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Weakness in Asian data, check. Weakness in European data, check. Weakness in US data, check. USDJPY overnight sell-off primed for US day-session ramp, check… New highs for US stocks, check…
S&P new all-time highs and thus positive year-to-date…
The Buying panic ensues…
Sparked by just a little USDJPY momentum ignition…
via Zero Hedge http://ift.tt/1eaLnlN Tyler Durden
Ever since the weekend’s coup d’etat (as he called it: remember, it isn’t officially a coup until John Kerry deems it so – see Egypt), Ukraine’s overthrown president Victor Yanukovych (despite signing an agreement with the opposition and blessed by Europe which foresaw new legitimate presidential elections sometime after September) has been in hiding, following an aborted attempt to depart the country by plane. This is understandable: after all a warrant has been issued for his arrest. Which perhaps explains why as Gazeta.ru, citing UNIAN.net, reports his latest location is the Russian military base in Sevastopol, the one place where the Ukraine government, legitimate or not, will never dare to tread. UNIAN adds that Yanukovich will “board a landing ship of the Black Sea Fleet of the Russian Federation, which the deposed president will use to go to Russia, according to TV channel ATR.“
What happens To Yanukovich once he arrives in Russia, and more importantly, how Russia will respond to Ukraine, and EU, and US, demands for his deportation, is unknown.
What is known is that as Interfax Ukraine reported, “At the entrance to Sevastopol near restaurant “Puck” at the Yalta highway appeared antitank hedgehogs – crew patrol says it measure against frequent carjackings in Sebastopol, said “Sevastopol newspaper.”
For those confused, “antitank hedgehogs” are these things:
What is also concerning is the following unverified video released yesterday, which shows military vehicles on the road outside of Sevatsopol.
Legitimate military preparations or not, all eyes remain on Russia.
via Zero Hedge http://ift.tt/1dp6Z9T Tyler Durden
Ever since the weekend’s coup d’etat (as he called it: remember, it isn’t officially a coup until John Kerry deems it so – see Egypt), Ukraine’s overthrown president Victor Yanukovych (despite signing an agreement with the opposition and blessed by Europe which foresaw new legitimate presidential elections sometime after September) has been in hiding, following an aborted attempt to depart the country by plane. This is understandable: after all a warrant has been issued for his arrest. Which perhaps explains why as Gazeta.ru, citing UNIAN.net, reports his latest location is the Russian military base in Sevastopol, the one place where the Ukraine government, legitimate or not, will never dare to tread. UNIAN adds that Yanukovich will “board a landing ship of the Black Sea Fleet of the Russian Federation, which the deposed president will use to go to Russia, according to TV channel ATR.“
What happens To Yanukovich once he arrives in Russia, and more importantly, how Russia will respond to Ukraine, and EU, and US, demands for his deportation, is unknown.
What is known is that as Interfax Ukraine reported, “At the entrance to Sevastopol near restaurant “Puck” at the Yalta highway appeared antitank hedgehogs – crew patrol says it measure against frequent carjackings in Sebastopol, said “Sevastopol newspaper.”
For those confused, “antitank hedgehogs” are these things:
What is also concerning is the following unverified video released yesterday, which shows military vehicles on the road outside of Sevatsopol.
Legitimate military preparations or not, all eyes remain on Russia.
via Zero Hedge http://ift.tt/1dp6Z9T Tyler Durden
Since his historical track record has been spot on until now, we thought it useful to reflect on the wisdom of the maestro as he speaks this morning and his recent appearances. On the heels of the success of his un-best-selling book, Greenspan explains:
It appears he bubble-vision is strong and yet he notes that US income inequality is potentially harmful to the US political system and Dodd-Frank doesn’t work; adding that the US needs 4% growth to fix itself.
