Bank of England

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.

"Ladies and gentlemen. A few weeks ago, in Riyadh, I was at a small, private function along with the British central bank governor, Mark Carney. Mr Carney asked me two questions. First, why did the oil price drop? And the second, where is the price heading? I will tell you today what I said to him then."

- Ibrahim Al-Muhanna, Advisor to the Minister of Petroleum and Mineral Resources for Saudi Arabia

Fed to lose patience.  Many expected Norway and Switzerland to cut rates.  Could they be disappointed? 

What next for the greenback?

Betting on the end of what is a 30-year interest rate cycle may not a productive use of our time. However, the first thing you need to know about central banks is that they are the worst traders in the world. The worst.

Closing out another whirlwind week, which has seen the biggest S&P 500 intraday plunge and surge in months, futures are taking a breath (if not so much the Nikkei which closed over 19,000 for the first time since 2000 - one wonders how many direct equity interventions it took the BOJ to achieve that artificial "price discovery"). In lieu of any notable macro news, the most significant update hit less than an hour ago when Goldman piled on the EUR pressure, when it released a note in which it further revised down its EURUSD forecast.

• 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)

• Fed Likely to Remove ‘Patient’ Barrier for Rate Increase as Soon as June (Hilsenrath) - which year?
• Clinton says used personal email account for convenience (Reuters)
• Euro sinks to 12-year lows as yield gap grows (Reuters)
• Get Ready for Oil Deals: Shale Is Going on Sale (BBG)
• EIA raises 2015 US oil production forecast, cuts 2016 outlook (Reuters)
• How Falling Oil Prices Are Hindering Iraq’s Ability to Fight Islamic State (WSJ)
• China economic data weaker than expected, fuels policy easing bets (Reuters)
• ECB ‘Chasing Own Tail’ as Bond Rates Turn Negative, SocGen Says (BBG)
• Swiss makers quietly gear up with smartwatches of their own (Reuters)

First she tried to take over the credit derivatives world which she first had to create, and succeeded. Then, after Enron failed, she tried to take over the California electricity market and also failed. And all through this time she made sure the prices of the world's precious metals were right where she wanted them. Now, a year after an embarrassing attempt to become head of her former regulator ended in humiliation, she is back and has her sights set on the final financial frontier: Bitcoin.

• 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)

Something curious has emerged as a result of the divergent "Fed-vs-Everyone-Else" central bank policy: as JPM observed over the weekend while looking at the dollar fx basis, the dollar funding shortage is back with a vengeance, and is accelerating at pace not seen since the Lehman collapse.

We need to look at the concept of a reserve currency differently, because it is important. We need to look at it as a privilege and a responsibility and not as a weapon we can use against the rest of the world. If we abolish, or even lessen, legal tender laws and allow the process of price discovery to reveal the best sound money, if we allow our US dollar to become the best money it can - a truly sound money - then the chances of our personal and collective prosperity are greatly enhanced. We all have the same interest. We all want to have the highest standard of living for ourselves and our families. A sound money reserve currency offers us the best chance of achieving our shared goal; therefore, we should rally around every effort to make it so.

There is a major new buyer in the gold market - Apple  ... New Apple watch could use up to one third of total annual gold supply... Each watch to use up to two ounces of gold... May have enormous ramifications for gold market and propel prices higher

• 5 Things to Watch in February’s Jobs Report (WSJ)
• Draghi Declares Victory for Bond-Buying Before It Starts (BBG)
• Apple Pay Sign-Ups Get Tougher as Banks Respond to Fraud (WSJ)
• As World’s Hottest Economy Unravels, Nigerians Feel the Squeeze (BBG)
• EU discontent over French budget deal's 'political bazaar' (Reuters)
• Foreign Takeovers See U.S. Losing Tax Revenue (WSJ)
• Goldman Shareholders’ Hope for Bigger Payout Dashed by Fed (BBG)
• Europe Stocks Headed for 31% Surge This Year Amid QE, Citi Says (BBG)
• Dollar revs up for jobs data, euro bonds rally on ECB (Reuters)

The tide is turning against the banks. We will see more and more corporations turn away from the banks as advisory entities. They just cannot be trusted when they are also the market-makers making commissions/spreads on the trading that are totally undisclosed. The day of the banks is coming to an end. It looks more like the next downturn will drive the spike right through their hearts. Just maybe, we may get back to the way its should be – relationship business, not transactional where they have the incentive to manipulate markets for the quick buck and front-run clients.