Once again the corporatocracy wins as the so-called "Trojan horse" Trans-Pacific Partnership (TPP) trade agreement has been finalized. As WSJ reports, the U.S., Japan and 10 countries around the Pacific reached a historic accord Monday to lower trade barriers to goods and services and set commercial rules of the road for two-fifths of the global economy, officials said.
Following Friday's disastrous payrolls report, which confirmed all the pre-recessionary economic data and signaled that instead of approaching "lift-off" and decoupling from the rest of the world, the US economy is following the emerging markets into a slowdown in what may be the first global, synchronized recession since 2008, the market saw its biggest intraday surge since 2011 and the sharpest short covering squeeze in history, we are happy to announce that the "market" is now solidly back in "bad news is good news" mode.
When "whatever it takes" is not enough... Despite Draghi's promises and EU leaders' exuberance, European Investor Confidence tumbled to its lowest since January as the Q€ bounce has now well and truly died. While volatility has picked up over the last month and reassuring tones have been uttered by every central banker in the world, it is the real economy that appears to be weighing on confidence as Eurozone Composite PMI prints at 53.6 - its lowest since February.
As the German refugee crisis has now dragged down not only Merkel, whose popularity rating just tumbled to a four year low "reflecting growing concern over the influx of hundreds of thousands of refugees into Germany, a poll showed on Thursday", but has exposed "free speech" advocate Facebook as merely another government propaganda pawn, Germany has been scrambling to find some silver lining on this scandal. It did just that on Friday, when the bank with the greatest amount of notional derivatives in Europe and the world, Deutsche Bank, raised its German 2016 GDP forecast "because the heavy influx of migrants would increase consumption as much as half a percentage point."
The reaction function of officials takes on added importance in the week ahead.
The scandal swirling around Germany's largest listed company had its beginnings in an attempt to crack the U.S. market, the missing link in VW's global footprint. But, as Handelsblatt details, what began as expansion ended in deception (piecing together the events that led up to the scandal, based on the facts as they are currently known).
With China markets closed for holiday until the middle of next week, and little in terms of global macro data overnight (the only notable central banker comment overnight came from Mario Draghi who confidently proclaimed that "economic growth is returning" which on its own is bad for risk assets), it was all about the USDJPY which has seen the usual no-volume levitation overnight, dragging both the Nikkei higher with it, and US equity futures, which as of this moment were at session highs, up 7 points. The calm may be broken, though, as soon as two hours from now when the September "most important ever until the next" payrolls report is released.
News That Matters
As Bloomberg reports, "German Chancellor Angela Merkel’s government signaled it will step up expulsions of economic migrants after the influx of asylum seekers reached a record in September."
The collapse is not over by any stretch...
Germany has long been a pioneer in the field of renewable energy, generating a record 78 percent of its power consumption from renewables in July of this year. In fact, Germany is one of the very few countries in the world that is actually struggling with too much renewable energy. The latest testimony to this fact is the new issue of decommissioning its old wind farms... and that is a growing problem (for The US too).
Stocks, Futures Soar As Europe Joins Japan In Deflation, Surge Driven By Hopes For More Japan, ECB QESubmitted by Tyler Durden on 09/30/2015 06:50 -0400
Terrible economic news is wonderful news for markets, all over again, and with the worst S&P500 quarter since 2011 set to close today, some horribly "great" news is just what the window-dressing hedge funds, most of whom are deeply underperforming the broader market (not to mention Dennis Gartman) ordered.
Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices. Thus, low oil prices are viewed as an all around benefit. In fact, nothing could be further from the truth...