He had plenty more to say…adding to his recent comments…
US Stocks
US Economy:
US Regulation:
US Income Inequality:
Bitcoin:
Bonds:
China
via Zero Hedge http://ift.tt/1dp70KU Tyler Durden
Since his historical track record has been spot on until now, we thought it useful to reflect on the wisdom of the maestro as he speaks this morning and his recent appearances. On the heels of the success of his un-best-selling book, Greenspan explains:
It appears he bubble-vision is strong and yet he notes that US income inequality is potentially harmful to the US political system and Dodd-Frank doesn’t work; adding that the US needs 4% growth to fix itself.
He had plenty more to say…adding to his recent comments…
US Stocks
US Economy:
US Regulation:
US Income Inequality:
Bitcoin:
Bonds:
China
via Zero Hedge http://ift.tt/1dp70KU Tyler Durden
For those who have been following the abysmal loan creation in Europe, which recently dropped to an all time low…
… today’s inflation, or rather make that deflation, data out of Europe should not come as much of a surprise. Then again, with January inflation posting the biggest drop in history, when it tumbled by a record 1.1% from December levels, even the skeptics may be stunned by how rapidly deflation is gripping the continent.
On an anual basis, Euro area inflation rose by 0.8% for the second month in a row and the 4th month of sub 1% annual inflation in a row. At this rate, Europe will enter outright deflation in a few short months.
Broken down by country:
Euro zone consumer prices fell in January at their fastest ever pace on a monthly basis, dragged down by a slump in the cost of non-energy industrial goods, keeping annual inflation well below the European Central Bank’s target.
Inflation rate in the 18 countries sharing the euro dropped by 1.1 percent in January when compared with December, keeping the annual inflation rate at 0.8 percent for a second month in a row, the EU’s statistics office Eurostat said.
The annual inflation rate was revised from 0.7 percent, which Eurostat released in a flash estimate on January 31.
Economists polled by Reuters expected consumer price inflation to accelerate slightly to 0.9 percent in January, a level that is still well below the ECB’s target of close to but below 2 percent.
The annual rate was influenced by a 1.2 percent decline in the highly volatile prices of energy, while the monthly decline was hit by a 3.9 percent fall in prices of non-energy industrial goods and a 0.4 percent drop in the price of services.
The ECB, which cut its key interest rate to a record low of 0.25 percent in November, is expected to stay put until mid-2015 unless money market rates rise and the euro strengthens.
…
Italy, the euro zone’s third largest economy, showed a 2.1 percent month-on-month decline, the biggest drop from among all euro zone members.
In Germany, Europe’s largest economy, consumer prices fell by 0.7 percent on the month, keeping the annual inflation rate steady at 1.2 percent, with both figures coming below expectations.
And now back to Mario Draghi who which struggles to find new and improved ways of making sure European purchasing power continues to decline in light with the canons of Keynesian fundamentalism.
Source: Eurostat
via Zero Hedge http://ift.tt/1fhRfFs Tyler Durden
Much as the 3rd grade Markit US Manufacturing PMI ‘beat’ was blamed for the furious rally last Thursday in stocks, it appears bad news in the form of today’s 3rd grade Markit Services PMI ‘miss’ is (rightly) completely ignored by the market. While the Services segment of the economy is vastly larger and more important for ‘guessers’, it seems USDJPY would not provide the juice this morning as this is the weakest services performance in 4 months. Of course, “weather” is blamed and optimism for the future remains but what was odd to us is that economists claim that in February manufacturing returned to normal… but clearly services did not.
The overall index plunged…
The employment sub-index slowed notably…
Commenting on the Services PMI data, Chris Williamson, Chief Economist at Markit said:
“The unusually severe winter weather undoubtedly looks to have taken its toll on the economy in the first quarter. Over the first two months of the year, the manufacturing and services PMI surveys are signalling an annualised growth rate of just 1.6%, which represents a halving of growth compared to the 3.2% pace seen in the fourth quarter.
