en Bomb Attack Hits Secretive US Base In Afghanistan As Mattis Makes Surprise Visit To Kabul <p>Taliban insurgents attacked a U.S.-operated base in Afghanistan's eastern province of Khost on Monday officials said <a href="">cited by Reuters</a>, giving few immediate details of an assault that coincided with a surprise visit to Kabul by U.S. Secretary of Defense James Mattis. The attackers detonated a car bomb at an entrance to Camp Chapman, a secretive facility manned by U.S. forces and private military contractors, said Mubarez Mohammad Zadran, a spokesman for the provincial governor.</p> <p>"I am aware of a car bomb attack at one of the gates in the U.S. base, but we are not allowed there to get more details," Zadran said. A spokesman for the U.S. military in Afghanistan, Capt. William Salvin, confirmed the car bomb attack. He said there appeared to be a number of Afghan casualties but none among U.S. or coalition personnel at the base.</p> <p>The attack came just three days after more than 170 Afghan soldiers were killed in an attack on their base by Taliban fighters disguised in military uniforms last Friday. On Monday, Afghanistan's defense minister and army chief staff resigned following the attack, Reuters reported. </p> <p>Photos on social media showed a plume of smoke rising from the scene of the attack in the eastern province of Khost.</p> <blockquote class="twitter-tweet"><p dir="rtl" lang="ps">???? ?? ???????? ???????. ???? ?? ???? ?????? ???.<a href="">#????</a> <a href=""></a></p> <p>— Arif Saqeb (@ArifPoshton) <a href="">April 24, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="">#BREAKING</a> - explosion reported in Khost province, close to Khost airport close to U.S Forces base <a href="">#Afghanistan</a> <a href=""></a></p> <p>— TOLOnews (@TOLOnews) <a href="">April 24, 2017</a></p></blockquote> <script src="//"></script><p>General John Nicholson, the top American commander in Kabul, recently told Congress that he needs a few thousand more soldiers deployed to assist Afghan security forces, so they can eventually tackle the Taliban insurgency on their own.</p> <p>Meanwhile, Defense Secretary James Mattis arrived in Afghanistan on Monday on a surprise <a href="">visit the WSJ reported</a>, and will meet with Afghan officials. In Kabul, Mattis will discuss war needs with both with Afghan officials and the top commander of the U.S.-led coalition, according to USA Today. </p> <p>Mattis’s visit comes amid turmoil in the Afghan armed forces, and takes place just hours after the resignations of his Afghan counterpart and the army chief of staff following the deadliest attack by insurgents on government forces since the war began in 2001. Friday’s Taliban attack on a government army base in Balkh province left about 170 people dead, Afghan officials said, after six Taliban fighters infiltrated the heavily guarded base aboard military vehicles and opened fire in what became a five-hour battle. Five of the militants were killed and a sixth was captured alive by Afghan commandos who had been rushed to join the battle, according to Afghan military officials.</p> <p>“There is a mosque and a dining facility on the base that seem to, at this point from our reports, have been the subject of significant attack from enemy forces,” U.S. Central Command spokesman Col. John Thomas told reporters at the Pentagon. </p> <p>Last week, a report surfaced that Mattis had privately cast doubt on President Trump's proposed Pentagon spending levels, telling members of Congress the $603 billion request is not enough to fulfill Trump's vow to rebuild the military. Mattis has not spoken out publicly against the spending plan, but he told lawmakers privately that even with the proposed funding increase, the Defense Department would not receive enough to do everything Trump has proposed.</p> <p>Currently, there are about 8,500 U.S. forces and some 6,000 soldiers from other members of the international coalition in Afghanistan in support of the central government in Kabul, which is fighting both the Taliban, the largest insurgency, and the local affiliate of the extremist group Islamic State.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="713" height="411" alt="" src="" /> </div> </div> </div> Afghan Civil War Afghanistan Afghanistan Afghanistan–Pakistan relations army Commandos Congress Department of Defense History by period international coalition in Afghanistan Khost Military history by country Mohammad None Pentagon Politics Reuters Taliban Taliban Taliban insurgency Twitter Twitter U.S. Central Command U.S. military in Afghanistan War War War in Afghanistan Mon, 24 Apr 2017 12:41:32 +0000 Tyler Durden 594033 at Gold Sovereigns - 'Treasure' Trove Found In UK - Don’t Be The Piano Owner <p><strong><span style="color: #222222; font-family: arial, sans-serif; font-size: 12.8px;"><a href="">Gold Sovereigns - 'Treasure' Trove&nbsp;Found In UK&nbsp;- Don’t Be The Piano Owner</a></span></strong></p> <p>The gold sovereigns – semi-numismatic gold coins made up of both gold sovereigns and half gold sovereigns dating from the reigns of Victoria, Edward VII and George V – were discovered inside an old piano after it was donated to a school last year.</p> <p><a href=";currency=GBP"><img src="" width="755" height="400" class="alignnone size-large" /></a><br /><em>A gold sovereign from that period is currently valued at between £200-250, with a half sovereign worth between £100-200.&nbsp;A pouch contains just a sampling of the 913 coins composing the hoard. &nbsp;</em><em>Image © Trustees of the British Museum via Coin World</em></p> <p>The largest ‘hoard’ of <a href=";currency=GBP">gold sovereigns</a> found in the UK ever has been declared ‘treasure’.</p> <div> <p>A piano tuner who discovered £500,000 (€590,000 or $640,000) worth of semi numismatic gold coins, gold sovereigns (0.2354 troy ounce) and half gold sovereigns (0.1167 troy ounces) inside the piano will get to keep half the cash – but the couple who owned the piano for 33 years won’t get a penny.</p> <p>The piano’s new owners, Bishop’s Castle Community College, Shropshire which is near Birmingham, will split the £500,000&nbsp;with the piano tuner Martin Backhouse.</p> <p>The gold sovereigns are expected to be claimed by the British Museum, but the cash will be split between the school and Mr Backhouse, a inquest has ruled.</p> <p>Meg and Graham Hemmings, who owned the piano for 33 years before donating it when they downsized, won’t get any of the money.</p> <p>John Ellery, Shropshire’s Coroner, used an inquest to seek the original owners of the gold sovereigns, but despite more than 40 people claiming the gold sovereigns,&nbsp;none could prove they belonged to them.</p> <p>The coroner said the gold sovereign&nbsp;hoard qualifies as ‘treasure’ because:</p> <p>(1)?It is substantially made of gold or silver<br /> (2)?It was deliberately concealed by the owner with a view to later recovery<br /> (3)?The owner, or his or her present heirs or successors, remain unknown</p> <p>The story clearly shows the value of gold coins and the financial benefit and financial security they can bring to their owners – providing they are owned in the safest way possible.</p> </div> <p><strong>Conclusion</strong><br /> Owning and taking possession of physical gold and silver coins and bars brings its own set of risks and should only be done by those who feel secure in their own home and or are very sure of the non vault place where they hide their gold coins or bars.</p> <p>If storing at home rather than in the some of the<a href=""> securest vaults in the world as provided by GoldCore</a>, you need to consider the risks.</p> <p>These risks are that you may forget where you have hidden your coins or bars – unlikely though this may sound it has happened – that you may lose access to their hiding place or indeed that you may have them stolen. Informing loved ones and next of kin by way of a solicitor or lawyer, trusted bullion dealer or other trusted counter party would be a way of addressing this.</p> <p>We encourage clients to take delivery of some of their bullion coins and bars providing they feel secure in their own home and have given some thought to these risks. The majority of a precious metal allocation is safer owned in the allocated and segregated storage in some of the safest vaults in some of the safer jurisdictions in the world.</p> <p>Having the option to take delivery within days is vital in this regard. This means that you can take possession in the event of a worst case scenario of a collapse of the banking, financial and or monetary system – for whatever reason.</p> <p><img src="" width="1024" height="683" class="alignnone size-large" /></p> <p>Possession is nine tenths of the law and hence the need to always consider how securely you own your gold and silver investments and how you maintain that possession and ownership.</p> <p>This interesting story shows how gold and silver buyers and investors need to give serious consideration as to how securely their safe haven coin and bar assets are held.</p> <p>Don’t be the piano owner …</p> <p><strong><a href=""></a></strong></p> Bishop’s Castle Community College Bullion Cash Coins Currency Entertainment Gold Gold coin Half sovereign Human Interest None Numismatics Precious metals recovery Sovereign Sovereigns Treasure trove Mon, 24 Apr 2017 12:37:23 +0000 GoldCore 594031 at Chinese Stocks, Bonds, Commodities Shun Global Euphoria Amid Government Leverage Crackdown <p>Despite another liquidity injection and the rest of the world in &#39;euphoric risk-on&#39; mode over the French election results, <strong><em>Chinese stock, bond, and commodity markets tumbled overnight...</em></strong></p> <p><a href=""><strong><em><img alt="" src="" style="width: 600px; height: 629px;" /></em></strong></a></p> <p>On Friday, we asked<a href=""><strong><em> &quot;Is China Trying To (Slowly) Burst Another Stock Market Bubble?&quot; </em></strong></a>as Chinese monetary conditions were tightening dramatically...</p> <p><a href=""><img height="318" src="" width="600" /></a></p> <p>And, as Bloomberg reports, it seems the catalyst is further crackdowns on shadow-banking.</p> <p><strong>China&rsquo;s banking regulator, which&nbsp;said&nbsp;late Friday it will focus on guarding against financial risks, has ordered local units to assess cross-guaranteed loans, </strong><a href="">according to a Caixin&nbsp;report</a>.</p> <p>Having gone <strong>86 trading days without a loss of more than 1% on a closing basis</strong>, the longest stretch since the market&rsquo;s infancy in 1992... Breaking below its 200-day moving-average.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 306px;" /></a></p> <p>&nbsp;</p> <p>CHINEXT (China&#39;s Nasdaq) is also getting hammered - testing its lowest levels since February 2015....</p> <p><a href=""><img height="306" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And Bonds were hammered too - with China bond futures price at the lowest since The Fed hiked rates in March...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 317px;" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="959" height="508" alt="" src="" /> </div> </div> </div> Bank Bond Business Caixin China ChiNext Economy Finance Financial market Financial services NASDAQ NASDAQ Stock exchanges in China US Federal Reserve Mon, 24 Apr 2017 12:28:53 +0000 Tyler Durden 594030 at An "Increasingly Worried" Chinese President Tells Trump To "Exercise Restraint" Over N.Korea <p>France, and the European "populist wave", may be fixed for now, but geopolitical concerns remain as was made clear last night when during a phone call late on Sunday between Chinese President Xi Jinping and Donald Trump, the North Korean neighbor called for all sides to "exercise restraint" as Japan conducted exercises with a U.S. aircraft carrier strike group headed for Korean waters. China, which has repeatedly called for the de-nuclearization of the Korean peninsula, <strong>is "increasingly worried" the situation could spin out of control</strong>, leading to war and a chaotic collapse of North Korea, something we <a href="">cautioned over two months ago</a>. </p> <p>Xi told Trump on the phone that China <strong>resolutely opposed </strong>any actions that ran counter to U.N. Security Council resolutions, the Chinese foreign ministry said <a href="">quoted by Reuters</a>. China "hopes that all relevant sides exercise restraint, and avoid doing anything to worsen the tense situation on the peninsula", the ministry said in a statement, paraphrasing Xi. The nuclear issue could only be resolved quickly with all relevant countries pulling in the same direction, and China was willing to work with all parties, including the United States, to ensure peace, Xi said.