Standard Chartered

Standard Chartered’s new CEO Bill Winters thinks the bank is positioned well in "markets which will offer outstanding opportunities for decades to come", and while that may be true, the opportunities in those markets didn’t prove to be all that outstanding in the first half of the year, as the bank’s EM and commodities exposure contributed to a 44% decline in H1 profits and prompted a 50% dividend cut. 

In many ways the overnight session has been a mirror image of yesterday, with the dollar accelerating its Lockhart-commentary driven rise, which curiously has pushed ES higher perhaps as a result of more USDJPY correlation algos being active and various other FX tracking pairs. Indeed, the weak yen is all that mattered in Japan, where the Nikkei 225 (+0.5%) rose amid JPY weakness, despite opening initially lower as index heavyweight Fast Retailing (-4.5%) reported a 2nd consecutive monthly decline in Uniqlo sales. Elsewhere in mirror images, China slid 1.7%, undoing about half of yesterday's 3.7% jump, and is now down for 4 of the past 5 days.

Today's market battle will be between those (central banks) "hoping" that a Greek deal over the weekend is finally imminent (which on one hand looks possible after a major backpeddling by Tsipras - who may never have wanted to win the Greferendum in the first place - yesterday in Brussels and today during his speech in the Euro Parliament, but on the other will be a nearly impossible sell to Greece as any deal terms will be far harsher than the deal offered by the Troika 2 weeks ago and will have no debt reduction), and those who finally noticed that the Chinese central planners have effectively lost control.

It's shaping up to be a rough year for CEOs at Europe's most notorious rate rigging, scandal laden investment banks. Just three months after Brady Dougan left Credit Suisse and barely 30 days since Anshu Jain and Jürgen Fitschen tendered their resignations at Deutsche Bank, Barclays has shown CEO Antony Jenkins the door.

• Chinese stocks tumble again, ignoring Beijing's blandishments (Reuters)
• Plight of Greek pensioners heaps pressure on Tsipras (Reuters)
• Cash Crunch Hits Everyday Life in Greece (WSJ)
• Souvlakis Tell a Story Well Beyond Today's Greek Crisis (BBG)
• Greek Referendum on Bailout Too Close to Call, Poll Shows (BBG)
• Move Over Greece: For Treasuries Traders, Today Is About the Fed (BBG)
• ECB adds corporate names to QE-eligible bonds (FT)
• Special Report: How Greece went bust (Reuters)
• Puerto Rico’s Pain Is Tied to U.S. Wages (WSJ)

Ron Paul, former congressman for Texas, laid plain the absurdity of central policy towards the markets in a recent interview with Amanda Diaz on CNBC. He believes a day of reckoning is in the cards because the central banks “can’t print money forever.”

After yesterday's unprecedented volatility fireworks across all markets and continents, today so far has been a modest disappointment, with no crashes and subsequent surges in China, where the Politburo's only achievement was keeping the bubble dream alive by pushing the Shanghai Composite over 5,000 for the first time since January 2008, closing the index 1.5% higher on the day - a very modest gain by China's recent blow-off top standards.  Europe, too, has been relatively tame with the 10 Year Bund starting off on the wrong foot, the yield rising back above 0.91% before once again dipping to the upper 0.8% range, tracking the move in the EURUSD tick for tick, which also is a tractor beam for the US 10 Year. On the equity, front, things are just as muted, with futures at the Low of Day as of this moment, despite yesterday's last minute manic buying spree, the S&P set to open below 2100 as a result.

