With All Major Markets Closed For Holiday, Here Are The Major News

With US markets closed for the Memorial Day holiday, and some of the key European markets likewise shuttered for public holiday including the UK, Germany and Switzerland, it is difficult to find where one can observe or trade the weekend's newsflow, which is once again centered on developments in Europe, where on Sunday Spanish Prime Minister Mariano Rajoy’s People’s Party suffered its worst result in a municipal election in 24 years while Greece continues to threaten with default 5 some years after it should have officially pulled the plug.

As DB summarizes the major swing to "anti-austerity" in yet another European country - a move that may further force the Eurozone to keep a hard line with Greece or else suffer concession demands from Spain next - the weekend the ruling People’s Party (PP) suffered a loss of support in the regional and local elections, with anti-austerity focused Podemos and the emerging Ciudadonos party making gains. In Madrid in particular (a PP stronghold), the People’s Party won the municipal election but could lose control of the city council after the ruling party took 21 seats but Podemos backed Ahora Madrid took 20, meaning it’s now looking like they could form a coalition with the third placed Socialists, according to Reuters. It’s a similar story in Spain’s second largest city Barcelona, where Podemos backed activist Ada Colau has won the most votes in the mayoral race. Although coalition negotiations may take some time, it’s one that worth keeping an eye on.

And then there is always Greece, whose endless saga continues to drag on after little meaningful progress over the weekend. Instead, the Greek government has called on its creditors to compromise and according to Finance Minister Varoufakis, ‘do their bit’. As the clock ticks, Interior Minister Nikos Voutsis has once again reiterated that Greece will not be able to make the IMF repayments due in June totaling €1.6bn (and starting on the 5th) saying that ‘this money will not be given and is not there to be given’. Issues over reforms, particularly labour and pensions, still remain at the heart of the disagreement and lack of progress with the Greek government adamantly stating that it will stick to its ‘red lines’ and PM Tsipras again saying on the weekend that the government ‘won’t budge to irrational demands’. In the meantime, German Finance Minister Schaeuble remains defiant, saying that the problems are rooted in Greece and now Greece does have to fulfill its commitments. For now, technical talks are set to continue this week with pressure and time mounting. Expect to see more and more headlines with time appearing to be close to running out.

So of what little markets are open, the Italian and Spanish are the worst-performing. The euro is weaker against the dollar. European shares fall with the banks and utilities sectors underperforming and basic resources, travel & leisure outperforming. 

There was Asia, of course, which was open and where another bout of Yen weakness pushed the Nikkei up 0.7%, while not even the (briefly and formerly) richest man in China getting busted inflating then selling his own stock, and thus crashing it, in what may be one of the biggest Chinese frauds in history, put a dent in the Chinese stock bubble juggernaut, as the Shanghai Composite added another 3.4% in what has become most obvious parabolic blow off top bubble observed since the Nasdaq's vertial move in the year 2000.

Market Wrap:

• S&P 500 futures down 0.1% to 2123.3
• Stoxx 600 down 0.1% to 407.2
• MSCI Asia Pacific up 0.2% to 153.7
• Gold spot down 0.1% to $1204.5/oz
• 8 out of 19 Stoxx 600 sectors rise; basic resources, travel & leisure outperform, banks, utilities underperform
• Eurostoxx 50 -0.7%, FTSE 100 closed, CAC 40 -0.7%, DAX closed, IBEX -1.7%, FTSEMIB -1.9%, SMI closed
• Asian stocks rise with the Shanghai Composite outperforming and the Sensex underperforming; MSCI Asia Pacific up 0.2% to 153.7
• Nikkei 225 up 0.7%, Hang Seng closed, Kospi closed, Shanghai Composite up 3.4%, ASX up 1%, Sensex down 0.9%
• 7 out of 10 sectors rise with consumer, utilities outperforming and telcos, staples underperforming
• Euro down 0.37% to $1.0972
• Dollar Index up 0.39% to 96.39
• Italian 10Yr yield up 1bps to 1.87%
• Spanish 10Yr yield up 2bps to 1.81%
• Brent Futures down 0.6% to $65/bbl, WTI Futures down 0.6% to $59.4/bbl