</p> <p>A potential risk catalyst is just hours away: North Korea prepares to celebrate the 85th anniversary of the foundation of its Korean People's Army on Tuesday. It has marked similar events in the past with nuclear tests or missile launches.</p> <p>That said, a Chinese foreign ministry spokesman said the call between the two presidents was the latest manifestation of their close communication, which was good for both of their countries and the world.</p> <p>On Sunday, Trump also spoke by telephone with Japanese Prime Minister Shinzo Abe, who later described the conversation as a "thorough exchange of views". </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"We agreed to strongly demand that North Korea, which is repeating its provocation, show restraint," Abe told reporters. "We will maintain close contact with the United States, keep a high level of vigilance and respond firmly," he said. Abe also said he and Trump agreed that China should play a large role in dealing with it.</p> </blockquote> <p>According <a href="">to Reuters</a>, a Japanese official said the phone call between Trump and Abe was not prompted by any specific change in the situation. Envoys on the North Korean nuclear issue from the United States, South Korea and Japan are due to meet in Tokyo on Tuesday. The U.S. government has not specified where the carrier strike group is, but U.S. Vice President Mike Pence said on Saturday it would arrive "within days".</p> <p>Meanwhile, South Korean Defence Ministry spokesman Moon Sang-gyun gave no details about the South's plan to join the approaching U.S. carrier group for exercises, apart from saying Seoul was holding discussions with the U.S. Navy. "I can say the South Korean and U.S. militaries are fully ready for North Korea's nuclear test," Moon said. South Korean and U.S. officials have feared for some time that North Korea could soon carry out its sixth nuclear test.</p> <p>As reported on Friday, satellite imagery analyzed by 38 North, a Washington-based North Korea monitoring project, found some activity at North Korea's Punggye-ri nuclear test site last week. However, the group said it was unclear whether the site was in a "tactical pause" before another test or was carrying out normal operations. </p> <p>Adding to the already tense situation, North Korea detained a U.S. citizen on Saturday as he attempted to leave the country. The arrest will be a topic of discussion when Trump hold a <a href="">top level briefing with Senators on April 26</a>.</p> <p>As a reminder, Trump sent a carrier group for exercises in waters off the Korean peninsula as a warning, amid growing fears North Korea could conduct another nuclear test in defiance of United Nations sanctions. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Angered by the approach of the USS Carl Vinson carrier group, a defiant North Korea said on Monday the deployment was "an extremely dangerous act by those who plan a nuclear war to invade". "The United States should not run amok and should consider carefully any catastrophic consequence from its foolish military provocative act," Rodong Sinmun, the official newspaper of the North's ruling Workers' Party, said in a commentary on Monday. </p> <p>&nbsp;</p> <p>"What's only laid for aggressors is dead bodies," the newspaper said.</p> </blockquote> <p>Two Japanese destroyers have joined the carrier group for exercises in the western Pacific, and South Korea said on Monday it was also in talks about holding joint naval exercises.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="654" height="342" alt="" src="" /> </div> </div> </div> China Donald Trump fixed Foreign relations of North Korea France International reactions to the 2006 North Korean nuclear test International reactions to the September 2016 North Korean nuclear test International relations Japan Korea Korean People's Army Military of North Korea Newspaper North Korea North Korea North Korea Nuclear program of North Korea Nuclear proliferation Politics Reuters Rodong Sinmun Shinz? Abe South Korean Defence Ministry U.N. Security Council Underground nuclear weapons testing United Nations United States Navy US government Workers' Party Mon, 24 Apr 2017 12:06:47 +0000 Tyler Durden 594029 at Executive Order From Trump Will Change The US Commodity Sector <p><a href=""><img src="" alt="trump-infrastructure" width="599" height="315" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112347" /></a> </p> <p> Last week, a request from the Uranium Producers of America (‘UPA’) grabbed the headlines, as the organization was asking the US Department of Energy (DOE) to <a href="">suspend the sale of (physical) uranium</a> on the spot market. The UPA correctly described the status of the US based Uranium producers as ‘fragile’, and it’s pretty clear the DOE has been a huge ‘help’ in destroying America’s domestic uranium market. </p> <p> UPA says ‘&nbsp;the uranium market is oversupplied in the short term, and the DOE material continues to overwhelm the market with large quantities of price insensitive supply’, and this statement is absolutely correct. The DOE has been selling yellowcake&nbsp;no matter what price it was receiving for it, but by doing so, the collateral damage in the sector was (and is) huge. </p> <p> Whether the DOE receives $25 per pound of uranium or $35 won’t make or break the government’s budget, but would make a huge difference for the domestic producers. Just to give you an example, in the second half of 2016, the DOE has dumped <a href="">3.4 million pounds of uranium</a> on the open market, whilst the total uncommitted utility demand for the same period was just 0.3 million pounds. Indeed, the DOE is dumping 11 times more uranium on the market than strictly necessary to fill a demand. </p> <p> The idea of selling ‘excess’ uranium has historically grown and was re-confirmed in 2015 by the Secretary of Energy under the Obama regime. According to Energy Secretary Moniz, it wouldn’t harm the market I if the USA would dump in excess of <a href="">5 million pounds</a> of uranium on the open market in 2016, but in hindsight, this has definitely aggravated the existing issues and as you can see on the next image, most uranium producers haven’t been able to generate a profit in the past six years. </p> <p> <a href=""><img src="" alt="URA 1" width="733" height="444" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112693" /></a> </p> <p> Source: </p> <p> Whilst there’s absolutely no urgent need to sell the stockpiled uranium, the government might actually be better off by waiting another 5 years. The tipping point of the US uranium production (and demand) is expected to be reached in the early 2020’s, when a high level of uncommitted demand will go on the market to discuss offtake agreements with producers. A low uranium price won’t help anyone (and might destroy jobs as several companies are now doing the bare minimum in order to survive for a few more years), whilst there’s additional upside for the DOE as well. Any business man with the ability to think reasonable will agree that selling uranium at $40 in five years from now is a superior plan compared to selling at $25 per pound right now. And if it helps to save jobs and companies, then that’s an additional bonus. </p> <p> However, fortunately for the uranium producers, the new president seems to understand that the first step to make sure the USA has a buoyant mining and commodity sector is to make sure that any government intervention does not harm the free market. And in this case, the government intervention (dumping uranium on the market definitely counts as an intervention) has had a huge negative impact on the average spot price, as you can see in the next image: </p> <p> <a href=""><img src="" alt="URA 2" width="837" height="497" style="display: block; margin-left: auto; margin-right: auto;" class="aligncenter size-full wp-image-112694" /></a> </p> <p> Source: </p> <p> In the <a href="">executive order</a>, dated March 28, President Trump seems to be willing to push the domestic mining industry forward. And for the uranium market, even simple measures like not dumping excess supply&nbsp;on the market would already have a huge impact without incurring a negative financial impact on the government finances level. </p> <p> Most people (correctly) interpreted that executive order to be a first step to resuscitate the US coal sector, but one part of the EO could also be seen as important for the uranium sector: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“President Trump’s Executive Order directs all agencies to conduct a review of existing actions that harm domestic energy production and suspend, revise, or rescind actions that are not mandated by law.</p> <p> Within 180 days, agencies must finalize their plans.“</p> </blockquote> <p> Could this mean the DOE will revise its policy to dump uranium on the open markets before the end of this year? We think that’s very likely, and this should give the entire US uranium sector more oxygen and keep all projects in good standing until the (long-term) uranium prices pick up again. </p> <p>And this could be the first step to a new US-focused and US-centered resources program. </p> <p> <strong><a href="">&gt;&gt;&gt; &nbsp;Click here to read our Guide to Gold, and protect your wealth!</a></strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the&nbsp;<strong><a href="">Gold &amp; Silver Report</a></strong>&nbsp;and the&nbsp;<strong><a href="">Commodity Report</a></strong>.