The LFB submits:Play: Latest Global Video Charting The reaction to better than expected U.S. Employment data on Friday was for equity trade to move higher, commodities to lose ground, and interest rate markets to be bought. In reality the NFP numbers offered a poor picture of the overall U.S.
So far today has been a replica of yesterday, with the crude rout continuing and pushing WTI under $45, but largely ignored by the FX carry pairs, and thus equity futures, which have seen some positive momentum from overnight trade data out of China where exports jumped 9.7% beating the 6% expectation, while imports fell 2.4% compared to a projected 6.2% decline as the trade surplus narrowed from November’s record $54.4 billion.
A quick anecdote that should quickly confirm just how broken everything is: earlier today MarkIt reported European manufacturing data that was atrocious, with both German and European PMIs tumbling to levels not seen since mid-2013, and with Europe's growth dynamo now in a contraction phase clearly signalling what has been long overdue: a European triple dip recession. So what happens? Moments later Germany sells €4.1 billion in 10 Year paper at a record low yield below 1%....
Following a volatile end to April, on whose last day many decided to frontrun "selling in May before going away", the world has taken a breather and overnight China was closed to celebrate May day, unable to celebrate the "beat" of the official Chinese Manufacturing PMI which printed unchanged from last month, at 50.1, goalseeked to beat the consensus expectation of 50.0 by the smallest of possible increments.
TOKYO: Asian shares were down on Friday and on track for a weekly loss as investors grappled with the prospect of higher borrowing costs in the United States, as the Federal Reserve prepares to raise rates amid the backdrop of slowing global growth. Data released overnight showed US gross domestic product increased at a 1.5 per cent annual rate, just shy of the consensus forecast for 1.6 per cent growth and slowing from a 3.9 per cent rise in the second quarter. But solid consumer spending kept alive the possibility that the Fed could deliver an interest rate increase in December.
Despite last night's Nikkei futures smash, in the hours that immediately followed, algos had an easy time levitating both European stocks and US futures on the usual no volume, until suddenly, a little after the European open, the European commission released an Easter egg when it finally admitted, with less than 2 months left in the year, that a European triple dip is in the card, when it slashed its May growth and inflation forecasts across the board
While the US daytime trading session has lately become a desperate attempt to expand multiples on the declining earnings of the S&P500, thanks to recurring BOJ intervention in the USDJPY, to keep the S&P above the 100 SMA at all costs including generous central banker verbal intervention...
The "polar vortex" (no, really) which is about to unleash even record-er cold temperatures upon the US may be the greatest thing to happen to the economy: after all once Q1 GDP estimates miss once again, what better scapegoat to blame it on than cold winter weather during... the winter.