Tag: finance

Even though 14 out of the surveyed 54 economists expected a rate cut of some sort, and some were even calling for an outright QE any minute now, this time the majority of academics, or 40 of them, were right and the ECB proceeded with no changes to its various interest rates.

From the ECB:

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.25%, 0.75% and 0.00% respectively.

 

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

Maybe Draghi will announce something more actionable at his press conference at 8:30 am but at this point it appears that the ECB’s hand are tied even as the continent continues to drift ever more into deflation.

via Zero Hedge http://ift.tt/1l5QiW1 Tyler Durden

• Spot the inaccuracies: Stocks rise on Ukraine diplomacy, ECB easing speculation (Reuters)
• Bank of England Extends Record-Low Rates Into a Sixth Year (BBG)
• China’s Chaori Solar poised for landmark bond default (Reuters), explained here previously
• EU leaders meet in Brussels to address Ukraine crisis (FT)
• Nine-month-old baby may have been cured of HIV, U.S. scientists say (Reuters)
• China Raises Defense Spending 12.2% for 2014 (WSJ)
• China Stock Index Rises as Developers Jump on Policy Speculation (BBG)
• VTB Cancels New York Forum as U.S. Relations Sour (BBG)
• IBM workers strike in China over terms of Lenovo takeover (FT)
• College Board Redesigns SAT Exam Making Essay Portion Optional (BBG)

 

Overnight Media Digest

WSJ

* The Obama administration further postponed a provision of the Affordable Care Act on Wednesday, the latest in a series of changes that have delayed or pared back the health overhaul so much that many of its ambitious goals won’t be achieved during its first years in full effect.

* More than 1,600 stockbrokers failed to disclose bankruptcy filings, criminal charges or other red flags in violation of regulations, without regulators noticing, according to a Wall Street Journal analysis.

* A crop of new lenders is jumping into the subprime personal-loan market, wooing consumers with flawed credit who have been neglected since the financial crisis.
 
* Bank of America Corp on Thursday will start offering a new checking account, capping a four-year effort to boost revenue from its most basic banking product without alienating customers and lawmakers.

* U.S. and European diplomats failed in a frantic, daylong effort to get Russia and Ukraine to begin direct negotiations aimed at ending Moscow’s military incursion into the former Soviet state, raising the prospect of a protracted standoff.

* The United Nations special envoy to Crimea was threatened by a group of 15 to 20 men, some armed, who told him to leave Crimea as he was walking out of the Ukrainian naval headquarters in the regional capital on Wednesday, a senior U.N. official said.

* A federal probe into why General Motors Co took nearly 10 years to recall cars with a potentially deadly defect heated up on Wednesday as safety regulators demanded the auto maker answer 107 questions on its handling of a faulty ignition switch.

* Private-equity firm Cerberus Capital Management LP is working to sew up a deal to buy Safeway Inc this week, though its efforts to do so have been complicated by supermarket giant Kroger Co, according to people familiar with the matter.

* The Bank of England suspended a staff member amid an internal probe into whether officials knew about or played a role in manipulation of foreign-exchange markets, sending a global investigation of banks to the top of London’s financial hierarchy.

* In the months before Mt. Gox’s collapse, the bitcoin exchange was coming under increasing pressure from one of its banks, which complained about an unmanageable volume of money transfers and repeatedly asked the exchange to close its account with the bank, people familiar with the situation say.

* General Electric Co gave Chief Executive Jeffrey Immelt his second base pay raise in the 12 years since he took over, a reward for the company’s 2013 performance when its stock rose more than 30 percent.

 

FT

Diplomatic efforts to counter Russia’s takeover of Crimea were in trouble on Wednesday after Kremlin refused to accept the legality of the new Ukrainian government and western allies scrambled to produce a united front on how tough a line to take with Moscow.

A two-decade-old European Union law could force Lloyds Banking Group and Royal Bank of Scotland to shift their legal domicile from Edinburgh to London if Scotland becomes independent.

Exxon Mobil has promised cuts in capital spending and reduced its expectations of future production joining other oil majors like Chevron and Royal Dutch Shell.

A Bank of England employee was suspended and a new investigation launched after allegations that its officials condoned or were aware of market manipulation embroiling the bank into an escalating foreign exchange scandal.

Barclays decision to pay higher bonuses despite falling profits has some shareholders calling for a management shake-up at the top of its investment banking division, even as the group faces an escalating political row.

 

NYT

* A national safety agency sent the automaker a list of 107 compulsory questions about a defective ignition switch that has been linked to 13 deaths and the recall of 1.6 million cars.

* In an effort to curb illicit activity, Facebook will delete posts that seek to circumvent gun laws, restrict minors from viewing pages that sell guns and inform potential sellers that private sales could be regulated or prohibited where they live.

* John Travolta’s mispronunciation of a name at the Oscars led the website Slate to create a feature to do the same with anyone’s name – the kind of an interactive game now driving Web traffic.

* Three former top executives of Dewey & LeBoeuf, the giant law firm that filed for bankruptcy protection in 2012, are expected to be charged with misleading other lawyers and lenders about the financial health of the firm.

* In a post on LinkedIn, Reid Hoffman criticized Carl Icahn’s campaign against eBay, arguing that the assault is rooted in short-term thinking that runs counter to Silicon Valley’s focus on long-term growth.

* The private equity giant Kohlberg Kravis Roberts is making a bigger push into the North American energy business.

* While Paul Tudor Jones II can still claim long-term annual returns of close to 19.5 percent in his $10.3 billion flagship fund, Tudor BVI Global, it has been 11 years since he last hit that level.

 

Canada

THE GLOBE AND MAIL

* Alberta’s opposition parties criticized Premier Alison Redford over travel expenses, including her international trips, for the second day in a row of a new legislature session.