<br /></em></p> </blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Follow us on&nbsp;<strong>Facebook&nbsp;<a href="">@SecularInvestor</a>&nbsp;[NEW]</strong>&nbsp;and&nbsp;<strong>Twitter&nbsp;<a href="">@SecularInvest</a></strong></p></blockquote> Business Department Of Energy headlines Matter Nuclear materials Nuclear technology Physical universe Twitter Twitter U.S. Department of Energy Uranium Uranium Uranium mining Uranium mining by country Uranium mining in the United States Mon, 24 Apr 2017 12:00:32 +0000 Secular Investor 594028 at Frontrunning: April 24 <ul> <li>French election relief sends Europe soaring (<a href="">Reuters</a>)</li> <li>Gloves off as Le Pen and Macron pitch for final battle (<a href="">Reuters</a>)</li> <li>French Runoff Creates Fresh Political Divisions (<a href="">WSJ</a>)</li> <li>U.S. Government Shutdown May Hinge on Trump’s Demand for Mexico Wall (<a href="">BBG</a>)</li> <li>Congress returns as Trump pressures Democrats ahead of funding deadline (<a href="">Reuters</a>)</li> <li>The Rich Are Living Longer and Taking More From Taxpayers (<a href="">BBG</a>)</li> <li>Mattis Pays Surprise Visit to Kabul (<a href="">WSJ</a>)</li> <li>Bomb attack hits U.S. base in eastern Afghanistan (<a href="">Reuters</a>)</li> <li>The Electric Car Revolution Now Faces Its Biggest Test (<a href="">BBG</a>)</li> <li>States Seek to Blunt Insurers’ Costs in Bid to Shore Up Health Exchanges (<a href="">WSJ</a>)</li> <li>Top Iron Ore Forecaster Says Prices Will Sink Back Below $50 (<a href="">BBG</a>)</li> <li>Billionaire Doctor’s $11,000 Cancer Test Has Few Takers So Far (<a href="">BBG</a>)</li> <li>‘Apartheid Without the Racism’: How China Keeps Rural Folks Down (<a href="">WSJ</a>)</li> <li>German Business Confidence Climbs to Highest Since July 2011 (<a href="">BBG</a>)</li> <li>Goldman Got Burned by These Debts in Rare Trading Miss (<a href="">BBG</a>)</li> <li>How a $1.4 Billion ETF Gold Rush Rattled Mining Stocks Around the World (<a href="">WSJ</a>)</li> <li>PPG Again Raises Bid For Akzo Nobel (<a href="">WSJ</a>)</li> <li>Akzo to Consider PPG's Sweetened $29 Billion Takeover Offer (<a href="">BBG</a>)</li> <li>IBM Says CEO Pay Is $33 Million. Others Say It Is Far Higher (<a href="">BBG</a>)</li> <li>U.S., Philippines scale back next month's military drills, no more 'war games' (<a href="">Reuters</a>)</li> <li>Samsung to Issue Galaxy S8 Software Updates After Complaints (<a href="">WSJ</a>)</li> <li>Local, global security firms in race along China's 'Silk Road' (<a href="">Reuters</a>)</li> <li>China clamps down on excess steel as Japan decries Trump 'protectionism' (<a href="">Reuters</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- Becton Dickinson and Co said Sunday that it would acquire C R Bard Inc for $24 billion, the latest merger of medical-supplies manufacturers. <a href="" title=""></a></p> <p>- State investment funds in Abu Dhabi and Malaysia struck an agreement to avoid potentially embarrassing arbitration proceedings related to billions of dollars that were allegedly misappropriated by a conspiracy of former executives and advisers to both funds, according to people with direct knowledge of the deal. <a href="" title=""></a></p> <p>- North Korea has arrested a U.S. citizen in Pyongyang, people familiar with the matter said, adding another potential flashpoint with the U.S. at a time of increasingly heated rhetoric. <a href="" title=""></a></p> <p>- The battle over Wells Fargo &amp; Co board is going down to the last possible moment, with uncertainty hanging over the re-election prospects of several directors at Tuesday's annual shareholder meeting, according to people familiar with the matter. <a href="" title=""></a></p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>LafargeHolcim Ltd Chief Executive Eric Olsen is set to step down on Monday following an internal investigation into activities at a plant the cement maker operated in Syria until September 2014.</p> <p>Becton Dickinson and Co would acquire C R Bard Inc in a $24 billion cash-and-stock deal that would give Bard shareholders about 15 percent of the combined entity, the two U.S. medical technology companies said on Sunday.</p> <p>Credit Suisse Group AG is braced for executive pay revolt from a shareholder this week, despite the board agreeing to a voluntary bonus cut by 40 percent.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- Tucker Carlson will assume Fox News's 8 p.m. time slot on Monday, the first time in nearly two decades that Bill O'Reilly will not be kicking off Fox News's prime-time lineup. <a href="" title=""></a></p> <p>- Fox News faced new sexual harassment allegations on Sunday as Alisyn Camerota, a former anchor, accused the former Fox News chief Roger Ailes of saying "grossly inappropriate" things to her and once inviting her to a hotel room when she asked for new opportunities at work. <a href="" title=""></a></p> <p>- American Airlines Group Inc suspended a flight attendant after an altercation on Friday in which the attendant took a stroller from a woman traveling with two young children and then argued with other passengers. <a href="" title=""></a></p> <p>- Kristina Johnson, an engineer who developed technology critical to 3-D movies and served as under secretary in the United States Energy Department before founding a hydroelectric company, will be appointed chancellor of the State University of New York. <a href="" title=""></a> </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Canada</span></em></p> <p>THE GLOBE AND MAIL</p> <p>** The collegial race to lead the federal NDP received an injection of drama this week with the announcement that former veterans ombudsman Pat Stogran is now a candidate. <a href="" title=""></a></p> <p>** The New Democratic Party in British Columbia has dismissed the critique of the party platform's financial sustainability. A five-page document commissioned by the BC Liberal Party found the NDP platform to be fiscally prudent, but neither transparent nor sustainable. <a href="" title=""></a></p> <p>NATIONAL POST</p> <p>** Bubbling beneath the surface of the BC campaign trail is a bitumen brawl between this province's New Democrats and Alberta's. And while neither political party seems willing to speak openly about the issue, the internal rift threatens unity at a time when the Orange Crush is poised to spill across BC, upending the 16-year dynasty of the Liberals. <a href="" title=""></a></p> <p>** Dow Chemical Co. is in line to collect the largest patent infringement damage award in Canadian history following a courtroom victory against Nova Chemicals Corp. <a href="" title=""></a> (Compiled by Vishal Sridhar)</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>Jaguar Land Rover has struck a deal to slash thousands of workers' pensions by severing the link to final salaries and switching to career average pay. <a href="" title=""></a></p> <p>Jupiter Asset Management had quietly canvassed investors in recent weeks about a 50 percent rise for its boss Maarten Slendebroek. However, it pulled the pay deal after objections from a number of institutions. Two of its top 10 investors told The Sunday Times that the 50 percent hike was unacceptable in light of the government's focus on reining in rewards. <a href="" title=""></a></p> <p>The Guardian</p> <p>Rachel Reeves, a Labour MP who sits on the Treasury select committee, will outline plans on Tuesday for regulators at the Financial Conduct Authority to cap the maximum amount that banks can charge customers for unauthorised overdrafts, similar to the limit imposed on charges on payday loans of 24 pound a month. <a href="" title=""></a></p> <p>The Telegraph</p> <p>The upmarket burger chain Five Guys is in talks with its U.S. parent to expand in Europe beyond the five countries it currently operates in. Five Guys' UK chief executive, John Eckbert, said the company had growth plans for the UK, France, Germany, Spain and Portugal, where it already has sites, but saw scope for the chain to thrive in other European nations. <a href="" title=""></a></p> <p>One of the co-founders of is returning to the business world after a 10-year absence to launch a financial advice service he claims has the same disruptive potential. Duncan Cameron's jointly-owned eVestor service aims to cut the cost of full-service financial advice by 80pc. He says it will deliver sophisticated advice to investors "whether they have 1 pound or 1 million pounds". <a href="" title=""></a></p> <p>Sky News</p> <p>Former Barclays and Santander executive Stephen Jones will be named as the inaugural chief executive of UK Finance on Monday, a new trade association that is poised to become one of Britain's most powerful lobbying groups. <a href="" title=""></a></p> <p>The upmarket cycling-wear brand Rapha has moved its sale preparations up a gear by hiring advisers to carry out a review of the company's options. Rapha's board has appointed William Blair, an investment bank, to undertake an exercise that is likely to lead to a sale. <a href="" title=""></a></p> <p>Three Mobile has apologised after customers were not able to send texts or make phone calls. The company said it experienced a "temporary works issue" which affected its service during Saturday afternoon and evening. It said that although calls have been restored they are working to restore a full service. <a href="" title=""></a></p> <p>&nbsp;</p> 3-D Abu Dhabi Afghanistan Barclays BBG BC Liberal Party Bitly Business Business China Congress Credit Suisse eastern Afghanistan Economy Financial Conduct Authority Fox News France Germany http Jaguar Japan Mexico New Democratic Party News media North Korea Portugal Reuters Reuters The Wall Street Journal United States Energy Department University of New York Wells Fargo William Blair Mon, 24 Apr 2017 11:48:55 +0000 Tyler Durden 594027 at Pence Cuts Asia Trip Short; Returns Early To Focus On Critical Week For Trump <p>Vice President Mike Pence has cut short the final leg of his Asia trip to return back to Washington, where the Trump administration faces a critical week on tax reform and a funding plan to keep the government running, Reuters reported overnight. Pence, who has been traveling in Asia to reassure allies and partners about President Donald Trump's commitment to the region, had originally planned to spend two nights in Honoluluat the end of a trip that took him to South Korea, Japan, Indonesia and Australia.</p> <p>An aide to the vice president said Pence is cutting his trip short because of a series of issues in Washington this week. He pointed to topics including healthcare, tax reform and government funding. The vice president will no longer visit the USS Arizona memorial because of the shortened trip and will instead leave Hawaii on Monday.</p> <p>According to <a href="">Reuters</a>, Pence will now spend one night in Hawaii and is slated to be back in Washington on Tuesday morning, an aide told reporters before Air Force Two landed at Pago Pago in American Samoa for refueling. While he spoke with business leaders in each country, Pence's trip was overshadowed by rising tensions in North Korea, where it is feared another nuclear test could be conducted soon in defiance of United Nations sanctions.</p> <p>Trump has a busy week ahead. Funding appropriated by Congress to run the government runs out on Friday, so he and lawmakers must agree on new legislation or the government will shut down on Saturday. Saturday is also Trump's 100th day in office, a benchmark used by pundits to assess the initial accomplishments and shortfalls of his young presidency. </p> <p>Trump plans to outline principles for tax reform onWednesday, a top brief for Pence. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="642" height="370" alt="" src="" /> </div> </div> </div> Australia Christianity Climate change skepticism and denial Congress Donald Trump Donald Trump presidential campaign Japan Mike Pence North Korea Politics Politics of the United States Presidency of Donald Trump Presidential transition of Donald Trump Reuters Trump Administration United Nations United States Mon, 24 Apr 2017 11:28:18 +0000 Tyler Durden 594023 at A Delighted Wall Street Reacts To The French Election <p>With European stocks on fire, and US futures moving fast to recoup recent all time highs, it is no surprise that Wall Street is feeling particularly bullish this morning. </p> <p>As noted previously, the market moves suggest that traders were positioned for French pollsters to be wrong again, and yet unlike Brexit and Trump, this time the polls were spot on. The snapshot result: the French CAC 40 is up as much as 4.6%, DAX up as much as 2.9% to record high; euro-zone Stoxx banking sector index up as much as 6.9%; VStoxx volatility index down as much as 31%; France- Germany bond yield spread narrows to lowest since January; euro gains as much as 2%. Meanwhile, looking at the runoff round, polls now see Macron defeating Le Pen with a sizable margin, somewhere in the 62%-38% area. </p> <p>Below is a sample of slleside analyst reaction to Sunday's outcome.