• Senate lets NSA spy program lapse, at least for now (Reuters)
• Draghi Deflation Relief Means Little With Greek Threat Unsolved (BBG)
• Tepid factory data add to Asian gloom (FT)
• Citigroup Likely to Close Banamex USA (WSJ)
• Frugality of High Earners in U.S. Shows Long Shadow of Recession (BBG)
• Greece’s Tsipras Warns Bell May Toll for Europe (BBG)
• Carnegie Mellon Reels After Uber Lures Away Researchers (WSJ)
• Romário leads drive for Brazilian probe into Fifa (FT)
• Faster than China? India's road, rail drive could lay doubts to rest (Reuters)

Was that it for the "reflation" aka Bund-rout trade? One look at German bonds this morning and the sharp, panic selloffs seen in recent days are completely gone making one wonder if the ECB is done selling Bunds the CTAs who were riding the momentum train have all been squeezed out of their long positions and now the trend back to -0.20% can resume only to be followed by another abrupt 6-sigma move as the ECB once again sells inventory to buy itself more monetization runway. As a reminder, the ECB has to buy debt until September 2016 and it won't be able to if the 30-Year Bund is at -0.20% in a few months (or weeks).

• Fed’s Yellen: Stock Valuations ‘Generally Are Quite High’ (WSJ)
• Britain's dead-heat election 'down to the wire' on polling day (Reuters)
• European Markets Roiled by U.S. Fed Chief Janet Yellen’s Comments (WSJ)
• Stocks Drop With German Bonds to Extend $2 Trillion Global Loss (BBG)
• Oil heads toward 2015 highs despite ample supply (Reuters)
• Wary of bond 'cliff,' Fed plans cautious cuts to portfolio (Reuters)
• Saudi Arabia mulling land operations on Yemen border (Reuters)

China, the world’s largest gold producer and buyer, feels its market weight should entitle it to be a price setter for gold bullion. It is asserting itself at a time when the established benchmark, the century-old London ‘gold fix’, is under scrutiny because of long-running allegations of price manipulation.

• Maryland Governor Calls in National Guard to Control Baltimore Riots (BBG)
• Fed Seen Delaying Liftoff to September to Push Down Unemployment (BBG)
• Nepal PM says toll could rise to 10,000 (Reuters)
• China Readies Fresh Easing to Tackle Specter of Debt (WSJ)
• ‘Damned Lies’ Threaten to Overshadow U.K. GDP in Election Fight (BBG)
• Uncertainty Over Impact of a Default by Greece (NYT)
• Why the Cost of Hedging European Banks Stocks Has Soared (BBG)
• Carinthia cash crunch gives Austria its own mini-Greece (Reuters)

• Clinton charities will refile tax returns, audit for other errors (Reuters)
• China Warns North Korean Nuclear Threat Is Rising (WSJ), or another country realizes war is the only "exit"
• Shares, euro sag after euro zone PMIs disappoint (Reuters)
• China Manufacturing Gauge Drops to Lowest Level in 12 Months (BBG)
• Deutsche Bank Said to Pay $2.14 Billion in Libor Case (BBG), or roughly a €20,000 per banker "get out of jail" fee
• Brazil’s Petrobras Reports Nearly $17 Billion in Asset and Corruption Charges (WSJ)
• Can This Oil Baron’s Company Withstand Another Quake? (BBG)
• Bad for Q1 GDP: Raytheon sales fall amid weak U.S. defense spending (Reuters)

"The fair value of hedges held by 57 U.S. companies in the Bloomberg Intelligence North America Independent Explorers and Producers index rose to $26 billion as of Dec. 31, a fivefold increase from the end of September," Bloomberg writes, noting that the very same Wall Street banks on the hook for the hedges also financed the shale boom.

• Saudis keep on pumping, oil prices keep on slumping (Reuters)
• Tenet Healthcare Nearing Deal to Buy United Surgical Partners (WSJ)
• Dizzying Pre-IPO Tech Values Spurred by Rush of Hedge-Fund Money (BBG)
• Russia threatens to aim nuclear missiles at Denmark ships if it joins NATO shield (Reuters)
• Torrent of Cash Exits Eurozone (WSJ)
• Draghi Cheerleads for Euro-Area Economy as Greek Risk Looms (BBG)
• Fortescue Mines for More Financing Options (WSJ)
• Topix Charts Evoke Calm Before ’13 Rout as Momentum Gains (BBG)