* If the early signals are correct, the Fraser River could have the biggest salmon run in British Columbia history this summer, with up to 72 million sockeye returning.

Reports in the business section:

* Chrysler Group LLC walked away from talks with the federal and Ontario governments after they asked how much of its proposed C$3.6 billion ($3.25 billion) investment would be spent in Ontario – a request that was likely to draw out negotiations and delay the company’s effort to bring a new minivan to market.

* Cisco Systems Inc said on Wednesday that it has chosen Toronto as one of its four new global innovation hubs, a C$100 million ($90.40 million) investment. The move, which follows a December announcement by the Ontario government that it will give financial support to help the company expand, adds to a sense of momentum around the province’s tech sector.

NATIONAL POST

* Joaquin Roberto Meza Delgado, a former senior diplomat for El Salvador who fought for years to stay in Canada after being accused of embezzling diplomatic funds meant for his country’s consulate in Vancouver, has been returned to his homeland where he was promptly arrested at the airport.

* An analyst at Canada’s anti-terrorism financing agency was stripped of her security clearance and position after she acknowledged meeting Russian diplomats at social events in Ottawa, according to court documents released Wednesday.

FINANCIAL POST

* The pundits have been calling for a housing correction in Canada for two years now, but somehow prices and sales, especially in the country’s big cities, keep defying gravity. A poll out Wednesday found that 34 percent of Canadians surveyed are willing to enter a bidding war and fight it out to secure a property, 21 percent more than a year ago.

* Canada’s insistence that tomato juice be extracted from “sound, ripe, whole” tomatoes instead of paste – a higher standard than in the U.S. – has partially saved an H.J. Heinz Co plant marked for closing by Warren Buffett’s private-equity partner.

 

China

CHINA SECURITIES JOURNAL

– China supports development of insurance products for online retail sales, said Xiang Junbo, the chairman of China Insurance Regulatory Commission, adding that the launch of regulations “will not be too slow”.

– China has earmarked 10 billion yuan ($1.63 billion) to fight air pollution in the first half of this year, said Zhou Shenxian, Minister of Environment Protection.

SHANGHAI SECURITIES NEWS

– China is on track to meet its target to slash overcapacity in bloated industries by 2014, said an official from the Ministry of Industry and Information Technology, adding that the ministry has stepped up efforts to ensure companies with outdated capacity are shut. Beijing has said it will eliminate 27 million tonnes of steel, 420 million tonnes of cement and 350 million tonnes of flat-glass production capacity this year.

21st CENTURY BUSINESS HERALD

– Yu E Bao, a money-market fund promoted by Alipay, may promote a substantial increase in social financing costs, said Ma Weihua, member of the national committee of CPPCC and former president of China Merchants Bank.

CHINA DAILY

– China’s top economic planning agency, the National Development and Reform Commission, will launch a self-imposed reform that will reduce its own power as part of the central government’s campaign to give the market play a greater role, Chairman Xu Shaoshi said.

 

Britain

The Telegraph

ROLLS-ROYCE INVESTIGATED IN US OVER BRIBERY CLAIMS

Rolls-Royce is being investigated by the U.S. Department of Justice, following allegations that its executives bribed officials in Indonesia, China and India in order to win lucrative contracts.

The Guardian

BARCLAYS AND LLOYDS SIDESTEP EU RULES AND HAND BOSSES ALMOST £1M IN SHARES

Bailed-out Lloyds Banking Group and Barclays have handed their bosses almost 1 million pounds ($1.67 million) in shares to sidestep the new rules from Brussels which are intended to clamp down on bankers’ pay.

HIRINGS HIT 16-YEAR HIGH ON STRONG GROWTH DATA

British companies hired staff at the fastest rate in 16 years in February, as growth in orders and broader economic recovery fuelled confidence.

The Times

GOVERNOR TO FACE MPS OVER BANK’S ROLE IN FOREX SCANDAL

Mark Carney has been called before MPs to respond to allegations that the Bank of England turned a blind eye to traders who were rigging the multi- trillion-dollar currency markets.

BARCLAYS PUTS HUNDREDS OF BANKERS IN THE £1M CLUB

Barclays handed eight of its high-rolling investment bankers pay and bonuses of more than £5 million each last year in the latest sign that largesse in the financial sector is alive and well.

The Independent

STANDARD CHARTERED TO SLASH PETER SANDS’ BONUS AFTER PROFITS DECLINE FOR THE FIRST IN A DECADE

Emerging markets bank Standard Chartered saw profits drop for the first time in a decade last year and its chief executive Peter Sands is taking a 21 per cent cut in his annual bonus.

AO SUPPLIERS ‘FURIOUS’ AFTER WHITE GOODS FIRM RAISES CONCERNS OVER DIXONS TERMS

Online white goods firm AO has written to suppliers asking them to clarify whether Dixons get better terms than they do, The Independent understands.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of Mar. 1 at 8:30–consensus 338K
Unit labor costs for Q4 at 8:30–consensus -0.5%
Nonfarm productivity for Q4 at 8:30–consensus 2.4%
Factory orders for January at 10:00–consensus -0.5%