“Payroll growth in the vast services economy also weakened alongside the disruptions to business activity, hitting the weakest for almost a year. However, companies clearly remained in expansion mode, with just over half of all firms expecting activity to rise over the coming year against just 3% expecting a decline.
But this is what he said about the US Manufacturing data just last Thursday which printed so positively…
“The flash manufacturing PMI provides the first indications that production has rebounded from the weather-related slowdown seen in January. Having slumped to a three-month low in January the PMI surged to its highest for almost four years in February, as companies reported business returning to normal after freezing temperatures and snow disrupted operations and supply chains.
so in February, Manufacturing returned to normal (not affected by weather?), but services not so much…
Credibility?
via Zero Hedge http://ift.tt/1hKsadW Tyler Durden
The last 3 days have seen China’s Shanghai Composite index tumble over 3% – its largest drop since October as sentiment comes under pressure from concerns about tightening in the real estate sector.
The pace of price appreciation has slowed notably – especially ‘existing’ apartment sales (i.e. the speculators are exiting) – as it appears houing demand is cooling off with the number of cities with falling MoM home prices rose to six in January from two in December.
The PBOC has jawboned as much and real estate sector financial condtions are tightening is slowing as a number of banks curb lending to developers. This is weighing on copper prices also as construction activity slows (exacerbating problems in the shadow banking system’s collateral pools). The PBOC is getting what they wanted – but may regret it.
Home price growth moderated further in January (via BofA)
Prices of new commodity homes for 70 medium-to-large-sized cities surveyed by the National Bureau of Statistics (NBS) increased by 0.40% mom in January, same as in December. In yoy terms, average price growth of the 70 cities dropped to 9.5% in Janaury from 9.7% in December.
The number of cities with higher mom home prices was 62 in January, down from 65 in December; while the number of cities with falling mom home prices rose to six in January from two in December. Soufun’s 100-city average new home price index painted a similar picture, with mom growth easing to 0.63% in January from 0.70% in December.
Secondary market worst hit as construction activity slides (Via SocGen),
China’s January housing price inflation largely unchanged from the previous month for new apartments but softened notably in the second-hand market. Together with the news of loan curbs on the sector, China’s equity market reacted negatively and fell by more than 2%, as property and related stocks led the decline.
…The deceleration was led by first-tier and upper-second-tier cities. Notably, Beijing reported the first decline in second-hand property prices (-0.1%mom) since June 2012, and Shanghai had the lowest second-hand home price inflation since May 2012.Easing housing inflation serves as another sign that housing demand is cooling off, which argues against further strengthening of construction activity. On top of that, bank lending to the real estate sector seems to have started tightening up, as a number of commercial banks have reportedly suspended lending to developers. The development supports our view that the property market will contribute to investment growth deceleration in 2014.
The bottom line is that the trend in 2013 is not sustainable
In 2013, China had 10% increase in new home prices and 20% growth (floor space) in new home sales. We don’t expect that trend to be sustained. In 2014, we expect average yoy national home price growth to slow to low single digit on tapering pent-up demand and higher housing supply. We also see an growing diversification among cities as urbanization and migrangration create both winners and losers.
Slowing or even falling home prices in some cities can create volatity in fixed asset investment and financial markets, but we think a one-way rise of home prices could be even more negative for China as it invites too much speculation.
via Zero Hedge http://ift.tt/1hhivsb Tyler Durden
Below are the key events in the coming week:
Monday, 24 February
Tuesday, 25 February
Wednesday, 26 February
Thursday, 27 February
Friday, 28 February
The above in table format:
Andthe key issues for the coming week from SocGen
US EXTREME WEATHER EFFECT TO CONTINUE
January durable goods are expected to contract 2.9% with the adverse weather as the main suspect. With the extreme weather conditions having continued well into February, it will be April before the first batch of economic data (hopefully) not subject to extreme weather reemerges.
