Global Macro Perspectives
China Consumer Price Index was up 4.9% in February, vs. 4.8% consensus and 4.9% January reading .
In line with expectations, I expect the monetary tightening will continue, but without the need for aggressive actions.
China Producer Price Index was up 7.2% vs. 7.0% consensus and 6.6% January reading. Running ahead of expectation, have to watch this closely.
Barry Ritholtz, chief executive officer at FusionIQ, talks about the outlook for financial markets after the Federal Reserve ends its program of quantitative easing. He speaks with Tom Keene on Bloomberg Television’s “Surveillance Midday.”
*** Zero Hedge: Exclusive: Bill Gross Dumps All Treasuries, Brings Total “Government Related” Holdings To Zero, Flees To Cash – No QE3? ***
*** self-evident: Reading comprehension quiz ***
*** Zero Hedge: Nomura Commodity Desk Liquidation Blamed For Commodity Weakness ***
*** Macro Man: Yours! ***
*** FT Alphaville: More proof the Chinese have been using copper as collateral ***
*** FT Alphaville: Carry trade as canary in the coal mine ***
*** The Big Picture: The End of QE: Part II ***
*** The Independent: World’s sixth mass extinction may be underway – study ***
Libya is out of the markets for some time. If demand stays at recent levels crude oil price will go up.
In U.S.: Markets are well supplied, demand historically speaking weak, refining capacity utilization low and crude oil imports. WTI – Brent pricing disparity lower, but still very high.
Refining industry discipline, stockpiling ahead of expected rise in prices and seasonal demand patterns are (very slowly) bringing down stockpiles.
Initial jobless claims in the U.S. were reported at 398.000 vs. 376.000 consensus and last week revised (up 3.000) reading of 371.000.
Four weeks moving average steady.
Moody’s downgraded Spain’s sovereign credit together with the Spanish bank recapitalization fund rating to Aa2 from Aa1. Oultook negative.
Not much happening with Spanish spreads after the downgrade.
China trade balance was reported at USD -7.3 billion vs. USD 6.45 billion in January and USD 4.9 billion consensus. Export and import growth were running at 2.4 and 19.4 percent vs. 37.7% and 51.0% y-o-y in January.
Large unexpected surprise, but something I hinted earlier in my dry bulk weeklies. Concerning deficit itself it’s probably result of seasonal effects (Lunar New Year) and POBC tightening measures. I expect some normalization in March, but nevertheless the market reaction could be violent in coming days because this is a game-changer, especially in relation to yuan appreciation calls.
POBC tightening to contain inflation will probably have to be relaxed or even reversed because Chinese government faces two alternatives: 1. higher growth & higher inflation vs. 2. lower growth & lower inflation. The outcome of this is pretty clear.
Laszlo Birinyi, president and founder of research and money management firm Birinyi Associates Inc., and Michael Holland, who oversees more than $4 billion as chairman of Holland & Co., talk about the outlook for the U.S. stock market, investment strategy for equities and some of their stock picks.
*** Bloomberg: Charlie Sheen Could Teach Wall Street a Lesson: Matthew Lynn ***
*** Climateer Investing: Charlie Sheen Calls on CFTC For Lower Silver Position Limits (JPM) ***
*** FT Alphaville: Where is Charlie Sheen’s CFTC comment? ***
*** Kid Dynamite’s World: On Misinterpreting PSLV’s Premium ***
*** Macro Man: Equities: “Bi-Winning” but for how long? ***
*** FT Alphaville: Back to the future with Europe’s stress tests ***
*** FT Alphaville: More on Japan’s odd metamorphosis… ***
*** FT Alphaville: Iceland vs Greece ***
*** Ludwig von Mises Institute: Oil Shock=More Fed Shock ***
*** Zero Hedge: European Gasoline Hits All Time Record Of $8.632 Per Gallon ***
MBA mortgage applications rose 15.5%; Prior reading was fall of 6.5%; On year level MBA Basic Index is down 18.8%.
A look at what is behind the jump in bearish sentiment among hedge fund managers, with Charles Biderman, TrimTabs Investment Research president/CEO.
*** FT Alphaville: The Saudi capacity puzzle ***
*** FT Alphaville: China’s yuan-child policy, relaxed ***
*** FT Alphaville: Greek spreads… the day after the downgrade ***
*** The Big Picture: Bill Gross: The Economy Is Not “Self-Sustaining” ***
*** The Big Picture: Banks Like Proposed Fraudclosure Settlement ***
Sharing his concerns over what will happen to bond yields and stock prices, with William Gross, Pimco co-CIO/founder.
*** FT BeyondBRICs: Fund file: the ETF dynamic ***
*** FT Alphaville: This is not normal ECB tightening ***
*** FT Alphaville: Moodys downgrades Greece to B1 from Ba1 ***
*** FT Alphaville: Shoot the messenger ***
*** FT Alphaville: A stress test mugged by reality ***
*** FT Alphaville: In the midst of a permanent oil-equity correlation breakdown? ***
*** FT BeyondBRICs: Oil: another turn of the screw ***
*** The Big Picture: Change in Ratings (or, Charlie Sheen Goes to Wall St) ***
*** Slope of Hope: Paralyzed with Fear ***
*** Abnormal Returns: The professionalization of the financial blogosphere ***
Baltic dry index rose 8.1% last week; Capesize Index was up 8.5%; Panamax Index rose 9.4%; Supramax Index increased 5.9%; Handysize Index was up 2.3%.
Iron ore and steel prices fell on high inventory (iron ore inventory near record high; steel inventory record high). Thermal coal inventory data not released.