07Mar2016 Pre-Market Commentary: US Futures Down Fractionally Just Below Resistance, WTI Crude Showing Weakness, Gold Remains Strong And 2044 Remains Elusive For The Spooz

Here is the current market situation from CNN Money

European markets are lower today with shares in London off the most. The FTSE 100 is down 0.97% while Germany’s DAX is off 0.93% and France’s CAC 40 is lower by 0.88%.

Oil rout over, OPEC aims for $50 anchor, says PIRA’s Ross

(Reuters) – Major OPEC producers are privately starting to talk about a new oil price equilibrium of $50 a barrel, adding to signs that the market’s long, deep rout is officially over, says one of the industry’s leading prognosticators.

Wall St. vets battle BP in fallout over Canada refinery

NEW YORK (Reuters) – A legal battle between a team of former Wall Street oil traders and behemoth producer BP plc over a remote Canadian refinery sheds rare light on the murky world of crude trading.

Oil rallies to three-month high; analysts warn of glut

LONDON (Reuters) – Brent crude hit a three-month high on Monday, extending gains that have lifted crude benchmarks by more than a third from this year’s lows on an improving global outlook and stronger sentiment for a market recovery.

SoftBank to separate Japan business from overseas operations

(Reuters) – Japanese telecoms conglomerate SoftBank Group Corp said it would separate its domestic business from overseas operations to better manage its mobile and broadband investments across the world.

UK business chief quits, accuses PM Cameron of EU exit ‘hyperbole’

LONDON (Reuters) – The head of a prominent British business lobbying group has quit his post after speaking in favor of Britain’s exit from the European Union and has accused Prime Minister David Cameron of trying to scare voters into supporting continued EU membership.

Alibaba’s Ant Financial could be valued at nearly $50 billion: WSJ

(Reuters) – Chinese e-commerce giant Alibaba Group Holding Ltd’s finance arm, Ant Financial Services Group, could be valued at nearly $50 billion in its current round of funding, the Wall Street Journal reported.

China angered by planned U.S. export restrictions on ZTE

BEIJING (Reuters) – China’s Foreign Ministry expressed anger on Monday at the U.S. Commerce Department’s plans to place export restrictions on Chinese telecoms equipment-maker ZTE Corp for allegedly violating U.S. export controls on Iran.

Europe shares fall after Asia hits two-month high, oil jumps

LONDON (Reuters) – European shares fell on Monday, unable to maintain the momentum that took Asian equities to two-month highs, as investors said a rebound in stocks seemed tired and looked ahead to a European Central Bank meeting expected to deliver more stimulus.

BASF shares fall after report it is weighing DuPont bid

FRANKFURT (Reuters) – Shares in BASF fell after a media report that the world’s top chemicals group by sales was evaluating a counter bid for DuPont , which late last year agreed to merge with Dow Chemical .

“It’s Our Damned Duty”: Merkel, Turkey Make Last Ditch Effort To Save EU At Key Summit

On Monday, officials from the EU and Turkey are gathered in Brussels to do some talking about the refugee crisis that threatens to tear Europe apart at the seams. And make no mistake, œtalk is probably all they’ll do.

Last year, Europe and Turkey agreed on a so-called œjoint action plan which essentially amounted to Turkish President Recep Tayyip Erdogan extorting ‚¬3 billion from Brussels in exchange for a promise to curb people smuggling and stem the flow of migrants into Western Europe. As The Guardian notes, œseveral months on, the pact remains little more than a piece of paper.

Although the check has been cut, it’s not entirely clear where the money went (surprise) and now that the effective closure of the Balkan route has created a severe bottleneck of refugees in Greece, Athens is very near to losing its mind.

As of Sunday, as many as 14,000 men, women, and children were stranded on Macedonia’s border which has been sealed and which migrant men have at various times tried to breach with homemade battering rams.

Now, Macedonia wants to extend the 19-mile, Orban-style razor wire fence to a 200-mile barrier complete with guards armed with tasers, a plan unveiled in Brussels over the weekend detailed.

Needless to say, Alexis Tsipras is at wit’s end.