ANALYST RESEARCH

Upgrades

Allegiant Travel (ALGT) upgraded to Outperform from Market Perform at Raymond James
Axiall (AXLL) upgraded to Buy from Neutral at Goldman
Biogen (BIIB) upgraded to Outperform from Market Perform at BMO Capital
Bob Evans (BOBE) upgraded to Buy from Hold at Miller Tabak
Cabot Oil & Gas (COG) upgraded to Buy from Neutral at UBS
H&E Equipment (HEES) upgraded to Buy from Neutral at UBS
Hawaiian Holdings (HA) upgraded to Buy from Hold at Deutsche Bank
Inphi (IPHI) upgraded to Buy from Hold at Jefferies
Kirkland’s (KIRK) upgraded to Buy from Hold at KeyBanc
Materion (MTRN) upgraded to Buy from Hold at KeyBanc
Navios Maritime (NM) upgraded to Buy from Hold at Stifel
Northern Tier (NTI) upgraded to Overweight from Equal Weight at Barclays
NuStar Energy (NS) upgraded to Overweight from Neutral at JPMorgan
Star Bulk Carriers (SBLK) upgraded to Buy from Hold at Stifel
Tiffany (TIF) upgraded to Buy from Neutral at Citigroup
Yum! Brands (YUM) upgraded to Outperform from Neutral at RW Baird

Downgrades

Brixmor (BRX) downgraded to Neutral from Buy at UBS
Continental Resources (CLR) downgraded to Neutral from Buy at UBS
Emeritus (ESC) downgraded to Hold from Buy at Deutsche Bank
Hilltop Holdings (HTH) downgraded to Outperform from Strong Buy at Raymond James
MarkWest Energy (MWE) downgraded to Neutral from Overweight at JPMorgan
New York Mortgage (NYMT) downgraded to Hold from Buy at MLV & Co.
OCI Resources (OCIR) downgraded to Neutral from Buy at Goldman
Redwood Trust (RWT) downgraded to Hold from Buy at Jefferies
Southcross Energy Partners (SXE) downgraded to Neutral from Overweight at JPMorgan
Spark Networks (LOV) downgraded to Market Perform from Outperform at William Blair

Initiations

Alcobra (ADHD) initiated with an Outperform at JMP Securities
Alon USA Partners (ALDW) initiated with an Underweight at Barclays
Amedica (AMDA) initiated with an Outperform at JMP Securities
Ascena Retail (ASNA) initiated with a Positive at Susquehanna
Nordson (NDSN) initiated with a Neutral at RW Baird

COMPANY NEWS

Ford (F) reported February China sales up 67% to 73,040 vehicles sold
Staples (SPLS) announced plans plans to close up to 225 stores in North America by end of 2015
Exxon Mobil (XOM) to build halobutyl rubber, hydrocarbon resin plants in Singapore
Biodel (BIOD) announced a commercial manufacturing agreement with Emergent BioSolutions (EBS)
Tekmira Pharmaceuticals’ (TKMR) anti-Ebola viral therapeutic received Fast Track designation from the FDA
A study by Sangamo BioSciences (SGMO) showed that treatment with the company’s ZFN-modified T-cells provide functional control of HIV without antiretroviral drugs
Stage Stores (SSI) announced the sale of Steele’s off-price division to Hilco Global
Logitech (LOGI) announced a $25M share buyback program and introduced a long-term financial model, including annual non-GAAP operating profit margin greater than 10%.

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Descartes Systems (DSGX), Safeguard Scientifics (SFE), SP Plus Corp. (SP), WuXi PharmaTech (WX), Giant Interactive (GA), Zogenix (ZGNX), Synacor (SYNC), Boyd Gaming (BYD), ValueVision (VVTV)

Companies that missed consensus earnings expectations include:
Stage Stores (SSI), Joy Global (JOY), Staples (SPLS), Costco (COST), Carriage Services (CSV), Universal American (UAM), General Communications (GNCMA), TG Therapeutics (TGTX)

Companies that matched consensus earnings expectations include:
Air Transport Services (atsg), Semtech (SMTC), Receptos (RCPT)

NEWSPAPERS/WEBSITES

Darden (DRI) cancels meeting amid pressure from investors, Reuters reports
eBay (EBAY) CEO John Donahoe says several of its top shareholders agree PayPal should stay put, Reuters reports
Deutsche Telekom (DTEGY) CEO said  sees sale of T-Mobile US (TMUS) less likely in near-term, Bloomberg reports
DirecTV (DTV) discussing internet rights deal with Disney (DIS), Reuters reports
IBM (IBM) workers strike in China regarding terms of Lenovo (LNVGY) takeover, FT reports
Michigan AG: Chesapeake (CHK), Encana (ECA) face criminal antitrust charges, Reuters reports
Rolls-Royce (RYCEY) says cooperating with authorities on bribery allegations, FT reports
GM (GM) faces increased government pressure over delayed recall, WSJ reports
Foxconn to land 90M iPhone 6 (AAPL) orders in 2014, DigiTimes reports
Obama administration gives health plans additional two year reprieve (HUM, UNH, HNT, AET, MOH, CNC, AGP, HS, WLP, WCG, CI), WSJ reports

SYNDICATE

Constellium (CSTM) will offer 12.56M Class A ordinary shares for Apollo affiliate
Cousins Properties (CUZ) files to sell 8.7M shares of common stock
Dara BioSciences (DARA) files to sell 2.17M shares of common stock for holders
iCAD (ICAD) files to sell 2M shares of common stock
Medical Properties Trust (MPW) files to sell 8M shares of common stock
Primero Mining (PPP) announces 31.15M share offering by Goldcorp
Sun Communities (SUI) files to sell 4.2M shares of common stock
Synageva (GEVA) 2M share Secondary priced at $105.75

via Zero Hedge http://ift.tt/1cEF5qj Tyler Durden

While the world is convinced that Putin’s Tuesday press conference was an admission of blinking to the west, the reality is anything but that, and hours ago Crimea’s parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in what Reuters said is a “a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula.” To be sure, the Crimea – which has an ethnic Russian majority – affiliation to Moscow as opposed to Kiev is well-known, yet still the sudden acceleration of moves to bring Crimea formally under Moscow’s rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation. And now all Putin has to do is sit back and say the people have spoken and without spilling a drop of blood has effectively split the country in two parts, with the entire east of Ukraine, where pro-Russian sentiment also runs high – sure to follow Crimea. Just as we said from the very beginning.

