RBC Capital Markets

"Disappointing And Underwhelming" - An Unhappy Wall Street Reacts To The BOJ's Latest Announcement

Just after midnight east coast time, the BOJ presented its new and improved monetary policy dubbed “QQE with Yield Curve Control,” in which the central bank said it would buy JGBs such that 10-year yield remain at the current level of around zero percent. The BOJ will also buy JGBs at designated yields, and generally steepen the curve even as it failed to lower rates or add more QE. Wall Street took one look at what the BOJ came up with... and hated it immediately.

Crude Spikes After Massive Inventory Drawdown (Most Since Jan 1999)

Following last week's 2nd build in a row (and 5th of last 6), API reports crude inventories collapse over 12 million barrels - the most since Jan 1999 (against expectations of a 905k barrel build). Crude had rallied on the day early hovering aroung $45.50 for a few hours before the data hit, but spiked above$46 after the print.

USDJPY Plunges On Japan Stimulus Concerns; US Futures Flat With As Fed Begins Meeting

In a turbulent session for FX, the Yen soared as much as 1.4%, the most in three weeks, after Finance Minister Aso says the government will "leave actual policy measures to BOJ", sending the Nikkei lower by 1.4%. European stocks and U.S. equity index futures are little changed despite the slide in the key carry pair as the Fed starts its two day meeting.

Are The Saudis And Russians Deliberately Sabotaging Doha?

The actions and intentions of Saudi Arabia and Russia - the two largest oil-producing nations attending the Doha meeting on 17 April - have dashed all hopes of any fruitful outcome. The most important meeting of the last three decades, which has promised to forge new friendships and a new cartel, is turning out to be the biggest farce, even before the curtain is raised.

Frontrunning: March 31

  • Roller-coaster first quarter ends with shares, dollar under pressure (Reuters)
  • Oil prices slide as U.S. crude stocks hit record (Reuters)
  • GE Files to End Fed Oversight After Shrinking GE Capital (WSJ)
  • FDA Eases Rules for Abortion Pill, Making Access Simpler (BBG)
  • Kremlin denies report of Russia-U.S. deal on Assad's future (Reuters)
  • Thirst for Gasoline Fuels Oil Rally (WSJ)
  • Landlords in last-minute rush to beat stamp duty rises (BBG)

After €670 Billion In QE, European Inflation Plunges To -0.2%: Lowest In One Year

A little under one year after the ECB launched its own QE of €60 Billion/month in bond purchases in early March 2015, a process which has resulted in the ECB monetizing over €670 billion in European - mostly German - sovereign paper, moments ago Eurostat reported European February inflation (even though the month is not over yet), and it was a shock, with headline inflation tumbling form +0.3% Y/Y in January to a depressing -0.2% in February, the worst print since January 2015. It was expected to drop to "only" 0.0%.

Copper & Crude Are Soaring On China Hype

Amid hype hope that China will suddenly change course and unleash all new fiscal stimulus - because just what the nation needs is more ghost cities, ghost bridges to nowhere, and ghost infrastructure - has sparked panic-buying in crude and copper this morning...

Weekend Reading: The Awakening

"More monetary stimulus, wherever it is in the world, isn’t the answer for a global economy still trying to find a new growth path. Pay attention to bonds and ignore the sirens of the stock market."

Have Stocks Priced In A Recession? (Spolier Alert: Not Even Close)

"Based on current valuations, the prices of most stocks don’t appear to have factored in a recession scenario, ‘hence the downside should we see a recession could be rather severe',... the shares of most companies could still fall another 50% or more from current levels."