DB's Jim Reid concludes the weekend event summary

It’s another week of important data releases in the US this week which will help sharpen second quarter growth expectations some more and no doubt fuel the debate further on whether or not we are seeing a meaningful bounce back following the soft first quarter. Durable goods orders and in particular the core capex component will be one which will be closely followed tomorrow, while new homes sales and the Chicago PMI are also due this week. Of course, there will also be much focus on Friday’s second revision to Q1 GDP with our US colleagues expecting growth to be revised down to -1.0% for the quarter after the initial +0.2% estimate. We’ve got the usual full rundown on the week’s highlights at the end of the report. Markets on Friday were about as muted as you could get given we had US CPI and the Fed’s Yellen speaking. 10y Treasuries closed 1.9bps higher in yield at 2.210% and the S&P 500 finished -0.22% lower after core CPI was rounded up one-tenth of a percent above expectations to +0.3% mom (0.256% unrounded), which helped keep the annualized rate at +1.8% yoy. Yellen’s comments probably didn’t move the liftoff dial much after the Fed Chair said that it would be ‘appropriate at some point this year to take the initial step to raise the fed funds rate’ should the US economy continue to improve as expected.

So with a number of markets closed today, attention is mostly on the Asia timezone where bourses are trading firmer as we go to print. Indeed, the Nikkei (+0.69%), Topix (+0.69%), Shanghai Comp (+2.32%), CSI 300 (+2.03%) and ASX (+1.05%) are all higher, while bond markets are relatively unchanged on the whole. Asia credit markets are around a basis point wider this morning while oil markets are modestly higher (+0.2%). Meanwhile, in Japan the April trade data report showed export volumes rising slowly but the trade balance deteriorating somewhat. Exports rose 8% yoy and above expectations of 6%, while imports declined 4.2% yoy although more than the 1.1% decline expected. The result was a smaller than expected trade deficit (¥54.4bn vs. ¥351.1bn expected), however our colleagues in Japan noted that seasonally adjusted, the economy recorded a much larger deficit and noted that the trend in export volumes, although up, is signaling a gentle recovery.

Away from Asia, the Greek saga continues to drag on after little meaningful progress over the weekend. Instead, the Greek government has called on its creditors to compromise and according to Finance Minister Varoufakis, ‘do their bit’. As the clock ticks, Interior Minister Nikos Voutsis has once again reiterated that Greece will not be able to make the IMF repayments due in June totaling €1.6bn (and starting on the 5th) saying that ‘this money will not be given and is not there to be given’. Issues over reforms, particularly labour and pensions, still remain at the heart of the disagreement and lack of progress with the Greek government adamantly stating that it will stick to its ‘red lines’ and PM Tsipras again saying on the weekend that the government ‘won’t budge to irrational demands’. In the meantime, German Finance Minister Schaeuble remains defiant, saying that the problems are rooted in Greece and now Greece does have to fulfill its commitments. For now, technical talks are set to continue this week with pressure and time mounting. Expect to see more and more headlines with time appearing to be close to running out.

The political situation is also taking shape in Spain where over the weekend the ruling People’s Party (PP) suffered a loss of support in the regional and local elections, with anti-austerity focused Podemos and the emerging Ciudadonos party making gains. In Madrid in particular (a PP stronghold), the People’s Party won the municipal election but could lose control of the city council after the ruling party took 21 seats but Podemos backed Ahora Madrid took 20, meaning it’s now looking like they could form a coalition with the third placed Socialists, according to Reuters. It’s a similar story in Spain’s second largest city Barcelona, where Podemos backed activist Ada Colau has won the most votes in the mayoral race. Although coalition negotiations may take some time, it’s one that worth keeping an eye on.

Back to markets on Friday, unsurprisingly the bulk of the moves in Treasuries came following the CPI report with the 10y benchmark jumping around 4bps higher having traded a touch tighter in the run up to the print. 5y Treasuries saw the sharpest move closing 5bps higher on day at 1.563%, while 30y yields finished more or less unchanged (-0.4bps) at 2.985%. The data supported a bid for the Dollar with the DXY finishing +0.80% to mark the first weekly gain in six weeks. Gold closed +0.11% higher while oil markets had a softer session as WTI (-1.65%) and Brent (-1.76%) declined to $59.72/bbl and $65.37/bbl respectively. On the data, despite the modest rise in the core, headline CPI met expectations for the month of April having risen +0.1% mom to lower the annualized rate further into deflation at -0.2% yoy as expected. The move higher than expected in the core meanwhile appeared to be almost solely attributed to a somewhat unpredictable jump in medical care costs (+0.7% mom).

