• Tag Archives Japan
  • Mueller Subpoena Spooks Dollar, Sends European Stocks, US Futures Lower

    Yesterday’s torrid, broad-based rally looked set to continue overnight until early in the Japanese session, when the USD tumbled and dragged down with it the USDJPY, Nikkei, and US futures following a WSJ report that Robert Mueller had issued a subpoena to more than a dozen top Trump administration officials in mid October.
    And as traders sit at their desks on Friday, U. S. index futures point to a lower open as European stocks fall, struggling to follow Asian equities higher as the euro strengthened at the end of a tumultuous week. Chinese stocks dropped while Indian shares and the rupee gain on Moody’s upgrade. The MSCI world equity index was up 0.1% on the day, but was heading for a 0.1% fall on the week. The dollar declined against most major peers, while Treasury yields dropped and oil rose.
    Europe’s Stoxx 600 Index fluctuated before turning lower as much as 0.3% in brisk volumes, dropping towards the 200-DMA, although about 1% above Wednesday’s intraday low; weakness was observed in retail, mining, utilities sectors. In the past two weeks, the basic resources sector index is down 6%, oil & gas down 5.8%, autos down 4.9%, retail down 3.4%; while real estate is the only sector in green, up 0.1%. The Stoxx 600 is on track to record a weekly loss of 1.3%, adding to last week’s sell-off amid sharp rebound in euro, global equity pullback. The Euro climbed for the first time in three days after ECB President Mario Draghi said he was optimistic for wage growth in the region, although stressed the need for patience, speaking in Frankfurt. European bonds were mixed. The pound pared some of its earlier gains after comments from Brexit Secretary David Davis signaling a continued stand-off in negotiations with the European Union.
    In Asia, the Nikkei 225 took its time to catch up to the WSJ report that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials, although reports pointing to North Korea conducting ‘aggressive’ work on the construction of a ballistic missile submarine helped the selloff. The Japanese blue-chip index rose as much as 1.8% in early dealing, but the broad-based dollar retreat led to the index unwinding the bulk of its gains; the index finished the session up 0.2% as the yen jumped to the strongest in four-weeks. Australia’s ASX 200 added 0.2% with IT, healthcare and telecoms leading the way, as utilities lagged. Mainland Chinese stocks fell, with the Shanghai Comp down circa 0.5% as the PBoC’s reversel in liquidity injections (overnight net drain of 10bn yuan) did little to boost risk appetite, as Kweichou Moutai (viewed as a bellwether among Chinese blue chips) fell sharply. This left the index facing its biggest weekly loss in 3 months, while the Hang Seng rallied with IT leading the way higher. Indian stocks and the currency advanced after Moody’s Investors Service raised the nation’s credit rating.

    This post was published at Zero Hedge on Nov 17, 2017.


  • Dollar Slammed, USDJPY Roiled On Trump Campaign Subpoena Report

    it has been a rocky session for the dollar which has dumped to a 4-week low, dragging with it USDJPY, the Nikkei and Treasury yields – and to a lesser extend US equity futures – all of which have slumped in the Japanese am session, following a WSJ report that Robert Mueller’s team “caught the Trump campaign by surprise” in mid-October by issuing a document subpoena to more than a dozen top officials.
    The campaign had previously been voluntarily complying with the special counsel’s requests for information, and had been sharing with Mr. Mueller’s team the documents it provided to congressional committees as part of their probes of Russian interference into the 2016 presidential election. The Trump campaign is providing documents in response to the subpoena on an ‘ongoing’ basis, the person said.
    If confirmed, this would be the first time Trump’s campaign has been ordered to turn over information to Mueller’s investigation, even if subpoena has not – for now – compelled any officials to testify before Mueller’s grand jury.

    This post was published at Zero Hedge on Nov 16, 2017.


  • Deutsche: The Swings In The Market Are About To Get Bigger And Bigger

    Risk Parity not having a good day pic.twitter.com/GRdpB4NUOj
    — zerohedge (@zerohedge) November 10, 2017

    One week ago, on November 9 something snapped in the Nikkei, which in the span of just over an one hour (from 13:20 to 14:30) crashed more than 800 points (before closing almost unchanged) at the same time as it was revealed that foreigners had just bought a record amount of Japanese stocks the previous month.
    As expected, numerous theories emerged shortly after the wild plunge, with explanation from the mundane, i.e., foreigners dumping as the upward momentum abruptly ended, to the “Greek”, as gamma and vega stops were hit by various vol-targeting (CTAs, systemic, variable annutities and risk parity) funds. One such explanation came from Deutsche Bank, which attributed the move to a volatility shock, as “heightened volatility appears to have triggered program trades to reduce risk”, and catalyzed by a rare swoon in both stocks and bonds, which led to a surge in Nikkei volatility…
    … and forced highly leveraged risk parity funds and their peers to quickly delever. As DB’s Masao Muraki explained at the time:

    This post was published at Zero Hedge on Nov 16, 2017.


