13Mar2015 Pre-Market Commentary: Markets Expected To Open Lower, U.S. Dollar Near 1.00 As WTI Falls Further

Here is the European Market Open from CNN Money

European markets are lower today with shares in London off the most. The FTSE 100 is down 0.30% while Germany’s DAX is off 0.30% and France’s CAC 40 is lower by 0.29%.

February 2015 Overall Producer Prices Are Now in Deflation Year-over-Year

Written by Steven Hansen

The Producer Price Index inflation continued its growth deceleration – and overall the PPI is in deflation year-over-year. In all events, the intermediate processing continues to show a very large deflation in the supply chain.

Tesla reassigns global sales chief: Bloomberg

DETROIT (Reuters) – Electric carmaker Tesla Motors has reassigned its global sales chief and is looking to hire executives to run sales operations in Asia, North America and Europe, Bloomberg reported on Friday.

U.S. producer prices fall on weak trade margins

WASHINGTON (Reuters) – U.S. producer prices unexpectedly fell in February on weak trade margins, pointing to muted inflation pressures that could argue against an

Nerves set in as ECB unbottles policy genie

FRANKFURT (Reuters) – For the first time in years, the European Central Bank is embarking on a policy course with a following wind. But already some officials are fretting that the gale they are unleashing may turn into a hurricane.

Apple pies and iPads sweeten China’s dreaded TV expose

SHANGHAI (Reuters) – From cut-price apple pies to free iPads, companies in China are transforming Sunday’s dreaded consumer rights day into a shopping frenzy, to blunt the impact of being named and shamed in state broadcaster CCTV’s annual expose.

EU’s Juncker pushes for deal with Greece

BRUSSELS (Reuters) – EU chief executive Jean-Claude Juncker and Greek Prime Minister Alexis Tsipras called on Friday for European governments to show solidarity with Greece and resolve a credit crunch that risks dumping it out of the euro zone.

WTI Plunges To $45 Handle – Lowest Since January

While none of the catalysts are new (IEA warning temporary stabilization amid rising oil glut and increased US production), it appears the February bounce is done as our discussions of storage limitations gains traction among the ETF-driven knife-catchers. April WTI Crude futures have collapsed in the last few days from over $52 to a $45 handle now – the lowest since January and only marginally above cycle lows… As oil cratered so EURUSD slipped and S&P futures fell.

Crude Carnage…

And EURUSD algos hit another trigger point

As Reuters notes,

Oil prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency said on Friday.

“On the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however,” the Paris-based IEA said in its monthly report.

Airbus helicopters to sign South Korean deal March 16: sources

PARIS (Reuters) – Airbus Helicopters is slated to sign on Monday a contract worth around $3 billion for the development and production of military and civil helicopters in South Korea, sources close to the matter said on Friday.

Oil slips under $57 as IEA sees bigger glut

LONDON (Reuters) – Oil fell below $57 a barrel on Friday after the International Energy Agency said a global oil glut was building and U.S. oil production showed no signs of slowing yet.

Stock futures flat after volatile week, oil drops again

NEW YORK (Reuters) – U.S. stock index futures were little changed on Friday as investors held off on making bets following a volatile week that was marked by sharp swings in both directions.

Frontrunning: March 13

Again as first reported here: Record U.S. Oil Glut May Fill Storage, Cut Prices (BBG)

IEA sees renewed pressure on oil prices as glut worsens (Reuters)

No EU unanimity on renewing Russia economic sanctions (Reuters)

Nikkei 225 Closes Above 19,000 for First Time Since April 2000 (BBG)

Tsipras says Greece doing its part in euro zone deal (Reuters)

ECB Set to Buy Fewer Bonds as Price Gains Ease Crunch (BBG)

These Americans Are Getting Rich Trading Derivatives Banned in the U.S. (BBG)

U.S. 2015 profits forecast to grow 1.7 percent; oil, dollar are concerns (Reuters) – in a month this will say “decline”

Russian Central Bank Cuts Rate to Help Economy

Russia’s central bank cut its key interest rate on Friday by one percentage point to 14 percent in an attempt to support the economy, which is sliding into a brutal recession.