From Reuters:

The Crimean parliament voted unanimously “to enter into the Russian Federation with the rights of a subject of the Russian Federation”. The vice premier of Crimea, home to Russia’s Black Sea military base in Sevastopol, said a referendum on the status would take place on March 16. The announcement, which diplomats said could not have been made without Russian President Vladimir Putin’s approval, raised the stakes in the most serious east-west confrontation since the end of the Cold War.

 

Far from seeking a diplomatic way out, Putin appears to have chosen to create facts on the ground before the West can agree on more than token action against him.

 

EU leaders had been set to warn but not sanction Russia over its military intervention after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea, with a population of about 2 million, back to their bases. It was not immediately clear what impact the Crimean moves would have.

 

European Commission President Jose Manuel Barroso said in a Twitter message: “We stand by a united and inclusive #Ukraine.”

 

French President Francois Hollande told reporters on arrival at the summit: “There will be the strongest possible pressure on Russia to begin lowering the tension and in the pressure there is, of course, eventual recourse to sanctions.”

To be sure, the new Kiev government – which may or may not have killed its own citizens in order to rise to power while blaming the atrocities on Yanukovich as described yesterday – has responded in kind to how Putin views them, and declared the referendum illegal and opened a criminal investigation against Crimean Prime Minister Sergei Askyonov, who was appointed by the region’s parliament last week. The Ukrainian government does not recognise his authority or that of the parliament. Still, it is by now far too late for Kiev to enforce its will in Crimea.

In the meantime, and confirming that Putin has all the cards, EU leaders had been set to warn but not sanction Russia over its military intervention in Ukraine after Moscow rebuffed Western diplomatic efforts to persuade it to pull forces in Crimea back to their bases. According to EU sources the leaders gathered in Brussels delayed the discussion on sanctions to Russia to a new meeting in two weeks. As we stated yesterday, due to stern German industrial lobby objection, Europe will never implement full blown sanctions and at best will stick to some optical wristslap which has no real adverse impact on Russia.

But back to the Crimea, where a parliament official said voters will be asked two questions: should Crimea be part of the Russian Federation and should Crimea return to an earlier constitution (1992) that gave the region more autonomy?

“If there weren’t constant threats from the current illegal Ukrainian authorities, maybe we would have taken a different path,” deputy parliament speaker Sergei Tsekov told reporters outside the parliament building in Crimea’s main city of Simferopol.

“I think there was an annexation of Crimea by Ukraine, if we are going to call things by their name. Because of this mood and feeling we took the decision to join Russia. I think we will feel much more comfortable there.”

All the while, Europe is engaged in idiotic meetings and summits, spearheaded by John Kerry, who was quick to point out how constructive the meeting has been. Perhaps it would have been more so if Russia had participated:

Russian Foreign Minister Sergei Lavrov refused to meet his new Ukrainian counterpart or to launch a “contact group” to seek a solution to the crisis at talks in Paris on Wednesday despite arm-twisting by U.S. Secretary of State John Kerry and European colleagues. The two men will meet again in Rome on Thursday.

 

Tension was high in Crimea after a senior United Nations envoy was surrounded by a pro-Russian crowd, threatened and forced to get back on his plane and leave the country on Wednesday.

 

The EU summit in Brussels seemed unlikely to adopt more than symbolic measures against Europe’s biggest gas supplier, because neither industrial powerhouse Germany nor financial centre Britain is keen to start down that road.

 

The short, informal EU summit will mostly be dedicated to displaying support for Ukraine’s new pro-Western government, represented by Prime Minister Arseny Yatseniuk, who will attend even though Kiev is neither an EU member nor a recognised candidate for membership.

 

After meeting European Parliament President Martin Schulz, Yatseniuk appealed to Russia to respond to mediation efforts.

 

After a day of high-stakes diplomacy in Paris on Wednesday, Lavrov refused to talk to Ukrainian Foreign Minister Andriy Deshchitsya, whose new government is not recognised by Moscow.

 

As he left the French Foreign Ministry, Lavrov was asked if he had met his Ukrainian counterpart. “Who is that?” the Russian minister asked.

 

He stuck to Putin’s line – ridiculed by the West – that Moscow does not command the troops without national insignia which have taken control of Crimea, besieging Ukrainian forces, and hence cannot order them back to bases.

 

Kerry said afterwards he had never expected to get Lavrov and Deshchitsya into the same room right away, but diplomats said France and Germany had tried to achieve that.

 

Western diplomats said there was still hope that once Lavrov had reported back to Putin, Russia would accept the idea of a “contact group” involving both Moscow and Kiev as well as the United States and European powers to seek a solution.

Keep hoping. In the meantime, with each passing day, Putin consolidates his new territory even as the west dithers, Europe is unable to obtain the bailout loans it has promised Ukraine, and Kerry keeps talking.

via Zero Hedge http://ift.tt/1hPtOYR Tyler Durden

Following yesterday’s abysmal employment and service data which led to an unchanged close it quite clear that the market has returned to a mode where it ignores all newsflow – at least the bad, which is due to the weather, the good news is due to the recovery – and instead is simply driven by such “fundamental drivers” as the momentum and position of the Yen carry trade. And overnight the USDJPY positively exploded following news that the Japan advisory committee has decided the nation’s pension fund, the GPIF, does’ t need a domestic bond focus. Implicitly this means that the GPIF will soon be able to purchase stocks like Facebook and Tesla, which is a guaranteed way of generated short-term gains and longer-term total losses for the Japanese pensioners. Of course, when the latter happens, nobody will have been able to foresee it and some scapegoat somewhere will be summarily fired. As for what this means for futures, the drift higher has made SPOOs rise once more and at last check was just below if not at new all time highs on an ongoing barrage of increasingly negative macro news.