  • Looking For Inflation In All The Wrong Places

    A policeman sees a drunk man searching for something under a streetlight and asks what the drunk has lost. He says he lost his keys and they both look under the streetlight together. After a few minutes the policeman asks if he is sure he lost them here, and the drunk replies, no, and that he lost them in the park. The policeman asks why he is searching here, and the drunk replies, ‘this is where the light is’. – The Streetlight Effect
    The drunk in the above story is an idiot, of course. But no more so than modern economists who can’t find inflation because they’re looking only at the part of the economy covered by their government’s Consumer Price Index.
    But gradually, grudgingly, a handful of mainstream economists do seem to be figuring out that the soaring value of stocks, bonds, real estate, fine art, collectibles and cryptocurrencies is a legitimate sign of a depreciating currency and future instability. Inflation, in other words. From yesterday’s Morningstar:
    Lack of inflation is a global issue
    (Morningstar) – The lack of inflation is a global issue. Unemployment is at cyclical lows in the US, Germany, and Japan, yet in each of these countries there is only small evidence that wages are picking up. No doubt globalisation and technology are common factors that have helped constrain wages across countries.

    This post was published at DollarCollapse on NOVEMBER 14, 2017.


  • Gartman: “The Bear Market Is Upon Us We Fear “

    With the BTFD algos showing some uncharacteristic hesitancy this morning, Dennis Gartman’s overnight commentary may provide just the catalyst they need to do their sworn duty and ramp stocks into the green within minutes of the cash open for one simple reason: Gartman fears a bear market of “some serious vintage” is now be upon us.
    As excerpted from his latest overnight letter to clients:
    STOCK PRICES ARE UNIVERSALLY WEAKER THIS MORNING as all ten of the markets comprising our International Index have fallen and as two of the ten… the markets in Japan and in Brazil… have fallen by more than 1% with the former down 1.5% as we write and as we finish TGL and with the latter down a truly material 2.3%. In the end, our Index has fallen 86 ‘points’ or 0.7% and is down 175 ‘points’ from its all-time high of 12,012 on Thursday of last week, or 1.4% below that high.
    We note the ‘universal’ nature of the weakness for having all ten markets moving in the same direction is indeed quite rare and historically this occurs at major turning points; that is, the lows were made back in the spring of ’09 amidst panic, final liquidation of stocks when we had one or two days of universal weakness followed by a day or two of universal strength. That was a major turning point, obviously. Further, the interim lows made in January of this past year were accompanied by one day of ‘universal’ movement, and there are other examples that we can recall when prices moved in ‘universal’ terms and which marked major turning points. Today’s ‘universal’ weakness…only a week from the global market’s all-time high… is a harbinger of further material weakness we fear and sets the stage for the start of what we fear might well be a bear market of some serious vintage.

    This post was published at Zero Hedge on Nov 15, 2017.


  • Japan’s Plea To Millennials: Please Buy Stocks

    Ever since the Federal Reserve first got into the business of blowing massive equity bubbles back in the 1980’s, Americans have shown a willingness to happily, if ignorantly, embrace each successive iteration to the rigged market. Of course, as E-Trade recently confirmed via the following ad, making money in equities is a very simple two-step process: (1) get invested, (2) buy a yacht made of Cuban mahogany and party with models…why would anyone in their right mind pass that up?
    ***
    Unfortunately, at least for the central planners at the Bank of Japan who would love to be as efficient at creating asset bubbles as their U. S. counterparts, Japanese investors have a slightly longer memory than U. S. investors and have shunned stocks ever since an entire generation of wealth was wiped out in the 90’s. After 20 years of stocks pretty much only trading in one direction, one can understand their concern.

    This post was published at Zero Hedge on Nov 14, 2017.