UniCredit in constant talks with U.S. authorities over Iran probe: CEO

CERNOBBIO, Italy (Reuters) – UniCredit is in constant discussions with U.S. authorities investigating the Italian bank for possible violation of sanctions on Iran, its chief said after news Commerzbank had agreed to a settlement in a related probe.

Russia Cuts Interest Rate From 15% To 14%, Ruble Rises

Following the dramatic December surge in Russian interest rates when the Bank of Russia scrambled to preserve confidence in the then-plummeting currency and sent the interest rate to a whopping 17%, now that the oil price crash has stabilized it has been walking down this dramatic move, and after reducing rates by 2% on January 30 to 15%, moments ago the Bank of Russia once again cut rates this time by the expected 100 bps to 14%. The bank also said that more rate cuts are in the pipeline.

According to the WSJ, “Friday’s move is another sign of confidence from Russian authorities that the worst of the economic turmoil caused by Western sanctions and the plunge in the oil price could soon be over. But economists said it represents a risky bet that Russia’s still-fragile financial system could soon be on the mend.”

The ruble firmed to 61.3 versus the dollar after the rate cut from levels of around 61.5 a dollar before the announcement.

As well as its key rate, the central bank cut its deposit rate to 13%, while the repo rate went down to 15% on the back of long-awaited slowdown in inflation.

All of the above means it is time to update the list of 24 central bank easings/rate cuts less than three months in 2015:

1. Jan. 1 UZBEKISTAN

Uzbekistan’s central bank cuts its refinancing rate to 9 percent from 10 percent.

2. Jan. 7/Feb. 4 ROMANIA

Romania’s central bank cuts its key interest rate by a total of 50 basis points, taking it to a new record low of 2.25 percent. Most analysts polled by Reuters had expected the latest cut.

3. Jan. 15 SWITZERLAND

The Swiss National Bank stuns markets by scrapping the franc’s three-year-old exchange rate cap to the euro, leading to an unpre …

U.S. 2015 profits forecast to grow 1.7 percent; oil, dollar are concerns

NEW YORK (Reuters) – Corporate America’s profit engine may be running out of steam. Wall Street analysts, expecting two quarters of declining earnings, are banking on a second-half recovery to keep 2015 from becoming the worst year for profits since the last recession.

Exclusive: Microsoft’s digital assistant to head to Android, Apple devices

SEATTLE (Reuters) – Microsoft is working on an advanced version of its competitor to Apple’s Siri, using research from an artificial intelligence project called “Einstein.”

Nomura, RBS face U.S. mortgage trial; $1 billion damages at stake

NEW YORK (Reuters) – A U.S. housing regulator is set to take two of the world’s biggest banks to trial on Monday to try and recoup more than $1 billion in damages over mortgage bonds sold to government-run mortgage finance companies ahead of the 2008 economic crisis.

Euro Resumes Slide After Goldman Cuts Forecast, Expects Parity In 6 Months; Futures Flat

Closing out another whirlwind week, which has seen the biggest S&P 500 intraday plunge and surge in months, futures are taking a breath (if not so much the Nikkei which closed over 19,000 for the first time since 2000 – one wonders how many direct equity interventions it took the BOJ to achieve that artificial “price discovery”). In lieu of any notable macro news, the most significant update hit less than an hour ago when Goldman piled on the EUR pressure, when it released a note in which it further revised down its EURUSD forecast.

Here is the key section from Goldman’s Robin Brooks:

In the month following the ECB’s QE announcement on January 22, EUR/$ went sideways as markets looked for a new catalyst. At the time, in an FX Views entitled “The End of the Beginning”, we argued that the downward trend in EUR/$ is powerful for several reasons. In particular, we flagged building portfolio outflows by Euro area residents as a driver of EUR/$ lower and since then have written repeatedly (see here, for example) on the normalization in US monetary policy aeuro ” the fading role of forward guidance aeuro ” as another catalyst. We see the latest downdraft in EUR/$ as a reflection of both forces and update our forecast to 1.02, 1.00 and 0.95 in 3, 6 and 12 months (from 1.12, 1.10 and 1.08 previously), as well as 0.85 and 0.80 at end-2016 and end-2017 (from 1.00 and 0.90), respectively. We therefore expect more downside in the near term, with the expected removal of “patient” at next week’s FOMC a key catalyst. In the longer term, we continue to believe that EUR/$ will significantly undershoot our GSDEER measure of fair value (around 1.20), reflecting diverging growth and monetary po …

With Plan to Join China-Led Bank, Britain Opens Door for Others

Britain’s joining the Asian Infrastructure Investment Bank over American objections will encourage allies like South Korea and Australia to follow suit, analysts say.

