Month: March 2018

Following the passage of the $1.3 trillion omnibus spending bill last Friday, right-wing pundit Ann Coulter has been on the war path against President Trump – who she called a “shallow, lazy ignoramus,” that isn’t “giving us what he promised at every single campaign stop.”

Speaking candidly to a Columbia University audience comprised largely of College Republicans and a few hecklers expecting a debate, Coulter broke down her bitter disappointment with Trump – recounting one instance in which she and the President engaged in a “profanity-laced shouting match” in the Oval Office last year over what she felt was his weak follow-through on immigration promises made during the campaign. 

“It kind of breaks my heart,” Coulter acknowledged of her disappointment with the president, and she recounted a profanity-laced shouting match she had with Trump in the Oval Office last year over what she saw as his lackluster follow-through on immigration policy. “He’s not giving us what he promised at every single campaign stop.” –Daily Beast

That said, Coulter still says that Trump was the best house in a bad neighborhood when it came to voting for the 2016 lineup of candidates.

“I regret nothing. I’d do the exact same thing,” said Coulter. “We had 16 lunatics being chased by men with nets running for president—and Trump. So of course I had to be pedal-to-the-metal for Donald Trump. I’d been waiting 30 years for someone to say all these things”—i.e., that illegal immigration is hurting low-income American citizens and carries with it high rates of crime. “I went into this completely clear-eyed.”

“I knew he was a shallow, lazy ignoramus, and I didn’t care,” said the conservative pundit. 

At one point in the evening, Coulter dispatched a heckler after she blamed income inequality in California on immigration.

We are bringing in immigrants who are good for the very rich,” she said. “They don’t live in their neighborhoods. They don’t fill up their schools or their hospital emergency rooms. And, oh boy, you should see how clean Juanita gets the bathtub. You can eat off of it after she’s done.”

“You’re a racist!” shouted a young man from back.

“No, I’m sorry, the people bringing in Juanita, the maid, and underpaying her, are the racists,” Coulter fired back. “You are a moron!” she added, to fervent applause. “You’re very stupid. I can’t argue with stupid people.”

On Wednesday evening, Coulter joined Fox Business Network‘s Lou Dobbs to discuss her “ignoramus” comment. When Dobbs called her out on it, she said “A switch changed with him,” adding “An elegant person would have said the things he was saying. It was precisely that he was so coarse that allowed him to say these incredibly courageous things. He didn’t care what Manhattan elites thought of him.” 

“Now all he wants is for Goldman Sachs to like him,” she continued. “I don’t know what happened. But that’s a different president. I haven’t changed. He has.”

“Affirmation complexes are never attractive and unfortunately I believe there is some truth to the fact that there are those in the White House who would like to guide him toward this liberal fantasy that is a nightmare for America and has proved to be such for our middle class which has been dwindling for the past 20 years,” Dobbs said, to Coulter’s hearty agreement. “Under this president, they’re starting to grow and money is starting to come in and we’re starting to see housing prices rise.”

Watch below: 

Last Friday after Trump signed the $1.3 trillion omnibus bill which he said he would “never sign another” like it again Coulter took to twitter to knock Trump down a peg.

“ I will never sign another bill like this again”

Yeah, because you’ll be impeached.

— Ann Coulter (@AnnCoulter) March 23, 2018

Is Coulter justified in her outrage? Or is she simply echoing the sentiment of millions of Trump voters who expected a wall, an incarcerated Hillary Clinton and someone who wouldn’t cave on a massive omnibus bill nobody read before passing?

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The date for the first meeting between a North Korean and South Korean leader in a decade has been set for April 27, South Korean officials told US media. For the first time since the Korean War broke out in 1948, a North Korean leader will cross the DMZ to attend the meetings, which are set to be held in South Korea.

After Kim Jong Un promised that he would consider denuclearization of the peninsula during talks with Chinese President Xi Jinping this week, it appears that the multiple rounds of sanctions imposed by the UN and the US are having their desired effect.

According to Bloomberg, the last inter-Korean summit was held in October 2007 between then President Roh Moo-hyun and Kim Jong Il, the father of Kim Jong Un. The pair signed a peace declaration calling to end the armistice with a permanent treaty, but progress stalled and the two sides remain in a stalemate. While the two countries allowed for some family reunions, relations later soured under a more conservative administration in the South. 

President Trump, who has repeatedly threatened the North with nuclear annihilation, cheered Kim’s decision to seek a detente with the West and a meeting with the US.

Received message last night from XI JINPING of China that his meeting with KIM JONG UN went very well and that KIM looks forward to his meeting with me. In the meantime, and unfortunately, maximum sanctions and pressure must be maintained at all cost!

— Donald J. Trump (@realDonaldTrump) March 28, 2018

A government spokesman said South Koreans were encouraged to be “united in making a groundbreaking turning point for peace.”

“As the date for the inter-Korean summit is finalized now, we will do our best to be fully prepared for it during the given time,” Moon’s spokesman, Kim Eui-kyeom, said in a text message. “We hope all South Koreans will be united in making a groundbreaking turning point for peace settlement on the Korean Peninsula at the summit.”

The subject of the talks will be improving inter-Korean relations and de-nuclearization, according to Reuters.

The two Koreas had agreed to hold the summit at the border truce village of Panmunjom when South Korean President Moon Jae-in sent a delegation to Pyongyang this month to meet North Korean leader Kim Jong Un.

