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08Apr2016 Pre-Market Commentary: Future Indexes Higher, WTI Crude Trending Higher, US Dollar Volatile But Stable, Markets To Melt Up In Relatively Quiet Session

Written by Gary

US stock future indexes are climbing higher in the premarket as is WTI crude. WTI was at $36.70 earlier and has since moved higher to the high $38's and may take the markets higher as well. Morning news is quiet with the 'normal' dovish rumblings from Ms. Yellen and group. Markets are expected to open higher in what may be a quiet Friday Session.

Here is the current market situation from CNN Money

European markets are sharply higher today with shares in Germany leading the region. The DAX is up 1.49% while France's CAC 40 is up 1.12% and London's FTSE 100 is up 1.01%.

What Is Moving the Markets

Here are the headlines moving the markets.

Santander seen set for another U.S. stress test failure

MADRID (Reuters) - Santander is expected to earn the dubious distinction of being the only bank to fail the Federal Reserve's annual health check for three years running, despite efforts to improve controls at its U.S. unit, banking sources and analysts say.

Yellen, alongside Fed alum, says rate hikes on track

NEW YORK (Reuters) - The U.S. economy is on a solid course with some hints of inflation so the Federal Reserve is on track for further interest rate hikes, Federal Reserve Chair Janet Yellen said on Thursday in a defense of her decision to tighten policy late last year.

Europe's banks under scrutiny as regulators look into Panama Papers

BERN/GENEVA (Reuters) - Banking watchdogs across Europe have begun checking whether lenders have ties to a massive document leak from Panama that showed how offshore companies are used to stash clients' wealth.

Surging oil, Yellen's comments drive futures higher

(Reuters) - U.S. stock index futures rose on Friday, boosted by a surge in oil prices and Federal Reserve Chair Janet Yellen's positive comments on the economy.

Stock ETFs add sixth week to streak of inflows: Lipper

NEW YORK (Reuters) - Exchange-traded fund investors showed continued confidence in U.S. markets, delivering stock ETFs based in the country $3.5 billion and their sixth straight week of net new cash during the latest week, Lipper data showed on Thursday.

Stocks up as investors look to end bruising week on a high

LONDON (Reuters) - Stocks and bond yields rebounded on Friday but were still firmly on track to end lower over the course of a bruising and volatile week marked by the Japanese yen's surge against the dollar.

U.S. says China internet censorship a burden for businesses

BEIJING (Reuters) - The United States has labeled China's internet censorship a trade barrier in a report for the first time since 2013, saying worsening online restrictions are damaging the business of U.S. companies.

Mercedes diesel owners file new lawsuit in United States

FRANKFURT (Reuters) - Owners of Mercedes diesel cars filed a new class-action lawsuit in the United States saying the vehicles likely contained a "defeat device" used to cheat emissions testing, an accusation that Daimler , which owns the carmaker, denied.

China citizens protest ChemChina-Syngenta deal amid GMO worries

BEIJING (Reuters) - Around 400 Chinese citizens have signed a letter to protest the purchase of Swiss-based seeds and pesticides company Syngenta by state-owned ChemChina, saying the deal would eventually lead to genetically modified crops being sown across swathes of the country.

Why Bank Of America Remains A "Seller Of Risk"

It is not only BofA's "smart money" clients who have been selling the rally non-stop (and at an accelerating pace) for the past 10 weeks: so has the bank's chief investment strategist, Michael Hartnett, whose reluctance to embrace the mania has been duly documented on these pages.Below we lay out the reasons why he "remains a seller of risk."

From his latest summary note:

Positioning...Sell Signal: our Global Flows Trading Rule triggered œsell almost 4 weeks ago; note BofAML Bull & Bear Index now at 4.1 = 9-month high = most bullish sentiment since Jun'15;

Watch Cash level in next Tuesday's April BofAML Fund Manager Survey (Feb = 5.6% œunambiguous buy signal , March = 5.1%, April < 4.8% (3yr avg) would be risk-negative).

Positioning ¦US$ Bull Unwind: Fed-induced pullback in US$ continues to cause unwind of 2015 inflows into "strong-dollar markets ¦Japan equity redemptions have lagged European equity redemptions (Charts 5 & 6).

