Less than one week after the BOJ floated a trial balloon using Bloomberg, that it would reduce the rate it charged some banks which set off the biggest USDJPY rally since October 2014, we are back where we started following last night's "completely unexpected" (for everyone else: we wrote "What If The BOJ Disappoints Tonight: How To Trade It" hours before said "shock") shocking announcement out of the BOJ which did absolutely... nothing. "It’s a total shock,” Nader Naeimi, Sydney- based head of dynamic markets at AMP Capital Investors told Bloomberg. "From currencies to equities to everything -- you can see the reaction in the markets. I can’t believe this. It’s very disappointing."
- Ties between Germany and Russia enter new chill (Reuters)
- Tax authorities begin probes into some people named in Panama Papers leak (Reuters)
- SEC investigates ex-JPMorgan debt traders (FT)
- Who Will Win Wisconsin? Here Are Six Credible Predictions (BBG)
- Victim in Wall St. Scheme Was a Classmate of Its Accused Architect (NYT)
- Saudi Arabia Will Only Freeze Oil Production If Iran Joins (BBG)
- Japanese gloom ensures slow start to quarter for world stocks (Reuters)
- Saudi Arabia Plans $2 Trillion Megafund for Post-Oil Era (BBG)
- Prices Sag in Warning to ECB Even as Manufacturing Picks Up (BBG)
- China factories scent hint of spring, Europe still chilly (Reuters)
- Theranos Devices Often Failed Accuracy Requirements (WSJ)
For Japan, the post "Shanghai Summit" world is turning ugly, fast, because as a result of the sliding dollar, a key demand of China which has been delighted by the recent dovish words and actions of Janet Yellen, both Japan's and Europe's stock markets have been sacrificed at the whims of their suddenly soaring currencies. Which is why when Japanese stocks tumbled the most in 7 weeks, sinking 3.5%, to a one month low of 16,164 (after the Yen continued strengthening and the Tankan confidence index plunged to a 3 year low) it was anything but an April fool's joke to both local traders.
As was announced late this afternoon, Anbang unexpectedly pulled its Starwood offer, and for a very specific reason. According to the FT, an investor consortium led by China’s Anbang Insurance has lost the bidding war for Starwood Hotels & Resorts, after failing to demonstrate that it had the financing in place to back up its latest $14bn offer, according to a person directly involved.
- Headline of the day: Oil prices fall as investors' faith in rally wanes (Reuters)
- Europe shares, dollar gain as investors look to Yellen (Reuters)
- Chinese Bidder for Starwood Has Mysterious Ownership Structure (WSJ)
- Germany wants refugees to integrate or lose residency rights (Reuters)
- BlackRock Joins Pimco Warning Investors to Seek Inflation Hedge (BBG)
- Goldman Sachs and Bear Stearns: A Financial-Crisis Mystery Is Solved (WSJ)
With Europe back from Easter break, we are seeing a modest continuation of the dollar strength witnessed every day last week, which in turn is pressuring oil and the commodity complex, and leading to some selling in US equity futures (down 0.2% to 2024) ahead of today's main event which is Janet Yellen's speech as the Economic Club of New York at 12:20pm, an event which judging by risk assets so far is expected to be far more hawkish than dovish: after all the S&P 500 is north of 2,000 for now.
- Brussels Rocked by Deadly Attacks With Blasts at Airport, Subway (BBG)
- Death count climbs in Brussels blasts (Reuters)
- Europe on High Alert After Blasts in Belgium (WSJ)
- Brussels Phone Users Urged to Text Not Call as Networks Jammed (BBG)
- U.S. Embassy Urges Citizens in Brussels to Shelter in Place (BBG)
- Oil prices swept lower after Brussels blasts spook investors (Reuters)
- Oil Drops With Emerging-Market Currencies on Rig Recovery Signs (BBG)
- A plea for help - How China asked the Fed for its stock crash play book (Reuters)
- Obama to meet Raul Castro on historic Cuba trip (Reuters)
- Wall Street's Pile of Unwanted Treasuries Exposes Market Cracks (BBG)
- Dimon's Timing Looks Savvier by the Day as Equities Rebound (BBG)
Had central bankers simply taken to heart that well known idiom that cautions "a stitch in time saves nine" early on, they would not now be so frantically stitching such a gaping gash in the world economy. One thing is for certain. All of this quantitative pleasing has done little to lift the spirits of the world’s worker bees.
The scale of China's outbound investment wave is so great that the value of deals announced in the third quarter of 2015 exceeded China's current-account surplus for the same period, according to data compiled by Bloomberg. That trick will be repeated in the current quarter, unless China puts in its best current-account performance since 2008. What is going on here? The answer is quite simple: following Beijing's ramp up in capital outflows, China has found a new and innovative way to export funds offshore.
- Bank of Japan Holds Fire on Stimulus, Negative Rate Unchanged (BBG)
- Donald Trump Aims for a Knockout in Tuesday Primaries (WSJ)
- Global Stocks Fall on Commodities Decline, Ahead of Fed Meeting (WSJ)
- Oil prices fall as clouds gather over supply picture (Reuters)
- Many Shale Companies Are Unable to Ramp Up Oil Output (WSJ)
The "hostel takeover" saga for Starwood Hotels took another unexpected turn this morning, when the company's stock price soared following news that the hotel chain had received an unsolicited $76/share non-binding proposal (8% premium to the Friday close) from an investor group led by China’s Anbang Insurance Group, in a deal that seeks to scuttle its planned combination with Marriott International. The proposed deal values Starwood, one of the world's largest hotel companies which includes such brands as Westin, Sheraton, The Luxury Collection, W Hotels, St. Regis, Le Meridien and many others, at $12.8 billion.
AMEX is crashing, down over 9%, following lower revenues and weak guidance...