According to a statement, the two sides will hold a working-level meeting on April 4 to discuss details of the summit, such as staffing support, security and news releases.

Meanwhile, Bloomberg reported that the North has also expressed a desire to meet with the Japanese government.

Japanese Foreign Minister Taro Kono told parliament that his nation would consider holding talks with North Korea in the context of the other summits taking place. The Asahi newspaper said earlier that Kim Jong Un’s administration was seeking a summit with Prime Minister Shinzo Abe. The yen weakened to a two-week low against the dollar after the report.

As a reminder, talks between the US and the North, which are tentatively expected to be held at the DMZ, are set for May.

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After three days of violent moves and sharp intraday reversals, in a week that feels far longer than just 4 days in, even equities appear exhausted today, and have entered the slow drift into the Easter break with volatility and volume far more subdued than earlier in the week courtesy of a slowdown in the newsflow, and as a result risk is once again bid, as it has been in the early part of most days this week… the question is will we get another late-day selloff.

Commenting on the recent risk moves, Deutsche Bank notes that markets seem to have spent the last 24 hours packing their bags and jetting off for the long weekend after an eventful last few weeks.

Aside from digesting a few more tech related stories, the lack of any material newsflow – the first time we can say that in a while – certainly seems to have helped. Indeed, by the end of trading last night the S&P 500 and Dow closed -0.29% and -0.04% respectively. The lack of any real direction throughout the session is best summed up by the fact that the S&P 500 passed between gains and losses by 37 times.

For some investors, especially the bulls, the coming holiday will be a relief following a roller coaster quarter in which stellar global equity gains gave way to a volatility blow up in February and a tech wreck. “We’ve done some damage with the correction and it’s going to take some time to repair,” Bob Doll, portfolio manager and chief equity strategist at Nuveen Asset Management, told Bloomberg TV. “Expect choppy, sideways volatility.”

The MSCI All-World Index of global stocks is set to end a 7-quarter winning streak – its longest such stretch of gains since 1997 – while global bonds are set for their first decline in currency neutral terms since 2016. The “melt-up” that sent the MSCI’s world share index up 8% in January has melted away, and now the Dow Jones, S&P 500, FTSE Nikkei and scores of other big markets are all down for the year.

“We have got to make sure (the market selloff) …is not too prolonged because the longer this goes the higher the chance it will start to affect the man on street,” said Head of Equities at London & Capital Roger Jones.

So heading into Easter weekend, European stocks are higher on Thursday after a mixed, if mostly higher session in Asia, as equity markets staggered  toward the end of the most tumultuous quarter in years.

For the third consecutive day, S&P futures support at the 2,600 level, and we trading at session highs, 10 points higher than Wednesday’s close, around 2,618, while the VIX edged lower in early trading. “I think most of these markets are staring at the 200-day moving average on the S&P 500 to see if it breaks,” said Societe Generale’s Kit Juckes. As a reminder, the S&P 200DMA is at 2,588, so around 30 points lower.

Europe’s Stoxx 600 Index headed for a 3rd day of gains as most major country bourses traded quietly in the green. Automakers led the move higher after Renault and Nissan Motor were reported to be in talks to merge. Defensive sectors were in the red with focus on utilities and healthcare whilst broad gains are seen across all the other sectors. Sodexo (-14.1%) was the laggard this morning after reporting its earnings, dragging down Elior (-1.0%) and Compass (-3.6%) in the UK food catering segment. SwissRE (+2.9%) is leading the SMI after Softbank is said to be interested in building a 25% stake in the Co. for a USD 9.6bln deal. TomTom suffered losses of 6.3% after  approaching Deutsche Bank for a potential sale of the whole firm or minority stake, but then denied calling for an adviser to seek potential buyers. Understandably, volumes were subdued, with many traders wrapping up ahead of a long weekend.

To be sure, the overnight quiet has been the exception lately, with the Stoxx 600 making gains or losses of more than 1% 16 times in the current quarter.

Earlier in Asia, equity markets traded indecisive as bourses failed to completely shrug-off the lacklustre lead from Wall Street. Helping the mood were media reports that Japan had sounded out North Korea’s government about a bilateral summit, and that Pyongyang had also discussed the possibility of a broader meeting with other global leaders. As a result, Japanese shares closed higher even as the yen retraced some of Wednesday’s slump, while stocks in China and Korea gained. ASX 200 (-0.5%) and Nikkei 225 (+0.6%) were mixed with Australia dragged lower by tech as well as recent weakness across commodities, while the Japanese benchmark was propped up for most the day by a softer currency. Elsewhere, Hang Seng (+0.2%) and Shanghai Comp. (+1.2%) were choppy in the midst of earnings season and with initial gains seen following reports of VAT reductions, although continued liquidity inaction by the PBoC and ongoing trade tensions with the US eventually weighed.

In FX, the dollar found support around fixing times, and after sliding earlier in the session is back to unchanged levels.

In a rather lackluster session, G-10 currencies remained confined to relatively tight ranges as traders await direction from tier-one data out of the U.S. due later Thursday. The USD/JPY holds close to 106.50 as yesterdays strong USD was unwound during Asian hours. A small pickup in activity into the Tokyo fix also saw EUR/USD and GBP/USD forced to session lows with most G-10 pairs then remaining in tight ranges.

