RBC Capital Markets

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."

These Are The 10 Companies Most Hated By Wall Street

While the list of "most hated buyside" stocks is at least actionable, not even we are sure what to do with the list of companies that are most hated by the sellside, besides perhaps revealing what it is.  So for all those wondering, here courtesy of Factset, is the list of 10 S&P500 companies with the highest percentage of Sell ratings.

Why Oil Is Tumbling: Oil Hedges Were Just Rolled Over

Wwith oil volatility surging in recent months, oil producers needed to take advantage of a rally, technical or otherwise, and an oil vol lull to reestablish hedges, even if it meant at far lower prices than recent benchmarks.  This is precisely what happened in the past week following one of the most torrid surges in the price of oil seen in recent years.

Dell Buys EMC In Record $67BN Deal: Creates "World's Largest Private Integrated Tech Company"

Just when you thought the M&A boom is over after a surge in bond yields that Goldman has repeatedly dubbed as "recessionary", and which will make the debt cost of any funding so high that there is barely any room for execution error, moments ago as had been extensively leaked previously, private Dell announced it would acquire tech giant EMC in a deal valued roughly $67 billion, while maintaining VMWare as a publicly-traded corporation. Good luck with raising the tens of billions in debt the deal will require: our best wish to Barclays, BofA, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, RBC who will all be underwriting the required debt financing to Dell.

What Wall Street Thinks Caused The Bund Rout

As Bloomberg summarizes the various opinions suggested by Wall Street analysts, the rout in German debt and other European sovereign bonds was caused by market-technical factors such as investor positioning and supply glut rather than shift in views on economic outlook, analysts say, with profit-taking on successful QE trades, thin market liquidity and position-squaring before month-end are cited among main bearish catalysts.