</p> <p><strong>BofAML equity strategists including Ronan Carr, James Barty</strong></p> <ul> <li>Political uncertainty has been a headwind to global investors re-allocating to Europe; BofAML sees significant potential for European fund flows to recover further</li> <li>Focus can shift to solid fundamentals in Europe</li> <li>Solid macro backdrop, strong operating leverage evident in European corporates point to upside risks to BofA’s 11% EPS forecast for Stoxx 600; earnings momentum is strong with 84% of sectors enjoying upgrades</li> </ul> <p><strong>Citi strategists including Jonathan Stubbs</strong></p> <ul> <li>European banking sector likely to benefit from lower political risk premium and narrower sovereign spreads following “risk-on” outcome in first round of French election</li> <li>Says French banks could outperform by ~10% in short term, broader sector likely to be key leadership group in market</li> <li>Lower political risk could “release handbrake” across policy makers, CEOs, investors and individuals; expects international investors, particularly U.S., to return to European equities</li> </ul> <p><strong>Credit Agricole strategist Valentin Marinov</strong></p> <ul> <li>“Very hard” to find a euro-negative factor; risk is clearly pointing to more euro upside from here</li> <li>Now with political risks abating, investors’ attention may turn to the certainly attractive assets denominated in euros, like euro area stocks</li> </ul> <p><strong>Natixis strategist Sylvain Goyon</strong></p> <ul> <li>Expects a relief rally, CAC 40 could outperform DAX by 3%-4% within a few days given French market discount</li> <li>Among sectors which could benefit the most from relief rally: insurance, banks, financial services, autos, tech, real estate</li> </ul> <p><strong>AXA IM economist Laurent Clavel</strong></p> <ul> <li>What really was priced was the possibility of a very market unfriendly result; For the French economy just yet the economic policy uncertainty is not lifted</li> <li>“The membership of France in the euro zone and in the EU, that risk, which was really the focus of markets, is almost gone”</li> </ul> <p><strong>Goldman Sachs equity strategist Peter Oppenheimer</strong></p> <ul> <li>Equity market has already largely priced the outcome; concerns about the vote have not prevented European equities and CAC 40 from performing well on an absolute basis in 2017</li> <li>Expect the results to generate some relief for FTSE MIB, French and Italian banks, and a very minor relief for CAC 40</li> <li>French domestic stocks and CAC 40 have not underperformed significantly as of late; Goldman doesn’t expect them to rally materially now, or after second round</li> </ul> <p><strong>BlackRock strategists including Richard Turnill</strong></p> <ul> <li>Result is positive surprise for risk assets in near term</li> <li>Business-friendly and pro-European Macron, who has maintained large winning margin in head-to-head polls with Le Pen, can now build on his momentum</li> <li>Result should lead to material reduction in perceived political risk in Europe; some risk premium should linger until legislative elections in June</li> <li>If Macron becomes France’s next president, may struggle to implement his agenda without stable parliamentary majority</li> <li>Expects Italy to be the next focus of European political risk</li> </ul> <p><strong>Credit Suisse equity strategist Pierre Bose</strong></p> <ul> <li>Markets are likely to react positively to the news, with the risk of an adverse presidency for the French economy and European integration now markedly lower </li> <li>Continues to prefer European equities backed by cheap valuation and positive growth momentum; European banking stocks should also benefit in next few days; CS continues to prefer them to their U.S. counterparts</li> </ul> <p><strong>JPMorgan AM fund manager Stephen Macklow-Smith</strong></p> <ul> <li>Assuming Macron does win the presidency, investors will no longer have an excuse not to allocate to European equities. We hadn’t taken that much risk off the table as we were expecting a market-friendly outcome, but will marginally add cyclical exposure. In short-term sees French financials catching up with the rest of the market</li> </ul> <p><strong>Runestone Capital Fund founder and portfolio manager Rune Madsen</strong></p> <ul> <li>Result reduces some short-term risk. Potential negative did not transpire, there will most likely be less demand for protection</li> <li>Still, with previous events like Brexit or U.S. election, initial reaction was not what transpired one day or a few weeks later; important to keep that in mind</li> </ul> <p><strong>Bankhaus Lampe equity strategist Ralf Zimmermann</strong></p> <ul> <li>Vote could mean that global stock investors are more willing to trade future positive macro surprises in Europe</li> <li>Bigger picture is unchanged: fundamental upside for stocks is now limited, valuations have expanded notably, particularly in U.S., but also in Europe, which means that stock prices have outpaced earnings estimates</li> </ul> <p><strong>Societe Generale analysts</strong></p> <ul> <li>With risk of populism fading, investors should start focusing on the banks’ strong fundamentals; highlights credit and deposit growth is strong, GDP estimates have gone up and number of companies expected to be loss- making has remained flat</li> </ul> <p><strong>Kepler Cheuvreux analysts</strong></p> <ul> <li>Despite a number of open questions, notably whether the new president will find a governing majority, still there, French elections will reassure investors, trigger fresh capital flows into the region</li> <li>Expects higher risk premium for pure European assets seen since Brexit vote to soften somewhat; says risky European domestic exposure should outperform over the next few months</li> </ul> <p><strong>TD Securities macro strategist Jacqui Douglas</strong></p> <ul> <li>Results for top candidates almost exactly in line with what polling had predicted, TD confident investors can look to a big Macron win in second round, as polls have him wining by nearly a 2:1 ratio</li> <li>Given renewed trust in polls, markets unlikely to wait until May 7 before pricing out the risk of Frexit, and we look for a risk-on trading environment to start the week</li> </ul> <p><strong>Investec Wealth &amp; Investment strategist John Wyn-Evans </strong></p> <ul> <li>Had said for a while that Europe looked attractive as an investment destination, but had been holding back from further investment owing to political concerns</li> <li>Europe has the potential for further recovery that has already taken place in, for example, the U.S. and the U.K.</li> <li>Europe’s stock market is calculated to be one of the most operationally geared into continued recovery and on the long view has a lot of catching up to do</li> </ul> <p><strong>Makor Capital Markets strategist Stephane Barbier de la Serre</strong></p> <ul> <li>Le Pen comes a close second, however the math of vote redistribution will simply not work for her and therefore expect Macron to win the run-off with a wide margin</li> <li>It does dispel at once the risk of any kind of “Frexit” in the foreseeable future, which should lead to much reduced risk premia on French stocks and bonds and therefore boost prices of all European risk assets in the next few weeks</li> </ul> <p><em>Source: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="640" height="360" alt="" src="" /> </div> </div> </div> Actuarial science Blackrock Bond Bond Brexit Business CAC 40 Capital Markets Credit Suisse Economy Euro European Union Finance Financial risk France Fund Flows Germany goldman sachs Goldman Sachs Italy Market risk Money Real estate recovery Risk Premium Risk premium Runestone Capital Fund Stock market STOXX Stoxx 600 U.K. Europe Volatility Mon, 24 Apr 2017 11:09:36 +0000 Tyler Durden 594022 at Key Events In The Coming Busy Week: US GDP; ECB & BOJ Meetings, And Lots Of Earnings <p>The key economic releases this week are the durable goods report on Thursday and Q1 GDP on Friday.&nbsp; It iweek is the busiest week of earnings season, with 40%&nbsp; of S&amp;P 500 equity cap reporting. In addition, there are a few scheduled speaking engagements by Fed officials this week.&nbsp; </p> <p>Further, as SocGen notes, this week, markets will digest the French election results, with data releases focusing on the strength of the euro area recovery. The ECB may signal upside risks to near-term growth ahead of higher core inflation on Friday. EU leaders will meet to adopt Brexit negotiation guidelines. In the US, softer 1Q GDP data will be scrutinized, while rising inflation in the UK may have a longer term impact on growth. In Asia, GDP data should be boosted by net exports while the BoJ may upgrade it economic assessment.</p> <p><strong>United States: Q1 GDP likely to show weak growth</strong></p> <p style="padding-left: 30px;">This week, consensus expects broadly unchanged new home sales as well as subdued business investment (ex aircraft orders). Most of the focus will be on Friday’s Q1 GDP where the Atlanta Fed expects growth to tumble to just 0.5%. Still, the Fed (and markets) is used to softness in Q1 growth that at least in the past has snapped back in the second half. Lastly, a one- or two-week bill looks likely to keep the government open past the Friday deadline, giving Congress a bit more time to work on a longer-term deal. </p> <p><strong>Euro area: ECB to acknowledge upside risks to near-term growth. </strong></p> <p style="padding-left: 30px;">While markets will digest the French election results, <strong>the ECB will likely acknowledge upside risks to growth in 1H on Thursday while remaining on hold. </strong>Both headline and core inflation should recover by two-tenths on Friday, while the first 1Q GDP estimates for France (0.2% qoq) and Spain (0.7%) will give an early indication for the euro area (next Wednesday). Both the EC confidence indicators and the German Ifo will probably moderate but are expected to remain high. A special summit of EU-27 leaders (Saturday) will set the guidelines for the EU in the upcoming negotiations with the UK.</p> <p><strong>Asia Pacific: Solid 1Q GDP gains in Korea and Taiwan; BoJ may upgrade assessment</strong></p> <p style="padding-left: 30px;">First quarter GDP data from South Korea and Taiwan are likely to have been boosted by net trade, as suggested by the strong external trade recovery across the region. The BoJ is widely expected to maintain its current policy stance and make no meaningful changes to its economic forecasts, but may upgrade its assessment of the economy. In Australia, annual rates of headline and core inflation are likely to have moved up, but not quite into target. </p> <p><a href=""><img src="" width="500" height="675" /></a></p> <p><strong>JPM lays out the Calendar of events to watch for in the week of Mon Apr 24 </strong></p> <ul> <li>The big focus this week will be on earnings (the week of 4/24 is the peak of the CQ1 season), central banks (decisions from the BOJ and ECB), Eurozone eco data (Eurozone Arp CPI on Friday 4/28), US eco data (Q1 US GDP and ECI both hit Fri 4/28), and US gov’t funding (legislation to fund the gov’t expires on Apr 28 – a shutdown is considered unlikely).</li> <li><strong>Calendar for Mon Apr 24</strong> – the main focus on Mon will be earnings (HAL, HAS, ITW KMB, LII, and TCB pre-open and AA, AMP, CCI, CDNS, CR, ESRX, NEM, RE, RMBS, RRC, SANM, TMUS, UDR, WHR, WNC, WRB, and ZION after the close).&nbsp; </li> <li><strong>Calendar for Tues Apr 25</strong> – the main focus will be on US FHFA/Case-Shiller home prices for Feb (9amET), US new home sales for Mar (10amET), US conf. board confidence figures for Apr (10amET), and earnings (AKS, AN, BHI, BIIB, CAT, CIT, CNC, DD, Ericsson, FCX, FITB, GLW, KO, LH, LLY, LMT, MAS, MCD, MMM, NLSN, Novartis, NTRS, OI, PCAR, PHM, PNR, R, SAP, SPGI, ST, TROW, TRU, TUP, VLO, WAT, WSO, and XRX pre-open and ARNC, BHP, BXP, CB, CENX, CHRW, CMG, COF, CREE, DFS, EQR, EW, ILMN, JNPR, SYK, T, TSS, TXN, UHS, and ULTI after the close).</li> <li><strong>Calendar for Wed Apr 26</strong> – the main focus will be on earnings (ALK, ANTM, APH, AVY, BA, BAX, Credit Suisse, Daimler, DPS, GD, HES, HSY, IR, NDAQ, NSC, PEP, PG, ROK, Santander, Standard Chartered, STT, STX, TEL, TWTR, UTX, X, WRK, and WYN pre-open and AMGN, AVB, CAVM, EQIX, FFIV, FISV, KIM, MAA, NOW, NTGR, ORLY, PYPL, SAM, UNM, VAR, XL, and XLNX after the close).