When OPEC did not cut production last November, the oil market collapsed in shock and awe that the cartel would not just give in and allow non-OPEC members to walk away with market share. Today, in Vienna, "exactly as expected," OPEC once again confirmed production will remasin at 30 million barrels per day in the face of the global oil glut and prices for WTI and Brent have jumped $0.50 to $1.00 (we presume on machines and removal of a worst case boost to production).
- Europe shares set for worst week of 2015 (Reuters)
- Jobs Report Not Likely to Trigger June Rate Hike (Hilsenrath)
- U.S. jobs market seen firming despite lackluster growth (Reuters)
- Gross Says Bond Rout Scary as Hell Even Without Bear Market (BBG)
- Apple Is the New Pimco, and Tim Cook Is the New King of Bonds (BBG), which ZH said in 2013
- In 'year of Apple Pay', many top retailers remain skeptical (Reuters)
- OPEC Nations Signal Few Prospects for Oil-Production Change (BBG)
- China regulator says amending rules on margin trading, short selling (Reuters)
After yesterday's unprecedented volatility fireworks across all markets and continents, today so far has been a modest disappointment, with no crashes and subsequent surges in China, where the Politburo's only achievement was keeping the bubble dream alive by pushing the Shanghai Composite over 5,000 for the first time since January 2008, closing the index 1.5% higher on the day - a very modest gain by China's recent blow-off top standards. Europe, too, has been relatively tame with the 10 Year Bund starting off on the wrong foot, the yield rising back above 0.91% before once again dipping to the upper 0.8% range, tracking the move in the EURUSD tick for tick, which also is a tractor beam for the US 10 Year. On the equity, front, things are just as muted, with futures at the Low of Day as of this moment, despite yesterday's last minute manic buying spree, the S&P set to open below 2100 as a result.
For once Mario Draghi was right. A day after the European central bank head warned of a spike in volatility, volatility did just that, with markets everywhere from China to Europe seeing volatility explode.
— U.S. Embassy Syria (@USEmbassySyria) June 1, 2015
Greece has received what The New York Times recently described as “dueling sales pitches” on two proposed natural gas pipelines, with the US pressing Athens to support The Southern Gas Corridor rather than Gazprom's Turkish Stream project. It appears Moscow may have made the more convincing case because, much to Washington's dismay, Greece is set to sign an MOU for the Greek portion of The Turkish Stream pipeline in June.
Greece still has one card left to play in fractious negotiations with creditors: the so-called 'Russian pivot'. Over the course of difficult talks between Syriza and the troika Moscow has, at various times, sought to take advantage of the hostilities between Athens and Brussels by making a series of overtures including the possibility of Greece joining the BRICS bank. Now, at least one Greek official says the country will likely accept the invite.
Courtesy of central planning, virtually every single capital market has become an illiquid penny stock, with wild swings from one extreme to the other, the latest example of this being the Shanghai Composite, which after soaring 10% in the past ten days, crashed 6.5% overnight tumbling 321 points to 4620 after it briefly rose just shy of 5000. This was the biggest drop since January 19 when the Composite dropped 7.7% only to blast higher ever since. Putting the "plunge" in perspective, now the SHCOMP is back to levels not seen in... one week.
While yesterday most markets were closed and unable to express their concerns at the very strong showing of "anti-austerity" parties in Spain's municipal election from Sunday, then today they have free reign to do just that, and as a result European stocks are broadly lower, alongside the EURUSD which dripped under 1.09 earlier today, with Spanish banks among the worst performers: Shares of Banco Sabadell, Bankia, Caixabank and Popular were down 1.8 to 2.3% earlier this morning, and while the stronger dollar was a gift to both the Nikkei and Europe in early trading, after opening in the green, Spain's IBEX has since slid into the red on concerns of what happens if the Greek anti-status quo contagion finally shifts to the Pyrenees.
The revelation from an internal US intelligence document that the very US-led coalition supposedly fighting ‘Islamic State’ today, knowingly created ISIS in the first place, raises troubling questions about recent government efforts to justify the expansion of state anti-terror powers.
China is building the world’s greatest economic development and construction project ever undertaken: The New Silk Road. The project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between east and west for dominance in Eurasia. For the world at large, its decisions about the Road are nothing less than momentous. The massive project holds the potential for a new renaissance in commerce, industry, discovery, thought, invention, and culture that could well rival the original Silk Road. It is also becoming clearer by the day that geopolitical conflicts over the project could lead to a new cold war between East and West for dominance in Eurasia.
The US is now considering the possibility of sending so-called "spotters" to Iraq, a move ostensibly aimed at making airstrikes against ISIS more effective. Meanwhile, the militant group has claimed responsibility for Friday's suicide bombing in Saudi Arabi that killed 21.
The State Department has released 850 pages of e-mails from Hillary Clinton’s private e-mail address. Clinton has been under fire for using a private e-mail server (as opposed to an official government account) to discuss potentially sensitive matters of national security and foreign policy during her tenure as the nation’s top diplomat. Specifically, there are big questions about who knew what and when about an attack on US outposts in Benghazi that killed US ambassador J. Christopher Stevens.
Murray Energy, the third-largest coal producer in the US, will layoff 21% of its employees with the majority of the cuts coming in West Virginia, which is staring down a $195 million budget gap thanks to the slide in coal prices. Meanwhile, CEO and founder Robert Murray is buying more coal mines.