  • Key Events In The Coming Week: Taxes, Inflation, Yellen, Draghi, Kuroda And Brexit

    This week’s economic calendar features several key data releases and Fedspeak. The main data release in US include: CPI inflation, retail sales, industrial production, housing data and monthly budget statement. We also get the latest GDP and CPI reading across the Euro Area; the employment report in the UK and AU, Japan GDP, China IP, retail sales and FAI. In Emerging markets, there are monetary policy meetings in Indonesia, Chile, Egypt and Hong Kong.
    Market participants will also want to pay close attention to tax reform progress in Washington. The House Ways and Means Committee had voted along party lines (24-16) to deliver its bill to the full House. The Senate Finance Committee’s proposal was also revealed last week and is slated for markup this week. Both versions are essentially opening gambits by the two chambers and the hard work begins when the two bills are ‘reconciled’. As a reminder, the Senate version is likely to be closer to the final version. In our view, there is a decent chance that some version of tax reform can be achieved, but this is likely to be a Q1 event and there are numerous potential stumbling blocks along the way.
    With respect to the data, October inflation and retail sales reports are the main focus. Tuesday, DB expects headline PPI (+0.1% forecast vs. +0.4% previously) to moderate following a spike in gasoline prices last month due to hurricane-related supply disruptions. However, core PPI inflation (+0.2% vs. +0.1%) should firm. Analyst will focus on the healthcare services component of the PPI, as this is an input into the corresponding series in the core PCE deflator – the Fed’s preferred inflation metric. Recall that healthcare has the largest weighting in the core PCE.

    This post was published at Zero Hedge on Nov 13, 2017.


  • Back to the Yield Curve Future

    A few weeks ago, we highlighted the apparent contradiction of the reflation trade that has unfolded in the Treasury market. In brief, that contradiction is the flattening yield curve.
    This week, we’re returning to the yield curve – the 2-10 spread specifically – and we will be discussing what it means if it is indeed a harbinger of slower economic growth.
    A Trade of Desperation?
    First, we must posit that the narrowing spread between the 2-yr note yield and the 10-yr note yield might not be the telltale economic indicator some pundits think it is.
    It could be, yet we can’t dismiss the possibility that it’s a byproduct of a desperate search for yield among foreign investors staring at such low rates at home.
    Hear Russell Napier on Debt Deflation: Too Much Debt, Not Enough Money
    Before inflation, the yield on the 10-yr Japanese Government Bond is 0.02%; the yield on the 10-yr German bund is 0.38%, and the yield on the UK’s 10-yr gilt is 1.26%. The yield on the 10-yr Treasury note is 2.33%.

    This post was published at FinancialSense on 11/13/2017.


  • US to Import Inflation from Japan, China, South Korea

    Even from Japan – whose export producer prices are soaring.
    The oil price collapse that started in 2014 pushed down input costs that companies – the ‘producers’ – faced. And producer price indices, which measure inflation further up the pipeline, plunged. But this is over. And the biggest export powerhouses in Asia that have ballooning trade surpluses with the US, show how.
    The Producer Price Index in Japan – the ‘Corporate Goods Price Index,’ as it’s called there – jumped 3.4% in October compared to a year ago, after already climbing an upwardly revised 3.1% in September, the Bank of Japan reported on November 13. It was the tenth month in a row of year-over-year gains and the highest annual rate since September 2014, by which time the collapsing energy prices were mopping up any inflationary pressures (chart via Trading Economics):

    This post was published at Wolf Street on Nov 12, 2017.


  • Doug Noland: “Money” on the Move

    This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
    It’s been awhile since I’ve used this terminology. But global markets this week recalled the old ‘Bubble in Search of a Pin.’ It’s too early of course to call an end to the great global financial Bubble. But suddenly, right when everything looked so wonderful, there are indication of ‘Money’ on the Move. And the issue appears to go beyond delays in implementing U. S. corporate tax cuts.
    The S&P500 declined only 0.2%, ending eight consecutive weekly gains. But the more dramatic moves were elsewhere. Big European equities rallies reversed abruptly. Germany’s DAX index traded up to an all-time high 13,526 in early Tuesday trading before reversing course and sinking 2.9% to end the week at 13,127. France’s CAC40 index opened Tuesday at the high since January 2008, only to reverse and close the week down 2.5%. Italy’s MIB Index traded as high as 23,133 Tuesday before sinking 2.5% to end the week at 22,561. Similarly, Spain’s IBEX index rose to 10,376 and then dropped 2.7% to close Friday’s session at 10,093.
    Having risen better than 20% since early September, Japanese equities have been in speculative blow-off mode. After trading to a 26-year high of 23,382 inter-day on Thursday, Japan’s Nikkei 225 index sank as much as 859 points, or 3.6%, in afternoon trading. The dollar/yen rose to an eight-month high 114.73 Monday and then ended the week lower at 113.53. From Tokyo to New York, banks were hammered this week.