Hey overnight FX highlights from Bloomberg:

• EUR/USD was little changed, trading in a tight range, while the U.S. yield curve continued to bull-flatten
• The pound weakened amid continued month- and quarter-end flows
• USD/JPY declined as the pair’s surge Wednesday prompted investors to book profits ahead of the Easter holiday outside Japan
• Aussie recovered after dropping to a fresh year-to-date low of 0.7643 against the dollar, supported by gains in the price of iron ore

Treasuries also rose, if modestly, paced by core government bonds in Europe, with EGBs particularly quiet, showing a small outperformance of the European periphery, while benchmark yields on German government bonds crept back above 0.5% having been on a sharp slide for most of the month. Spanish yields meanwhile saw their biggest monthly fall since mid-2016. The 10-year U.S. Treasury yield was at 2.7662 percent after touching a near two-month low of 2.743 percent overnight amid the strains on Wall Street.

In commodities, WTI was poised to end its longest losing streak in almost a month, even as U.S. crude stockpiles resumed their expansion. Gold nudged lower, extending Wednesday’s plunge, while cryptos continued to slide overnight.

Bulletin Headline Summary from RanSquawk

• European bourses drifting higher heading into the long Easter weekend
• DXY stable around the 90.00 level
• Looking ahead, highlights include national German CPI, US personal income, PCE, Canadian GDP, Fed’s Harker

Market Snapshot

• S&P 500 futures up 0.4% to 2,618.50
• STOXX Europe 600 up 0.1% to 369.63
• MXAP up 0.02% to 171.83
• MXAPJ up 0.1% to 562.21
• Nikkei up 0.6% to 21,159.08
• Topix up 0.3% to 1,704.00
• Hang Seng Index up 0.2% to 30,093.38
• Shanghai Composite up 1.2% to 3,160.53
• Sensex down 0.6% to 32,968.68
• Australia S&P/ASX 200 down 0.5% to 5,759.37
• Kospi up 0.7% to 2,436.37
• German 10Y yield fell 0.3 bps to 0.5%
• Euro up 0.02% to $1.2310
• Italian 10Y yield fell 3.3 bps to 1.586%
• Spanish 10Y yield fell 1.0 bps to 1.203%
• Brent futures down 0.1% to $69.43/bbl
• Gold spot little changed at $1,324.33
• U.S. Dollar Index little changed at 90.11

Top Overnight News from Bloomberg

• North Korean leader Kim Jong Un and South Korean President Moon Jae-in will hold a summit on April 27, according to a South Korean Unification Ministry official. China’s commerce ministry said the nation is open to talks with the U.S. and it won’t submit to unilaterally coerced negotiations
• Japan will not get dragged into bilateral negotiations with the U.S. over steel and aluminum import tariffs, Finance Minister Taro Aso says in parliament Thursday
• Officials from the two Koreas are meeting Thursday on their heavily militarized border to discuss details of an upcoming summit between Kim Jong Un and South Korean President Moon Jae- in. The talks at Panmunjom could set the stage for a similar meeting between Kim and U.S. President Donald Trump
• Robert Lighthizer, the U.S. Trade Representative ,said Wednesday he’s “hopeful’’ of reaching a deal “in the next little bit” with Canada and Mexico to update the North American Free Trade Agreement. Canada’s chief negotiator,Steve Verheul, said he didn’t know what an “in principle’’ deal would look like and “significant gaps” remain
• Treasury 7-Year auction got a cool reception as it came after a rally cut benchmark 7Y yields from Tuesday high of 2.78%. The 2.34 bid-to-cover ratio, lowest since February 2016, compared with 2.54 average for previous six auctions
• President Donald Trump is hailing the revised U.S. free trade agreement with South Korea as a “great deal” yet the revamped U.S.-South Korea accord unveiled earlier this week isn’t much different from the existing pact that Trump often condemned as “disastrous.” White House ‘win’ on South Korea gets mixed marks
• SoftBank Group Corp. is edging closer to a deal to buy a stake in Swiss Re AG that would value the reinsurer at as much as 37 billion Swiss francs ($39 billion), according to people with knowledge of the matter
• Carry trades are set for a fourth straight quarter of losses despite the relative calm of foreign-exchange rates over the past three months

Asian equity markets traded indecisive as bourses failed to completely shrug-off the lacklustre lead from Wall St. where the major indices were subdued amid month-end flows and continued tech losses. ASX 200 (-0.5%) and Nikkei 225 (+0.6%) were mixed with Australia dragged lower by tech as well as recent weakness across commodities, while the Japanese benchmark was propped up for most the day by a softer currency. Elsewhere, Hang Seng (+0.2%) and Shanghai Comp. (+1.2%) were choppy in the midst of earnings season and with initial gains seen following reports of VAT reductions, although continued liquidity inaction by the PBoC and ongoing trade tensions with the US eventually weighed. Finally, 10yr JGBs were weaker as Japanese yields rose across the curve, with demand for paper sapped by initial outperformance in Japanese stocks and after an uninspiring 2yr auction in which the amount sold, b/c and accepted prices all declined from prior. PBoC skipped open market operations for a net daily drain of CNY 40bln. PBoC sets CNY mid-point at 6.3046 (Prev. 6.2785)