UBS Chief Executive’s Pay Rose Nearly 5% in 2014

Sergio P. Ermotti’s total compensation was about $11.1 million despite the bank’s performance being “tempered” by legal and regulatory charges in 2014.

Europe holds onto gains from ‘game-changing’ week

LONDON (Reuters) – European equities were set for a sixth straight week of gains on Friday, fuelled by a dramatic slide in the euro on the back of the European Central Bank’s bond-buying plan that has kept euro zone yields near record lows.

Bizzaro World Becomes Normality: Germany Issues Five Year Negative Bond

………..Nathan McDonald for Sprott Money

The luxury of paying your government to hold your money, once thought as absurd, hilarious and downright preposterous is now a reality.

For the first time ever, Germany sold five year debt at a negative interest rate. You heard that correct, German citizens and investing institutions that wish to buy government debt in Germany, will be paying the government to hold THEIR money!

Not only does this exist, but it was a success! Last week, Germany successfully sold a3bn worth of five year bonds at a negative interest rate of 0.8 percent.

The reason for the success, is the greater than expected QE announcement by the ECB, who announced last month that they would be entering into a a60bn per month repurchasing program. Essentially telling investors that no matter the price, we’ll buy your bonds.

You can chalk this movement up as one more folly of government intervention. Another artificial market has been created, a market that will add little to no value to investors, other than speculators who are simply hoping the government will re-buy the bonds at a higher price.

Yet, investors have it all wrong. Those with the fortitude and the ability to see further than a month to month basis (an affliction that appears to af …

Vague Email Rules Let Federal Agencies Decide When to Hit Save or Delete

The controversy over Hillary Rodham Clinton’s email use while secretary of state has opened a window into how unclear guidelines have been for top government officials.

Its red shirts fading, Venezuela’s oil giant embraces pragmatism

CARACAS/HOUSTON (Reuters) – A subtle change in office attire may be the most telling symbol of a quiet revolution taking place inside Venezuela’s troubled economic engine, giant oil firm PDVSA.

Why Yahoo Has Become Even More Undervalued As A Takeover Bet

Any company, including Alibaba, that might buy Yahoo today would be getting its core business for “free.”

Giant Japanese oven gives Boeing room to ramp up 787 output

NAGOYA, Japan (Reuters) – Kawasaki Heavy Industries Ltd opened a plant on Friday with an oversized kiln to bake and harden carbon fiber aircraft fuselage sections, giving it capacity to surpass Boeing Co’s production targets for the 787 Dreamliner.

Parasite Turns On Parasite: HFT Sues Other HFTs For “Egregious Manipulation” Of Treasury Securities

There was a time when those who dared to call out the massive Libor manipulation conspiracy (such as what Zero Hedge did with one of its first posts in 2009) for being a massive Libor manipulation conspiracy some 4 years before the “theory” became a fact, were branded as scaremongering, fringe voices, best to be ignored. Then, of course, once the “theory” became “fact” it suddenly was perfectly obvious to everyone in retrospect.

But the bigger question, and what stumped the so-called experts, is how could something so vast, with so many moving pieces, remain a secret for as long as it did.

The answer is extremely simple: everyone who was in on the “secret” was also benefiting from it: from the lowliest Libor rigger to the CEO of Barclays and every other major bank, they all knew what was going on, but also knew that if the information became public knowledge, the jig would be up, and everyone’s benefits would evaporate with some even going to jail (at least in a hypothetical legal system in which bankers actually go to jail). In other words, it was merely a case where everyone’s interest was aligned to maintain the conspiracy cartel as long as possible.

Which brings us to High-Frequency Trading: another vast “conspiracy”, this time involving market rigging and manipulation, which Zero Hedge also called out as early as April 2009, only to be mocked before it became a generally accepted fact that the “algos” manipulate and frontrun virtually any security that is traded on an exchange or over the counter. This culminated with Michael Lewis’ book “Flash Boys”, only unlike th …