Stocks in Europe gapped higher at the open in reaction to positive close by the Nikkei 225 index which as noted benefited from comments by Japan’s advisory committee that the GPIF doesn’t need domestic bond focus, but gradually moved off the best levels as market participants positioned for a slew of risk events. Nevertheless, financials remained the best performing sector, while health care underperformed and was largely weighed on by German listed Merck following earnings release pre-market. At the same time, Bunds failed to benefit from the looming risk events and after gapping lower at the open, prices remained under selling pressure as further alleviation of fears surrounding Ukraine/Russia encouraged flows into riskier assets.

There was little in terms of tier 1 macroeconomic releases this morning, but both France and Spain successfully tapped capital markets and going forward, apart from digesting monetary policy announcements by the BoE and the ECB, attention will also be on the weekly jobs and US factory orders reports.

Bulletin news summary from RanSquawk and Bloomberg

• Japan’s health ministry advisory committee said the GPIF doesn’t need domestic bond focus and that there is no need for the fund to focus on passive investments
• All analysts surveyed expect the Monetary Policy Committee to keep the bank rate at 0.50% and the Asset Purchase facility at GBP 375bln, due at 1200GMT/0600CST
• 6 out of the 54 surveyed analysts are calling for a cut in the main ECB refi rate to 15 bps, 8 are calling for a cut to 10bps and the other 40 are expecting rates to stay on hold at 25bps, due at 1245GMT/0645CST
• Treasuries steady, 10Y yields holding near midpoint of range seen over last two days as market awaits tomorrow’s payrolls report, est. 146k, unemployment rate holding at 6.6%.
• Goldman and Deutsche Bank cut payrolls estimates after yesterday’s weaker than forecast ISM Svcs, ADP reports
• EU leaders will consider repercussions for Russia at an emergency meeting today on the Ukraine crisis, after Russia’s foreign minister spurned a U.S. effort to ease tensions in the Crimean peninsula
• China’s Finance Minister Lou Jiwei said growth as low as 7.2%  would meet this year’s target of “about” 7.5% as he tried to moderate expectations for an economy at risk from swelling debt
• German factory orders rose 1.2% in January vs. median estimate for 0.9% gain in Bloomberg survey
• ECB meets today, with rate decision due at 7:45am ET, Draghi presser 8:30am; stronger-than-expected output and inflation and rising economic confidence might spare  the bank from radical steps such as negative rates 40 out of 54 economists in a Bloomberg News survey expect no change in benchmark rate
• Bank of England also meets today, decision due at 7:00am; expected to keep official rate at 0.50%
• China is beefing up spending on high-tech weapons and upgrading combat readiness as it throws its military weight behind territorial claims that have stirred tensions with Japan and Southeast Asian neighbors
• Sovereign yields higher. EU peripheral spreads narrow. Asian equities higher, Nikkei +1.6%; Shanghai Composite +0.3%. European equity markets, U.S. stock-index futures decline. WTI crude, gold and copper little changed

US Event Calendar

• 8:30am: Initial Jobless Claims, Feb 28, est. 336k (prior 348k); Continuing Claims, Feb. 21 est. 2.970m (prior 2.964m)
• 8:30am: Non-Farm Productivity, 4Q final, est. 2.2% (prior 3.2%); Unit Labor Costs, 4Q final, est. -0.5% (prior -1.6%)
• 9:45am: Bloomberg Consumer Comfort, March 2 (prior -28.6)
• 10:00am: Factory Orders, Jan., est. -0.5% (prior -1.5%)
• 12:00pm: Household Change in Net Worth, 4Q (prior $1.922t) Central Banks
• 7:00am: Bank of England seen holding benchmark rate at 0.50%
• 7:45am: ECB seen holding benchmark interest rate at 0.25%
• 8:30am: ECB’s Draghi holds news conference in Frankfurt
• 8:15am: Fed’s Dudley at Wall St. Journal event in New York
• 1:00pm: Fed’s Plosser speaks in London
• 6:00pm: Fed’s Lockhart speaks in Washington Supply
• 11:00am: Fed to buy $1b-$1.25b in 02/15/2036-02/15/2044 sector
• 11:00am: U.S. to announce plans for following week’s sales     of 3Y notes, 10Y notes and 30Y bonds

Asian Headlines

Japan’s health ministry advisory committee said the GPIF doesn’t need domestic bond focus and that there is no need for the fund to focus on passive investments. However the panel recommended little change to fund’s return target, which should seek 1.7% points return above rate of wage growth vs. the current 1.6%. (BBG)

PBoC conducted a 6th consecutive drain with CNY 43bln via 14-day repos and CNY 50bln via 28-day repos for a total net drain of CNY 70bln this week vs. CNY 160bln drain last week. (RTRS)

EU & UK Headlines

German Factory Orders (Jan) M/M 1.2% vs. Exp. 0.9% (Prev. -0.5%, Rev. -0.2%)

German Factory Orders WDA (Jan) Y/Y 8.4% vs. Exp. 7.5% (Prev. 6.0%, Rev. 6.1%)

Greece is trying to reach Troika deal by Saturday, according to Greek finance Minister Stournaras. (BBG) This follows reports that Greece no longer expects an overall deal by next week, after it asked its international lenders to approve its latest bailout review despite an unresolved dispute over how much new capital its banks need.

French Tresor sold EUR 7.99bln vs. Exp. EUR 8bln in OATs and the Spanish Treasury sold EUR 5.004bln vs. Exp. EUR 5bln in bonds this morning. Of note, peripheral bond yield spreads are seen marginally tighter this morning.