Top Asian News

• Japan Watchdog Says Deutsche Bank, BofA Colluded on Bond Trade
• Ping An Is Said to Start Work on $3 Billion OneConnect IPO
• Hyundai Motor’s Chung Overhauls Group as Succession Looms
• Two Koreas Set April 27 for Kim Jong Un’s Historic Walk South

European equities (Eurostoxx +1.2%) are back into positive territory, improving on the mixed tone seen in Asia overnight and shrugging-off the losses on Wall Street. Defensive sectors are in the red with focus on utilities and healthcare whilst broad gains are seen across all the other sectors. Sodexo (-14.1%) was the laggard this morning after reporting its earnings, dragging down Elior (-1.0%) and Compass (-3.6%) in the UK food catering segment. SwissRE (+2.9%) is leading the SMI after Softbank is said to be interested in building a 25% stake in the Co. for a USD 9.6bln deal. TomTom suffered losses of 6.3% after approaching Deutsche Bank for a potential sale of the whole firm or minority stake, but then denied calling for an adviser to seek potential buyers. Finally, as a reminder, Melrose’s GBP 8bln hostile bid for GKN is due to expire today at 1300 BST.

Top European News

• German Joblessness Hits Record Low as Firms Push Capacity Limits
• Wary U.K. Consumers Keep House Prices Subdued Year Before Brexit
• Bulgaria Reluctant to Seek ECB Scrutiny Before Euro Entry

In FX, the Greenback is showing little sign of losing its month, quarter and Japanese FY end bid, although the DXY is only tentatively above the 90.000 handle and the Dollar is somewhat mixed against its G10 rivals. Usd/Jpy is hovering just above 106.50 having touched 107.00 overnight after the biggest 1 day jump this year so far and with near term support seen at the 30 DMA (106.35). Aud/Usd has recovered some poise after hitting a fresh 2018 low around 0.7644 overnight but looks capped ahead of macro supply seen at 0.7680 vs major support at 0.7600 where hefty option expiry interest also resides (1.2 bn). Usd/Cad remains close to 1.2900 amidst less positive NAFTA vibes (long way to go to reach a deal and US demands on food not palatable), and with the Loonie now looking towards Canadian GDP data for some independent direction. Eur/Usd looks anchored around 1.2300 with strong support and resistance not far from the round number at 1.2286 and 1.2329 (latter representing the 30 DMA) and little to offer impetus via German jobs or inflation data given outcomes relatively close to consensus. Cable is clinging to 1.4050 (just) having lost grip of 1.4200 and 1.4100 handles on the run in to the end of March and long Easter weekend amidst decent expiries at the latter level and 1.4000, while techs are also wary of a fib at 1.4041. Nzd/Usd sits near  0.7200 and Usd/Chf is just above 0.9550

In commodities, WTI (+0.3%) and Brent Crude (+0.1%) are trading in close proximity to yesterday’s post-DoE levels. Prices have also been supported by yesterday’s comments from OPEC stating the producer cartel and other suppliers are looking to continue withholding the output cut for the rest of the year and potentially 2019. Moving on to metals, Gold is trading close to the prior session’s lows where the yellow metal posted its biggest 1-day percentage fall in almost 9 months as it continues to move inversely to the dollar. Base metals have seen a rebound in prices on the London Metal Exchange with Nickel (+2.0%) leading the advance and copper (+1.0%) higher following recent declines.

Looking at the day ahead, it’s a reasonably busy day for data highlighted by that February PCE data in the US, and personal income and spending reports. The latest weekly initial jobless claims reading, March Chicago PMI and final revisions to the March University of Michigan consumer sentiment reading are also due. Away from the data, in the early evening the Fed’s Harker is due to speak.

US Event Calendar

• 8:30am: Initial Jobless Claims, est. 230,000, prior 229,000; Continuing Claims, est. 1.87m, prior 1.83m
• 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.2%, prior 0.2%; Real Personal Spending, est. 0.1%, prior -0.1%
  • 8:30am: PCE Deflator MoM, est. 0.2%, prior 0.4%; PCE Deflator YoY, est. 1.7%, prior 1.7%
  • 8:30am: PCE Core MoM, est. 0.2%, prior 0.3%; PCE Core YoY, est. 1.59%, prior 1.5%
• 9:45am: Chicago Purchasing Manager, est. 62, prior 61.9
• 9:45am: Bloomberg Consumer Comfort, prior 56.8
• 10am: U. of Mich. Sentiment, est. 102, prior 102; Current Conditions, prior 122.8; Expectations, prior 88.6

 

DB’s Craig Nicol concludes the overnight wrap

Markets seem to have spent the last 24 hours packing their bags and jetting off for the long weekend after an eventful last few weeks. Aside from digesting a few more tech related stories, the lack of any material newsflow – the first time we can say that in a while – certainly seems to have helped. Indeed, by the end of trading last night the S&P 500 and Dow closed -0.29% and -0.04% respectively. The lack of any real direction throughout the session is best summed up by the fact that the S&P 500 passed between gains and losses by 37 times.

The Nasdaq (-0.85%) did lag behind but at least that was the first sub-2% move in either direction for that index since this time last week. That performance looks even more solid when you look at the fall for the NYSE FANG index  (-2.40%), which is now down -13.15% in the last 8 sessions. The tech equivalent of the VIX did however rise to 30.19 and is not far off the recent high of 33.89. In fact, the spread of the VXN over the VIX at one stage touched the highest in 13 years yesterday. Meanwhile, Europe spent much of the day scrambling back from a big leg lower at the open, sparked by that selloff in the US the night before. The Stoxx 600 clambered to a +0.46% gain after being down as much as -1.33% at one stage.