    This post was published at Wall Street Examiner by Doug Noland ‘ November 11, 2017.


  • Japan Rocked By Violent Stock Plunge As Nikkei Tumbles 850 Points Before Recovering Losses

    Something snapped in Japan today.
    With Asian stocks finally breaking out a decade-long doldrum, and hitting record highs earlier in the session, and with Japanese equities starting off the session on the right foot and continuing their recent ascent which until Wednesday had seen them rise on 23 of the past 25 days, Japanese shares suddenly lurched on Thursday, plunging sharply lower after dramatic intraday swings took the Nikkei and Topix indexes to multi-decade highs only to drop in the afternoon on futures-driven trading ahead of the following day’s options settlement. All told, in a little over an hour, what had been another solid rally in Japanese stocks turned into some rather sharp clear-air turbulence, with the Nikkei 225 Stock Average plunging about 3.6% from the afternoon-session high to its low for the day.
    It all started off well enough: in the morning session, the Topix notched a new 26-year high and the Nikkei 225 broke the 23,000 level for the first time since January 1992, as financial and securities shares rallied.
    Then something flipped and in a gut-churning rollercoaster of a move, the Nikkei lurched from an over 2% gain which took it to a fresh 25 year high at the end of the morning session, to a loss of as much as 1.7%. The sudden reversal quickly spread to the currency market, with the yen surging before spreading across Asia: South Korean and Hong Kong equities also tumbled in sympathy. As Bloomberg snarks, “Sydney traders could count themselves lucky their market had already closed before the worst of the sell-off.”

    This post was published at Zero Hedge on Nov 9, 2017.


  • Global Markets Stumble, Spooked By Japanese Stock Fireworks

    The overnight fireworks in Japan, which saw the Nikkei plunge by 860 intraday points and sent vol and volumes soaring (before recovering most losses), spooked traders in Asia and around the globe, and U. S. equity futures are red this morning, along with European shares and oil. As one early riser sellside desk notes, the Nikkei 225 provided the latest example of choppy markets and the 860 point intraday plunge “got us worried. Is this a warning sign for risk assets?” President Trump’s challenge of China for “unfair trading practices” (which he blamed on his predecessors) did not help the calm mood.
    ‘The stock market has run out of a little momentum since the blow-out on the (Japanese) topix so it feels like it’s temporarily paused,’ said Societe Generale strategist Kit Juckes. ‘We are waiting for some news from the Republicans on the tax plans, there is a bond market that has stalled and we’ve got rather soggy looking emerging markets… We probably need to get U. S. Treasury yields higher to get things going again.’
    In the aftermath of the Japanese vol spike, the MSCI Asia Pacific Index turned briefly negative having earlier climbed to all-time record.

    This post was published at Zero Hedge on Nov 9, 2017.


  • Gold And The Big Four: Slam Dunk

    The synergistic relationship between gold and economic growth is quite healthy, and poised to become even more healthy in 2018 – 2019. Please click here now. Double-click to enlarge this fabulous South Korean stock market ETF chart. Big name Western money managers are finally racing to move money into Asian markets, and this is great news for both gold and global stock markets. For several years I’ve recommended that the gold community slightly reduce (but not drop) their focus on gold’s Western world fear trade and increase their focus on the Eastern stock markets and the love trade for gold. South Korea’s stock market sports 50% earnings growth and a P/E ratio of just 10! Japan’s market is also red hot, and so are the markets of China and India. US markets have risen strongly, but with anemic economic growth and nosebleed valuations. Growth is vastly stronger in Asia, but without European and US money manager participation, Asian stock markets have previously languished. This situation has changed dramatically in 2017, and 2018 should see an acceleration of this new trend. The bottom line: American markets are hot but overvalued. Asian markets are red hot but not overvalued. I own ETFs (and some individual stocks) in the ‘Big Four’ Asian markets; India, China, Japan, and Korea. I urge all Western gold bugs to ‘get with the (good) times’. The fear trade for gold will never disappear, but it’s a new era, and this new era is dominated by Asia. Investors should be very comfortable owning Asian stock markets and gold…at the same time. The bottom line: America isn’t out, but Asia is in! When times are good (and they are now very good in Asia), Asians buy more gold. Exponentially more. Chinese demand reflects this fact. It’s rising again; demand is up almost 20% over 2016, and poised to rise even more strongly in 2018.

    This post was published at GoldSeek on 7 November 2017.


