Budget Deficit

US Futures Rebound Despite Global Stock Weakness As USDJPY Ramps HIgher

After breaking a multi-year stretch of 9 daily record highs in the Dow Jones, overnight global markets saw some early weakness with Asian stocks retreating after BOJ chief Kuroda dashed hopes for so-called helicopter money, triggering yen’s steepest rally in a month and pulling the Nikkei lower by 1.1%. This however did not last long, and around the European open the traditional ramp in the USDJPY helped European equities shrug off early downside, while US equity futures have already recovered half of yesterday's losses.

This 'Market' Discounts Nothing Except Monetary Cocaine

In short, the market is not trading on a rebound in GDP, revenue growth or a breakout of already elevated profit margins. It’s just high on one more dose of monetary cocaine that in short order will prove to have been not even that.

Frontrunning: July 12

  • Stocks Advance on Stimulus Bets (BBG)
  • Japan to craft stimulus by end-July, may issue construction bonds (Reuters)
  • May ally says Britain to trigger EU divorce 'when we're ready' (Reuters)
  • Last Woman Standing, Theresa May Offers Calm on Brexit Road (BBG)
  • Merkel urges Britain to quickly clarify relationship with EU (Reuters)

US Futures Rebound After Volatile Session, All Eyes On June Payrolls

In a session where bleary-eyed traders followed the all-night tragic developments out of Dallas and initially sold off risk assets, it is good to see that some normalcy prevailed with the traditional post Europe-open futures ramp, which was further assisted by the successful resolution of the Dallas standoff, which has pushed futures modestly higher ahead of today's main event for markets, the June payrolls report due in under two hours.

Spain's Social Security Program Will Go Bust In 2018

Spain’s Social Security system is expected to go broke by 2018. In the US, concerns over such matters are virtually nonexistent. But Spain cannot print Euros, and is already deep in the hole on meeting budget deficit targets.

Is The End In Sight For Alaska's Oil Based Economy?

Alaska has long been one of the few U.S. states without an income tax. Thanks to its incredible bounty of natural resources, the state had more than enough cash coming in through oil company taxes and especially Prudhoe Bay production. All of that is starting to change. After a 40 year oil boom that transformed Alaska from a frozen tundra into one of the richest states in the country, the oil price crash is bringing reality back to bear.

Saudi Officials Crackdown On FX Market As Currency Peg Starts To Strain

As we warned previously, the devaluation, or breaking of the Saudi Riyal peg to the dollar, could be the black swan event for crude oil and the recent weakness in SAR forwards - while not as violent as Nigeria's Naira - certainly signals a renewed market fear that breaking the peg is imminent. It appears Saudi officials are none too pleased with the free markets speculating on this devaluation and as Bloomberg reports, banks in Saudi Arabia are coming under fresh pressure over products that allow speculators to bet against the kingdom’s currency peg, according to people with knowledge of the matter, which were supposedly banned in January.