US Headlines

Fed’s Fisher (voter, hawk) said Fed policy creating incentives for increasing risk and that QE is distorting financial markets. Fisher also stated there is no clear plan for draining excess bank reserves. (BBG)

Fed’s Williams (non-voter, dove) expects first main rate increase around mid-2015 and downgrades 2014 growth outlook to about 2.5% from 3%. (BBG)

Equities

Stocks in Europe traded higher since the get-go, with health care underperforming as ongoing alleviation of fears surrounding Ukraine/Russia stand-off, together with less than impressive earnings by Merck, buoyed investor demand for more riskier assets. In terms of other notable equity movers, Deutsche Telekom shares came under pressure after the company said that it will not reach EUR 6bln free cash flow target in 2015.

FX

AUD strength was observed across the board overnight and this morning following the release of better than expected retail sales and higher than expected trade balance reports. At the same time, JPY weakness which ensued overnight following comments by an advisory committee on the GPIF was also evident during the first half of the European trading session.

Analysts at Barclays recommend going tactically short EUR/USD at spot 1.3733 with a tight stop at 1.3825 and a target of 1.3550 as as any unexpected easing by the ECB should prompt a lower EUR.

Commodities

The EU is to consider repercussions for Russia at an emergency meeting today on the Ukraine crisis, after Russian Foreign Minister Lavrov fended off a US effort to ease tensions in the Crimean peninsula. (BBG)

Crimea parliament votes to join Russia, according to RIA. Of note, Crimea will hold a referendum on the region’s status on March 16th, according to RIA.

Sinopec says China may see a ‘severe’ oil refining overcapacity ‘soon’. (China Business News)

Russian offline oil-refining capacity has been revised lower for March, to 672,000 tonnes down from the previous March forecast of 1.37mln tonnes. (BBG)

Strikes at South African platinum mines, ongoing since January 23rd, are set to continue as talks between employers and the AMCU have broken down, with the two parties far apart after six weeks of negotiations. (BBG)

via Zero Hedge http://ift.tt/1gU8qzz Tyler Durden

 

Gold fell $2.36 to $1332.74 in late Asian trade before it rallied back to $1341.79 by early afternoon in New York, but it then fell back off into the close and ended with a gain of just 0.17%. Silver climbed to $21.314 in London, but it then fell back off in late trade and ended with a loss of 0.09%.

Gold traded below its highest level in more than four months as tension between Ukraine and Russia eased leading to traders taking profits on gold.
 

Palladium, 1994 to March 2014 – (Bloomberg)

Palladium climbed for a fifth day and jumped to an 11 month high. Palladium for June delivery rose  0.7% to $769/oz. Palladium has gained 5.5% during the last five days of the crisis and is up 7.9% year to date. There are real concerns that that any economic sanctions against Russia could disrupt exports of the precious metal from the world‘s largest producer and exacerbate an already tight supply situation.

The risk of supply disruptions from Russia come at a time when the market was already dealing with reduced palladium supply as a result of a nearly six week-old strike in South Africa’s platinum-group-metals mining sector.

According to Bloomberg Industries analysts Kenneth Hoffman & Oliver Nugent, “any sanctions imposed by the EU and the U.S. on the export of Russian palladium group metals would create a serious supply shortage that may be difficult for industries to replace.”

This year will show the third consecutive deficit year in global palladium supply, according to a BI survey of analysts. Russia provided 44% of global palladium supply and 13.6% of platinum last year, according to Johnson Matthey.



According to BI, “a pick up in China’s demand for platinum group metals may offset any sanctions imposed on Russia by the U.S. and European Union. An increase of 26% sequentially in platinum imports by China in November suggests that domestic supplies are depleting. Russia has typically provided about 30% of China’s palladium imports and China may need to increase imports from the country as labor disputes in South African mines continue to affect production.”

Tensions have eased but the crisis is far from over. Russia is the world’s largest energy producer and Ukraine hosts a network of strategic pipelines that carry more than half of Russia’s gas exports to the EU. So, any conflict between the two countries threatens oil and gas supplies and puts Europe’s energy security and indeed economic recovery at risk.

Russia and Ukraine together account for roughly 40% of global grain exports, mainly wheat. Russia is also a large corn exporter and a conflict would likely lead to food and energy price inflation.

Ore deposits of palladium are rare and are mostly located in Russia and South Africa. Russian resource nationalism, as has been seen with natural gas, could lead to supply disruptions and to palladium going higher in the coming months. Some analysts believe palladium may be in deficit for most of the next decade as Russia depletes stockpiles. Also, industrial uses and investment demand for the precious metal looks set to increase.

The 7 Key Bullion Storage Must Haves
A diversification into precious metals remains prudent and will again protect investors, both retail and institutional, pensions owners and savers, over the medium and long term. However, this is only the case if bullion owned is physical bullion coins and bars and not digital, pooled, or paper formats. Fully segregated and allocated coin and bar storage remains the safest way to own bullion.

Download your copy of 7 Key Allocated Gold Storage Must Haves here.

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Below is the photo that reveals why US and EU bankers despise Russian President Putin so much. As a quick experiment, type “Obama, gold” and “Cameron, gold” into Google images and conduct a search. You will discover that theses searches come up empty. Any similar photos to the one below by US President Obama or UK Prime Minister Cameron would be a massive betrayal of their puppet masters – the BIS, the IMF, the World Bank, the ECB, the BOE and the Federal Reserve.

 

Simply put, physical gold and physical silver are real money. The US dollar and the euro are not. 