  • Global Stock Meltup Sends Nikkei To 25 Year High

    The global risk levitation continues, sending Asian stocks just shy of records, to the highest since November 2007 and Japan’s Nikkei topped 22,750 – a level last seen in 1992 – while European shares and US equity futures were mixed, and the dollar rose across the board, gains accelerating through the European session with EURUSD sumping below 1.16 shortly German industrial output shrank more than forecast, eventually dropping to the lowest point since last month’s ECB meeting. Meanwhile soaring iron-ore prices couldn’t provide relief to the Aussie as the RBA held rates unchanged as expected; Oil traded unchanged at 2.5 year highs, while TSY 10-year yields rose while the German curve bear steepened, both driven by selling from global investors.
    The Stoxx Europe 600 Index edged lower, erasing an early advance, despite earlier euphoria in stocks from Japan to Sydney, which reached fresh milestones. Disappointing reports from BMW AG and Associated British Foods Plc weighed on the European index as third-quarter earnings season continued. Earlier, the Stoxx Europe 600 Index rose as much as 0.3%, just shy of a 2-year high it reached last week. Maersk was among the worst performers after posting a quarterly loss, saying a cyberattack in the summer cost more than previously predicted. Spain’s IBEX 35 gains crossed back above its 200 day moving average. European bank stocks trimmed gains after European Central Bank President Mario Draghi said that the problem of non-performing loans isn’t solved yet, though supervision has improved the resilience of the banking sector in the euro region. Draghi was speaking at a conference in Frankfurt.
    Over in Asia, equities rose to a decade high, with energy and commodities stocks leading gains as oil and metals prices rallied. The MSCI Asia Pacific Index gained 0.8 percent to 171.40, advancing for a second consecutive session. Oil-related shares advanced the most among sub-indexes as Inpex Corp. rose 3.7 percent and China Oilfield Services Ltd. added 4.6 percent. The MSCI EM Asia Index climbed to a fresh record. The Asia-wide gauge has risen 27 percent this year, outperforming a measure of global markets. The regional index is trading at the highest level since November 2007. Hong Kong’s equity benchmark was at its highest since December 2007 as Tencent Holdings Ltd. advanced for an eighth session. Australia’s S&P/ASX 200 index closed at its highest level since the financial crisis.

    This post was published at Zero Hedge on Nov 7, 2017.


  • Trump Says Trade With Japan Is Not Fair And Not Open – Awkward Moments Ensue

    The first stage of Donald Trump’s five-nation tour of Asia began well with the President playing golf with Prime Minister, Shinzo Abe, describing their relationship as ‘really extraordinary’.
    This suggested progress following the awkward moment during their previous meeting in February 2017. Abe was the first foreign leader Trump met after his election victory and Trump was mocked on social media after refusing to give Abe his hand back during their 19-second handshake. Today their budding relationship was tested as Trump lashed out at Japan’s unfair trade practices and his related attempts at humour. In rhetoric that sounded familiar to his campaign speeches Trump complained that Japan has been ‘winning’ on trade, alluding to the $69 billion trade deficit in 2016.
    ‘We want fair and open trade. But right now, our trade with Japan is not fair and it’s not open. The US has suffered massive trade deficits with Japan for many, many years. One way that Trump is aiming to fix the trade deficit by making it easier for Japanese companies to do business in the US. However, his decision to highlight the auto industry was perhaps unfortunate. Nonetheless, Trump lamented.

    This post was published at Zero Hedge on Nov 6, 2017.


  • Texas Church Shooting Leaves 26 Dead; Suspect Was Dishonorably Discharged From Air Force

    Update (8:50 pm ET): Trump offered his condolences for victims and their families after today’s “horrific” shooting during a press conference in Japan.
    “Victims and their families were in their sacred place of worship. We cannot put into words the pain and grief we all feel,” Mr. Trump said in televised remarks.
    “In dark times such as these, Americans do we what do best and we pull together. We lock hands and we joins arms. Through the tears and through the sadness we stand strong.”
    Meanwhile, a new photo of the shooter has been released…


    This post was published at Zero Hedge on Nov 5, 2017.


