Not much going on tonight, except for the non-coupy martial law announcement in Thailand where the government is said to still be in charge of everything except for martial law decisions taken by the army of course, which in turn is in charge of everything else apparently including the central bank which intervened so extensively in the market, the Baht was barely changed at one point. There was also news of explosions and clashes in Benghazi but as everyone knows,what difference does Libya make at this, or any other, point. Additionally overnight there were reports that the cities of Slavyansk and Kramatorsk in east Ukraine were being shelled by the Ukraine army but that too barely registered as bullish for the USDJPY (which in now traditional fashion ramped during the US day session then sold off during Asia hours).
Since there are no major economic announcements in the US today, one day ahead of the FOMC minutes due tomorrow, markets will be focusing on headlines out of China where Putin has started his 2-day visit and is expected to announce some groundbreaking deals and alliances with China shortly. Additionally, overnight Russian Prime Minister Medvedev said that “Russia is being pulled into a new Cold War with the U.S. and its allies, who are using economic warfare reminiscent of the Soviet Union under Brezhnev, blaming Obama, for a lack of political tact.”
Also keep an eye on peripheral European bonds all of which have seen another day of significant weakening even as the US 10 Year is back down to 2.53% after briefly threatening yesterday to be sold off.
But don’t forget: only two things really matter today:
- there is a ~$2.5 billion POMO, and
- it’s a Tuesday.
Which as every E*trade baby knows is the most bullish combination for centrally planned markets anywhere. For now the USDJPY and the spoos are slow to recall these two facts but give them time – after all one needs “confidence” that the successful manipulation of markets will continue come Polar Vortex or El Nino.
Bulletin headline summary from RanSquawk and Bloomberg
- EUR underperformed GBP as projected interest rate paths between UK and EU rates continued to diverge, though today’s UK CPI (1.8% vs Exp. 1.7%) was skewed by transitory effects and failed to lift GBP/USD even higher.
- RBA minutes struck a dovish tone as the bank is to remain accommodative for the time being, which consequently sent AUD/USD below the 0.9300 level and the 50DMA line.
- Treasuries steady, 10Y yields holding near YTD lows, curve spreads little changed after 5/10 yesterday reached steepest in a month. NY Fed’s Dudley speaks on economy and monetary policy at 1pm ET today; no eco data.
- Russia is being pulled into a new Cold War with the U.S. and its allies, who are using economic warfare reminiscent of the Soviet Union under Brezhnev, Russian Prime Minister Medvedev said, blaming Obama, his one-time partner in a reset of relations, for a lack of “political tactâ€
- Putin starts a two-day visit to China today, seeking to complete an agreement on natural gas supplies to the world’s second-largest economy, held up for more than a decade because of a debate over the price
- Thailand’s army imposed martial law nationwide after months of political turmoil that brought down an elected leader and tipped the economy into a contraction
- JPMorgan Chase & Co., HSBC Holdings Plc and Credit Agricole SA were accused today by the EU’s antitrust arm of colluding to manipulate interbank lending rates
- From centuries-old pubs to Mayfair clubs to the halls of Parliament, London is abuzz with talk of escalating property values, foreign buyers with piles of cash and half-built garages selling for vast sums
- Sovereign yields higher. Nikkei +0.5%, Shanghai +0.2%. European equity markets decline, U.S. stock futures decline. WTI crude and gold little changed, copper higher
