Tag: finance

While shortened Christmas Eve trading is traditionally the lowest volume day of the year, based on recent trends it may be difficult for today’s action to stand out from the landscape thanks to an ongoing volume collapse, which however should make the even more traditional low-volume melt up that much easier. Sure enough, futures are modestly higher driven by their favorite signal, the EURJPY. Not surprisingly there has been particularly light newsflow with market closures in Germany, Italy and Switzerland in addition to early market closures for UK, France, Netherlands and Spain. Those markets that are open are trading in positive territory with the FTSE 100 being supported by BSkyB following an upbeat pre-market report for the company and their customer base, whilst the IBEX 35 is being supported by the financial sector. Overnight in China there was news of an injection of CNY 29bln via a 7-day reverse repo, although market commentators have said that this is more of a gesture than any meaningful intervention given the size of the country’s banking market. Fixed income markets are particularly light with there being no trade in the bund future given the Eurex closure, with other trading products relatively flat given the lack of newsflow. However, the short-sterling curve has bear-steepened and thus continuing the trend seen since the end of last week as a result of both UK unemployment and UK GDP coming in better than expected.

Looking ahead, volumes are expected to remain thin, with the release of
US Durable Goods Orders, New Home Sales and Richmond Fed Manufacturing
Index taking focus ahead of the festive period

Overnight news bulletin from RanSquawk and Bloomberg

• The few European equity markets still open drift higher as yesterday’s record close on Wall Street pushes the Nikkei 225 to 6-year intraday highs
• China’s liquidity squeeze temporarily sated as the PBoC inject CNY 29bln in 7-day reverse repos – prompting short-term funding rates to fall at the fastest rate in two years, however sentiment not sustained as markets disregard the move as a mere gesture into year’s end
• Treasuries steady, with yields across the curve holding near Sept. highs; curves little changed after taper-spurred bear-flattening that pushed to 5/10 and 5/30 spreads to three-month tights.
• Market close early for Christmas Eve, with futures trading  over at 1pm, cash Treasuries at 2pm
• Trading in London quiet as storms that lashed southern England yesterday have closed dozens of railway lines, halted ferry sailings and left airports struggling to restore services
• Boaz Weinstein’s Saba Capital Management LP is headed for its second losing year in a row, hurt in part by a wager that European equities would rise more than high-yield credit, according to four people with knowledge of the hedge-fund firm
• The healthcare.gov web site yesterday experienced a single-day record number of visits and consumers were moved into a queuing system deployed when the website approaches 50k simultaneous users
• Obama’s staff, in a symbolic move, signed the president up for a health-care plan this past weekend through the District of Columbia exchange, according to a White House spokesman; the president, who receives his health care from the military, enrolled “as a show of support” for the new marketplaces
• Sovereign yields mostly higher. EU peripheral spreads tighten. Asian and European stocks gain, and U.S. equity index futures rise. WTI crude and copper rise, gold little changed

Asian Headlines

The PBoC injected CNY 29bln via 7-day reverse repo; first injection in 3 weeks. The 7-day bond repurchase rate, a key gauge of short-term funding, fell 344 basis points to 5.4%, the steepest decline in more than two years, as liquidity improved.

10yr JGBs moved marginally higher overnight by 7 ticks to 143.93, supported by reports that Japan is to cut its bond issuance to JPY 155.1trl in fiscal 2014. The Nikkei 225 initially outperformed and climbed above the 16000 level for the first time since 2007. However, the Nikkei 225 then pared the majority of its gains, finishing with gains of 0.1% at 15889.33 amid profit taking heading into the close in Japan.

EU & UK Headlines

French GDP (Q3 F) Q/Q -0.1% vs. Exp. -0.1% (Prev. -0.1%)
French GDP (Q3 F) Y/Y 0.2% vs. Exp. 0.2% (Prev. 0.2%)
Barclays pan-Euro agg month-end extensions: +0.03y
Barclays Sterling month-end extensions:+0.06y
Europe Closed, UK Early Closure.

US Headlines

Fed’s Fisher (non-voter, hawk) said he argued in favour of a USD 20bln taper at last FOMC meeting says market could have absorbed that scale of reduction. (Fox Business)

Shoppertrak says US retail sales have fallen 2.1% for the weekend of December 20-22. (Newswires)

Barclays US Tsys month-end extensions:+0.07y

US Early Closure.