</li> <li><strong>Calendar for Thurs Apr 27</strong> – the main focus will be on central banks (BOJ, Riksbank, and ECB decisions), China industrial profits for Mar (Wed night/Thurs morning), US advanced goods trade balance for Mar and durable goods for Mar (8:30amET), US pending home sales for Mar (10amET), the expiration of the FCC anti-collusion rules (related to the recent spectrum auction), Trump’s press conf., and earnings (ABBV, Airbus, ALLE, ALLY, AMT, APD, BASF, BMY, BSX, CBG, CELG, CMCSA, CME, Deutsche Bank, DOW, F, IP, IVZ, JCI, LAZ, LLL, LUV, MMC, MPC, Nokia, NOV, POT, PX, Roche, RS, SIRI, SPG, STM, UAA, UNP, UPS, USG, VC, WCC, and ZBH pre-open and AFL, AIV, AMZN, BIDU, CERN, ESS, EXPE, FLEX, FTNT, GOOGL, GPRO, HIG, INTC, KLAC, LPLA, MHK, MSFT, PFG, Samsung Electronics, SBUX, SWKS, SYNA, VRSN, VRTX, and WDC after the close).</li> <li><strong>Calendar for Fri Apr 28 </strong>– the main focus will be on Eurozone eco data (including Eurozone Apr CPI at 5amET), US Q1 GDP and ECI (8:30amET), US Chicago PMI for Apr (9:45amET), Michigan Sentiment for Apr (10amET), and earnings (CL, CVX, GM, GT, HST, LYB, PSX, SYF, VFC, WY, and XOM pre-open).</li> </ul> <p><strong>Global Economics Calendar: Week of Mon April 24th, also via JPM</strong></p> <ul> <li><strong>Monday, April 24th: </strong>US (Chicago./Dallas Fed Indices); Eurozone (Germany IFO Current Assessment, UK CBI Business Optimism); Other (Taiwan Unemployment Rate, Japan Leading/Coincident Index, Taiwan Industrial production, Taiwan Money Supply, China Conference Board China March Leading Economic Index, Japan PPI Services)</li> <li><strong>Tuesday, April 25th:</strong> US (FHFA House Price Index, S&amp;P/CoreLogic 20-City HPI, New Home Sales, Conference Board Consumer Confidence Index, Richmond Fed); Eurozone (France Business Confidence, Spain PPI, ECB Bank Lending Survey, UK Public Finances, Euro Area Fourth Quarter Government Debt); Other (Hong Kong Trade Balance)</li> <li><strong>Wednesday, April 26th: </strong>US (MBA Mortgage Applications); Eurozone (France Consumer Confidence, Spain Total Mortgage Lending, France Jobseekers); Other (Japan All Industry Activity Index, Japan Machine Tool Orders, Japan Buying/Selling Foreign Stocks/Bonds, China Swift Global Payments, China Industrial Profits, BOJ 10-Yr Yield Target, BOJ Policy Balance Rate)</li> <li><strong>Thursday, April 27th: </strong>US (Advance Goods Trade Balance, Wholesale/Retail Inventories, Durable Goods Orders, Jobless Claims, Pending Home Sales, Kansas City Fed Manufacturing Activity Index); Eurozone (Germany GfK Consumer Confidence, Spain Unemployment Rate, Spain CPI, Germany CPI, Italy Economic Sentiment, Eurozone Economic Confidence, ECB Main Refinancing Rate, ECB Asset Purchase Target, UK GfK Consumer Confidence, Spain Budget Balance); Other (Taiwan Monitoring Indicator, Taiwan Bounced Check Ratio, Japan Jobless Rate, Japan National CPI, Japan Industrial Production, Japan Retail Sales)</li> <li><strong>Friday, April 28th: </strong>US (Employment Cost Index, GDP Annualized, Core PCE, Chicago PMI, University of Michigan Survey); Eurozone (France GDP, France CPI, Eurozone M3 Money Supply, Spain GDP, Spain Retail Sales, UK GDP, Eurozone CPI, Italy PPI, , UK Nationwide House Prices); Other (Japan Vehicle Production, Japan Housing Starts)</li> </ul> <p><strong>A look at the upcoming busiest week of Q1 earning season:</strong></p> <p>The CQ1 season isn’t even half over although several important companies posted numbers over the last 1.5 weeks.&nbsp; As is the case with any given earnings period, the most “important” sectors from the perspective of the macro narrative are banks, semis, capital goods, and credit cards.&nbsp; The US bank season is nearly over and numbers were pretty healthy, esp. relative to reduced expectations.&nbsp; Loan growth wasn’t as bad as the weekly Fed data suggested, NII/NIM was inline-to-better, expenses and credit remain under control (there were some pockets of credit deterioration but nothing that suggests a broader systemic problem), and trading was healthy (the one notable exception was GS which badly lagged its peers in FICC; GS mgmt. didn’t sound concerned and cited the latter two letters, i.e. currencies and commodities, for the shortfall).&nbsp; At the moment for bank stocks the direction of TSY yields (and the shape of the curve) is having a greater influence than earnings.&nbsp; In semis only a handful of companies reported but the early results are solid, esp. semi equipment (ASML and LRCX).&nbsp; MXIM’s report Thurs night was more controversial – the headline income statement figures were solid for Mar actuals and June guide but mgmt. on the call acknowledged some softness in the US auto market (although MXIM really wasn’t outright negative on autos and while SAAR is drifting lower the amount of silicon per unit continues to experience strong growth).&nbsp; The initial indications from the capital goods companies w/DOV, GE, and HON all posting healthy organic growth (both revs and orders) while Eurozone reports were decent too (Schneider, ABB, etc.).&nbsp; GE was controversial as very strong orders and income statement numbers were offset by very weak cash flow.&nbsp; GWW was the one notable disappointment within the industrial space although the problem was competition/pricing (and not necessarily end-market demand).&nbsp; The best sector for assessing the health of “the consumer” isn’t retail but instead the credit cards (the key is the amount of card swipes, not where those swipes are occurring) and numbers out of that group so far in CQ1 have been positive (w/upside reports out of AXP and V/Visa).&nbsp; Other earnings highlights over the last week include CSX (solid Q and Hunter Harrison provided positive guidance), IBM (pretty weak all around w/soft revs and margin downside), EBAY (decent Q1 but weaker Q2 guide), NFLX (some noise w/Q1 subs light and better Q2 guide but the H1 numbers in aggregate were about inline), and VZ (the big focus was the very weak subscriber metrics; the sub results would have been even worse had VZ not unveiled its unlimited data plans in the middle of the Q).</p> <p>* * * </p> <p><strong>Finally, a focus just on US events in the coming week, together with consensus and Goldman estimates</strong></p> <p><span style="text-decoration: underline;"><strong>Monday, April 24 </strong></span></p> <ul> <li><strong>10:30 AM Dallas Fed manufacturing index, April (consensus +17.0, last +16.9)</strong></li> <li><strong>11:30 AM Minneapolis Fed President Kashkari (FOMC voter) speaks: </strong>Minneapolis Federal Reserve President Neel Kashkari will give the keynote speech at the 6th Annual Fink Investing Conference at UCLA in California. Audience Q&amp;A is expected. </li> <li><strong>03:15 PM Minneapolis Fed President Neel Kashkari (FOMC voter) speaks: </strong>Minneapolis Federal Reserve President Neel Kashkari will participate in a moderated discussion at Claremont McKenna College in Claremont. Audience Q&amp;A is expected. </li> </ul> <p><span style="text-decoration: underline;"><strong>Tuesday, April 25 </strong></span></p> <ul> <li><strong>09:00 AM S&amp;P/Case-Shiller 20-city home price index, February (GS +1.1%, consensus +0.7%, last +0.9%):</strong> We expect the S&amp;P/Case-Shiller 20-city home price index to rise 1.1% in the February report following a 0.9% increase in the prior month. The measure still appears to be influenced by seasonal adjustment challenges, and we place more weight on the year-over-year increase, which rose to 5.7% from 5.5% in January.</li> <li><strong>09:00 AM FHFA house price index, February (consensus +0.4%, last flat):</strong> Consensus expects the FHFA house price index to rise 0.4% (mom sa) in February, after a flat reading in January. The FHFA house price index has a wider geographic coverage than the S&amp;P/Case-Shiller home price index, but is based only on properties financed with conforming mortgages. On a year-over-year basis, FHFA home prices rose 5.7% in January, down from 6.2% in December.</li> <li><strong>10:00 AM New home sales, March (GS -2.0%, consensus -1.4%, last +6.1%):</strong> We expect new home sales to fall 2.0% in March, retracing some of its 6.1% February increase, as we expect the negative impact of Winter Storm Stella in the Midwest and Northeast to be partially offset by a favorable fundamental backdrop and an elevated level of single-family building permits.</li> <li><strong>10:00 AM Conference Board consumer confidence, April (GS 121.0, consensus 123.0, last 125.6):</strong> We forecast that consumer confidence declined 4.6pt to 121.0 in April from the cycle high in March. Our forecast reflects some sequential deterioration in consumer surveys in late March and early April, as well as recent stock market weakness.</li> <li><strong>10:00 AM Richmond Fed manufacturing index, March (consensus +16, last +22)</strong></li> </ul> <p><span style="text-decoration: underline;"><strong>Wednesday, April 26 </strong></span></p> <ul> <li>There are no major data releases. </li> </ul> <p><span style="text-decoration: underline;"><strong>Thursday, April 27 </strong></span></p> <ul> <li><strong>08:30 AM U.S. Census Bureau Advance Economic Indicators Report: Advance goods trade balance, March preliminary (GS -$65.9bn, consensus -$65.4bn, last -$63.9bn)</strong>; We estimate the goods trade deficit widened $2.0bn to $65.9bn in March, following February’s sharp narrowing that we believe reflected a pronounced impact from the relatively early Chinese New Year, which likely shifted the timing of imports from February to January. Based on our expectation of a partial reversal of these effects as well as a (likely related) sharp rebound in March inbound container traffic, we expect renewed deterioration in the trade balance. At the same time, lower March oil prices should reduce the nominal petroleum deficit, providing a partial offset.</li> <li><strong>08:30 AM Wholesale inventories, March preliminary (consensus +0.3%, last +0.4%); 08:30 AM Durable goods orders, March preliminary (GS +2.1%, consensus +1.3%, last +1.8%) ; Durable goods orders ex-transportation, March preliminary (GS +0.4%, consensus +0.4%, last +0.5%); Core capital goods orders, March preliminary (GS +0.5%, consensus +0.5%, last -0.1%); Core capital goods shipments, March preliminary (GS -0.1%, consensus +0.2%, last +1.0%):</strong> We estimate durable goods orders rose 2.1% in March, driven by higher non-defense aircraft orders indicated by stronger company-reported data. We believe the details of the report are likely to be mixed. Manufacturing production was soft in March, exhibiting a 0.2% pullback in ex-auto manufacturing and a 0.4% drop in the capex-sensitive business equipment category. Chinese New Year effects may also weigh on core capital goods shipments growth, to the extent that they boosted the February level. At the same time, capital goods company results and commentary have been encouraging, with mounting evidence of accelerating growth in the industrial economy. Accordingly, we estimate softer shipments, but firmer orders in March, with month-to-month growth rates of -0.1% and +0.5%, respectively. We estimate durable goods orders ex-transportation rose 0.4%. </li> <li><strong>08:30 AM Initial jobless claims, week ended April 22 (GS 245k, consensus 243k, last 244k); Continuing jobless claims, week ended April 15 (consensus 2,010k, last 1,979k):</strong> We estimate initial jobless claims edged up 1k to 245k. Claims have returned to normal levels following two weeks of temporary elevation in mid-to-late March that likely reflected the impact of Winter Storm Stella. Continuing claims – the number of persons receiving benefits through standard programs – have continued to trend down in recent months, suggestive of additional labor market improvement that we expect to continue. </li> <li><strong>10:00 AM Pending home sales, March (GS +0.5%, consensus -1.0%, last +5.5%):</strong> Regional housing data released so far suggest the improvement in February contract signings continued into March, despite unseasonably cold temperatures and above-average snowfall. We expect a 0.5% increase in the pending homes sales index, adding to the 5.5% increase in the prior month. Stable-to-higher March pending homes sales would be particularly encouraging in the context of higher mortgage rates, which incidentally have declined so far in April after reaching a two-year high in mid-March. We have found pending home sales to be a useful leading indicator of existing home sales with a one- to two-month lag.