Daily Reading – Friday, March 18, 2011

*** Zero Hedge: Historical Precedent To Predict The Success Rate Of The G7 Yen Devaluation “Accord” ***
*** Zero Hedge: Fed Confirms First FX Market Intervention In 11 Years As Effects Start To Fizzle ***
*** FT Beyond BRICs: EM fund flows: backing off ***
*** FT Alphaville: Who’s been buying Japan like crazy? ***
*** FT Alphaville: Yen volatility is too much for one bank ***
*** FT Alphaville: Those European stress test details ***
*** FT Alphaville: The usual Portuguese bond gyrations ***
*** The Economist: Miracle, or delayed gratification? ***
*** Bloomberg: Sushi Restaurants Drop Japanese Fish From Menus as Radiation Concerns Grow ***

Libya Declares Immediate Ceasefire

Talking about strange twist of events… Markets not buying the story.

China Raises Bank Reserve Requirement for Third Time in 2011

China raised bank reserve requirement from 19.5% to 20% for large banks. I’m beginning to take kind of bearish stance on China because this sort of measures does not bode well for fixed-asset investment fueled economic growth.

Japan earthquake/tsunami/nuclear disaster nagative effect on Chinese manufacturing is also, in my opinion, widely underestimated.

U.N. Approves “No-Fly Zone” Over Libya

The United Nations Security Council approved a resolution authorizing international military intervention (any measures short of a ground invasion) in Libya.

March Philadelphia FED General Business Conditions Index At 43.4

Philadelphia FED General Business Conditions Index rose to 43.4. Consensus was at 32.0, prior reading was at 35.9.

This is a positive outlier, it is highly unlikely that index can remain at these levels. Manufacturing surveys overestimate implied industrial growth in recent months.

Video Of The Day – Bloomberg TV – Pimco’s El-Erian Interview on Japan Earthquake

Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., discusses the potenial impact of last week’s 9-magnitude earthquake and tsunami in Japan on the U.S. and global economies. El-Erian speaks from Newport Beach, California, with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

U.S. Industrial Production Fell 0.1% In February

U.S. industrial production fell 0.1% in February. The consensus was at 0.6%, January revised (up 0.4%) reading was at 0.3%. On year level industrial production is up 5.5%.

Daily Reading – Thursday, March 17, 2011

*** FT Alphaville: The situation in Tokyo, a view from the ground ***
*** FT Alphaville: China: pass the salt ***
*** FT Alphaville: On top of everything, Mizuho bank is having ATM problems ***
*** The Reformed Broker: Here’s Something You Didn’t Know – Pimco Shares Trading on SecondMarket ***
*** Zero Hedge: Tokyo Passengers Set Off O’Hare Radiation Detectors ***
*** Early Warning: Saudi oil production increased in February ***

U.S. Consumer Price Index Rose 0.5% In February

U.S. consumer price index rose 0.5% in February vs. 0.4% consensus and January reading of 0.4%. On year level CPI inflation is running at 2.2%.

U.S. Initial Jobless Claims At 385.000; Down 16.000

Initial jobless claims in the U.S. were reported at 385.000 vs. 388.000 consensus and last week revised (up 4.000) reading of 401.000.

Four weeks moving ticked lower.

U.S. Petroleum Weekly – March 17, 2011

Libya is out of the markets, but judging from the recent events the rebels are on the brink of defeat and since world needs oil purchases of Libyan crude could resume in following months.

Focus in the last few days has shifted to Bahrain, there also the ruling regime is succeeding to restore order using extremely violent measures.

The biggest question is the demand impact of Japanese earthquake, tsunami and nuclear disaster. I believe that short term demand shock is widely underestimated, but for the time being and despite the fundamental facts mentioned above I believe crude oil is bound to rise on all of this uncertainty.

Japan Update – Things Getting Worse?

Japanese official reports are quite scarce, so this is my inferring based on what is not said rather than on what is said.

Video Of The Day – CNBC – Can Japan’s Economy Recover?

Stephen Roach, Morgan Stanley Asia non-executive chairman, discusses whether the world’s third-largest economy can survive its recent natural disasters. Will it encounter another recession?

Number Of U.S. Housing Starts Fell 22.5% In February; Number Of Building Permits Issued Fell 8.2%

U.S. housing starts in February fell 22.5% to 479.000 vs. revised (24.000 higher) 520.000 January reading. The consensus was at 566.000. On year level U.S. housing starts are down 20.8%.

Morning Reading – Wednesday, March 16, 2011

*** FT Alphaville: Goldman sees no earthquake impact on Japan’s GDP ***
*** FT Alphaville: CDS markets predictably worried ***
*** FT Alphaville: Meanwhile, in Bahrain… ***
*** FT Alphaville: Moody’s downgrades Portugal to A3 from A1 ***
*** FT Alphaville: Portugal: finally about the banks ***
*** Calculated Risk: Lawler: Early Read on February Existing Home Sales ***
*** Zero Hedge: DigitalGlobe’s Satellite Imagery Analysis Of Fukushima ***
*** Zero Hedge: Magnified Picture Of Reactors 3 And 4 Post Explosion ***

 

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