 

Russian President Vladimir Putin displays his fondness for gold

 

 

And in case you’ve missed them, our most recent SmartKnowledge videos are listed below:

 

What Bankers Want With Ukraine

The History of Gold and Silver Clearly Tell Us Where it is Heading in the Future

Another JP Morgan Banker Dead: It’s DefCon1 for the Criminal Banking Industry

Connect the Dots: The Power of the Lone Dissenter to Bring About Change

What the Chinese Yuan is Telling Us is Coming

 

Subscribe to the SmartKnowledgeU YouTube channel here and follow us on Twitter here.

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Submitted by Mike Krieger of Liberty Blitzkrieg blog,

Recently, what came out with the justices in the United Kingdom … they looked at what happened on Miranda and other things, and they said it’s interesting: journalists have no standing when it comes to national security issues. They don’t know how to weigh the fact of what they’re giving out and saying, is it in the nation’s interest to divulge this.

 

– General Keith Alexander, Director of the NSA

Although General Alexander states the above with regard to the UK justice system, he clearly agrees with the assessment. Read the passage above again and think about how scary that statement is. It becomes clear that one of the reasons abuses at the NSA are so egregious is because of the attitude of the person in charge. Alexander genuinely thinks that intelligence officials know best, and should not be subject to any sort of accountability. You don’t need to be a card-carrying member of the ACLU to see how dangerous this perspective is. To endorse this notion that “journalists have no standing when it comes to national security issues,” is to effectively make illegal one of the most important free speech rights in any democracy. This sort of attitude represents the antithesis of American values.

Not only does General Alexander see things this way, apparently he is lobbying for Congressional legislation that would solidify this authoritarian view within the law itself. For example, the Guardian reported yesterday that:

General Keith Alexander, who has furiously denounced the Snowden revelations, said at a Tuesday cybersecurity panel that unspecified “headway” on what he termed “media leaks” was forthcoming in the next several weeks, possibly to include “media leaks legislation.”

 

The general, who is due to retire in the next several weeks, said that the furore over Snowden’s surveillance revelations – which he referred to only as “media leaks” – was complicating his ability to get congressional support for a bill that would permit the NSA and the military Cyber Command he also helms to secretly communicate with private entities like banks about online data intrusions and attacks.

So apparently he has several pieces of authoritarian legislation on his plate at the moment. He laments Snowden is making the implementation of his fascist tendencies more difficult. Just another reason to celebrate Snowden.

“We’ve got to handle media leaks first,” Alexander said.

 

“I think we are going to make headway over the next few weeks on media leaks. I am an optimist. I think if we make the right steps on the media leaks legislation, then cyber legislation will be a lot easier,” Alexander said.

 

Alexander has previously mused about “stopping” journalism related to the Snowden revelations.

 

“We ought to come up with a way of stopping it. I don’t know how to do that. That’s more of the courts and the policymakers but, from my perspective, it’s wrong to allow this to go on,” he told an official Defense Department blog in October.

 

The specific legislation to which Alexander referred was unclear. Angela Canterbury, the policy director for the Project on Government Oversight, a watchdog group, said she was unaware of any such bill. Neither was Steve Aftergood, an intelligence policy analyst at the Federation of American Scientists.

Does this guy really have something up his sleeve, or is he just delusional?

But staff at Georgetown University, which sponsored the Tuesday cybersecurity forum, took the microphone away from a Guardian reporter who attempted to ask Alexander if the NSA had missed the signs of Russia’s invasion and occupation of Ukraine, which appeared to take Obama administration policymakers by surprise.

 

Although the event was open to reporters, journalists were abruptly told following the NSA director’s remarks that they were not permitted to ask questions of Alexander, who did not field the Ukraine question. Following the event, security staff closed a stairwell gate on journalists who attempted to ask Alexander questions on his way out.

Shocker.

Full article here.

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When Hillary Clinton compared Russia's incursion into Ukraine to the early days of Nazi Germany's expansion, she joined an illustrious band who have compared Russian President Vladimir Putin to Adolf Hitler since the 2008 Georgia crisis.

 

Via The Washington Post,

Rubio

 

McCain

 

Sen. Lindsey Graham (R-S.C.): "If you could go back in time, would you have allowed Adolf Hitler to host the Olympics in Germany? To have the propaganda coup of inviting the world into Nazi Germany and putting on a false front?"

 

Former national security adviser Zbigniew Brzezisnki (in 2008): Putin is "following a course that is horrifyingly similar to that taken by Stalin and Hitler in the 1930s."

 

And again today: Called Putin "a partially comical imitation of (former Italian Prime Minister Benito) Mussolini and a more menacing reminder of Hitler."

 

Canadian Foreign Affairs Minister John Baird: "The Sudetenland had a majority of Germans. That gave Germany no right to do this in the late 1930s."

 

Canadian Prime Minister Stephen Harper: "We haven't seen this kind of behavior since the Second World War."

 

Anti-Putin activist and former chess champion Garry Kasparov: "Intentionally or not, the Putin regime has followed the Berlin 1936 playbook quite closely for Sochi."

 

Russian historian Andrey Zubov: "This has all happened before. Austria. Early March, 1938. The Nazis want to build up their Reich at the expense of another state."

 

British actor and gay rights activist Stephen Fry: "He is making scapegoats of gay people, just as Hitler did Jews. He cannot be allowed to get away with it."

 

International security expert Jonathan Eyal: "The Sudetenland option is not his first priority, but it is his fail safe priority."

 

Russian satirist Viktor Shenderovich: In reference to Russian figure skater Yulia Lipnitskaya, Shenderovich said he liked her "very much! But if you only knew how much Berliners in the summer of 1936 liked shot putter Hans Woelke … a smiling, handsome young man who symbolized the youth of the new Germany!"