In bond land 10y Treasuries consolidated below 2.80% after yields closed at 2.782%, although touched 2.7425% intraday which is the lowest since early February. That was despite a bigger than expected upward revision to Q4 GDP (more on that below). The curve flattened once more though with 2s10s down 1.3bps to a fresh 10-year low while 5s30s also fell 3.4bps. In Europe yields were broadly speaking a couple of basis points lower yesterday.

So, as it’s the last day before markets shut down for the long weekend, it should be a fairly quiet end to the week although we say that slightly tentatively given what markets have done over the last few weeks. In any case we do have some important data to consider as we’ll get the US PCE report for February this afternoon. Both our US economists and the market expect a +0.2% mom print for the core, while the headline deflator is also expected to come in at +0.2% mom. The data takes on a little bit more significance in light of the Fed last week raising its inflation forecast above 2% in 2019. Our economists note that a print in line with their expectation would keep the year-over-year reading roughly steady at +1.5% yoy, however the 6m and 3m annualized rates should jump to +2.1% and +2.4% respectively, and so putting a bit of daylight between the run rate and the Fed’s target. Our colleagues also make the point that this is the last inflation data before the wireless services price drop is annualized in the March report, which will boost core CPI and core PCE by about 20bps and 10bps, respectively. Anyway, today’s data is due out at 1.30pm BST.

Ahead of it, markets in Asia are trading mixed this morning with the Nikkei (+0.40%) and Kospi (+0.27%) modestly up while the Hang Seng (-0.27%) and ASX 200 (-0.37%) are slightly lower. Bourses in China are flat having recovered from an early fall. Futures in Europe and the US are down about -0.10%.

Back to the subject of tech, yesterday Luke Templeman in our team published a timely and topical note as part of his Accounting Lifeguard series called ‘Europe’s digital tax’. Luke highlights that the ‘interim’ three percent tax on digital revenues is likely to be the mere opening salvo in negotiations between European states about the design of a new tax system and companies outside the technology sector should not be complacent. The EU’s digital tax may merely represent the first change to move taxation from being a domicile-based system to one based on value-creation. Given the decades-long rise of multinational firms, their taxation has become an increasingly sensitive topic. Digital firms are now the test subjects. You can find a link to Luke’s report here.

Rounding back to the US GDP print which we mentioned at the top, Q4 growth was revised up four-tenths and more than expected to +2.9% yoy annualized (vs. +2.7% expected) at the final reading. A 20bp uplift from personal consumption was the main driver. The data also included the latest corporate profits numbers, however it was a bit of a disappointment. Profits fell -0.1% qoq following two straight quarters of growth, although it appeared to be driven by financials predominantly with non-financial corporate profits still fairly solid.

In terms of the other macro data from yesterday, the February advanced goods trade deficit in the US was slightly wider at -$75.4bn (vs. -$74.4bn expected), while February wholesale inventories (+1.1% mom vs. +0.5% expected) and pending home sales (+3.1% mom vs. +2.0% expected) were both above expectations. In Europe, Germany’s April GfK consumer confidence index was slightly above consensus at 10.9 (vs. 10.7 expected) while France’s March consumer confidence was in line at 100. In the UK, March CBI retailing reported sales was below market at -8 (vs. 7 expected), partly impacted by the harsh weather during the month, although we should note that the data can be particularly volatile.

Away from the data, there were also some Brexit headlines to digest yesterday. The BOE noted that it’s “reasonable” for UK based firms “to plan that they will be able to continue undertaking activities during the (Brexit) implementation period in much the same way as now”. Chancellor Hammond also echoed similar sentiments and said that the BOE’s statement and the transition deal “will provide further confidence to financial services firms that there will be a smooth exit”.  Notably, the FCA did caution that the transition agreements are not binding until they’re ratified as part of the withdrawal agreement.

Before we look at the day ahead, the Fed’s Bostic has reiterated that staying on a gradual path of rate hikes would be appropriate. He added that “unemployment is very close to full employment position and inflation our 2% target. If things are close to where we hope that they’ll be, then our policy doesn’t need to be super accommodative”. Elsewhere, the Bundesbank’s Wuermeling noted that “the upbeat economy and the inflation forecast would justify bringing (QE) to a rapid end, if the economic recovery in the Euro area continues as expected”.

Looking at the day ahead, it’s a reasonably busy day for data highlighted by that February PCE data in the US, and personal income and spending reports. The latest weekly initial jobless claims reading, March Chicago PMI and final revisions to the March University of Michigan consumer sentiment reading are also due. In Europe, the main highlight will likely be the flash March CPI report in Germany. Money and credit aggregates data in the UK along with the final Q4 GDP revision is also due. Away from the data, in the early evening the Fed’s Harker is due to speak.

Before we wrap up, a quick mention that on Easter Friday most major markets will be shut for the long weekend holiday. Industrial production and housing starts data is due in Japan for February while in Europe we’ll get the flash   March CPI reports in France and Italy. Finally, on Saturday, China’s official PMIs for March will be released.

