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Overnight Sentiment - Closed
With Europe and the UK closed today, it was unclear if the traditional overnight futures levitation would take place as scheduled. To nobody's big surprise, it did, driven as usual by the EURUSD, which rose from an overnight low in the mid 1.27s following news that the Cypriot parliament head wanted to pull his country out of the Eurozone as reported here, but more importantly as that second ramp funding carry pair of choice, the USDJPY fell to the lowest in a month following yet another miss in the Japan Tankan big manufacturer index, touching under 93.30 for the first time since March 6, pushing the Nikkei 225 lower by over 2% - has the magic of Japanese rhetoric finally worn off and is the market finally demanding action instead of hollow promises, threats and simply, words? In China we got a miss in the official PMI data setting up yet another Schrodinger PMI split in Chinese economic growth indicators where the official details once again deteriorating while those tracked by HSBC/Markit are mysteriously improving. Also in Asia, rumblings out of South Korea, which continues to miss on key export and economic growth indicators, that it should cut rates mean the export-driven country is on the verge of joining the global currency warfare at which point the free Japanese lunch is over.
As noted previously, Europe is closed for Easter which means no volume, which means the New York Fed's trading desk will have no problems levitating futures to another all time record close now that every day has to be a record-er close, or else the magic of the ponzi will fail. Below are the key few overnight highlights via Bloomberg:
- Treasuries lower, led by longer maturities, after three straight weeks of gains. EUR/USD little changed at 1.2824, slid at 1.3% last week. Trading could be light today with Europe and U.K. markets closed for holiday.
- Yen gains, reaching 93.28 overnight, as Japan’s Tankan improved less than expected in March while South Korean exports rose 0.4% vs 1.8% median est. and a pickup in China’s output trailed forecasts
- Pessimism among big Japanese manufacturers may make it harder for BoJ’s Kuroda to achieve 2% inflation target as he needs companies to boost spending and wages to help revive growth; BoJ concludes policy meeting on Wednesday
- China’s March new home prices posted the biggest gain in more than two years as buyers rushed into the market ahead of property curbs by local governments, driving real estate stocks higher
- China’s overnight money-market rate slumped the most in a month on speculation cash supply will rise after banks met quarter-end capital requirements
Key economic events today:
- 8:58am: Markit US PMI Final, March, est. 55.2
- 10:00am: Construction Spending M/m, Feb., est. 0.8% (prior -2.1%)
- 10:00am: ISM Manufacturing, March, est. 54.2 (prior 54.2), ISM Prices Paid, March, est. 59.5 (prior 61.5) Supply
- 11:00am: Fed to buy $2.75b-$3.5b in 2020-2023 sector
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winning hearts and minds - CLOSED
Maybe we should keep it closed.....while we're on a roll.
just got back from bankers meeting.
boy are they sick of all this yammering about cyprus.
don't want a repeat of all this attention.
have decided to demobilize the press from slovenia this week.
also, no mention of "atm" or "haircut". local ordinances against taking pictures of banks and atm's and people gathering. local ordinances against gathering near banks or gov buildings.
also there is a clear need for a banking security force. the international kind. with boots and riot gear. to protect the hard working staff at the branches. like during occupy.
also no reporting on who is transferring what amount in advance of the bank holiday. that kind of reporting does not help stability.
with these plans in place, we look forward to peaceful resolutions of liquidity headwinds, going forward.
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Despite the NIK falling over 2% the magicial US futures levitated... says it all doesn't it
It does.
Easier to say which days WON'T be POMO days.
This Friday Fri-05-Apr-13
Next Wednesday Wed-10-Apr-13
Then Tue-16-Apr-13 and Thu-25-Apr-13.
Otherwise , all POMO days, the usual $45 bn-ish!
DavidC
Samsung, Samsung! Wherefore art thou Samsung?
Nah. They're just getting warmed up. You think Korea is going to blink & let Japan back in? The Yen & Won are going into a death embrace. Just watch.
I'm all in with South Korea .... drove my little Kia Soul from Playas de Tijuana to Rosarito .... 100 mph .... 93 octane Pemex premium .... $3 per gallon .... 1.6 litre .... smooth as glass at 5K rpm .... eat your heart out Kim Jong Un !
But now, whenever one of your cylinders starts to misfire, it plays a cool calypso beat.
Day-O .... daylight come an' I wanna go home ! You're an engineer .... this car uses 5-20 multi-grade oil and has the skinniest spark plugs I've ever seen .... I do change them every 15K .... and save the old ones in a coffee can .... for the hard times to come !
The President of Cyprus transferred €21 million from Nicosia to London just days before the robbery was announced,
I don't know which bank yet, Lloyds probably,
Europe is a fckn circus,
We're goin to war again, 100% certain of that,
Well, here's Yahoo's overnight sentiment:
"Era of Fed Stimulus Wanes"
http://finance.yahoo.com/news/era-fed-stimulus-wanes-160800194.html
They are right about one thing, something's eventually gotta give.
What free Japanese lunch? There is none! Very, very few companies benefit from the cheaper yen and main street not at all. Although it is not yet reflected in the numbers, Japan is in recession right now. Outside central Tokyo, stores and restaurants are empty. Abe extravagant spendings are not the road to recovery, their are the minimum needed to avoid a sharp economic decline. As for other developed economies, grobalization means that salaries are stuck resulting in little inflation but the permanent influx of money inflates asset bubbles, the one after the other. Hard to see an exit but it certainly can go on a little longer, a full generation has now been born within this environment. Positive in the short term then!