First Brussels forced Athens to accept a third sovereign bailout that carried draconian terms and all but guaranteed the country will rem …

Frontrunning: March 7

Trump or Cruz? Republicans face tough choices as primary race churns forward (Reuters)

The Week the Republican Party Melted Down (BBG)

Rust Belt Could Be Donald Trump’s Best Route to White House (WSJ)

China’s Leaders Put the Economy on Bubble Watch (WSJ)

Top Chinese Official Rebutts Soros Prediction for Hard Landing (BBG)

China Plans Income-Tax Overhaul to Bolster Consumption (BBG)

Oil jumps as sentiment boosted; analysts warn of glut (Reuters)

The Odd Couple: Merkel, Tsipras Fate Tied Over EU Refugees Deal (BBG)

As covered here last week: The Treasury Market’s Big Short Is in 10-Year Notes, Repos Show (BBG)

China angered by planned U.S. export restrictions on ZTE (Reuters)

Europe Faces Pension Predicament (

Futures Lower On Lack Of China Stimulus; Oil Squeeze Continues; Gold Spikes Ahead Of ECB

In the aftermath of last week’s disappointing G-20 Shanghai summit, there was much riding on this weekend’s start of the China’s People’s Congress, and specifically what if any stimulus announcement Beijing will make; sadly for stimulus addicts China disappointed and after the unimaginative scope of growth proposals none of which it will come remotely close to hitting, it is hardly surprising that European stocks and US equity futures have taken a leg lower, even if Chinese stocks rose and certain commodities such as Iron Ore soared overnight on hopes China will either “rationalize” capacity or at least build some more roads to nowhere. Others, such copper were less lucky.

While few will admit, what is happening is that China has effectively confirmed the current reform cycle has been a failure and is going back to square one: as Nicola Marinelli, a fund manager at Pentalpha Capital In London told Bloomberg, œChina is serving more of the same solution, more stimulus, but it just makes things worse later and it’s becoming apparent that it cannot sustain the official growth rate.

Elsewhere, European banks are starting to slide now that attention turns to Thursday’s ECB meeting when Mario Draghi is expected to further cut the European deposit rate by 10 to 20 bps, in the process further impairing bank profits. On this Marinelli said, œthe ECB might also disappoint, GDP growth remains sub-par and we don’t know what to do about it, while a higher oil price means higher inflation soon and hence less headroom for central banks.

Aside from equities, the oil ramp has shown some further strength overnight as “weak hand” shorts continue to be squeezed, while gold’ …

Chinese Reserves Drop To Fresh Four Year Low After February’s $29BN Decline

After three consecutive declines in China’s Foreign Reserves in the November-January period, which averaged nearly $100 billion per month (with particular attention paid to last month’s number), consensus expectations were for a moderation in reserve outflows in February to approximately $40 billion in February; moments ago the PBOC reported, that as expected, reserve outflow “slowed down” to just $28.6 billion, bringing China’s total foreign reserves to $3.2 trillion, the lowest level since late 2011.

According to Goldman, accounting for currency valuation effects could amount to around +US$10bn, and therefore sales of FX reserves might have been about US$39bn in January (vs. estimated $89bn in January). In any case, with the February drop, Chinese total reserves are back to levels not seen in over 4 years.

One factor for the slowdown in Chinese capital outflows may be the relative stability of the Chinese currency, which after suffering a substantial devaluation at the end of 2015 and early 2016, has since stabilized to levels during the start of year fixing. As Nathan Chow, a Hong Kong-based economist at DBS Group Holdings Ltd., told Bloomberg “financial markets were more stable last month compared with January and the sentiment toward the …

ECB Rates Have Markets on Edge

The ECB is expected to push a key interest rate further into negative territory on Thursday, a move that is at once widely anticipated by markets and viewed with trepidation.

Global Stocks Lose Ground After Three-Week Rally

Global equity markets retreated as investors took stock after a three-week rally.

Alibaba’s Ant Financial Valued at More Than $50 Billion

Investors are hanging a valuation of more than $50 billion on Alibaba’s deal-hungry financial-services affiliate Ant Financial, the latest sign of appetite for the sector.

Banking Deserts, Branch Closings, And Soft Information

from Liberty Street Economics

— this post authored by Donald Morgan, Maxim Pinkovsky, and Bryan Yang

U.S. banks have shuttered nearly 5,000 branches since the financial crisis, raising concerns that more low-income and minority neighborhoods may be devolving into “banking deserts” with inadequate, or no, mainstream financial services. We investigate this issue and also ask whether such neighborhoods are particularly exposed to branch closings – a development that, according to recent research, could reduce credit access, even with other branches present, by destroying “soft” information about borrowers that influences lenders’ credit decisions. Our findings are mixed, suggesting that further study of these concerns is warranted.

Jeff Reeves’s Strength in Numbers: Oil stocks’ latest big rally is no gusher

investors should continue to avoid energy picks in their portfolio, writes Jeff Reeves.

Amazon to open second brick-and-mortar bookstore in San Diego

Amazon is opening a second physical bookstore in a San Diego mall this summer, according to reports.