Digging into Yellen’s comments a bit more, the Fed Chair also noted that following the first move, the pace of normalization  will likely be gradual while she mirrored other similar Fed comments that any move will be data dependent. There was some mention of a ‘generally disappointing pace of wage growth’ and that although the labour market was approaching full strength ‘we are not there yet’. Also noted were headwinds that had previously constrained growth, including ‘weak growth abroad’ should abate supported by ‘monetary policies that generally remain highly accommodative’.

Over in Europe on Friday, bond markets closed relatively mixed on the whole as 10y Bunds (-3.6bps) finished tighter, while in the periphery Italy (+1.6bps), Spain (+1.6bps) and Portugal (+2.6bps) finished a tad wider. After 4 consecutive weeks of moves of at least 7bps higher in yield for 10y Bunds, last week saw yields actually close 2bps tighter over the five days. Risk assets were a touch weaker on Friday. Equity markets were led by a decline for the DAX (-0.42%) while the CAC (-0.07%) and Stoxx 600 (-0.03%) finished modestly lower. In credit Crossover ended 5bps wider meanwhile. Much of the focus data-wise was on the final revision to Q1 GDP in Germany which saw no change to the +0.3% qoq print as both net exports and inventories in particular proved to be a drag. Following this, our colleagues in Germany have now lowered their 2015 GDP forecast from 2.0% to 1.6% given the weaker starting base now. They did however note that they still expect quarterly growth rates to average a healthy +0.4% qoq in 2015 and that the downward revision should not distract from the underlying story of strong domestic demand that remains unchanged in their view. Staying in Germany, we also got the May IFO survey which showed just a modest 0.1pt decline to 108.5 (vs. 108.3 expected). Although the expectations index fell 0.4pts in line to 103.0, the current assessment survey was a notable beat versus consensus after improving 0.3pts to 114.3 (vs. 113.5 expected). Elsewhere, manufacturing confidence for France improved 1pt to 103 (vs. 101 expected) while there was an equal rise in business confidence for the region as expected to 97.

Looking at the week’s calendar now, with markets closed in the US and some of Europe, there are no data releases due aside from the BoJ’s monthly economic report for May this morning. We’ve just got Japan PPI and UK CBI reported sales to look forward to in the Asia and European timezones on Tuesday before we get a bumper data day in the US on Tuesday afternoon with durable goods orders, capital goods orders, FHFA house price index, S&P/Case Shiller house price index, May flash composite and services PMI’s, new home sales, consumer confidence, Richmond Fed manufacturing index and the Dallas Fed manufacturing activity index. Wednesday starts in China where we get industrial profits data for April and small business confidence in Japan. There are more confidence indicators in Europe on Wednesday with German and French consumer confidence. There are no releases of note in the US in the afternoon. On Thursday we get Japan retail sales in the early morning. We then turn to Europe where we get various May confidence indicators for the Euro area. Initial jobless claims and pending home sales will be due in the US on Thursday. It’ll be a busy end to the week on Friday as we get CPI, industrial production, housing starts and the jobless rate out of Japan first of all. In Europe we start with French consumer spending, quickly following by Euro area money supply data and then the preliminary Q1 GDP report for the UK. Over in the US the second reading for Q1 GDP will be important given the expected revisions, while we also get the Chicago PMI and the final May University of Michigan consumer sentiment reading. There’s plenty of Fedspeak this week with Fisher, Mester, Lacker, Williams and Kocherlakota all due.

Comments

[Cognitive Dissonance]

Somewhere in the vast universe there is a HFT algo looking for an 'open' market to manipulate. I weep for the poor machines.