We are sure there are plenty more to come…

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Premier Li Keqiang delivered his first government work report at the opening of the National People’s Congress (NPC) meeting last night. The new government promises to speed up reform, manage debt risks, fight pollution, and yet maintain 7.5% economic growth all at the same time but as SocGen'sWei Yao warns, this is going to be nothing if not challenging. Maybe mindful of a potential miss, Yao points out that policymakers seem to give themselves a small degree of flexibility by using new phrases like “a reasonable range for the growth rate” and “the growth target is
flexible”. Mission intractible or mission impossible?

Via SocGen's Wei Yao,
Premier Li sets himself a mission impossible
 

In the meantime, financial system risk continues to intensify as we expected. On the night before the NPC meeting, China’s bond market saw the first ever default, as a solar company failed to service its debt. One of the reasons given for keeping the same growth target is to maintain market confidence. However, judging from the lack of performance of China’s stock market today, investors may well be focusing more on debt risk just like us.

 

Targets: little flexibility

In the 2014 Government Work Report, the GDP growth target is set again at 7.5%, the same as in 2013. However, the growth targets for fixed asset investment, industrial production and foreign trade are all lowered by 0.5ppt to 17.5%, 9.5% and 7.5%, respectively. The hope is for household consumption to step up, as retail sales are expected to grow at an unchanged targeted pace of 14.5% despite a big miss (13.1%) last year.

Besides, there is no change to the stated policy stance: prudent monetary policy and proactive fiscal policy. Broad money is again targeted to grow 13% and fiscal deficit is budgeted to widen to CNY 1.35tn from CNY 1.2tn in value, which is however estimated by the government at 2.1% of GDP – the same as in 2013.

Still somewhat different from the previous government, Premier Li mentioned several times that growth should be kept within “a reasonable range”, without specifying the range. He said that the upper bound of such a range is determined by inflation and the lower bound by unemployment. The government aims to keep the unemployment rate below 4.6%, while the latest reading is 4.1%. Given that, 7.5% looks more than enough. Furthermore, the work report from the National Development and Reform Committee (NDRC) – the planning agency – pointed out for the first time that there is some flexibility around the growth target. It seems that policymakers are still trying to give themselves some leeway.

Reform dividend or drag?

In our view, the Chinese government really needs a lot more flexibility this year, given their reform promises. We agree that all the structural reform promised at the Party Plenum last November is good for China’s long-term prospects by sustaining potential productivity growth and mitigating tail risks. However, the reform dividend that Premier Li cited as one of the growth engines in 2014 may not materialise so quickly.

Going through the 2014 reform list (see below), we are pleased to see a number of concrete steps. To name a few, the language is quite firm on widening the yuan trading band, setting up a deposit insurance scheme, introducing a resolution mechanism for financial institutions, further deregulation, as well as opening banking, energy, infrastructure and telecommunication to private players. Deregulation and de-monopolisation are the only changes that we think may deliver positive impacts relatively soon, but it is not at all certain how much of a boost one can expect right away. At the same time, financial liberalisation entails higher financial market volatility in a time of rising debt risk.

The work report also devoted a section to “the war against pollution”, saying that the bad smog across China is a “red light” to the old growth model. The measures enlisted to fight this war include specific capacity reduction targets for a number of heavy industries and more marketdriven utility prices. None of these are exactly pro-growth.

Moreover, policymakers have not forgotten the local government debt problem. There are more details on how they plan to defuse the risk. The thinking is to increase formal local government bonds (LGBs) but to curtail growth of local government financing vehicles’ (LGFVs) borrowing. At the moment, outstanding LGBs amount to less than CNY 800bn, while LGFVs owe more than CNY 10tn to banks, bond investors and the shadow banking system. The central government plans to issue CNY 400bn LGBs on behalf of local governments this year, which represents an increase of CNY 50bn from 2013. In the case of a sharper-than-expected GDP deceleration, this will be far from enough to ensure acceleration in infrastructure investment growth.

First bond default

It seems to us a mission impossible to achieve each and every task outlined in the Premier’s speech without compromising on the growth target. In other words, in order to hit the growth target, debt risk will probably build further and/or reform progress may suffer. This is because the starting point for 2014 is more challenging than 2013 in two major aspects:

First, the property market is likely to become a drag on growth, instead of a boost as last year. Housing sales were booming in H1 2013, which supported a revival of construction and real estate investment in H2. Signs are mounting that housing markets in lower tier cities are cracking. If the government insists on delivering growth, it will have little choice but to resort to infrastructure investment and local government borrowing.

Second, financial risk is much heightened after another year of rapid credit growth. We have long argued that China’s financial market will finally see defaults in 2014. Just on the night before the NPC meeting, a solar-panel manufacturer informed its bond investors that it is unable to pay the CNY 90mn interest on its CNY1bn bond as scheduled on 7 March. Trust product defaults are most likely to be the next. Although we do not think that China will suffer a systemic financial crisis as a result, lower credit and investment growth seems inevitable as investors start to learn to price risk
 

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Members of the Ukrainian parliament have had their mobile phones hacked by equipment installed in Russia-controlled Crimea, according to the nation’s security services. Reuters reports that “an IP-telephonic attack is under way on mobile phones of members of Ukrainian parliament for the second day in row.”

 

Via Reuters,

“I confirm that an IP-telephonic attack is under way on mobile phones of members of Ukrainian parliament for the second day in row,” Valentyn Nalivaichenko told a news briefing.

 

“At the entrance to (telecoms firm) Ukrtelecom in Crimea, illegally and in violation of all commercial contracts, was installed equipment that blocks my phone as well as the phones of other deputies, regardless of their political affiliation,” he said.

 

“The security services are now seeking to restore at least the security of communications,” he said. “All state information security systems were unprepared for such a brazen violation of the law.”

Hardly surprising but not exactly the actions of a nation that has “folded” on Ukraine as stocks seem to suggest.

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