This week is also set to see a markdown of Q4 GDP by 0.6pp from the previous release to 2.6%. We look for the February Chicago PMI to deliver the bright spot of the week with a modest gain to 59.8 (from 59.6).
Hopes for a taper pause at the 18-19 March FOMC have been encouraged by the weaker data. Analysing recent indications from Fed officials, we believe the threshold for a pause is high and it would take a significant revision to the outlook for the Fed to steer away from the indicated path. Our expectation remains that the Fed will stay the course and taper $10bn in March.
EU COMMSION TO FORECAST GRADUAL RECOVERY
Tuesday will see the release of the EU Commission’s winter economic forecast and we expect the baseline forecast to remain that of a gradual and multi-speed recovery with euro area real GDP growth forecast for 2014 close to the previous number of 1.1% but with the risk that the previous 2015 number of 1.7% will see some downward revision. The more important changes, however, are likely to be to the inflation outlook, notably for 2014 where the EU Commission previously forecast 1.5%. The ECB will deliver new forecasts in March, but already in December staff projections set 2014 inflation at 1.1% (with real GDP forecast at 1.1%).
Also of interest will be the Commission forecasts on public finances. Evidence suggests significant fiscal drift in the periphery, something we expect Commission forecasts to confirm.
NEW SOFTENESS IN EURO AREA INFLATION & M3
The flash February HICP is set to clock in at 0.6%, down from 0.7% previously. Much of this decline reflects slower energy inflation and the core should remain unchanged at 0.8%. Lower headline inflation combined with weak M3 growth rates will fuel the debate on ECB. In our opinion, it will take further disappointment in activity data to push the ECB to ease further in March.
CHINA PMI SET TO SLIP FURTHER
The official February PMI release is set to echo the trends of the HSBC index with a decline to 50 from 50.5 previously. This is fully in line with our call for Chinese GDP growth of 6.9% in 2014, but still far removed from a hard landing scenario.
BRAZIL TO HIKE 50BP DESPITE STAGFLATION
With the continued deceleration of real economic activity, Brazil is very close to recession territory. With inflation expectations still hovering around 6%, we expect the BCB to pursue further tightening and look for a rate hike of 50bp this week to 11% followed two more rate hikes of 25bp at each of the two subsequent meetings. The Selic rate is thus set to reach 11.5% in Q2.
Source: Goldman, BofA, SocGen
via Zero Hedge http://ift.tt/1cHnRvA Tyler Durden
The Olympics are now over, which means that Russia can finally start taking steps toward making good on its warning from last week, spoken by a senior government official to the FT, that “If Ukraine breaks apart, it will trigger a war,” adding that “they will lose Crimea first [because] we will go in and protect [it], just as we did in Georgia.” And while there have been photos (so far unconfirmed) of Russian military vehicles heading into the Ukraine, for the time being Russia has kept a surprisingly low profile. Until now.
Reuters adds:
Prime Minister Dmitry Medvedev on Monday said Russia had grave doubts about the legitimacy of those in power in Ukraine following President Viktor Yanukovich’s ouster, saying their recognition by some states was an “aberration”.
“We do not understand what is going on there. There is a real threat to our interests and to the lives of our citizens,” Medvedev was quoted by Russian news agencies as saying.
“There are big doubts about the legitimacy of a whole series of organs of power that are now functioning there.”
Finally, from the AP:
Dmitry Medvedev said Monday, according to Russian news agencies, that the new authorities have come to power as a result of “armed mutiny,” so their legitimacy is causing “big doubts.”
All this is happening as (insolvent) Europe is scrambling to obtain the tens of billions it needs to make good on a topping overbid for the Ukraine, something which Russia appears to be largely laughing about, and certainly something which Gazprom, which incidentally holds the fate of all of Europe, and not just Ukraine, in its hands. Literally.
As we have said since the Ukraine coup became official: keep an eye on the Russian response. Right now it is all that matters.
via Zero Hedge http://ift.tt/1k3xVAz Tyler Durden