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09Apr2015 Pre-Market Commentary: Markets Set To Open Flat, Oil Trending Lower And US Dollar Trending Higher

Written by Gary

U.S. Equities futures were flat ahead of the opening bell but the rising US dollar is pushing futures lower.

The number of Americans filing new claims for jobless benefits rose less than expected last week and the four-week moving average hit its lowest level since 2000, suggesting an abrupt slowdown in job growth in March could be temporary. The premarkets reaction was muted on this announcement, however oil is trending down again and could have a devastating effect on the markets is it trends below 50.


Here is the current market situation from CNN Money

European markets are higher today with shares in France leading the region. The CAC 40 is up 0.92% while London's FTSE 100 is up 0.70% and Germany's DAX is up 0.43%.

What Is Moving the Markets

Here are the headlines moving the markets.

04 April 2015 Initial Unemployment Claims Rolling Averages Again Improve

Blue Line 4 Week Average

The market was expecting the weekly initial unemployment claims at 275,000 to 325,000 (consensus 285,000) vs the 281,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 285,250 (reported last week as 285,500) to 282,2500. The rolling averages have been equal to or under 300,000 for most of the last 6 months.

Read more ...

U.S. jobless claims up; four-week average lowest since 2000

WASHINGTON, (Reuters) - The number of Americans filing new claims for jobless benefits rose less than expected last week and the four-week moving average hit its lowest level since 2000, suggesting an abrupt slowdown in job growth in March could be temporary.

Euro zone sets Greece reform deadline ahead of IMF repayment

BRUSSELS/ATHENS (Reuters) - Euro zone partners set Greece a deadline of six working days to improve proposed economic reforms in time for finance ministers to consider some emergency funding to keep the country afloat after it makes a repayment to the IMF on Thursday.

Iran Dictates "Deal" Conditions To Obama, Demands All Sanctions Lifted On "Same Day"

If there was any confusion whether Iran thought it had gotten the best of John Kerry and the Obama administration as a result of the non-deal April 2 "framework" announcement for some future possible deal, it can be swept away following a Reuters report that Iran will only sign a final nuclear accord with six world powers if all sanctions imposed over its disputed atomic work are lifted on the same day, President Hassan Rouhani said in a televised speech on Thursday.

In other words, Iran is now dictating conditions to Obama, something it would not consider doing if it thought it did not had the leverage, or if it actually cared about how said negotiations ultimately conclude.

From Reuters:

"We will not sign any deal unless all sanctions are lifted on the same day ... We want a win-win deal for all parties involved in the nuclear talks," Rouhani said.

Since the preliminary agreement was reached, Iran and the United States seem to have different interpretations over some issues, including the pace and extent of sanctions removal.

"Our goal in the talks (with major powers) is to preserve our nation's nuclear rights. We want an outcome that will be in everyone's benefit," Rouhani said in a ceremony to mark Iran's National Day of Nuclear Technology.

And just in case his speech may have been lost in translation, here again, for the benefit of John Kerry, is Iran's presidential assessment of the winners and losers in the Lausanne negotiations.

"The Iranian nation has been and will be the victor in the negotia ...

Walgreens profit beats Street, drug chain to close 200 U.S. stores

(Reuters) - Walgreens Boots Alliance Inc reported a better-than-expected quarterly profit and said it would close about 200 stores in the United States under a cost-cutting program that would help it save $1.5 billion by the end of fiscal 2017.

Oil rallies more than 2 percent after slump but sentiment weak

LONDON (Reuters) - Oil prices rallied more than 2 percent on Thursday, clawing back part of a 6 percent slump triggered by a jump in U.S. crude inventories and record Saudi output, although analysts said sentiment remained bearish.

Airplanes Avoid French Skies, Hundreds Of Planes Grounded Due To French Air Traffic Strike

The US had snow in the winter to "explain" why for the second year in a row Q1 GDP tumbled from 3% to around 0%; Europe, whose GDP unlike its market (the Stoxx 600 just hit a record high) will also miss lofty expectations for an economic recovery thanks to ECB money printing, may have a French air traffic controllers strike to blame the Q2 GDP miss for.

