 with a 4.6 million reduction in oil inventories, everyone was keenly looking forward to today's DOE data. Moments ago the DOE indeed confirmed the API data, reporting that in the past week oil inventories declined by 4.949MM, more than the API print, down from last week's 2.3MM and well below the expected 2.850MM increase. This was the largest draw since the first week of January.
- Cruz, Sanders score decisive victories in Wisconsin (Reuters)
- Clinton Can’t Get to New York Fast Enough After New Sanders Win (BBG)
- Trump, Clinton Have Single-Digit Leads in Pennsylvania (BBG)
- Panama law firm says data hack was external, files complaint (Reuters)
- ‘Panama Papers’ Puts Spotlight on Boom in Offshore Services (WSJ)
- Barclays partners with Goldman-backed bitcoin payments app (FT)
Unlike yesterday's overnight session, which saw some subtantial carry FX volatility and tumbling European yields in the aftermath of the TSY's anti-inversion decree, leading to a return of fears that the next leg down in markets is upon us, the overnight session has been far calmer, assisted in no small part by the latest China Caixin Services PMI, which rose from 51.2 to 52.2. Adding to the overnight rebound was crude, which saw a big bounce following yesterday's API inventory data, according to which crude had its biggest inventory draw in 2016, resulting in WTI rising as high as $37.15 overnight
WTI's 'mysterious' spike into the NYMEX close extended after hours (almost as if someone knew something). Inventories drewdown 4.6mm barrels according to API (drastically less than the expected 2.85mm build). This is the biggest weekly draw since Jan 1. Cushing was expected to see a build of 100k (after 2 weeks of draws) but saw a considerably larger one at +620k. Distillates inventories built as Gasoline drewdown very modestly.
ICBC becoming a new LBMA market maker in the gold market, while expected, is an important development and again shows China's intent with regard to becoming a key player in the global gold market.
- Panama Papers: Biggest Banks Are Top Users of Offshore Services (WSJ)
- Panama Papers probes opened, China limits access to news on leaks (Reuters)
- Credit Suisse CEO Distances Bank From ‘Panama Papers’ (WSJ)
- Fed's Evans says market more pessimistic on U.S. rate hikes (Reuters)
- IMF's Lagarde Says Risks to Weak Global Recovery Are Increasing (BBG)
The market's slumberous levitation of the past month, in which yesterday's -0.3% drop was the second largest in 4 weeks and in which the market had gone for 15 consecutive days without a 1% S&P 500 move (in March 2015 the sasme streak ended at day 16) may be about to end, after an overnight session, the polar opposite of yesterday's smooth sailing, which has seen a sudden return of global risk off mood.
In a new and unexpected retaliation by Saudi Arabia for Iran's intransigence, moments ago the FT reported that Saudi Arabia has taken steps to slow Iran’s efforts at increasing oil exports, banning vessels that transport Iranian crude from entering their waters, according to traders and shipbrokers.
The longer the Fed perpetuates today’s massive 24X bubble with soporific open mouth interventions like Yellen’s pathetic speech last week, the more violent and traumatic the risk asset implosion will ultimately be. You would think our monetary politburo might at least notice that after trading in no man’s land between 1870 and 2130 on the S&P 500 for the past 700 days, the casino is positioned exactly where it stood in 2007 and 2000. Simple Janet has attained a new milestone as a public menace with her speech to the Economic Club of New York. It amounted to yelling “stay” in a burning theater!
The early exuberance in oil has faded today as WTI tumble to fresh one-month lows, crucially losing the key 40-week moving average once again as the downtrend looks set to continue. With BNP Paribas warning that WTI is set to revisit the lows of the year, the time for redeterminations looms large over a sector that has been bid up once again on hope that this time it's different.
In a quiet start to the week following last week's surprisingly strong rebound which followed a stronger than expected jobs report (perhaps to demonstrate that good news is once again good news), Japan stocks continued to sink as the USDJPY dropped to fresh lows, while commodities declined for a fifth day as the supply glut from crude to copper weighed on prices, dragging down commodity currencies. European equities rose, rebounding from a one-month low.
Today, what little hope there may have been that Iran will suddenly change its mind and join the production freeze evaporated on Sunday when Iran's oil minister rejected a Saudi demand to stop throttling up its petroleum production. As the WSJ adds, this threatens what has become a farcical deal to "limit crude output and raise prices" when the major oil producers meet in Doha on April 17.