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29Feb2016 Pre-Market Commentary: Crude Prices Melting Up After Saudis Signaled To Limit Market Volatility, Asia And Europe Markets In The Red

Written by Gary

U.S. stock future indexes turn positive an hour before opening bell and the markets are expected to open fractionally higher. China's central bank resumed its easing cycle on Monday, injecting an estimated $100 billion worth of long-term cash into the economy while OPEC kingpin Saudi Arabia said it would work with other producers to limit oil market volatility.


Here is the current market situation from CNN Money

European markets are mixed. The CAC 40 is higher by 0.01%, while Germany's DAX is off 0.58%. Shares in London are unchanged with the FTSE 100 at 6,095.60.

What Is Moving the Markets

Here are the headlines moving the markets.

EU clears Dell's purchase of EMC Corp

BRUSSELS (Reuters) - The European Commission said on Monday it had cleared Dell Inc's planned $67 billion acquisition of data storage company EMC Corp .

Icahn offers to buy rest of Federal-Mogul to boost auto business

(Reuters) - Billionaire Carl Icahn's investment company offered to buy the 18 percent of auto parts maker Federal-Mogul Holdings Corp that it did not own for about $213 million, as it focuses on growing its auto business.

China central bank resumes easing cycle to cushion reform pain

BEIJING/SHANGHAI (Reuters) - China's central bank resumed its easing cycle on Monday, injecting an estimated $100 billion worth of long-term cash into the economy to cushion the pain from job layoffs and bankruptcies in industries plagued by overcapacity.

Oil edges higher as Saudis advocate cooperation to stabilize market

LONDON (Reuters) - Brent crude futures edged higher on Monday, adding to strong gains last week, on rising hopes that the market has bottomed out and as OPEC kingpin Saudi Arabia said it would work with other producers to limit oil market volatility.

Global shares fall on G20 disappointment, Fed hike prospect

LONDON (Reuters) - Global shares retreated on Monday after a weekend meeting of G20 finance chiefs ended with no new plan to spur global growth and as investors fretted the U.S. Federal Reserve could raise interest rates before year-end.

Amazon to attack UK grocery market with Morrisons deal

LONDON (Reuters) - Amazon has launched its biggest foray into food outside of the United States with a deal in Britain to offer fresh and frozen goods to customers, in some places as quickly as under one hour, in a deal with supermarket Morrisons.

China expects to lay off 1.8 million workers in coal, steel sectors

BEIJING (Reuters) - China said on Monday it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 percent of the workforce, as part of efforts to reduce industrial overcapacity, but no timeframe was given.

Chevron mulling sale of Asian geothermal assets: Bloomberg

(Reuters) - Chevron Corp , the No. 2 U.S. oil producer, is considering a sale of its geothermal assets in Asia, Bloomberg reported citing people familiar with the matter.

Small Caps At Crucial Resistance - Beware Shenanigans

Amid a recent exuberant short-squeeze-driven bounce, the 'real' valuation of the Russell 2000 remains at insanely high levels...

and gravely decoupled from credit markets...

But as Dana Lyons' explains the market likes to do whatever will fool the most people. So while this level should at least be an interesting one in producing a battle between the Russell 2000 bulls and the bears, it would also be an ideal spot for the market to unleash its shenanigans.

The Russell 2000 Small-Cap Index is nearing a level containing multiple layers of potential resistance.

Earlier this week, we posted a discussion regarding the prospects for the current stock market rally ("Is The Stock Rally Glass Half Full Or Half Empty?"). Our view was that, despite a growing (or growling) consensus that a resumption of the selloff, or an outright crash, was imminent, several factors lined up in favor of a conti ...

"The Liquidity Just Dries Up In A Stressed Market" - How HFT Killed FX Trading

Two years ago, when looking at the first available public data out of HFT frontrunning powerhouse Virtu, we observed the surge in net income from FX at the expense of all other traditional product categories, and reported what we thought was "The One Financial Product Now Targeted By The HFT Swarm" - currencies and FX in particular.

We made the following forecast:

"for those trading FX, our condolences: because the typical bizarro, idiot moves that previously were reserved for stocks are now sure to take over the final bastion of capital markets. In other words, the next time you feel like the USDJPY is trading as if it is in need of a software update, you will be right."

We were also right, and two years later not only have thousands of FX traders lost their jobs (in no small part due to massive criminal collusion which has sent hundreds of riggers packing) to algos, but Bloomberg reports that in true HFT fashion which provides copious liquidity when it is not needed, and pulls all bids and offers the moment there is a violent move in the underlying, leading to an instant evaporation of all liquidity in what is now known as an "HFT stop" moment, "the specter of shrinking liquidity gripping fixed-income desks globally is creeping its way into the world's biggest, most liquid financial market." FX.

Bloomberg adds th ...

Frontrunning: February 29



Shares fall on G20 disappointment, Fed hike worries (Reuters)

China cuts reserve requirement ratio for fifth time since Feb. 2015 (Reuters)

China Stocks Tumble Toward 15-Month Low as Stimulus Bets Unwind (BBG)

S&P 500 Futures Signal 2nd Day of Stock Losses; Valeant Slides (BBG)

Valeant fundamental risks are too severe to suggest the stock is poised for a lasting rebound (WSJ)

Iran reformists cheer election gains, hardliners play down shift (Reuters)

'Spotlight' Wins Oscar for Best Picture in Hollywood's Biggest Night (WSJ)

His Job Is to Sell a $1,000 Pill for $10 Without Losing Money (BBG)

Former Malaysian Prime Minister Resigns From Ruling Party (WSJ)

Foxconn, Sharp Said to Weigh Revising Terms of Approved Deal (BBG)

It's Getting Harder for Currency Traders to Make Money, Market Veteran Says (

Global Stocks Lower on China Currency Concerns

Global stock markets were lower Monday after Chinese officials guided the yuan to its weakest level in three weeks.

China Cuts Reserve Requirement to Boost Liquidity

China's central bank said it will lower the amount of deposits banks hold in reserve by 0.5 percentage point, as a burgeoning liquidity shortage outweighs concerns over the impact of credit-easing on the yuan.

Citi to Sell 20% Stake in China Guangfa Bank for $3 Billion

Citigroup reached a deal to sell its $3 billion stake in China Guangfa Bank to China Life Insurance.

Economic Preview: U.S. jobs report for February comes at pivotal time

There's only one way to erase any doubt about whether the U.S. economy has gotten stuck in another rut: Show a rebounding in hiring in February.

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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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