<strong></strong></li> <li><strong>11:00 AM Kansas City Fed manufacturing index, April (consensus +16, last +20)</strong></li> </ul> <p><span style="text-decoration: underline;"><strong>Friday, April 28 </strong></span></p> <ul> <li><strong>08:30 AM GDP (advance), Q1 (GS +1.4%, consensus +1.1%, last +2.1%); Personal consumption, Q4 (GS +1.3%, consensus +0.9%, last +3.5%):</strong> We expect a +1.4% increase in the first vintage of Q1 GDP (qoq saar), driven by a double-digit increase in residential investment (+12.6%) and a robust pace of growth in business fixed investment (+6.9%), partially offset by a negative growth contribution from inventory investment (-0.7pp) and net exports (-0.1pp). Accordingly, our growth estimate for the domestic final sales component is somewhat firmer at +2.1%. We look for real personal consumption to rise 1.3%, aided by a late-quarter boost to utilities consumption that reflects the impact of unseasonably cold weather in March.</li> <li><strong>08:30 AM Employment cost index, Q1 (GS +0.7%, consensus +0.6%, last +0.5%); </strong>We estimate that growth in the Employment Cost Index (ECI) accelerated to 0.7% in Q1 (qoq sa) from 0.5% in Q4, with the year-over-year pace rising to 2.3% (from 2.2%). Our forecast mainly reflects firming wage growth in an economy at or near full employment. The ECI rose a softer-than-expected 0.5% in the fourth quarter, and the headline measure appears to have overshot to the downside relative to underlying wage growth in the ECI sample. Wages and salaries excluding incentive-paid occupations actually firmed last quarter, rising 2.5% year over year vs. 2.4% in Q3. This suggests some scope for the gap to close (or overshoot in the other direction) in Q1. Relatedly, we see scope for improving wage growth in sales and related occupations and in the administrative and support services industries, where wages and salaries exhibited rare outright declines last quarter.&nbsp; Wage growth data has generally been stable-to-higher so far in 2017, most notably the Atlanta Fed wage tracker, which rose to 3.4% year over year in March. Our broader Q1 wage tracker rose 2.9% year over year in Q1, up from 2.8% in Q4 and compared to the Q4 ECI of +2.2% (yoy). Taken together, our base case expectation is that growth in the Employment Cost Index will round up to +0.7%. </li> <li><strong>09:45 AM Chicago PMI, April (GS 57.0, consensus 56.5, last 57.7):</strong> We expect the Chicago PMI to decrease to 57.0 in April after the index edged up to 57.7 in March. Despite expected sequential softness, the index is likely to remain at a level consistent with growth in the manufacturing sector, in line with the reports of other regional manufacturing surveys in April. </li> <li><strong>10:00 AM University of Michigan consumer sentiment, April final (GS 97.5, consensus 98.0, last 98.0):</strong> We expect the University of Michigan consumer sentiment index to pull back 0.5pt to 97.5 in the April final estimate, reflecting some sequential deterioration in April consumer surveys. The preliminary report’s measure of 5- to 10-year ahead inflation expectations was unchanged at 2.4%. With gas prices rebounding in April, the related technical drag on reported inflation expectations should be limited.</li> <li><strong>01:15 PM Fed Governor Brainard (FOMC voter) speaks:</strong> Federal Reserve Governor Lael Brainard will give a speech on “Fintech and the Future of Finance” at the Kellogg School of Management at Northwestern University in Illinois. Audience Q&amp;A is expected.</li> <li><strong>02:30 Philadelphia Fed President Harker (FOMC voter) speaks:</strong> Philadelphia Federal Reserve President Patrick Harker will give a speech on “How STEM Can Get You Anywhere” at the X-STEM Symposium in Washington D.C. Audience Q&amp;A is expected. </li> </ul> <p><em>Source: JPM, Goldman, SocGen</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1073" height="625" alt="" src="" /> </div> </div> </div> Asia Pacific Atlanta Fed Australia Bank Lending Survey Bank of Japan Business Case-Shiller Census Bureau Central Banks Chicago PMI Chicago./Dallas Fed China China Conference Board China Claremont McKenna College Conference Board Congress Consumer Consumer Confidence Consumer confidence Consumer confidence index Consumer price index Consumer Sentiment Continuing Claims CPI Credit Suisse Daimler Dallas Fed Dallas Fed Deutsche Bank Economy Economy of the European Union Economy of the United States Employment Cost ETC Euro European Union Eurozone Eurozone Federal Communications Commission federal government Federal Reserve fixed France Germany Gross domestic product Hong Kong Housing Starts Illinois Inflation Initial Jobless Claims Italy Japan Kansas City Fed KIM M3 Michigan Minneapolis Fed Minneapolis Federal Reserve Money Supply Neel Kashkari New Home Sales NIM Northwestern University in Illinois Personal Consumption Philadelphia Fed Philadelphia Federal Reserve recovery Richmond Fed S&P 500 S&P/Case School of Management SocGen Standard Chartered SWIFT Trade Balance Trade Deficit U.S. Census Bureau UCLA in California Unemployment University Of Michigan University of Michigan Washington D.C. Wholesale Inventories Mon, 24 Apr 2017 11:03:21 +0000 Tyler Durden 593977 at Euphoria Returns: European Stocks Soar, Dax Hits Record; S&P Futs Surge In "French Relief Rally" <p>Risk is definitely on this morning as European shares soar, led by French stocks and a new record high in Germany's Dax, after a "French relief rally" in which the first round of the country’s presidential elections prompted investors to bet that establishment candidate Emmanuel Macron will win a runoff vote next month, and who is seen as a 61% to 39% favorite to defeat Le Pen according to the latest just released Opinionway poll. </p> <p>For those who may have missed yesterday's events, here is a quick recap from DB:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The fact that Macron and Le Pen have made it through to the second round was in line with the most likely scenario for the last several weeks and is a big market positive given their head-to-head polling numbers but make no mistake viewed over a longer-term horizon its another political shockwave <strong>as the two mainstream party's candidates have been eliminated in the first round for the first time under the 5th Republic. </strong></p> <p>&nbsp;</p> <p>A reminder that the polls have suggested that in a run-off Macron has consistently been 20-30% ahead of Marine Le Pen. It would take a numerical shock perhaps 5-10 times larger than Brexit or Trump for Le Pen to win. It does seem that the prefirst round polls have been relatively accurate so Macron should rightly be red hot favourite now. The fact that many of the losing candidates (not Melenchon) have been throwing their support behind Macron helps reinforce this<strong>. </strong></p> <p>&nbsp;</p> <p><strong>So this was a big anti-establishment vote but a tame one for now due to the fact that a market friendly candidate made it through and is very much expected to win. </strong>The first round polls were close enough that you couldn't have ruled out a very market unfriendly Le Pen/Melenchon run-off but now that risk has been eliminated the second round is perhaps more straight forward. The latest numbers with 97% counted are Macron 23.9%, Le Pen 21.4%, with Fillon and Melenchon with just over 19% each. </p> </blockquote> <p>Asian stocks also surged, expect for China, which suffered its biggest drop of the year, down 1.4%, ending the streak of losses no greater than 1% going back to December. The dollar has tumbled against the euro, while crude oil rises. In the US, S&amp;P futures surged 1.2% to 2,374.5, again approaching an all time high, on the heels of the favorable France vote and as Trump vowed to announce tax reforms this week. </p> <p>Back to Europe where French stocks led gains in European equities as traders speculated that candidate Emmanuel Macron will win the country’s presidential election after he made it through to the second round. Led by gains in French banks, <strong>the CAC 40 Index surged 4.4% at 11 a.m. in Paris</strong>, poised for its best advance since June 2012, <strong>while the Euro Stoxx 50 Index jumped 3.2 percent and the broader Stoxx Europe 600 Index rose 2 percent</strong>, both heading for their highest levels since August 2015. Banks were the biggest winners among Stoxx 600 groups. The Euro Stoxx Banks Index surged 6.7 percent, heading for its highest level since December 2015.</p> <p>As shown in the chart below, the CAC 40 is poised to close at its highest level in more than nine years. It could outperform Germany’s DAX Index by 3 percent to 4 percent within a few days, Natixis strategist Sylvian Goyon <a href="">told Bloomberg</a>. The French benchmark had advanced less than the DAX in the year through Friday’s close, before outperforming on Monday.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>Commenting on the move, Andrea Tueni, a trader at Saxo Bank, said that “the result will bring some relief to the market. This confirms the ‘central scenario’ that was mostly priced in already, so I don’t expect euphoria on the markets. Banking stocks could outperform after their recent weakness.” And yet euphoria is precisely what has been unleashed looking at not only the CAC but also Germany's Dax, which is trading at record highs this morning. </p> <p><strong>Germany’s DAX Index rallied in sympathy to a new all time high. </strong></p> <p><a href=""><img src="" width="500" height="276" /></a></p> <p>More on the "unexpcted" euphoria: every industry group in the Europe 600 Index rose, volatility fell the most since 2005, and the cost of insuring against losses on French banks’ junior debt fell by the most in almost seven years. The VStoxx Index of euro-area volatility slumped 30% , poised for a record decline. France’s VCAC Index tumbled 36%. Gold was on course for its biggest drop in seven weeks and the yen was the worst performer among major currencies. Hinting that early euphoria may have been overdone, the euro scaled back gains after it’s best open on record. </p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>“Macron will not only help stabilize the European Union, but also help build stronger support mechanisms,” Azad Zangana, senior economist for Europe at Schroders Plc in London, wrote in a note to clients. “The contest is not over yet, but investors are likely to take comfort and to begin to think about the more attractive valuations that European equities offer." </p> <p>The spread between German and French 10Y yields, aka "<em>le spread</em>" plunged by over17 bps, and has dropped to under 50 bps as fears of a French shock evaporate. The spread was just under 80bps in February when fears of a Le Pen win peaked, and has since narrowed to the lowest level since late 2016.</p> <p><a href=""><img src="" width="500" height="297" /></a></p> <p>While Europe and the rest of the world soared, China tumbled, and a selloff in Chinese stocks deepened after the Shanghai Composite plunged 1.4%, the most in four months, <a href="">amid the previously noted concern authorities </a>will step up measures to crack down on leveraged trading. The Composite suffered its biggest one-day loss since Dec. 12, as industrial companies and material producers led losses. The ChiNext small-cap gauge slipped 1.6 percent to 1,809.91, its lowest closing level since September 2015.