Equities

The FTSE and CAC40 drift higher, as positive equity sentiment carries across from the Wall Street and Tokyo sessions, with the US growth picture continuing to climb after the well-received Fed taper and strong US growth numbers. BSkyB top the FTSE-100 this morning after the Co. disclose their HD service added 107,000 subscribers during Q1, with over a third of customers now using the triple play offering of TV, broadband and telephone, according to the Daily Mail. Elsewhere, ARM Holdings pull back from yesterday’s Apple-inspired rally, to head into the early close down just under 1.5%.

FX

After a printing a Nikkei-inspired high at 104.41 in Tokyo trade, USD/JPY pulled back from the highs alongside the Japanese index, as Asia-Pacific assets came under mild profit-taking into their respective closes. Elsewhere, there is little to report, with chatter of stops in EUR/USD below 1.3670, with little in the way of bids until the 1.3650 mark.Meanwhile in Turkey, TRY is seeing some strength following comments from the Turkish central bank governor saying the bank is to sell a minimum of USD 450mln in regular forex auctions every day until year-end.

Commodities

After residing below USD 1,200/oz for the entirety of the Asia-Pacific session, spot gold managed to briefly push above the handle mid-morning in Europe, however yesterday’s highs at USD 1,206/oz came under no threat, as prices declined below USD 1,200/oz well ahead of the US crossover. Energy trading remains muted, with Brent being somewhat supported by the continued refinery closures in France (the strike at 3 refineries has now entered the 12th day), and the ongoing conflict in South Sudan, which has cut 45,000bpd from the country’s oil output.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1gzHkkZ1TIA/story01.htm Tyler Durden

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

Watching Indian bureaucrats attempt to halt more than one billion human beings’ desire for gold has been one of the more entertaining and pathetic stories of all of 2013. It is one that I have covered on many occasions, the latest being my post from earlier this month:  Gold Smuggling Increases 7x in India and Surpasses Illegal Drug Trade.

Well it appears the trend continues, potentially at an accelerated rate, as we just learned that, incredibly, “almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold.” As I have said many times in the past, if an Indian wants their gold, they will have their gold.

CHENNAI: Faced with curbs on gold imports and crash in international prices leaving it cheaper in other countries, gold houses and smugglers are turning to NRIs to bring in the yellow metal legally after paying duty. Any NRI, who has stayed abroad for more than six months, is allowed to bring in 1kg gold.

 

It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg of gold, totalling up to 80kg (worth about Rs 24 crore). At Chennai airport, 13 passengers brought the legally permitted quantity of gold in the past one week.

 

“It’s not illegal. But the 80kg gold that landed in Calicut surprised us. We soon got information that two smugglers in Dubai and their links in Calicut were behind this operation, offering free tickets to several passengers,” said an official. The passengers were mostly Indian labourers in Dubai, used as carriers by people who were otherwise looking at illegal means, he said. “We have started tracing the origin and route of gold after intelligence pointed to the role of smugglers,” he said.

 

Reports from Kerala said passengers from Dubai have brought more than 1,000kg of gold in the last three weeks. People who pay a duty of Rs 2.7 lakh per kg in Dubai still stand to gain at least Rs 75,000 per kg, owing to the price difference in the two countries. Gold dealers in Kerala say most of this gold goes to jewellery makers in Tamil Nadu and Andhra Pradesh.

 

These government measures to control the current account deficit did not reduce the demand for gold in the market. “RBI tried to discourage gold purchases because it doesn’t have the utility of other commodities like oil or copper. It mostly sits there in lockers. But when the gold imports through proper channels have come down, merchants have started depending on illegal channels to meet the demand from consumers,” he said.

As expected, a gigantic fail, but at least it served to enrich smugglers from across the region.

Full article here.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KR3wOzO59oY/story01.htm Tyler Durden

With the second consecutive extension to the Obamacare enrollment deadline announced hours ago, one would image the website’s designers realized that in what would, hopefully (supposedly) be an epic scramble by tens of thousands, or just tens, of Americans to sign up in the last moment, that there could be a traffic surge and adjust appropriately. So the thinking goes, at least, in theory. In practice, however, for those trying to sign up for socialized healthcare in California, what they are being greeted with, instead, is the socialist equivalent of the BSOD, better known as “ERROR: Sorry, An Error Has Occurred in the System.”

