Barclays

The only news that matters to algos today is whether Janet Yellen will include the word "patient" in the FOMC statement as a hint of a June rate hike, even though the phrase "international developments" is far more important in a world in which everyone (such as the 25 or so central banks who have cut rates in the past 80 days) is now scrambling to export deflation to everyone else. And with carbon-based traders recuperating from St. Patrick's day, few will notice that the oil tumble continues as WTI touches new 6 year highs after yesterday's shocking 10MM+ API build, and is now openly eyeing a collapse into the $30s. Just as nobody will notice that even as futures in the US and European stocks are looking a little hungover ahead of the Fed and perhaps on the latest bout of anti-austerity out of Europe, the China levitation has gone full retard, with the SHCOMP up another 2.1% yesterday and now in full-blown parabolic mode as housing data confirms the Chinese housing bubble has truly burst, and as shadow bankers dump all their funds into stocks in hopes of making up for losses due to regulatory intervention.

Money is getting tight in China where the PBoC finds itself stuck between easing to counter economic deceleration and exacerbating capital outflows. 

Someone call the ECB because it looks like the game is well nigh up. Greek FinMins are taking time away from photo shoots and looting pension funds to call out QE for creating equity bubbles and the mainstream financial news media has figured out that there’s an acute collateral shortage and that buying €1.1 trillion in bonds €15 million at a time probably indicates a forced deviation from the original plan.

The beginning of the end of high frequency trading has arrived, and it has done so in a most unexpected fashion: with an HFT turning on other HFTs and revealing on the record, for the entire world to see, just how truly parasitic, manipulative and "market-rigging" the algorithms truly are.

Central banks' ability to distort markets, inhibit price discovery, and create systemic risk is alive and well as ECB asset purchases ripple through euro money markets. "The ECB’s liquidity bazooka will likely create the conditions for all rates money markets to stay in negative territory. This would represent a very challenging environment for investors, especially those focusing on the euro money markets, whose resilience to negative rates has not fully tested yet," Barclays warns.

As HFT shops begin to turn on each other, it seems appropriate to reflect on the impact that Michael Lewis' Flash Boys book had on exposing the ugly truth that many have been discussing for years in US (and international) equity (and non-equity) markets. As Lewis concludes, after explaining the attacks he has suffered from the HFT industry, "If I didn't do more to distinguish 'good' H.F.T. from 'bad' H.F.T., it was because I saw, early on, that there was no practical way for me or anyone else... to do it. ...  The big banks and the exchanges [have] been paid to compromise investors’ interests while pretending to guard those interests. I was surprised more people weren’t angry with them."

• As reported here first: The U.S. Has Too Much Oil and Nowhere to Put It (BBG)
• Dollar Drops From 12-Year High as S&P Futures, Bonds Gain (BBG); Dollar Bulls Retreat From 12-Year High to Euro With Fed in View (BBG)
• Clinton Private Email Plan Drew Concerns Early On (WSJ)
• ECB Bond Buying Not Needed With Economy Improving, Weidmann Says (BBG)
• China Feb new yuan loans well above forecast (Reuters)
• U.S. probing report Secret Service agents drove car into White House barrier (Reuters)
• Kerry tells Republicans: you cannot modify Iran-U.S. nuclear deal (Reuters)
• PBOC Pledges to Press on With Rate Liberalization Amid Slowdown (BBG)
• China Prepares Mergers for Big State-Owned Enterprises (WSJ)

China is in the midst of attempting to help local governments refinance a mountain of debt, some of which was accumulated off balance sheet via shadow banking conduits at relatively high rates. According to UBS, "Chinese domestic media are saying that the authorities are considering a Chinese "QE" with the central bank funding the purchase of RMB 10 trillion in local government debt."

• Dollar at 12-year peak versus euro, emerging markets spooked (Reuters)
• CIA sought to hack Apple iPhones from earliest days (Reuters)
• Draghi Urged Greece to Allow Troika Back Before It’s Late (BBG)
• Brent crude dips below $58 on strong dollar and supply (Reuters)
• Credit Suisse replaces CEO Dougan with Prudential's Thiam (Reuters)
• More "distressed" energy M&A: Verisk buys Wood Mackenzie for £1.85bn (FT)
• Prepare for a surge in defaults: Investors Are Buying Stocks and Bonds From Energy Producers Amid Oil Price Drop (WSJ)
• Private equity executive ordered to pay £72m to ex-wife (FT)
• Democratic donors unfazed by Hillary Clinton's use of private email (Reuters)
• Expensive Hepatitis C Medications Drive Prescription-Drug Spending (WSJ)
• 'ISIS Hackers' Almost Certainly Not ISIS Hackers (NBC)

• ECB Starts Buying German, Italian Government Bonds Under QE Plan (BBG)
• Creditors Reject Greece's Reform Proposals (BBG)
• Is Apple Watch the Timex digital watch of the Internet era? (Reuters)
• Tesla shedding jobs in China as sales target missed (Reuters)
• Malaysia Airlines says expired battery on MH370 did not hinder search (Reuters)
• Gunmen kill more than 12 Islamic State militants in eastern Syria (Reuters)
• GM Plans Share Buyback, Averting Proxy Fight (WSJ)
• Wisconsin capital marked by third day of protests after police shooting (Reuters)

It was not all smiles and jokes as Mario Draghi's European QE officially launched in Europe, with Greece leaving the proverbial turd in the monetary punch bowl.

Austria’s decision to wind down Heta Asset Resolution AG sent ripples through the financial system, causing credit rating downgrades in Austria and bank losses in Germany: "It’s a mini-Greece going off in the heartlands of Europe." Here are some of the consequences, and delightful ironies, of a completely unexpected black swan landing in the south of Austria.

With all eyes squarely on the ECB as Mario Draghi prepares to flood the EMU fixed income market with €1.1 trillion in new liquidity starting Monday, Soc Gen’s Albert Edwards reminds us that “another type of QE” is drying up thanks largely to the relative strength of the US dollar. "The bottom line is that in a world of over-inflated asset values, the strength of the dollar is resulting is a rapid tightening of global liquidity as emerging economies (and indeed the Swiss) stop printing money to buy the US dollar. This should be seen for what it is — a clear tightening of global liquidity. Investors ignore this at their peril."

The US had a credit bubble, China has a credit bubble. The US had a housing bubble, China has a housing/investment bubble. Will China eventually have to go down the same path as the U.S., and the Eurozone? The answer: yes.

• RBS to cut up to 14,000 jobs in investment banking unit (FT)
• Doctors, patients scramble ahead of high court Obamacare decision (Reuters)
• Rajan Cuts India Rates After Modi Agrees to Inflation Target (BBG)
• Russia’s Putin Makes First Public Comments on Killing of Boris Nemtsov (WSJ)
• House breaks impasse, passes security funding without provisions (Reuters)
• How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge (BBG)
• Jeff Immelt’s Overhaul of GE Impeded by Falling Oil Prices (WSJ)
• Sahara India Defaults on Luxury Hotel Loans From Bank of China (BBG)