  • Synchronized Global Not Quite Growth

    This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
    Going back to 2014, it was common for whenever whatever economic data point disappointed that whomever optimistic economist or policymaker would overrule it by pointing to ‘global growth.’ It was the equivalent of shutting down an uncomfortable debate with ad hominem attacks. You can’t falsify ‘global growth’ because you can’t really define what it is.
    Japan was common then among the world’s various economies to be relying so much on it. As I wrote that September:
    The curious part about that ‘pick-up in global demand’ is exactly what I am driving at. What he [BoJ Deputy Governor Kikuo Iwata] is saying is that the economy in Japan will get better because some nebulous notion of the global economy will get better; or, if you want to be specific, they expect the economy to improve because the economy is expected to improve. While he (and those like him) will not admit to engaging such circular logic, that is what it really amounts to…
    It became a staple of mainstream analysis because it was easy and non-specific. And in many ways it has become so again, in 2017 perhaps even to that much more of an impressive (sounding) degree. This time around not only is ‘global growth’ supposedly picking up, it is doing so in synchronizedfashion. Being applied to Japan again and more so China, it’s the first time in seven or perhaps ten years, apparently, that this has happened – therefore we are meant to be very impressed by it even if it still remains undefined.

    This post was published at Wall Street Examiner on November 3, 2017.


  • The End Is Near… Depopulation Is Out Of Control… So Buy Stocks (Seriously)

    Authored by Chris Hamilton via Econimica blog,
    The world economy is premised on a ludicrous idea – that Asia, then India, and then Africa will continue to drive economic growth.
    So as not to turn this article into a book, lets consider this idea focusing on East Asia consisting of China, Japan, North and South Korea, Taiwan, and minor others. This region consists of 1.6 billion persons or about 22% of earths inhabitants. However, since 2008, it is this region that is responsible for nearly 100% of the global increase in demand for oil (best proxy available for true economic growth) and having primarily driven global economic growth. My point in this article is that the growth in this region is entirely a credit driven supernova against collapsing populations which will never be able to fill the 100+ million newly added apartments or pay back the debt incurred to achieve the “growth”. Contrarily, from an investor standpoint, this weakness is the green light to “invest” as aggressively as possible because as long as central banks exist, they have your back.
    Consider, since 2000, China’s debt outstanding has risen something like 14x’s to 17x’s or from about $2 trillion to something between $30 to $35 trillion presently. As for Japan, who knows Japan’s true debt as Japan’s central bank is buying much or most of the debt and essentially throwing it in a black hole, never to be seen again(…monetization with a capital “M”).
    Why the massive debt creation and central bank monetization? Depopulation with a capital “D”. First off, consider the collapse in fertility rates for these nations (chart below). To maintain a constant, zero growth population, the childbearing population needs to produce 2.1 children in order to replace themselves (dashed line, below). However, as the chart below shows, E. Asian nations have seen negative fertility rates for decades (Japan turning negative in ’74, S. Korea in ’83, China in ’92, and N. Korea in ’96).

    This post was published at Zero Hedge on Nov 3, 2017.


  • Dollar Rebounds, Futures Rise Ahead Of Surge In Payrolls

    One day after the dollar slumped sharply on initial disappointment with the GOP tax plan, the greenback has rebounded ahead of a nonfarm payrolls report that is expected to show the US economy gained over 300,000 jobs in the post-hurricane rebound, and as investors reassessed the latest news on U. S. tax-cut plans. Stocks in Europe and Asia advanced, US equity futures were as usual in the green, while oil headed for an eight-month high on signs OPEC will agree to extend supply cuts.
    In an otherwise quiet session, the biggest overnight news was President Nicolas Maduro announcing Venezuela will seek to restructure its global debt after the state oil company makes one more payment. While the risk of contagion is low, the emerging-market index of currencies declined for the first time this week. In early trading, the PDVSA dollar bonds maturing 2027 plunged at the start of trading, slumping 10 cents on the dollar to 20 cents in early London trading. As a result, EMFX weakened across the board with some analysts noting the Venezuela debt restructuring as a driver, though most weakness occurred after Turkey’s inflation report.
    In global macro, markets are in their usual pre-NFP lull, with most G-10 currencies staying within yesterday’s ranges. The weakest quarter for Australian retail sales in seven years sent the Aussie lower and bonds climbing. The Aussie dollar dropped as much as 0.5 percent back below 77 U. S. cents and bond yields extended declines as traders pushed back bets on the timing for an interest-rate increase. The Bloomberg Dollar Index was steady in Asia, amid modest moves in most G-10 currencies, before edging higher with the start of the London session as fast-money names added dollar longs before U. S. jobs report. Treasury futures were stuck in tight ranges through Asian hours, on very muted volumes, just 37% of recent averages, with cash markets closed for a Japan holiday; as Bloomberg reports, TSYs came under pressure in London, widening vs Germany.

    This post was published at Zero Hedge on Nov 3, 2017.