Yesterday, the SNCTA union - France's largest - called the two-day strike in a dispute over working conditions. As BBC reports, later on Wednesday, the DGAC civil aviation authority asked airlines to halve scheduled flights on Thursday.

The immediate result: hundreds of flights and thousands of passengers have been grounded.

From BBC:

Short-haul flights have been the worst affected but France's largest airline, Air France, said long-haul flights were still operating.

The airline added that 60% of medium-haul flights from and to Paris' main airport, Charles de Gaulle, would still operate, but that it would ground two out of three flights at Paris' second-largest airport, Orly.

"Disruption is expected over the whole country," the DGAC said in a statement. Travellers have been advised to contact their airline.

What is the reason for the strike: France's civil aviation agency said part of the dispute involves plans to raise the retirement age for controllers from 57 to 59 years.

Further strikes are planned for 16 to 18 April and 29 April to 2 May, coinciding with spring school holidays in France.

Low-cost airline Ryanair says it has had to cancel more than 2 ...

Peak Central Planning: BofA Says Fed's Dudley "Does Not Want Stocks To Decline; Wants Bond Prices To Go Down"

Yesterday we got the latest confirmation of what the Fed will never openly admit and which everyone knows. Or rather, the Fed would never openly admit previously, namely that all it cares about are stock prices, or as we first dubbed it here a year ago, the Fed is "Dow Data Dependent." The admission came courtesy of Bill Dudley who during an interview yesterday said:

DUDLEY: FED RATE PATH WILL BE SHAPED PARTLY BY MKT REACTION

In other words, the Fed's actions will be shaped by the market, which in turn is shaped by the Fed. Or, as anyone who has used Excel will observe (apparently not the former Goldmanite head of the New York Fed), a circular reference (and one which #Ref!s out whenever there is selling and exchanges have to be closed).

That in itself was bad enough, but things got substantially more laughable when the big banks were forced to defend his words in the context of the Fed's dual mandate, because - well - simply there is no defense that doesn't point out the obvious: the Fed could care less about jobs or inflation and all it does care about is the Dow Jones.

Enter Bank of America, with what may be the peak farce not of the so-called recovery, and the following sentence in particular.

While Dudley clearly does not want stocks to decline a lot, he also wants to avoid meaningful increases... Also very apparent is that Dudley wants bond prices to go down â€" not a lot but clearly down.

And there it is, central planning courtesy of the US central bank, writ large. The USSR is spinning, and laughing, in its grace not only because it knows how such "planning" ends, but because it is truly ironic tha ...

US Dollar Surge Returns, Pushes Equity Futures Lower

As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a "different story") a development that was met with yet another ultimatum by its "partner", the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.

As a result, the Hang Seng (+2.7%) jumped to its highest level since 2007, gaining as much as 6.4%, with volume turnover on the Index ~400% above the 30-day average. Gains were led by Chinese regulators allowing mainland Chinese funds to buy shares in HK and as analysts see HK stocks as undervalued relative to their Chinese peers, due to the out performance of the Shanghai Comp. vs. HSI. Despite opening above 4,000 for the first time since 2008, the Shanghai Comp (-0.9%) moved lower given the flows away from Chinese equities into Hong Kong stocks. Nikkei 225 (+0.75%) extended on its 15-year highs and is now in close proximity to the key 20,000 level, further underpinned by JPY weakness. JGBs rose with the curve notably flatter after today's 30yr auction which despite a lower than prev. b/c, s ...

IMF Payment Sends Greek Yields Lower; Athens Warns "Next Month Is A Different Matter"

A central bank official, according to The FT, said that Greece has repaid the €450m it owed the International Monetary Fund today. Bond yields have fallen across the Greek curve with 10Y GGBs now at 11.1% (down 70bps from Tuesday's highs). Greek stocks are not as impressed and are giving back their gains. Tsipras, on return from Moscow, explained Greece "was not a beggar...asking other countries to solve its problem," but as a senior Greek official earlier this week said that while it would be able to make Thursday's IMF repayment, it will still exhaust its cash reserves very soon and "next month is a different matter." HSBC points out that the real crisis point looms on the 12th May.

