Wednesday, April 13, 2016

Today's Headlines

Posted by Gary .....at 2:14 PM
Bloomberg:   
  • Europe Faces Risk of a New Refugee Wave From Libya, Tusk Says. European Union President Donald Tusk warned about a possible overwhelming influx of refugees from warn-torn Libya, saying that Italy and Malta may need EU support to cope. “The numbers of would-be migrants in Libya are alarming,” Tusk told the European Parliament on Wednesday in Strasbourg, France. “This means that we must be prepared to help and show solidarity to Malta and Italy should they request it.” As Europe gets a grip on the biggest refugee wave since World War II through an agreement last month with Turkey to stem flows to Greece, Tusk is seeking to guard against the risk of complacency in EU national capitals. A fledgling Libyan unity government is struggling to halt a collapse that has uprooted nearly half a million people and enabled Islamic State to establish a presence along the Mediterranean Sea.
  • Bears Still Fear China Despite Better Economic Data. (video)
  • The Beginning of the End of Central Bank Easing. The doves don't work. (video) Traders are now taking the long view on central bank easing, shifting focus to which monetary policymakers will be the first to change course and withdraw stimulus, according to Bank of America Merrill Lynch FX Strategist Athanasios Vamvakidis. The euro-area, Japan, Norway, New Zealand, and Sweden are the five major developed economies in which central banks have eased policy this year—and by some financial metrics, they don't have much to show for it. In all of these instances, currencies have strengthened relative to the U.S. dollar in the wake of more accommodative monetary policy (denoted by a circle on the chart below.) 
  • Biggest Surge in Banks Since 2011 Sends Europe Shares Up 4th Day. (video) Europe’s equities climbed the most in a month, with banks posting their biggest surge since October 2011, on optimism that China’s economy is stabilizing. Commodity producers led gains after data showed that China’s exports jumped the most in a year and declines in imports narrowed. The U.K. market, rich in miners, advanced, with the FTSE 100 Index turning positive for 2016. The region’s lenders, which suffered the most in the first quarter, surged 6.3 percent as a group. The Stoxx Europe 600 Index climbed 2.5 percent, with more than 500 of its members rallying. The gauge is extending a rebound after posting four consecutive weeks of losses, the longest run since 2014.
  • OPEC Warns of Deeper Cuts to Oil Demand Forecast on Slowdown. (video) OPEC said it may deepen cuts to its forecast for global oil demand growth due to slowing economic expansion in emerging markets, warmer weather and the removal of fuel subsidies. The Organization of Petroleum Exporting Countries trimmed estimates for demand growth in 2016 by 50,000 barrels a day because of a slowdown in Latin America, projecting worldwide growth of 1.2 million barrels a day. Weakness in Brazil’s economy, the removal of fuel subsidies in the Middle East and milder winter temperatures in the northern hemisphere could prompt further cutbacks, the group said.
  • No Cheer for World's Steelmakers as China Exports Surge 30%. Steel exports from China rebounded in March to the highest level this year, underscoring the competitive threat facing global producers still reeling from last year’s record surge in shipments and slump in prices. Shipments expanded to 9.98 million metric tons, up 30 percent on-year and higher than the 8.11 million tons in February, according to data from the customs administration on Wednesday. The March figure takes exports for the quarter to 27.83 million tons, about 8 percent more than a year earlier.
  • China Steelmaker Misses 3rd Bond Payment as Defaults Spread. Dongbei Special Steel Group Co. defaulted on bonds a third time since its chairman was found dead by hanging last month, adding to mounting debt nonpayments in China. The maker of alloy steels used in machinery and car parts failed to fully pay 45.04 million yuan ($6.97 million) of interest due April 12 on its 5.63 percent notes that mature in 2018, it said in a statement on Chinamoney’s website. The firm, based in the northeastern city of Dalian, cited tight cash flow and said it is raising money through various means. 
Fox News:
  • ISIS magazine takes credit for Obama shift in hostage negotiations. (video) ISIS claimed victory Wednesday for the Obama administration’s summer shift in allowing hostage negotiations with terrorists, posting an article in the radical Islamist group’s online magazine declaring, “it’s clear that violence is the only message they will respond to.” The article, in the new issue of the Islamic State’s “Dabiq” magazine released Wednesday, is attributed to ISIS hostage and British photojournalist John Cantlie. Titled “The Blood of Shame,” it’s illustrated with a picture of President Obama and side-by-side covers of two newspapers: The Daily Telegraph, showing an ISIS executioner slitting a hostage’s throat, and The New York Daily News, showing Obama smiling in a golf cart.
CNBC:
  • Why Feb oil bottom may not be 2016 low: Kilduff. (video) The low of the year for U.S. crude prices may not be in yet, oil expert John Kilduff said Wednesday. On CNBC's "Squawk Box," he said Sunday's meeting in Qatar of OPEC and non-OPEC producers on a possible output freeze was "one big joke" because of all the conflicting commentary from the various oil ministers. "This is going to be the mother of all 'buy the rumor sell the news' events here on Sunday. I think there's no way they come across with any kind of a deal or sufficient rhetoric to satisfy this rally right now," Kilduff said. "I think there will be a pullback starting next week." 
  • Why Donald Trump is destined to lose. Trump may lead with primary voters, but he is disliked by the rest of his base, and he trails miserably with general election voters. Bloomberg Politics and my own firm Purple Strategies just released a poll of married women — a group Romney won by seven points — showing Trump down 12 points against Clinton, while Cruz is tied. Even a third of Republican primary-voting married women feel Trump is "offensive and insulting" or "setting a new low" — startling numbers from within one's base.
Zero Hedge:
The Telegraph:
  • Russia jets make 'simulated attack' on US warship in 'aggressive' Baltic incident. Russian military aircraft have conducted a series of "aggressive" overflights of a US destroyer in international waters in the Baltic Sea, a US defense official said Wednesday. Speaking on condition of anonymity, the official described several incidents this week, including one on Tuesday in which a Russian Su-24 jet flew just 30 feet (nine meters) above the USS Donald Cook in a "simulated attack profile." "This is more aggressive than anything we've seen in some time," the official said.
  • World faces 'lost year' as policymakers sleepwalk towards fresh crisis, warns IMF. In its bluntest warning to date on the costs of policy inaction, the IMF said “financial and economic stagnation" could take hold unless governments prevented a "pernicious feedback loop of fragile confidence, weaker growth, low inflation and rising debt burdens" from forming. José Viñals, the head of the IMF's financial stability division, said a prolonged slowdown could knock around 4pc off global output relative to current expectations over the next five years amid repeated bouts of market turmoil.

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