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03Apr2015 Market Update: Markets Closed For Good Friday, SP500 Futures And U.S Dollar Plunging Because Of Huge March Payroll Miss

Written by Gary

Markets are closed today, but U.S. Financial's this morning were terrible. U.S. job growth weakest since 2013, but unemployment rate steady.

As of now the steep futures decline could be called fractional at less than one percentage point and Monday next week could be a real disaster for some financially IF the decline gets deeper.


Here is the current market situation from CNN Money

North and South American markets finished mixed as of their recent closing prices. The Bovespa gained 3.67% while the S&P 500 was higher by 0.35%. The IPC was even.

What Is Moving the Markets

Here are the headlines moving the markets.

BLS Jobs Situation Surprisingly Bad in March 2015

Written by Steven Hansen

The BLS jobs report headlines from the establishment survey was weak and well below expectations. The unadjusted data shows relatively weak jobs growth. The real story this month is the ALL the establishment survey jobs growth for 2015 was re-estimated lower. This is such a soft jobs report that the Federal Reserve will be reluctant to raise their interest rates.

It's Starting to Fall Apart: German Bank Sues the ECB

L-Bank

We probably haven't seen the last of the troubles in the Eurozone. As the European Central Bank is trying to put out several fires with regards to Greece and its huge Quantitative Easing money-printing program, it's important for the Eurozone to keep everybody on the same page. But as could be expected, some banks in the Eurozone aren't really too keen on playing ball and have rejected the interference of the central bank.

An apotheosis seems to have reached as a German bank has now effectively sued the European Central Bank. The Landeskretitbank Baden-Wurttemberg (hereafter â€'L-Bank') has protested against the fact it would now fall under the new regime whereby the ECB would assume supervision over in excess of 100 financial institutions in the Eurozone.

ECB Banking Supervision

Source

L-Bank is arguing the cost to comply with the newer and stricter rules is too much to bear for a bank that has a low-risk business profile. Despite having over 30B EUR in assets (which was the threshold for banks to either have the ECB or the national regulators as supervisor), L-Bank says it doesn't belong on the ECB's watch list ...

Payrolls Reaction - Bad News Is Bad News: Stocks Down, Bonds Up As Carry Trades Unwind

Uh-oh... the payrolls "bad news" does not appear for now to be bad enough to prompt a "good news" buying mania as perhaps - just perhaps - the market is coming around to the total farce of smoke and mirrors of lower rates and QE doing anything for the real economy is being exposed... Dow futures are down 90 points, TSY yields down 7-8bps and USD weakness spreads as carry trades are unwound en masse.

Stock futures not happy...

The entire bond complex is seeing yields collapse...

as The Dollar gets dumped and Swissy soars...

The S&P has joined the Dow in the red for 2015...

U.S. Economy Gained 126,000 Jobs in March, Signaling a Slowdown in Hiring

This latest jobs report underscores what has been a persistent theme: that in the recovery, many working Americans have received only scant benefits from the upswing.

March Payrolls Huge Miss: Only 126,000 Jobs Added, Worst Since December 2013

We warned yesterday that the "whisper expectation is for a NFP print that will be well below consensus, somewhere in the mid-100,000s if not worse now that the bartender hiring spree is over", and we were right: moments ago the BLS reported that in March a paltry 126K jobs were added, nearly 50% below the 245K expected, and the lowest monthly increase since March 2013.The unemployment rate was unchangned at 5.5%.

The change in total nonfarm payroll employment for January was revised from +239,000 to +201,000, and the change for February was revised from +295,000 to +264,000. With these revisions, employment gains in January and February combined were 69,000 less than previously reported. Over the past 3 months, job gains have averaged 197,000 per month.

Most importantly this ends any speculation about a rate hike in mid 2015, or ever for that matter, as virtually all Fed credibility is now lost.

And before you ask, no it wasn't the weather:

More from the report:

Total nonfarm payroll employment increased in March (+126,000). Over the prior 12 months, employment growth had aver ...

U.S. job growth weakest since 2013; unemployment rate steady

WASHINGTON, (Reuters) - U.S. employers added the fewest jobs in more than a year in March amid signs the economy was starting to take strain from a strong dollar and lower oil prices, which could delay an anticipated interest rate increase from the Federal Reserve.

What If An Oil Rebound Never Comes?