And to think the fawning media said so many times that Healthcare.gov was fixed, that people actually believed the lie.

Below is a screenshot of what everyone who clicks on the “Apply Now” screen in the Covered California state portal.

 

Needless to say, with fixed websites like these, who needs the Syrian Electronic Army?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PlbiEHaUP-w/story01.htm Tyler Durden

With the second consecutive extension to the Obamacare enrollment deadline announced hours ago, one would image the website’s designers realized that in what would, hopefully (supposedly) be an epic scramble by tens of thousands, or just tens, of Americans to sign up in the last moment, that there could be a traffic surge and adjust appropriately. So the thinking goes, at least, in theory. In practice, however, for those trying to sign up for socialized healthcare in California, what they are being greeted with, instead, is the socialist equivalent of the BSOD, better known as “ERROR: Sorry, An Error Has Occurred in the System.”

And to think the fawning media said so many times that Healthcare.gov was fixed, that people actually believed the lie.

Below is a screenshot of what everyone who clicks on the “Apply Now” screen in the Covered California state portal.

 

Needless to say, with fixed websites like these, who needs the Syrian Electronic Army?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PlbiEHaUP-w/story01.htm Tyler Durden

With all eyes squarely focused on US equity markets daily impersonation of the Caracas Stock Index, BofAML is growing increasingly concerned about China. Since the start of December, Chinese equities have been under significant pressure with the Shanghai Composite on the edge of completing a 3-month Double Top. A break of 2079 would confirm this move, exposing considerable downside in the weeks ahead.

 

This could also prove to be the catalyst that ends the 17-month downtrend for USDCNY.

 

Since late October the pair has shown tentative signs of basing. A sustained break of 17m trendline resistance (6.0747) would confirm a medium term turn in trend, exposing the Aug/Sep highs at 6.1225 and potentially beyond.

 

BofAML concludes with one word… “Beware”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0fuS7TTYLWk/story01.htm Tyler Durden

Despite the recent sharp narrowing in the U.S. federal budget deficit, the U.S. fiscal policy outlook carries financial stability risks, driven by three factors (aacording to the OFR – aka, The Treasury). First, a rapid pace of deficit reduction carries economic costs. Second, a clear resolution of the nation’s long-term fiscal challenges is still lacking. Finally, the political process for implementing sustainable fiscal adjustments has become more uncertain.

(click for large legible version)

Chart: Goldman Sachs

But this substantial fiscal adjustment carries two risks. First, it has created a fiscal drag on an economy that remains weak. Second, it creates an extra burden on other policy levers to support the economy. A policy mix that keeps short-term interest rates and unconventional monetary policy tools in place for an extended period potentially increases future risks to financial stability, whether through excessive risk-taking in credit markets or through volatility and interest rate shocks.

Delays in addressing long-term challenges could have longer-term, and potentially permanent, adverse financial stability consequences.

 

While everyone is still bleating over the success’ of the budget deal (despite its betrayal), the next few months have plenty of potential mines for fiscal fragility.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bfQJyV6lijE/story01.htm Tyler Durden

For the first time in 3 weeks, the PBOC un-tapered and added CNY 29 billion liquidity (via reverse repo). Despite the Chinese governments denial of any liquidity crisis, the decision to “fold” reflects a clear indication that, as Monex strategist Eimear Daly notes, “China’s attempting to incrementally liberalize markets and to allow instabilities to unwind with minimal damage; and spikes in interbank lending rates show authorities are struggling to manage this task.”

The liquidity was provided at 4.1% (not a particularly low rate but overnight repo is well off the highs of the last week) but 7-day repo rates (though down 3.5%) remain high at 5.5% (150bps above the ‘normal’ levels of July to October).

The night is young though as we suspect, just as yesterday, the big banks will soak up the first juice and leave the small banks (who need the most) floundering…

 

 

Chart: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Vi5MdF9kbBQ/story01.htm Tyler Durden

For the first time in 3 weeks, the PBOC un-tapered and added CNY 29 billion liquidity (via reverse repo). Despite the Chinese governments denial of any liquidity crisis, the decision to “fold” reflects a clear indication that, as Monex strategist Eimear Daly notes, “China’s attempting to incrementally liberalize markets and to allow instabilities to unwind with minimal damage; and spikes in interbank lending rates show authorities are struggling to manage this task.”