[DetectiveStern]

I dread to think what kind of manipulation goes on in smaller markets. If you can scam the biggest "market" in the world think of all the scamming you could do to the Kyrgyz Stock Exchange

[junction]

For all the talk of high finances and big money, news organizations pretty much ignore covering stories about how politicians use traffic tickets as a cash cow, looting motorists in the name of law enforcement.  The Ferguson, Missouri killing of Michael Brown for jaywalking drew attention to how that community’s police funded the city government using fine income from traffic ticket quotas, tickets rubberstamped by judges in Ferguson's kangaroo civil courts.  The blowback from Ferguson has now spread to California, where Governor Jerry Brown is now attacking traffic courts, the same Jerry Brown who two years ago signed a law protecting redlight camera company Redflex Traffic Systems from lawsuits.  That Redflex is facing corruption charges for political bribes meant nothing to Brown, now a senile old governor who is a puppet of his aides. What stands out in Judy Lin’s fine AP article (the paid off corporate press pretty much just plagiarized her article when it was cited on the Drudge Report)  is how almost 5 million motorists in California lost their driver’s licenses because they failed to pay traffic tickets and how many traffic courts in California illegally required motorists appealing their tickets to pay off previous traffic ticket debt before they could have a hearing.  All this happening with nary a peep from the paid off press, filled with lying reporters and scared editors.  California governor pitches amnesty on traffic debt for poor Under plan, drivers with lesser infractions would pay half of what they owe, and administrative fees would be slashed from $300 to $50

By Judy Lin
Associated Press

http://www.policeone.com/police-products/traffic-enforcement/articles/8555167-Calif-governor-pitches-amnesty-on-traffic-debt-for-poor/

Posted: 05/23/15, 9:39 AM PDT

SACRAMENTO, Calif. — Calling California's traffic court system a "hellhole of desperation" for the poor, Gov. Jerry Brown is proposing an amnesty program for residents who can't afford to pay off spiraling fines and penalties that have resulted in 4.8 million driver's license suspensions since 2006.

The push by the Democratic governor spotlights concern among lawmakers and court administrators that California's justice system is profiting off minorities and low-income residents. It's a civil rights issue that has prompted discussions between the Brown administration and the U.S. Department of Justice, according to the governor's spokesman, Evan Westrup.

In this March 18, 2010 file photo, people line up outside the Metropolitan Courthouse in downtown Los Angeles. (AP Image)

It's not clear if the Justice Department has launched an inquiry into California's court system. The department did not return requests for comment. Westrup declined to provide details on the meetings with federal officials.

Under Brown's plan, drivers with lesser infractions would pay half of what they owe, and administrative fees would be slashed from $300 to $50.

Advocates for the poor have likened California's problem to the police and municipal court structure in Ferguson, Missouri, which was criticized by the Justice Department as a revenue-generating machine following last year's fatal shooting of Michael Brown by a police officer.

"California has sadly become a pay-to-play court system," said Michael Herald, a legislative advocate for the Western Center on Law and Poverty who helped write a scathing report released last month by civil rights groups on how Californians are getting caught in a cycle of debt and having their driver's licenses suspended as a result of costly traffic tickets and court penalties.

Traffic fines have been skyrocketing in California and courts have grown reliant on fees as a result of budget cuts during the recession.

Twenty years ago, the fine for running a red light was $103. Today, it costs as much as $490 as the state has established add-on fees to support everything from court construction to emergency medical air transportation. The cost can jump to over $800 once a person fails to pay or misses a traffic court appearance.

Civil rights groups like the American Civil Liberties Union have found that some traffic courts routinely deny people a hearing unless they pay the amount owed up front. The debt also has to be paid off in order for their licenses to be reinstated.

"Everyone is entitled to their day in court and that includes the poor," said Christine Sun, associate director of ACLU of Northern California.

On Monday, California Chief Justice Tani Cantil-Sakauye directed the court system's policymaking body, the Judicial Council, to make clear that people do not have to pay off traffic court debts before they can get a hearing.

Since 2006, the state has suspended 4.8 million driver's licenses after motorists failed to pay or appear in court, according to the Department of Motor Vehicles. Of those, only about 83,000 licenses were reinstated.

Michael Armas, 31, of Oakland, said he has been unable to find a labor or construction job without his driver's license for the past year and a half because he hasn't paid minor citations such as driving while using a cellphone or an improperly displayed license plate. His tickets have spiraled into a $4,500 debt.