Submitted by Nick Cunningham via OilPrice.com,

Oil prices will remain subdued for the next 20 years.

That comes from a new policy brief from Stanford economist Frank Wolak, who says that a series of phenomena - surging U.S. shale production, a weakening OPEC, the shale revolution spreading globally, efficiencies in drilling, and more natural gas substitution for oil - will combine to prevent oil prices from rising above $100 per barrel anytime soon.

Wolak correctly identifies several trends that are already underway, several of which contributed to the 2014-2015 oil bust.

But there are very good reasons as to why the notion that oil prices will not rebound and instead stay in a moderate band of $50 to $60 per barrel over the next 20 years, as Wolak suggests, is a bit optimistic (or pessimistic, depending on your point of view). Wolak does offer some caveats for why his scenario for tepid oil prices may not play out, but they are treated more as outside risks rather than real possibilities.

Let's examine some of his points. First is the argument that shale production has truly upended global supplies. Citing a 5 million barrel-per-day increase from North America - 4 million from U.S. shale and 1 million from Canada's tar sands - Wolak wisely notes the role that shale has played in causing oil prices to crash over the past year. But the shale boom will likely be temporary. Most estimates project that U.S. shale will begin to fizzle after the next five years or so. The IEA in its

Pinning New Jobs to 2012 IPO Legislation Proves a Challenge

Three years after the introduction of legislation designed to spur employment by coaxing more companies into going public, tens of thousands of related jobs have been createdâ€"but it's a challenge to say just how many owe their existence to the bill.

The Algo Rampage Begins

Less than 20 minutes ago we warned the following:

The fun begins at 8:29:30 when Virtu headfakes all the algos into igniting momentum to see where the stops are ahead of NFP

â€" zerohedge (@zerohedge) April 3, 2015

We were off by 40 minutes because just over 5 minutes later, at 7:48 eastern, this happened: a market-wide FX stop hunt slamming every major pair.

Sadly for the algos, ES so far is unresponsive:

Nothing more than machines testing markets to see which has the most 'response' factor for when payrolls hits, and of course, where the stops are for the biggest bang for the momentum ignited buck.

And with all but Johnny 5 left to man the trading desks, is it any wonder this is happening?

Tsipras Heads To Moscow As IMF Withdraws Athens Staff; Greek Default Risk Hits Post-Crisis High

Amid growing pressure from their 'Troika colleagues' with Eurogroup Chair Dijsselbloem noting there is "still a long way to go" on Greek proposals and The IMF withdrawing its staff in Athens; new prime minister Alexis Tsipras heads to Russia to meet with Putin early next week. As Kremlin spokesman, Dmitry Peskov noted - somewhat intriguingly - "Greece has not asked [Russia] for financial aid... yet," as Tsipras is expected to seek agreement for a 'road map' of initiatives on the political and economic levels. Greek default risk has resurged in the last few days to its highest since the last 'restructuring'...

Greek default risk hits post-crisis highs...

With friends like this...

Eurogroup Chairman Jeroen Dijsselbloem said there's a "long way to go" to strike a deal on Greece's aid proposals even after the Athens government responded to demands for more detail on its bid to end the deadlock.

"It's continuously improving," Dijsselbloem told reporters today in the Hague. "They deliver more and more proposals that are more and more detailed. On some parts, we will definitely reach an agreement."

and

Spiegel (attention! might be another "Spiegel" denial soon) says that IMF recalls its st ...

Frontrunning: April 3


Iranians celebrate, Obama hails 'historic' nuclear framework (Reuters)

Iran Nuclear Accord Hailed as Landmark After Marathon Talks (BBG)

Two New York City women accused of planning 'terrorist attack' (Reuters)

Cyprus Lifts Capital Controls Two Years After Deposits Bail-In (BBG)

Jury Hits Chrysler With $150 Million Penalty in Boy's Death (WSJ)

Greece says ready to make IMF payment on April 9 (Reuters)

Germanwings Co-Pilot Set Plane to Go Faster Before Crash (BBG)

IBM hire advisers to deal with restless investors - sources (Reuters)

Distressed Diva Tilton Has More Than Just the SEC to Worry About (

Antitrust and Other Inquiries in Europe Target U.S. Tech Giants

New developments offer the latest sign that American tech giants face intensifying scrutiny in Europe that could curb their profits in the region and affect how they operate around the world.

