HSBC Asks If "US Is Turning European, Or Is It Japanese" As It Cuts 10 Year Forecast From 2.8% to 1.5%Submitted by Tyler Durden on 10/08/2015 09:53 -0400
As more and more "reputable" analysts realize that the 30 Year bull market in Treasury isn't going anywhere, another firm jumped on the "more easing" bandwagon overnight, when HSBC's Steven Major slashed his target yield on 10Y Treasurys for 2015 and 2016, from 2.4% and 2.8% to 2.1% and 1.5% respectively. The reason: more easing of course, or rather expectations for further ECB monetary easing which will help U.S. curve to perform.
It was supposed to be the day China's triumphantly returned to the markets from its Golden Holiday week off, and with global stocks soaring over 5% in the past 7 days, hopes were that the Shanghai Composite would close at least that much higher and then some, especially with the "National Team" cheerleading on the side and arresting any sellers. Sure enough, in early trading Chinese futures did seem willing to go with the script, and then everything fell apart when a weak Shanghai Composite open tried to stage a feeble rebound into mid-session, and then closed near the day lows even as the PBOC injected another CNY120 bn via reverse repo earlier.
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"As you know, the environment for global macro fundamentals-based trading continues to be challenging. That factor, combined with the lack of certainty over when a recovery will take hold, led us to conclude that the time was right to return capital to you."
RANsquawk Video: BoE October rate decision and minutes preview - Rate and vote split exp. to remain at 0.50% and 8-1 respectively, focus will be on whether the BoE adopt a more dovish stanceSubmitted by RANSquawk Video on 10/06/2015 08:13 -0400
The best headline to summarize what happened in the early part of the overnight session was the following from Bloomberg: "Asian stocks extend global rally on stimulus bets." And following the abysmal data releases from the past three days confirming that the latest centrally-planned attempt to kickstart the global economy has failed, overnight we got even more bad data, first in the form of Australia's trade deficit, and then Germany's factory orders which bombed, and which as Goldman said "seems to reflect genuine weakness in China and emerging markets in general and this will weigh on the German manufacturing sector."
Of all sectors the one which may pose the biggest surprise to investors is financials: it is here that Q3 (and Q4) earnings estimates have hardly budged, and as of September 30 are expected to rise by 10% compared to Q3 2014. This may prove to be a stretch according to Morgan Stanley whose Huw van Steenis is seeing nothing short of a bloodbath in banking revenues, with the traditionally strongest performer, Fixed Income, Currency and Commodity set for a tumble as much as 25%, to wit: "we think FICC may be down 10- 25% YoY (FX up, Rates sluggish, Credit soft), Equities marginally up but IBD also down 10-20%."
Despite the arguably undemocratic, obfuscating nature of our nation’s campaign finance laws and the blatant corporatist agenda mandated by the Supreme Court, let’s attempt to break down the major sources of political spending so far in the 2016 presidential election. You may be surprised to find out who is donating money to your candidate — and how that contribution may affect future policy positions.
With the Federal Reserve still hinting at raising interest rates, but trapped by weak economic growth, will the next big move by the Fed be another form of monetary accommodation instead? Or, are the underlying dynamics of the economy and market really strong enough to shake off the recent weakness and continue its bullish ascent?
- U.S., Allies Demand Russia Stop Attacks on Syria Opposition (BBG)
- Russian Airstrikes Defend Strategic Assad Regime Stronghold on Syria’s Coast (WSJ)
- Emerging Stocks Head for Weekly Advance Before U.S. Jobs Data (BBG)
- Wage Strife Clouds Car-Sales Boom (WSJ)
- Oregon town reels from classroom carnage (Reuters)
- Oregon shooter came from California, described as shy and skittish (Reuters)
It has been a cruel summer, with lots of leverage, for Bill Ackman and his Pershing Square hedge fund.
As Bloomberg reports, "JPMorgan Chase & Co. is set to pay almost a third of a $1.86 billion settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit-default swaps market, according to people briefed on terms of the deal."
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As WSJ reports, "Bank of America Corp. is expected to announce layoffs in its global banking and global markets unit as early as Tuesday, according to people familiar with the matter."
Unlike previous gold probe cases, this one will have major consequences. How do we know? Because just like in LIBOR-gate, just like in FX-gate, it is the biggest rat of all, Swiss megabank UBS, that is about to turn on its former criminal peers. As Bloomberg reported earlier "UBS was granted conditional leniency in Swiss antitrust probe of possible manipulation of precious metal prices." Why would UBS do this? The same reason UBS did so on at least on two prior occasions: the regulators have definitive proof it is involved, and gave it the option to turn evidence and to rat out its cartel peers, or face even more massive financial penalties. UBS, as usual, choice the former.