As The FT reports,

Greece repaid €450m it owed the International Monetary Fund on Thursday, sending bond yields sliding as investors' showed relief it had met its deadline.

A central bank official said that the payment to the IMF had been made.

The payment only brings minimal relief to Greece, as the country remains cash-strapped and faces more looming debt repayment deadlines.

Bonds are rallying but stocks are rapidly giving back their gains...

Fed officials say June rate hike still in play, hinges on data

NEW YORK (Reuters) - The Federal Reserve could still hike interest rates in June despite weak recent U.S. data and investor skepticism, two influential officials with the central bank said on Wednesday, putting the spotlight squarely on the economy's performance in the next two months.

Dollar bulls back off amid concern Fed will delay hike

BOSTON (Reuters) - Some of the biggest dollar bulls in the global bond fund sector have reversed course in recent weeks, cutting exposure to the greenback amid concern the U.S. Federal Reserve will delay a widely-anticipated interest rate hike.

German Stocks Pump'n'Dump After "Surprise" Industrial Production Plunge

For an hour or so, terrible news was great news as the DAX dipped and ripped after February Industrial Production fell 0.3% (against expectations of a 0.6% rise) and even worserer, January's 'everything is awesome' +0.9% rise was revised massively lower to 0.0%... February was the biggest drop in German Industrial production since August (but of course now that Q€ is here, we are sure everything will be great going forward).

German Industrial Production missed and dropped YoY unexpectedly in February...

Which was greeted by a small dip and nice rip in the DAX before sanity crept in and DAX drifted back into the red...

Charts: Bloomberg

Stocks gain momentum, Europe at seven-year high

LONDON (Reuters) - World stocks marched higher again on Thursday, drawing support from European auto sales and German trade data, while expectations that the first U.S. interest rate increase will come in the latter part of the year continue to grow.

China's first-quarter economic growth seen at six-year low of 7 percent

BEIJING (Reuters) - China's economy probably cooled further to grow 7 percent in the first three months of the year, a Reuters poll showed, which would be the weakest pace in six years and raise pressure on policymakers to do more to bolster growth.

Euro zone gives Greece six-day deadline to revise reforms: paper

ATHENS (Reuters) - Euro zone deputy finance ministers gave Athens a six working day deadline to come up with revised reform proposals to enable a deal to be reached at a Eurogroup meeting on April 24 to unlock bailout aid, Greek newspaper Kathimerini reported on Thursday.

Shell challenges Exxon dominance with $70 billion bid for BG

LONDON (Reuters) - Royal Dutch Shell agreed to buy smaller rival BG Group for 47 billion pounds ($70 billion) in the first major energy industry merger in more than a decade, closing the gap on market leader U.S. Exxon Mobil after a plunge in prices.

Greece will make $485 million loan payment to IMF on Thursday: government source

ATHENS (Reuters) - Greece confirmed it will pay a 450 million euro ($485 million) loan installment to the International Monetary Fund on Thursday, a government official told Reuters.

Samsung expects record Galaxy shipments, S6 edge shortage

SEOUL (Reuters) - Samsung Electronics Co Ltd expects record shipments for its new Galaxy S6 smartphones and said it will struggle to meet demand for the curved-edged version due to production constraints, adding to hopes for a turnaround in mobile sales.

State does not plan to keep extra Renault shares: Macron

PARIS (Reuters) - The French state has no intention of holding on to extra shares it is purchasing in car-maker Renault as part of an effort to maintain double voting rights acquired under a new law, Economy Minister Emmanuel Macron said on Thursday.

Bernanke Gets It Wrong On Germany's Trade Surplus

Former Federal Reserve Chairman Ben Bernanke has taken to blogging and has already caused quite a splash tackling some of the crucial economic questions facing the world today.

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