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Asia markets higher on a strong US finish, markets focused on France (CNBC) Asia markets were mostly higher on Friday after a strong session in the U.S. amid caution following a suspected terrorist shooting in Paris ahead of the first round of the presidential election at the weekend. The dollar traded at 99.805 against a basket of rivals, higher than levels around 99.6 seen in the previous session. U.S. crude was up by 0.08% at $50.75 a barrel. Brent crude was gained 0.04% to trade at $53.01. Spot gold was down 0.1% at $1,279.80 per ounce, as of 0343 GMT. U.S. gold futures slipped 0.2% at $1,281.60.
The Real World of Oil Has a Warning for Financial Markets (Bloomberg) The Brent physical oil market is flashing signs of weakness again as dwindling Asian purchases, an influx of American crude to Europe, and supplies flowing out of storage all combine to recreate a glut in the North Sea.
The weakness comes at a time when speculators have started rebuilding bullish positions after a sell-off last month, betting the market will tighten in the second quarter. Yet, Brent physical oil traders say the opposite is happening so far, according to interviews with executives at several trading houses, who asked not to be identified discussing internal views.
Trump to sign executive order, memoranda on financial regulation at Treasury (The Hill) President Trump on Friday will sign one executive order and two presidential memoranda dealing with financial regulation and taxes at the Treasury Department, according to the White House. All three documents will direct Treasury Secretary Steven Mnuchin to analyze key provisions of the Dodd-Frank Act and the tax code, and report back on ways to improve them. CNBC first reported that Trump would sign two executive orders at the Treasury. Trump promised to "dismantle" Dodd-Frank during his campaign, and signed two executive orders in February instructing his cabinet to look for economically beneficial reforms they could make to the law. It’s unclear how the two memoranda to be signed Friday differ from previous orders.
Paul Tudor Jones Says U.S. Stocks Should 'Terrify' Janet Yellen (Bloomberg) Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid. The legendary macro trader says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75 percent over two-plus years. That measure -- the value of the stock market relative to the size of the economy -- should be “terrifying" to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him.
Trump's Job Approval in First Quarter Lowest by 14 Points (Gallup) Donald Trump averaged 41% job approval during his first quarter as president, 14 percentage points lower than any other president in Gallup's polling history. Bill Clinton had the previous low mark of 55%. The average first-quarter rating among post-World War II presidents elected to their first term is 61%, with John Kennedy's 74% the highest.
The U.S. and China: Why the Sudden Convergence on North Korea? (Charles Hugh Smith, Of Two Minds) CHM has contributed to GEI. China's leadership may have finally concluded that supporting and protecting a costly, rogue-nuclear buffer state is actually reducing China's security and rather than enhancing it. The back story:
China has effectively subsidized and supported the North Korean state for the past 70 years as a buffer against a land invasion from South Korea. China supplies North Korea with fossil fuels and other essentials and protects it diplomatically.
But does this buffer-state strategy make sense in today's world? The threat is now from nuclear missiles and trade wars, not a land invasion. Though we cannot know what's being discussed or decided behind close doors, the high cost of subsidizing a rogue nuclear state for the now-irrelevant value of a physical buffer may finally be weighing on Chinese decision-makers.
The Shanghai Composite Index was set for a 2.2% tumble for the week, the most since mid-December, with mainland gauges of energy and materials companies leading the decline. Stocks that rose after China’s announcement of a new economic zone in Xiongan were among the worst performers. Hesteel Co., China Fortune Land Development Co. and Beijing Capital Co. plunged at least 18% for the week.
China’s securities regulator has stepped up criticism of what it called disruptive trading behavior, with chief Liu Shiyu saying at the weekend the nation’s bourses should punish irregularities “without mercy." The A-share gauge has been the world’s worst-performing equity market over the past five days, with trust companies said to have been ordered to cut exposure to the property sector and the Shanghai securities regulator demanding a crackdown on illegal futures trading.
Yuan Calm at Risk of Ending as China Share Drop Darkens Mood (Bloomberg) A selloff in Chinese stocks is threatening to end the yuan’s calmest period since its devaluation 20 months ago. Further equity declines could have a contagion effect on the currency, pushing it out of the narrow range that it has stayed in for almost three months, according to Banco Bilbao Vizcaya Argentaria SA and Australia & New Zealand Banking Group Ltd. This is in addition to a slew of other risks, including potential easing of capital controls, as well as U.S. interest-rate increases and geopolitical tensions that could spur renewed strength in the dollar. According to Xia Le, Hong Kong-based economist at BBVA, the yuan’s most-accurate forecaster as ranked by Bloomberg:
“When investors figure they don’t want to play with the A-shares, they will use the money to buy the dollar or find a way to purchase overseas assets. The stability in the yuan will be short-lived. The central bank, an opportunist in managing the exchange rate, will also depreciate the yuan when it sees the right chance, and the next one will likely come in May, when the dollar rises on bets for further U.S. hikes."
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