Greece says ready to make IMF payment on April 9

ATHENS (Reuters) - Greece will pay a loan tranche due on April 9 to the International Monetary Fund on time, its deputy finance minister said on Friday, seeking to quell fears of default after a flurry of contradictory statements on the issue in recent days.

Chaos In Yemen: Chinese Troops Arrive As US-Armed Rebels Set Sights On Central Bank

Iranian-backed Houthi rebels are now in control of the central Crater district in the key Yemeni port city of Aden despite a seventh consecutive day of bombing raids by the Saudi-led coalition which is keen on preventing the city from falling. Aden is the second largest city in the country with a population of some 800,000 and as noted by The Guardian, is "the last major holdout of fighters loyal to the Saudi-backed President Abd Rabbu Mansour Hadi." Residents have reported the presence of tanks, sniper fire, and patrolling Houthi fighters as the militia moves closer to exerting complete control over the city.

Via The Guardian:

Residents of Aden's central Crater district said Houthi fighters and their allies were in control of the neighbourhood by midday on Thursday, deploying tanks and foot patrols through its otherwise empty streets after heavy fighting in the morning.

It was the first time fighting on the ground had reached so deeply into central Aden. Crater is home to the local branch of Yemen's central bank and many commercial businesses.

"People are afraid and terrified by the bombardment," one resident, Farouq Abdu, told Reuters by telephone from Crater. "No one is on the streets - it's like a curfew".

Another resident said Houthi snipers had deployed on the mountain overlooking Crater and were firing on the streets below. Several houses were on fire after being struck by rockets, and messages relayed on loudspeakers urged residents to move out to safer parts of the city, he said.

...

Greece Said To Prepare "Grexit", Drachma, Bank Nationalization Plans

On Thursday morning, we took an in-depth look at what the progression of events is likely to be in the event a cash-strapped, negotiation-weary Greece finally, for lack of will or for lack of options, fails to scrape together enough cash to pay its creditors. As BofAML notes, a missed IMF payment and/or failure to make interest payments to either the ECB or private creditors over the coming weeks would likely lead to default within 30 days, at which point "mark-to-fantasy" becomes mark-to-market and then "mark-to-default" in very short order.

Although Greek officials came out midday with a "categorical" denial of reports that the country was set to run completely out of cash in just 7 days, it now appears Athens may be prepared to chance a missed IMF payment and all that comes with it if it means saving face and preserving Syriza's campaign promises to the beleaguered Greek populace.

More, via The Telegraph:

Greece is drawing up drastic plans to nationalise the country's banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands.

Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund next week.

Exclusive: IBM hire advisers to deal with restless investors - sources

NEW YORK/BOSTON (Reuters) - Some top shareholders of IBM, disappointed by 11 straight quarters of falling revenues, are seeking help from activist investors to shake up the company, but have been turned down by both Bill Ackman's Pershing Square and Jeffrey Ubben's ValueAct, according to people with knowledge of the matter.

Mining Strategies in Doubt After Iron-Ore Meltdown

While the declining price of oil has received all the attention, the collapse of iron-ore prices has outdistanced it; as prices fell to their lowest level in a decade, some miners' strategies have come into question.

ADB plans to co-finance projects with China's lenders: China Daily

SHANGHAI (Reuters) - The Asian Development Bank (ADB) plans to work with China's lenders to co-finance Asian projects outside China, ADB vice-president Stephen Groff was quoted on Friday as saying.

Toyota to end expansion freeze, invest $1.3 billion in two new Mexico, China plants: sources

TOKYO (Reuters) - Japan's Toyota Motor Corp will spend about 150 billion yen ($1.3 billion) to build two new car plants in Mexico and China, two people familiar with plans said, ending a three-year freeze imposed after unchecked growth lumbered the world's biggest auto maker with too many idle production lines.

Some big name fund managers lose money in March as rally stalls

BOSTON (Reuters) - Some of the world's most prominent hedge fund managers suffered losses last month as the U.S. stock market's rally stalled, but most are still boasting gains for the quarter.

Jury Makes Chrysler Pay $150 Million to Family of Boy Killed in Jeep Grand Cherokee

Jurors found that Chrysler acted with reckless disregard for human life in selling the 1999 Jeep with a rear-mounted gas tank. At least 75 people have died in post-crash fires.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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