</p> <p>China’s authorities are taking advantage of a strengthening economy to reduce financial-system risk by tightening the screws on leverage. The banking regulator said late Friday it will strengthen a crackdown on irregularities in the financial sector, echoing comments by the securities watchdog just days earlier, while the top insurance official is being investigated on suspicion of “severe” disciplinary violations. The Shanghai Composite has slumped almost 5 percent since closing at a 15-month high on April 11, the biggest loss among global gauges.</p> <p>"Market sentiment has been damped by recent tightening supervision on all fronts such as the banking commission, insurance commission, securities regulator," said Ben Kwong, executive director of KGI Asia Ltd. in Hong Kong. "They expressed concern about bubbles and credit defaults. The deleveraging process is still in progress."</p> <p>&nbsp;</p> <p><a href=""><img src="" width="502" height="261" /></a></p> <p>The declines dented optimism in Hong Kong, where the Hang Seng Index rose 0.4 percent, paring an earlier gain of as much as 0.7 percent that had come amid global risk appetite on bets that pro-growth centrist Emmanuel Macron will be France’s next president. The Hang Seng China Enterprises Index climbed 0.6 percent at the close, trimming an advance of 1.1%.</p> <p>However, China's potential tightening was not enough to dent today's global euphoria which spilled out from equities and across all risk assets, including most currencies even as the dollar dropped as safe haven trades were unwound, dragging Treasurys lower.</p> <p>With France in the rearview mirror, there will be some focus on potential other big events this week. As we ended last week the market mood was improved with reports of both a renewed push for Trump tax reform and also talk of another healthcare vote occurring sooner rather than later. Trump used his media on choice - twitter - to proclaim on Saturday that "Big TAX REFORM AND TAX REDUCTION will be announced next Wednesday". The capitals are his emphasis and he is not turning the dial down much from his "phenomenal" tax plan comment on February 9th. However that one he promised within 2-3 weeks. The consistent certainty and hyperbole make it a nightmare for markets as how do you analyse how realistic delivery is? It would be hard for credibility if this week brings nothing of note but this is a way of doing things that is unique to Mr Trump's presidency and with it the uncertainty level is high. Over the weekend Mick Mulvaney, director of the Office of Management and Budget suggested that Wednesday will bring the administration's "principles" and "some of the ideas that we like, some of the ideas we don't like" and intimated that the full plan won't be released until June. So we'll have to wait and see.</p> <p>Meanwhile, the euro climbed 1.3 percent to $1.0863 as of 10:18 a.m. in London. It soared as much as 2 percent earlier. Other European currencies rallied, with the Swedish krona and the Norwegian krone each increasing at least 1.8 percent. The yen fell 0.9 percent to 110.06 per dollar, after capping the first weekly loss in three on Friday. The Bloomberg Dollar Spot Index slipped 0.7 percent, trading at the lowest level since the U.S. election in November.</p> <p>In rates, French 10-year notes dropped 11 basis points to 0.84 percent. Portuguese and Spanish bonds also rallied. Meanwhile, Europe's "safe" German benchmark yields climbed 10 basis points and those in the U.K. added eight basis points. In the US, Treasury 10-year yields rose six basis points to 2.31%, rising back over the key support leve of 2.30%.&nbsp; </p> <p>In commodities, WTI climbed back over $50, rising 1% to 50.10 as gold slipped 1% to $1,271.92, its biggest drop since Mar. 2.</p> <p>Economic data Monday includes Chicago Fed Nat Activity. Alcoa, Halliburton are among companies scheduled to publish results. </p> <p><strong>Global Markets Snapshot</strong></p> <ul> <li>S&amp;P 500 futures up 1.2%2 to 2,374.50</li> <li>STOXX Europe 600 up 2% to 385.57, highest since Decembr 2015</li> <li>France’s CAC 40 up 4.3%&nbsp; </li> <li>Germany’s DAX up 2.8% </li> <li>U.K.’s FTSE 100 up 1.9% </li> <li>MXAP up 0.4% to 147.57</li> <li>MXAPJ up 0.6% to 481.24</li> <li>Nikkei up 1.4% to 18,875.88</li> <li>Topix up 1% to 1,503.19</li> <li>Hang Seng Index up 0.4% to 24,139.48</li> <li>Shanghai Composite down 1.4% to 3,129.53</li> <li>Sensex up 1% to 29,646.34</li> <li>Australia S&amp;P/ASX 200 up 0.3% to 5,871.78</li> <li>Kospi up 0.4% to 2,173.74</li> <li>Brent Futures up 0.8% to $52.37/bbl</li> <li>Gold spot down 1% to $1,271.73</li> <li>U.S. Dollar Index down 1% to 99.03</li> <li>German 10Y yield rose 9.4 bps to 0.347%</li> <li>Euro up 1.3% to 1.0863 per US$</li> <li>Italian 10Y yield fell 0.6 bps to 1.968%</li> <li>Spanish 10Y yield fell 8.2 bps to 1.613%</li> </ul> <p><strong>Top overnight news from Bloomberg</strong></p> <ul> <li>French Establishment in Disarray as Le Pen, Macron in Runoff</li> <li>Euro Rises to Five-Month High as Macron, Le Pen Win French Vote</li> <li>Freeport to Start Concentrate Exports From No. 2 Copper Mine</li> <li>Actelion Says J&amp;J Deal on Track to Close Toward End of 2Q 2017</li> <li>Trump Plans Top-Level Briefing With Senators on North Korea</li> <li>Jimmy Choo Puts Itself Up for Sale as JAB Shifts From Luxury</li> <li>LafargeHolcim CEO Olsen Resigns Amid Probe on Syria Dealings</li> <li>India Top Court Issues Notice to Google on Antitrust Body Plea</li> <li>Top Iron Ore Forecaster Says Prices Will Sink Back Below $50</li> <li>Creditors Lose Bankruptcy Lawsuit Over Lyondelbasell Merger</li> <li>L&amp;T Tech, Microsoft Win Multi-Million Dollar Project in Israel</li> <li>Blackstone, RWE Won’t Start New German Plants Before 2021: BDEW</li> </ul> <p><strong>Asian equities traded mostly higher </strong>amid heightened risk sentiment across asset classes following the French Presidential election 1st round. ASX 200 (+0.2%) was led by financials although underperformance in gold miners limited gains, while Nikkei 225 (+1.4%) outperformed on JPY weakness. Shanghai Comp (-1.4%) and Hang Seng (+0.4%) underperformed with heavy losses in the mainland <strong>after the PBoC reduced its liquidity injection and amid regulatory concerns after the CIRC warned of key risks and called for prudent investment plans. </strong>T-notes dropped 20 ticks and 10yr JGBs were also weighed as safe-havens suffered from the French election, while slight pressure was also seen following the BoJ Rinban announcement where it reduced its buying in 3yr-5yr maturities. PBoC injected CNY 10bIn in 7-day reverse repos, CNY 10bIn in 14-day reverse repos and CNY 10bIn in 28-day reverse repos. PBoC set CNY mid-point at 6.8673 (Prey. 6.8823). <strong>China's CIRC warned on risks facing the insurance industry and stated that companies must guard against liquidity risks with regular cash flow tests and called for a prudent investment scheme to be established to strengthen asset and liability management. </strong>Furthermore, there were separate reports that China is expected to implement further deleveraging measures. </p> <p><em>Top Asian News</em></p> <ul> <li>Shandong to Continue Work on Barrick Mine Bid, Australian Says</li> <li>Consortium Will Allow Further Dividend Payments to Tatts Holders</li> <li>Jack Ma Sees Decades of Pain as Internet Upends Older Economy</li> <li>Massacre of Soldiers by Taliban Spurs Afghan Minister to Resign</li> <li>China Bonds Extend Drop as 10-Year Yield Rises to 20-Month High</li> <li>PLDT in Talks for Manila Electric Stake, May Close Deal in 1H</li> <li>Nikon Sues ASML and Carl Zeiss Over Semiconductor Patents</li> </ul> <p><strong>European equities started off the week by surging </strong>notable outperformance in the CAC 40 (+4.0%) amid the fallout of last night's French Presidential election 1st round. Given that Macron has made it into the second round on Sunday May 7th and is widely touted to defeat Le Pen, this has spurred risk on sentiment with the financial sector the main beneficiary as French banks opened higher by 8-10%. This positive sentiment has spilled into other European financials with Commerzbank (+9.1%) and Deutsche Bank (+6.0%) supported as markets keep half an eye on the ramifications of upcoming domestic elections later this year. Fixed income markets have followed a similar vain to equities with French paper a key focus for markets with the GE-FR spread narrowing to circa 45bps as investors re-enter French bonds amid an unwind of political concerns. Conversely, USTs, Bunds and Gilts trade lower in more of a risk-play while peripheral markets have tightened against their core counterparts. Interestingly, Jun'17 BTPs have printed fresh contract highs despite Friday's downgrade by Fitch.</p> <p><em>Top European News</em></p> <ul> <li>German Business Confidence Climbs to Highest Since July 2011</li> <li>Draghi Seen Choosing Faster Exit Once French Hurdle Cleared</li> <li>Top Kazakh Bank on the Block for Under $1 May Need $738 Million</li> <li>Europe Banks in Biggest Relief Rally as Electoral Clouds Clear</li> <li>Romania Is Considering Policy Tightening, Central Banker Says</li> </ul> <p><strong>In currencies, </strong>it's been a quiet morning with the EUR gap contracting slightly, but all pairs still significantly higher from late Friday. Emmanuel Macron is now expected to win the second round vote, as his marginal lead over Le Pen will be enhanced to some degree by the backing from Fillon and Hamon first and foremost. EUR/USD looks comfortable in the mid 1.0800's for now, as does EUR/GBP in the mid 0.8400's, but EUR/JPY is now 1 big figure off its best levels. German IFO was supportive based on the business climate and current conditions. Risk sentiment will remain heavy on the weekend developments surrounding North Korea, who continue to sound off warnings to all and sundry in response to the US presence in the region. USD/JPY gapped to just under 110.00 before an eventual and brief look above 110.50, but the pair is looking heavy at these levels despite the pick up in US Treasury yields — 10yr is 2.30%+ this morning.&nbsp; The commodity currencies are all moving higher in tandem as the risk element supports all in equal measure. Marginal outperformance in the CAD as WTI moves above USD50.00 again, with the USD rate having tested through 1.3500 at the end of last week in the wake of the softer Canadian inflation read. Strong resistance seen through here, and we are now looking on a move on 1.3400. AUD/USD is hitting highs around 0.7580 this morning, but we note strong selling interest from 0.7600 higher up. NZD/USD trade extremely tight but gains now testing resistance just above 0.7050, more seen ahead of 0.7100.</p> <p><strong>In commodities,</strong> outside of the risk events affecting all markets at the present time, it is the usual mix of supply issues which have been impacting on metals and Oil. Gold is naturally lower in the wake of the Macron win, with favourable conditions for the second round vote conspiring to send the yellow metal back under USD1270, but we have since recovered back above there as the USD index softens a little. Silver suffered the bulk of losses last week, but remains firmly camped below USD18.00. Oil prices have slipped on inventory levels again, with the DoE report instrumental in pushing WTI below USD50.00. USD45-55.00 is now the range the market looks comfortable with ahead of any proposed extension to the production cuts. Base metals higher with the equity market lift, but Copper lagging as Grasberg output set to resume. Iranian oil minister Zanganeh said that OPEC &amp; non-OPEC producers have sent positive signals regarding an extension of production cuts. Zanganeh added that Iran would second any decision made unanimously by OPEC. members and commented that one shouldn't be hopeful about oil prices beyond USD 60/bbl for the time being. </p> <p><strong>Looking at today's </strong>calendar, it’s a fairly quiet start to the week today with the only data in Europe this morning being the April IFO survey in Germany and CBI total orders data in the UK. In the US we have the April Dallas Fed manufacturing activity survey.