Tapirul nu fuge, dar pietele cresc :D . La profit! Unlike most trading sessions in the past month, when the overnight session saw a convenient algo assisted USDJPY/AUDJPY levitation, tonight there has been no such luck for the permabullish E-Trade babies who are conditioned that no matter what the news, the next morning the S&P 500 will open green regardless. Whether this is due to ever louder fears that what is happening in China can not be swept under the rug this time will be revealed soon, but as of this moment both the USDJPY, and its derivative, US equity futures, are looking at a sharp lower open, as gold continues to press higher, while the traditional tension points such as Russia-Ukraine, and ongoing capital flight from some of the more fringe emerging markets, continues. Expect more of the same today as people finally peek below the Chinese surface to realize just how profoundly bad the situation on the mainland truly is. And while we realize macro news are meaningless, especially in Europe where the ECB is now the sole supervisor of all asset classes, the fact that Cyprus, Greece, Slovakia and Portugal, are all in deflation, and many more countries lining up to join the club, probably means that absent a massive global credit impulse, we have certainly reached the upward inflection point from the most recent $1+ trillion injection of liquidity by the Fed, not to mention the ongoing QE by the BOJ. So looking at markets, we see that risk averse sentiment which dominated the price action during the Asian session swiftly carried over into the European session, prompting flight to quality since the get-go as concerns over credit markets in China remained at the forefront. As a result, basic materials related stocks were among the worst performing in Europe, with consumer goods leading the move lower. At the same time, flight to quality supported JPY and Swiss rates, with credit spreads also widening. Looking elsewhere, even though gold managed to hold onto gains made overnight, base metals and energy products suffered as concerns over the future growth prospects in China escalated. There was little in terms of tier 1 macroeconomic releases this morning and going forward market participants will get to digest the release of the latest weekly DoE report, while the US Treasury will auction off USD 21bln in 10y notes. zerohedge/news/2014-03-12/futures-fade-chinese-credit-tremors-get-ever-louder
Posted on: Wed, 12 Mar 2014 12:39:28 +0000
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