Policy ¦Quantitative Failure:

a. Fed policy makers as fickle "as a feather in a storm but key US domestic demand indicator, small business confidence trending decisively lower (Chart 4)

Here Is What Janet Yellen Answered When Asked If The U.S. Is In An "Economic Bubble"

Three weeks ago, when the Fed and Janet Yellen shocked markets with their extremely dovish statement in which they admitted the US Federal Reserve no longer is US data dependent, and instead is far more focused on global developments and especially China's dollar-pegged currency (which makes it impossible for the Fed to be hawkish without causing further FX instability and leading to more Chinese capital flight), CNBC's Steve Liesman asked Yellen point blank a question which would seem otherwise completely taboo: does the Fed have a credibility problem.

This was her response:

Well, let me start -- let me start with the question of the Fed's credibility. And you used the word "promises" in connection with that. And as I tried to emphasize in my opening statement, the paths that the participants project for the federal funds rate and how it will evolve are not a pre-set plan or commitment or promise of the committee. Indeed, they are not even -- the median should not be interpreted as a committee-endorsed forecast. And there's a lot of uncertainty around each participant's projection. And they will evolve. Those assessments of appropriate policy are completely contingent on each participant's forecasts of the economy and how economic events will unfold. And they are, of course, uncertain. And you should fully expect that forecasts for the appropriate path of policy on the part of all participants will evolve over time as shocks, positive or negative, hit the economy that alter those forecasts. So, you have seen a shift this time in most participants' assessments of the appropriate path for policy. And as I tried to indicate, I think that largely reflects a somewhat slower projected path for global growth -- fo ...

Frontrunning: April 8

Stocks up as investors look to end bruising week on a high (Reuters)

Treasuries Set for Two-Week Gain; Greenspan Warns of Global Risk (BBG)

Yellen, alongside Fed alum, says rate hikes on track (Reuters)

Oil Prices Lifted by Fed Comments on U.S. Economy (WSJ)

China says G20 summit should be about economics, not politics (Reuters)

Cameron Accused of Hypocrisy for Stake in Father's Offshore Fund (BBG)

US government to challenge MetLife 'too big to fail' decision (FT)

Kerry visits Iraq, showing support for embattled PM (Reuters)

The Unraveling of a Wall Street Scion (WSJ)

How Saudi Arabia's war in Yemen has made al Qaeda stronger " and richer (Reuters)

Pope calls for compassionate Church open to 'imperfect' Catholics (Reuters)

The Art of Calling Brazil's Currency Rally From 6,700 Miles Away (

Fed To Hold Closed, Unexpected Meeting Under "Expedited Procedures" On Monday To Discuss Rates

With everyone's focus sharply attuned on anything to do with the Fed's rate hike policy, many will probably wonder why yesterday the Fed announced that this coming Monday, April 11, the Fed will hold a closed meeting "under expedited procedures" during which the Board of Governors will review and determine advance and discount rates charged by the Fed banks.

As a reminder, the last time the Fed held such a meeting was on November 21, less than a month before it launched its first rate hike in years.

Sumitomo Corp.: Where Commodity Pain Has Yet to Be Acknowledged

Despite some write-downs, major Japanese trading house Sumitomo sounds too hopeful about its exposure to commodities.

M&A Drought Leaves These Banks High and Dry

If merger activity keeps slowing, boutique advisory firms will suffer the biggest fallout.

How Fickle Markets Are Challenging ECB's Mario Draghi

A central bank's work is never done, it seems. The ECB faces challenges from market moves.

March 2016 CBO Monthly Budget Review: Total Receipts Up by 4 Percent in the First Half of Fiscal Year

from the Congressional Budget Office

The federal budget deficit was $457 billion for the first six months of fiscal year 2016, the Congressional Budget Office estimates - $18 billion more than the shortfall recorded in the same span last year. Receipts and outlays for the period were both 4 percent higher than the amounts recorded last year.

Fed's Balance Sheet 06 April 2016 Little Changed

Total Fed Balance Sheet:

Fed's Balance Sheet week ending balance sheet was $4,444 trillion. Over the last 8 weeks, changes have been relatively minor.

Market Extra: Yen strength is hot topic " but how does it stack up to recent history?

The sharp rise in the yen against the dollar so far this year has puzzled strategists and traders who once thought the dollar would resume its rally this year as the Federal Reserve prepared to raise interest rates.

The Wall Street Journal: Viacom CEO no longer in charge of Sumner Redstone health care decisions

Viacom Inc. Chief Executive Philippe Dauman has been alerted that he has been replaced as Sumner Redstone's healthcare agent by Mr. Redstone's daughter, Shari, according to people familiar with the matter.

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