</p> <p><strong>US Event Calendar</strong></p> <ul> <li>8:30am: Chicago Fed Nat Activity Index, est. 0.5, prior 0.3</li> <li>10:30am: Dallas Fed Manf. Activity, est. 17, prior 16.9</li> <li>11:30am: Fed’s Kashkari Speaks at UCLA in Los Angeles</li> <li>3:15pm: Fed’s Kashkari Participates in Q&amp;A at Claremont McKenna</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>Straight to France this morning. The fact that Macron and Le Pen have made it through to the second round was in line with the most likely scenario for the last several weeks and is a big market positive given their head-to-head polling numbers but make no mistake viewed over a longer-term horizon its another political shockwave as the two mainstream party's candidates have been eliminated in the first round for the first time under the 5th Republic. A reminder that the polls have suggested that in a run-off Macron has consistently been 20-30% ahead of Marine Le Pen. It would take a numerical shock perhaps 5-10 times larger than Brexit or Trump for Le Pen to win. It does seem that the prefirst round polls have been relatively accurate so Macron should rightly be red hot favourite now. The fact that many of the losing candidates (not Melenchon) have been throwing their support behind Macron helps reinforce this. So this was a big anti-establishment vote but a tame one for now due to the fact that a market friendly candidate made it through and is very much expected to win. The first round polls were close enough that you couldn't have ruled out a very market unfriendly Le Pen/Melenchon run-off but now that risk has been eliminated the second round is perhaps more straight forward. The latest numbers with 97% counted are Macron 23.9%, Le Pen 21.4%, with Fillon and Melenchon with just over 19% each. The Euro was the biggest early beneficiary, rising around 2% as soon as the exit polls were released and trading at around 5 month highs but as we go to print is now +1.1% at 1.0847 vs. the USD.</p> <p>Equity markets are firm outside of China without being euphoric. The Nikkei is 1.3% higher with US futures +0.8% higher. China is beating to its own drum and off over a percent following on from losses last week on market regulation worries. Treasury yields are 6bps higher. In credit Main, Senior Financials and Crossover are 5.75, 10.25 and 19bps tighter in overnight trading.</p> <p>To be fair markets hadn't aggressively priced in the alternative high risk scenario so there will likely be a limit to the inevitable risk-on from this first round result. Perhaps VSTOXX (vol on EU equities) has been as big a mover as any pre-election and may therefore be the main beneficiary. Expect Bunds to sell-off notably today (5-10bps??), OATs to out-perform, and Euro risk to perform well. The risk-on will be limited by the fact that as we discussed there hadn't been a huge amount of risk-off ahead of the event and also because a lot of the recent global softness was more due to recent US political and data disappointments.</p> <p>On that, with the first round of the French election out the way, there will be some focus on potential other big events this week. As we ended last week the market mood was improved with reports of both a renewed push for Trump tax reform and also talk of another healthcare vote occurring sooner rather than later. Mr Trump used his media on choice - namely twitter - to proclaim on Saturday that "Big TAX REFORM AND TAX REDUCTION will be announced next Wednesday". The capitals are his emphasis and he is not turning the dial down much from his "phenomenal" tax plan comment on February 9th. However that one he promised within 2-3 weeks. The consistent certainty and hyperbole make it a nightmare for markets as how do you analyse how realistic delivery is? It would be hard for credibility if this week brings nothing of note but this is a way of doing things that is unique to Mr Trump's presidency and with it the uncertainty level is high. Over the weekend Mick Mulvaney, director of the Office of Management and Budget suggested that Wednesday will bring the administration's "principles" and "some of the ideas that we like, some of the ideas we don't like" and intimated that the full plan won't be released until June. So we'll have to wait and see.</p> <p>We should also note that Friday marks the deadline to avoid a government shutdown and agree a new spending plan, and Saturday marks Trump's first 100 days in office. Ryan was bullish on avoiding the shutdown over the weekend and things will heat up on all things US governmental from tomorrow after House members return from a two week recess. So a very busy week ahead in Washington.</p> <p>The ECB will also get a lot of focus given their meeting on Thursday. As DB's Mark Wall has recently discussed, senior ECB Council members have for now shut down the debate on an early deposit rate hike with the normalization of inflation as yet unconvincing. However assuming France avoids a political shock, Mark expects the market to refocus on euro area reflation risks this summer but this meeting is too early for there to be too much change in language or emphasis outside of acknowledgment of an improving outlook, especially during the French campaign where Le Pen remains a runner. If Macron wins in 2 weeks, Mark thinks that with their inflation models and leading indicators consistent with underlying inflation rising in H2 we'll see more hawkish ECB behaviour from June onwards. They are keeping their baseline expectation for ECB exit largely intact. Based on their forecasts for growth and inflation, they expect forward guidance to be adjusted in June, tapering to be pre-announced in September and a oneoff deposit rate hike in December; the probably of the latter has declined but it remains our baseline. They expect tapering in H1 2018 and the first refi hike around the end of 2018.</p> <p>Rounding off last week, global markets were largely muted and remained cautious on Friday ahead of the French elections. Both the S&amp;P 500 reversed some of its gains from Thursday (-0.3%) while the STOXX&nbsp; (+0.02%) was broadly flat on the day, with the indices ending the week up +0.8% and down -0.65% respectively. The CAC (-0.37%) ended the day slightly lower, having dipped on the open by about 1% but recovering thereafter later in the day. French OAT 10Y yields at were also little changed at 0.94% (+1bp) in line with the bund move 10yr USTs were 1.5bps higher. Gold rose a touch to end the week nearly flat but Oil fell over 2% on Friday and fell from around $53 to $49.62 over the course of the week closing below $50 for the first in April. FX markets were also fairly quiet on Friday: the Euro (-0.4%) and Sterling (-0.1%) were lower on the day while the dollar ticked up by +0.1%. Over in commodity markets.</p> <p>Taking a look at data out of Europe on Friday, we saw flash PMI numbers for April for France, Germany and the Eurozone. The Eurozone numbers as a whole were positive with manufacturing and services rising to 56.8 (vs. 56.0 expected) and 56.2 (vs. 55.9 expected) respectively. Numbers out of France beat expectations across both manufacturing (55.1 vs. 53.1 expected) and services (57.7 vs. 57 expected). Nevertheless markets seemed reluctant to respond immediately as the weekend election risks took centre stage. Over in Germany the data was a little more mixed with manufacturing PMIs roughly in line with expectations (58.2 vs. 58.0 expected) while services fell (54.7 vs. 55.5 expected). Away from PMIs, we also saw UK retail sales data for March which recorded its largest monthly decline since 2010, falling -1.8% mom (vs. -0.5% expected; +1.7% previous). Over in the US we also saw Markit Flash PMI numbers for April, with both manufacturing (52.8 vs. 53.8 expected; 53.3 previous) and service PMIs (52.5 vs. 53.2 expected; 52.8 previous) falling on the month. Existing home sales data for March was however positive (5.71m vs. 5.60m expected).</p> <p>Looking at this week’s calendar, it’s a fairly quiet start to the week today with the only data in Europe this morning being the April IFO survey in Germany and CBI total orders data in the UK. In the US we’ll get the April Dallas Fed manufacturing activity survey. Kicking Tuesday off will be France where we get the April confidence indicators. Shortly after that its worth keeping an eye on the ECB’s bank lending survey before we then get public sector net borrowing data in the UK. Over in the US tomorrow we get the S&amp;P/Case-Shiller house price index, FHFA house price index, new home sales in March, conference board consumer confidence for April and the Richmond Fed manufacturing survey for April. Turning to Wednesday, it look set to be a pretty quiet day with Japan machine tool orders, French consumer confidence and US retail sales revisions the only prints of note. In China on Thursday we get March industrial profits data. The main focus in the Asia session though will be the BoJ policy meeting outcome. During the European session we’ll get Germany CPI in April, Euro area consumer confidence and of course the ECB rate decision around midday with Draghi due to speak after. It looks set to be a busy session in the US&nbsp; on Thursday too with March durable and capital goods orders data, wholesale inventories,&nbsp; advance goods trade balance, pending home sales, initial jobless claims and Kansas City Fed’s manufacturing survey. We close the week out in Japan on Friday with a bumper day of data including CPI, retail sales, jobless rate and industrial production. In Europe we’ll get CPI, PPI and Q1 GDP in France, along with Q1 GDP for the UK and CPI and money and credit aggregates data for the Euro area. We finish with a bumper afternoon of data in the US on Friday including Q1 GDP, core PCE, Chicago PMI and University of Michigan consumer sentiment. </p> <p>Away from the data, the Fedspeak this week consists of just Kashkari today and Harker on Friday. Away from that, Russia is due to hold talks with the US and UN today to discuss the Syrian peace process. UK PM Theresa May hosts EC President Juncker and EU’s Brexit negotiator Michal Barnier on Wednesday. President Trump also hosts Argentina President Mauricio Macri on Thursday. Earnings will be the other big focus this week with 194 S&amp;P 500 companies due.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="675" alt="" src="" /> </div> </div> </div> ASX 200 Bank Lending Survey Bank of Japan Bloomberg Dollar Spot Business Business CAC 40 CAD Case-Shiller Chicago Fed Chicago Fed Nat Activity Chicago PMI China Conference Board Consumer Confidence Consumer Sentiment Copper CPI Crude Crude Oil Currency Dallas Fed Dallas Fed DAX 30 Deutsche Bank Deutsche Börse DJ Euro Stoxx 50 Donald Trump ECB council Economy Emmanuel Macron Equity Markets Euro Euro Stoxx Banks European Central Bank European Union European Union Eurozone Fitch fixed flash France FTSE 100 Futures contract Germany Gilts Google Hang Seng 40 Hang Seng China Enterprises Hong Kong House Index Initial Jobless Claims Iran Japan Jim Reid Kansas City Fed Marine Le Pen Market Sentiment Markit Michigan New Home Sales Nikkei Nikkei 225 North Korea North Korea office of Management and Budget OPEC Organization of Petroleum-Exporting Countries People's Bank of China Richmond Fed S&P 500 S&P/ASX 200 S&P/Case Saxo Bank SSE 50 STOXX STOXX Stoxx 600 Taliban Trade Balance Twitter Twitter U.S. Treasury UCLA in Los Angeles United Nations University Of Michigan University of Michigan VCAC Volatility Wholesale Inventories Yen Mon, 24 Apr 2017 10:46:44 +0000 Tyler Durden 594021 at