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Following a recent barrage of negativity from former Lehman trader and current Bloomberg macro commentator, Mark Cudmore, who warned that stocks are likely to continue sliding as a short squeeze in bonds sends yields lower, overnight his Bloomberg Markets Live colleague and macro commentator, Garfield Reynolds, echoed Cudmore’s growing pessimism, urging readers to “Rest Up This Easter Because Markets Face an Ugly Q2”  and that “the worst for markets is yet to come” for four reasons he lists below.

His full Macro View is below:

Rest Up This Easter Because Markets Face an Ugly Q2: Macro View

Risk assets look to be in dire need of the Easter break because the second quarter has every chance of being more stressful than the first.

Volatility across bonds, FX and stocks is soaring. This quarter’s jump in implied vol is the most since the European debt crisis escalated in 2011 and it’s the sort of steep shift only seen on two prior occasions: the LTCM meltdown of 1998 and the Lehman-led crash of 2008.

Actual volatility is also exploding, with the U.S. benchmark leading the way for the first time since 2008 too. Oh, and the 206% surge in 90-day realized volatility for the S&P 500 has only been topped twice, in 1987 and 1930.

The market turmoil has been greeted with some bemusement due to the lack of an obvious real-world reason. “The fundamentals are still strong” is the catchcry. But the jump in volatility is in itself the key fundamental change.

It has fueled broader risk aversion, helping to explain why the MSCI All-World Index of global stocks is poised to snap a seven-quarter winning streak – – its longest stretch of gains since 1997 — and global bonds are set for their first decline in currency-neutral terms since 2016.

There are signs that it’s correct to be pricing in a marked deterioration from 2017’s perfect low-volatility rally. Global data is breaking down too fast for economists to keep up. Both Westpac’s data pulse index, which tracks outcomes relative to prior reports, and Citigroup’s surprise gauge are rapidly heading south.

The outperformance of Australia’s bond market, from the stunning inversion of the yield premium it has usually enjoyed over the U.S., to the drop in its yield curve under 50 bps and the evaporation of bets on RBA hikes, is another warning sign.

Australia is the large developed economy most tightly bound to the global-growth engine that is China, so it’s hard to see how the global uptick story makes sense when the land Down Under is being left behind.

Credit spreads are widening the most since 2016. This has been one of the few constants this quarter and will keep risk assets under pressure.

The worst for markets is yet to come:

• The S&P 500 has yet to really break down — the longer it holds above the 200-day moving average, the bigger the crash will likely be when it happens
• WTI has again failed to hold above $65, forming a very ominous double top that must make the near- record net longs for WTI nervous. With U.S. output surging, and sliding commodities signaling a slowdown in demand for raw materials, the stars are aligning for a big, disinflationary step down by crude
• Treasury 10-year yields have had to be dragged down kicking-and-screaming because the Fed is sticking to its dots, but the latest capitulation of the term premium forewarns of a larger collapse in rates
• When they do, that will cast doubt on the Fed’s guidance and spread a fresh wave of disruption across assets that will start out in bonds, currently less volatile than FX and stocks relative to historical norms

So, rest up and enjoy those chocolates.

 

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Authored by Jay Syrmopoulos via TruthInMedia.com,

With the rise of the term “fake news,” many individuals have turned to self-proclaimed fact-checking sites like Snopes and PolitiFact; the objectivity of these sites tends to be questioned by conservatives as having a covert liberal bias.

On Tuesday, the conservative Media Research Center unveiled a new project entitled “Fact-Checking the Fact-Checkers,” which is designed to “ensure the fact-checkers themselves are reliable, or exposed as liberal partisans if they aren’t.”

The Media Research Center explained in its announcement:

Sometimes you have to check the fact-checkers.

More and more, major news outlets are relying on “fact checkers” to, allegedly, ensure that the news is factual, sources are reliable, and statements are accurate.

In theory, this is admirable. In practice, it has proven to be simply another opportunity for the media to push their leftist agenda.

Fact checking groups — such as PolitiFact — routinely cast judgments while failing to disclose their own left-wing bias. Their allies in the media try to cast these groups as neutral third parties when, in fact, they are card-carrying members of the liberal echo chamber.

It’s no wonder that the public has so little faith in the fact-checkers. A 2016 Rasmussen poll found that an astonishing 62% of American voters think the fact-check-ers are biased.

The Media Research Center is flipping the script on these faux-fact-checkers. It’s time to turn the tables and give the public the real facts.

While Americans attempt to separate truth from propaganda, especially in regards to politics, some of these reportedly neutral third-party fact checkers – accused by conservatives of having a progressive bias – has left some consumers unsure of their reliability.

“In an era of ‘fake news’ and inaccurate reporting, it is important now more than ever that the fact-checkers themselves are exposed for their biases,” MRC President Brent Bozell said in a statement.

“MRC routinely finds instances when fact-checkers bend the truth or disproportionately target conservatives,” Bozell continued.

“We are assigning our own rating to their judgments and will expose the worst offenders. Americans deserve the truth. There must be accountability across the board, and that includes these alleged arbiters of fact and fiction.”

Some of the purported “fact-checking” sites the project plans to monitor are PolitiFact, FactCheck, Snopes, Washington Post Fact Checker, AP Fact Check, and CNN Fact Check.

As previously reported at Truth In Media, Emmy-winning investigative journalist Sharyl Attkisson held a recent Tedx talk at the University of Nevada, discussing the “fake news” narrative that gained tremendous discussion during and following the 2016 U.S. presidential election, saying that “the whole thing smacked of the roll-out of a propaganda campaign.”