The liquidity was provided at 4.1% (not a particularly low rate but overnight repo is well off the highs of the last week) but 7-day repo rates (though down 3.5%) remain high at 5.5% (150bps above the ‘normal’ levels of July to October).

The night is young though as we suspect, just as yesterday, the big banks will soak up the first juice and leave the small banks (who need the most) floundering…

 

 

Chart: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Vi5MdF9kbBQ/story01.htm Tyler Durden

It seems US sailors aren’t the only ones who three short years after the Fukushima disaster are being stricken by cancers and other radiation-induced diseases. For once, the media blackout surrounding the Japanese nuclear power plant tragedy appears to have crumbled, and at least a portion of the truth has been revealed. Hong Kong’s SCMP reports that fifty-nine young people in Fukushima prefecture have been diagnosed with or are suspected of having thyroid cancer. Notably, all of newly diagnosed were younger than 18 at the time of the nuclear meltdown in the area in March 2011. They were identified in tests by the prefectural government, which covered 239,000 people by the end of September.

And while it is not rocket surgery to put two and two together, now that the data is in the public domain, here come the experts to explain it away.

On one hand, there are those who seemingly have not been bribed by the Abe government to “bend” reality just a bit in the name of confidence. People such as Toshihide Tsuda, a professor of epidemiology at Okayama University who has called upon the government to prepare for a possible increase in cases in the future. “The rate at which children in Fukushima prefecture have developed thyroid cancer can be called frequent, because it is several times to several tens of times higher,” Japan’s Asahi Shimbun quoted him as saying.

He compared the figures in Fukushima with cancer registration statistics throughout Japan from 1975 to 2008 that showed an annual average of five to 11 people in their late teens to early 20s developing cancer for every 1 million people.

And then come those who probably would still be touting the great job Tepco is doing in containing the worst nuclear catastrophe in history, even though Tepco itself has now admitted the exploded nuclear power plant is out of control.  

Tetsuya Ohira, a professor of epidemiology at Fukushima Medical University, disagreed. It was not scientific to compare the Fukushima tests with cancer registry statistics, he argued. Scientific? Or not politically feasible for a prime minister who is desperate to restart domestic nuclear power plants, since Abenomics is getting monkeyhammered thanks to soaring energy and food import costs (and, among other factors, leading to a crash in Abe’s popularity rating), and any reality leaking, pardong the pun, from Fukushima will end both that ambition, and his political career prematurely.

Shockingly, a month ago, prefectural officials deemed it unlikely that the increase in suspected and confirmed cases of cancer was linked to radiation exposure. Their “logic” is that in the Chernobyl disaster of 1986, it was not until four or five years after the accident that thyroid cancer cases surged. Apparently the thought that the local cancer victims may have been subject to radiation orders of magnitude higher than Chernobyl thanks to a lying government which consistently repeated that “all is well” has not crossed anyone’s mind.

“It is known that radioactive iodine is linked to thyroid cancer. Through the intake of food, people may absorb and accumulate it inside glands,” said Dr Choi Kin, a former president of the Hong Kong Medical Association.

 

Children might absorb more of it than adults because they were still growing, he said, but it remained to be proven that the radioactive iodine came from the nuclear disaster instead of the normal environment.

Bottom line “experts” are divided about whether the Fukushima cancers are caused by nuclear radiation… which, perhaps, is why they are experts. As everyone else knows, a surge in thyroid cancer in a population in close proximity to an exploded power plant, can only be due to one thing: non-participation in the ponzi stock market. So start buying stocks, or else the p53 mutations are coming for you too!

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/morjMvnFFGQ/story01.htm Tyler Durden

With most stock indices breaking record highs (and even the NASDAQ back to 13+ year highs), we thought a time of reflection and giving (as opposed to receiving Fed liquidity) required a look at the bigger picture. The following 13 charts of the last 13 years cover everything from collapsing SAT scores to record high prices of alcohol and from surging gun background checks to record high food stamp recipients, this is not your great grandma’s depression-“recovery”…

(click image for massive legible version)

 

PDF available here (h/t @Not_Jim_Cramer )

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/55XHYs1uIu4/story01.htm Tyler Durden