Armas, who is African-American and Portuguese, said he's caught in a no-win legal cycle that's hampering his efforts to win custody of his 11-year-old daughter.

"How do you expect to pay something when you have no job, and you can't get a job without your license?" Armas said.

Brown hopes to bring relief to the poor with the 18-month amnesty program that would start Oct. 1.

"It's a hellhole of desperation and I think this amnesty can be a very good thing to both bring in money, to give people a chance to kind of pay at a discount," Brown said last week.

Brown's proposal is similar to a bill by Sen. Bob Hertzberg, D-Los Angeles, which would restore a license if the driver agrees to a debt payment program based on a sliding scale. The poorest would pay as little as 20 percent of the fine.

Senate President Pro Tem Kevin de Leon, D-Los Angeles, sent letters Tuesday to the Judicial Council and a nonpartisan analyst for ideas on changing the court fee structure.

California Governor Signs Bill Saving Red Light Camera Industry
Legislation exempting red light camera companies from legal challenge signed into law in California.
http://www.thenewspaper.com/news/39/3910.asp

Oct 1, 2012 - Governor Jerry Brown (D) signed legislation Friday rescuing California's red light camera companies from several pending legal challenges. The state Supreme Court has been poised to rule on whether defendants have the constitutional right at trial to confront the individuals responsible for generating the photographic evidence produced by automated ticketing machines. As recently as September 17, the state's second-highest court was ready to take up a similar question (view case).

Lobbyists for Redflex Traffic Systems, an Australian company, took credit in emails for authoring provisions of the newly signed law that takes those issues off the table. The new law re-writes the state's evidence code stating that the computer output and images from a red light camera are presumed accurate, even though cameras have ticketed motorists for running green lights or tricked them with signal timing that is deceptive. The National Motorists Association (NMA) lobbied against the camera industry proposal, arguing the creation of a new hearsay exception deprives motorists of a fundamental right to challenge the evidence against them.

Finally, the bill codifies the practice of private vendors sending "snitch tickets" to vehicle owners in cases where the photographs are not clear enough to send an actual citation. The new law calls them "courtesy notices" and creates a standardized form for their use. Though these notices can be thrown in the trash without consequence, they are worded in such a way as to fool owners into paying the citations anyway.

Redflex US Chief Calls It Quits
Head of US operations for Redflex Traffic Systems announces his resignation in the wake of major legal and financial woes.

http://www.thenewspaper.com/news/46/4663.asp

Mar 22, 2015 - The man brought in to rescue the US division of Redflex Traffic Systems from a corruption scandal and looming bankruptcy announced his resignation on Monday. James Saunders, who held the title of president and CEO of the American subsidiary of the Australian firm, will leave no later than June 30.

When Saunders joined Redflex in October 2010 as the vice president for account management, the company was sailing high with a stock price of $2.50 per share. He was elevated to the top US job in July 2013 after the company cleaned out the top management ranks in the wake of a federal bribery and corruption investigation that has the former head of US operations, Karen Finley, facing a long prison sentence in a case. One of Finley's co-defendants has already pleaded guilty, and her former deputy has turned state's evidence.

By the time Saunders took the reins, the stock had plunged to $1.13 a share and his job was to slow the decline as best he could. Saunders met with customers, reinforced the importance of ethics training and urged every reporter he could talk to believe that the company was different now.

Despite Saunders' effort, cities continued to drop red light camera and speed camera programs, many seeking to avoid being drawn into scandal. Earlier this month, Redflex announced that profit plunged 414 percent in the first half of the fiscal year. Australian investors are scurrying from the stock, which tumbled to 60 cents on Friday, a 47 percent drop under Saunders.

[NoPension]

But an " illeagal " pulled over, is now just sent on his merry way.
I have seen it.
Drunk, illeagal, no license or insurance = too much fucking trouble and no income stream.
Catch and release.

[doubledutch]

Not necessarily open,right now they are active in the ASX future...

[This is it]

the machines dont have holidays.

Skynet is open for business.