While Attkisson acknowledged that fake news has long existed in various forms, she said that noticed something different taking root within U.S. mainstream media in 2016.

Suspecting that the origins of this growing “fake news” narrative were less than organic, Attkisson began researching and said that she connected the origins of this phenomena to a decidedly progressive non-profit organization called “First Draft,” which, she notes, “appears to be the about the first to use ‘fake news’ in its modern context.”…

Upon investigation, Attkisson discovered that one of the major financial backers of First Draft’s anti-fake news coalition was none other than Google, whose parent company, Alphabet, was chaired by major Clinton supporter Eric Schmidt until Dec. 2017.

Schmidt “offered himself up as a campaign adviser and became a top multi-million donor to it. His company funded First Draft around the start of the election cycle,” Attkisson said.

“Not surprisingly, Hillary was soon to jump aboard the anti-fake news train and her surrogate, David Brock of Media Matters, privately told donors he was the one who convinced Facebook to join the effort.”

To learn more about the rise of the “fake news” narrative, watch Attkisson’s enlightening TedxTalk below:

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The last few days have seen a rapid rush to the ‘safe-haven’ dollar, stalling a seemingly non-stop drop in the world’s reserve currency.

 

Which raises the question, is the correlation between President Trump’s approval rating and ‘king dollar’ about to reignite?

President Trump’s approval rating has been rising on average since the start of the year, and the results from the most recent presidential job approval survey by CNN shows that Donald Trump is now at an 11-month high.

Although he still has majority disapproval, 42 percent of respondents are currently giving him a thumbs up – the highest rate recorded by CNN since March 2017 where the president was on 44 percent.

You will find more infographics at Statista

So how, during a time of seemingly endless scandals trying to burst their way into the public sphere, is Trump seemingly on the up?

Digging deeper,  Statista’s Martin Armstrong indicates that  the area in which he is performing the strongest is the economy.

Despite being criticized from some corners for his protectionist approach, Trump following through on his America First campaign promises is seemingly helping to win some voters back around.

In many ways, the road ahead is looking far from smooth for the president, but having come through scandal and controversy relatively unscathed in the past, who knows where this current wave will lead.

Fascinatingly, since Larry Kudlow was appointed as Director of the National Economic Council, proclaiming that investors should “sell gold and buy king dollar,” the two ‘assets’ have roundtripped to be practically unchanged…

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Authored by Johsua Gill via The Daily Caller,

A Greek Orthodox bishop is facing a re-trial over comments in which he allegedly incited violence against gay people, after government officials criticized his initial acquittal.

A Greek court acquitted Metropolitan Bishop Ambrosios of Kalavryta of a lawsuit levied against him by nine gay males over comments in a 2015 blog post in which he directed Greek faithful to “spit on them,” referring to gay people. Opposition parties united with the Greek government in criticism of the acquittal, and a senior prosecutor filed an appeal against the ruling on Monday, according to The Associated Press.

Justice Minister Stavros Kontonis also requested transcripts of Kalavryta’s initial trial to check to see if their were any errors in the process which would justify a re-trial. If convicted of incitement of violence against gay people, Ambrosios could face a fine of up to $25,000 and a maximum of three years in prison.

Ambrosios railed in the 2015 blog post against a Greek politician who he said openly supported homosexuality.

“Homosexuality is a diversion from the Laws of Nature! It is a social felony! It is a sin! Those who either experience it or support it are not normal people! It’s a scum of society,” a translation of Ambrosios’ blog post read (emphasis his).

Ambrosios directed his readers later in the post to remember the words of Lech Walesa of Poland, with regard to how they should treat those who support homosexuality and atheism.

“Hey, then, these scoundrels, spit on them! Discard them! Blacken(sic) them! They are not people! They are abodes of nature! Mental and spiritual suffering(sic)! They are people with mental disorders(sic),” Ambrosios quoted Walesa as saying.

Ambrosios is known for taking strong public stances against homosexuality and transgenderism and leading churches in opposition against legislation favoring LGBT individuals. Ambrosios directed churches in his diocese to protest the passing of a law in October of 2017 that allowed Greek citizens to identify as whichever gender they choose.

“It is an outrageous inspiration for someone to change his gender in a few minutes, with a simple declaration, so contrary to what God has gifted people with … whoever has ‘gender dysphoria’ is mentally ill,” a statement approved by the orthodox leaders of Kalavryta read concerning the law.

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Authored by Tsvetana Paraskova via OilPrice.com,

If crisis-hit Venezuela was hoping to pay off its US$3.15-billion debt to Russia with its new cryptocurrency, those hopes have been shattered as the Russian Finance Ministry announces that it won’t be accepting digital coin.

Venezuela will not be paying any part of its debt to Russia with its cryptocurrency, the head of the Russian Finance Ministry’s state debt department, Konstantin Vyshkovsky, has said.

In November last year, Russia threw a life-line to Venezuela after the two countries signed a deal to restructure US$3.15 billion worth of Venezuelan debt owed to Moscow. Under the terms of the deal, Venezuela will be repaying the debt over the next ten years, of which the first six years include “minimal payments”.

The following month, Venezuelan President Nicolas Maduro announced that his country would be issuing an oil-backed cryptocurrency, which it did, in February this year.