[DutchBoy2015]

Its Pentecost today in NL.  Same with Germany

[Urban Redneck]

Pentecost was yesterday in AT, CH, DE, DK, FR, GR, HU, IS, NO and any other country with Western Christian churches.  Today is Whit Monday.

[Cognitive Dissonance]

It's five o'clock somewhere in the world. Time to break out the cocktails algos.

[Urban Redneck]

But what is an algo in the City to do on one of Mammon's Days? Since the Satanic British monarchy decided to park an official Bank Holiday on top of a religious holiday...

[buzzsaw99]

...the Fed Chair said that it would be ‘appropriate at some point this year to take the initial step to raise the fed funds rate’ should the US economy continue to improve as expected.

Good night, Westley. Good work. Sleep well. I’ll most likely kill you in the morning. [/dread pirate roberts]

[Cognitive Dissonance]

There is more hedging going on in that statement about fed funds rates than is ever uttered by the experienced ladies man who is about to bed the virgin as she asks if he will still love her in the morning.

[knukles]

+++ for the DPR reference.  Talk about egocentricity and hubris warping of one's mind .....

[negative rates]

The operative word being "should", in a selective economy you have to word things so you can change your mind if things 'should not be".

[AIIB]

My idea for today is to set up my smoker in front of 33 Liberty, BBQ some baby back ribs, (with a bacon macaroni salad side dish), & hand it out for free

[Atomizer]

You'll receive more traffic giving away barbecue chicken. 

Last Week Tonight with John Oliver: Chickens (HBO) - YouTube

[negative rates]

Not if you don't want to go to jail, you can't feed people for free without first paying the gvt a lic fee to do so, it cost 3 times as much as you intend to "give away". Happy bbqing

[Atomizer]

Just tell them your feeding ISIS rebels or newly integrated illegal aliens. You won't be required to have a permit. 

/sarc

[AIIB]

ISIS rebels = Mossad agents. So presumably they don't eat pork & the ruse would be spoiled (yet the FREE aspect of it would definitely cause a conundrum)

[gwar5]

The Pitchfork Party(s) are finally on the move. I'm for them. The bankers need to be stopped and given what they deserve.  

[williambanzai7]

Today, The Buddhas Birthday was observed in Hong Kong.

[ANestIOS]

"while Greece continues to threaten with default 5 some years after it should have officially pulled the plug"

it seems that the plug pulling rule for greece is different than everyone elses

http://www.project-syndicate.org/commentary/greece-government-reforms-by...

[Atomizer]

Happy Memorial Day Zerohedge. Can I offer anyone a Obama ice-cream cone?

[AIIB]

Easy homemade gelato style ice cream

- 1 pint of heavy cream (whip with electric beaters until peaks form)

- add in 14 oz can of sweetened condensed milk

- mix thoroughly

- flavor as desired (vanilla, cookie dough, chocalate chips, oreos, fruit, whatever)

- cover & put in freezer for 6 hours

You can have this ready by dinnertime... ENJOY!

Twist: Cut into sections & pour melted semi-sweet or dark chocolate over them prior to freezing & you have a Klondike Bar

[CarpetShag]

.

[NoPension]

Old. Kiss me, I'm Irish!

New. Pack Me Fudge, I'm Irish!

Shag, you wimp.

[Atomizer]

Potato picking and extended ears have a new meaning. 

[CarpetShag]

I decided the original wording of the comment, which drew attention to the gay marriage referendum in Ireland, was in bad taste.

[ptoemmes]

https://www.youtube.com/watch?v=ztZI2aLQ9Sw

[Inthemix96]

Morning bitchez.

What we are watching unfold before our very eyes is the collective awakening of the masses, just last night I was on the drink with a bunch of friends I hadnt seen for a while, one who was very much asleep to the nonsense ruling us, hes not now.  And hes not very fucking happy about the way things are falling apart round our way.  If this lad has woken up, Dog fucking help the rulers when the rest start questioning the paedophiles running the worlds collective joints.

It took the fact that although the Lib-Dems got fucking wiped out after being in a co-alition with the Conservative child rapers, to make him understand that they too should have been wiped out.

Smile, you are witnesses to history.  This is the most exciting time in my own personal history I could ever have hoped for.

The masses, in real fucking time are becoming alive....

:-)