Maduro’s propaganda machine is touting the digital coin as a ‘ground-breaking’ first-ever national crypto currency, the El Petro–backed by 5 billion barrels of oil reserves in Venezuela’s Orinoco Belt.

But most observers see this crypto issuance as a desperate attempt to skirt U.S. financial sanctions.

Earlier this month, U.S. President Donald Trump banned U.S. purchases, transactions, and dealings of any digital coin or token issued for or by the government of Venezuela.

Last week, Time magazine reported that Russia secretly helped Venezuela in creating the Petro, with the purpose of undermining the power of U.S. sanctions, the magazine reported, citing sources familiar with the effort.

Russia slammed the Time report as “fake news”, with Deputy Director of the Information and Press Department of the Russian Foreign Ministry, Artyom Kozhin, saying that Russia and Venezuela had never worked together on the development of the Venezuelan cryptocurrency.

Russia and China are the last holdouts that still finance Venezuela, which is digging deeper into the downward spiral of economic crisis, hyperinflation, and crumbling oil production. However, China is reportedly thinking of cutting off Venezuela from new loans. This would leave Russia as the only financial supporter of the Maduro regime, and if all it’s got is a crypto coin that no one really believes in to pay off debt, loans are likely to be plentiful.

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Authored by Alex Gorka via The Strategic Culture Foundation,

Strange things happen in East and Central Europe that get little mention from media outlets.  Two heads of state, the PMs of Slovenia and Slovakia, resigned almost simultaneously.

Slovak Prime Minister Robert Fico was a victim of the scandal over the murder of Jan Kuciak, a journalist who was investigating government corruption.  The PM had to step down amid mass street protests.

Mr. Fico was known for his support of a stronger Visegrad Group. He opposed Brussels on many issues. It’s worth noting that he called for lifting sanctions and improving relations with Moscow. The PM was adamant that Russia was a reliable energy partner.  Is it a coincidence that he was forced to resign amid the anti-Russia campaign triggered by the Skripal case and other obviously concocted stories used as false pretexts for incessant attacks on Moscow? Wasn’t he a threat to the so-called unity of the EU against Russia? He definitely was.   

The PM did not hide the fact that his decision was made under great pressure. The ouster was engineered by outside forces, including philanthropist billionaire George Soros. For instance, Slovak President Andrej Kiska had a private meeting with the billionaire in September, 2017. It was a one-on-one conversation. No Slovak diplomat was present there.

According to Foreign Minister Miroslav Lajčák, “George Soros is a man who has had a major influence on the development in Eastern and Central Europe and beyond. That is a fact that cannot be questioned.” PM Viktor Orbán had this say about the event: “George Soros and his network are making use of every possible opportunity to overthrow governments that are resisting immigration.”

Slovenian PM Miro Cerar was attacked by Soros for his opposition to the EU policy on immigration. George Soros did not hide the fact that he was an ardent opponent of Miro Cerar’s stance. “It is an obligation for Europe to receive migrants,” the US financier lectured Europeans.  Now the PM has to go, after the results of a referendum on a key economic project were annulled by the top court and the media attacks on his stance regarding asylum seekers intensified. With Cerar no longer at the helm, the opposition movement to Brussels’s dictatorship has been weakened.

Who’s next?

Probably Hungary, which has become a target for Soros’s attacks.  The American billionaire has invested more than $400 million into his native country since 1989.  He has also announced his intention to influence the Hungarian election campaign and has employed 2,000 people for that purpose. The government wants its “Stop Soros” bills to become laws.  No doubt Hungary will come under attack for opposing the financier’s network.

Brussels will raise a hue and cry, criticizing the “undemocratic regime” ruling the country. The next parliamentary elections in Hungary will be held on April 8, 2018. It’ll be a tough fight to preserve independence while fending off attempts to impose US pressure through Soros-backed NGOs and educational institutions.  

Soros’s activities are also being resisted in the Czech Republic. Czech President Milos Zeman has accused the groups affiliated with Soros of meddling in his nation’s internal affairs. The financier is urging the EU to lean on Poland and compel it to “preserve the rule of law.”

Macedonia, is also resisting the billionaire-inspired subversive activities that have an eye toward regime change. The “Soros network” has great influence on the European Parliament and other institutions. The scandalous list of Soros’s allies  includes 226 MEPs out of 751.  Every third member — just think about that! If that isn’t corruption then what is? The lawmakers being swayed from abroad dance to Soros’s tune. They do what they are told, which includes whipping up anti-Russia hysteria. 

Moscow has its own history of dealing with the Soros network. In 2015, George Soros’s Open Society Institute was kicked out of that country as an “undesirable organization” that was established to boost US influence. 

It would be really naïve to think that Soros acts on his own. It’s an open secret that the US government flagrantly meddles in other countries’ internal affairs using the billionaire as a vehicle. Europe is an American competitor that needs to be weakened. USAID and the Soros network often team up in pursuit of common objectives.  In March 2017, six US senators signed a letter asking the State Department to look into government funding of Soros-backed organizations. But those efforts went nowhere, Foggy Bottom is always on Soros’s side, whatever it is. 

Many European countries are engaged in a fierce battle to protect their independence. The financier’s “empire” is chomping at the bit to conquer Europe by means of bribes and subversive NGOs.  These countries and Russia are resisting the same threat. Perhaps that’s why the sanctions against Russia are so unpopular among many East European politicians.

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