| Archive Copy: 8 November 2009 |
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COMMENTS by William Kidder bill@KidderReports skype: wkidder 646.257.2130
Will Nikkei continue to trade below the Dow? Expected to open up +21 Monday at 9,810 Monday schedule is dull -- Wednesday is Veterans Day holiday Auction: $40 billion 3Y's, up $3 billion from $37 billion at the last refunding SMRA says existing flattener trades may be painful this week due to record supply The 10Y closed at 3.50% on Friday. I think it will be lower in yield this Friday KR technical system remains in a sell signal, but oversold conditions have been erased Laidi: Oil key support stands at 75.50 (200-week and 38% retracement of 65-81.92 rally) Market expectations for CPI inflation is 2.17%, highest levels since late last year NEWS FT: Brown rapidly backpedalled from his proposal for a financial transactions tax Oil companies shut output in Gulf due to hurricane Ida - could push oil prices higher The House narrowly passed a health-care bill with 1 GOP vote: 39 Democrats voted no FDIC shutters five more banks - YTD total is 120 G-20 finance officials: Too early to end stimulus Stimulus, not transactions tax needed: Geithner
Aljazera AP Barchart BBC Bloomberg FT FinViz Google Guardian LAT LSE MarketWatch MercoSur
Nikkei NY Post NYT Reuters Seeking Alpha Stratfor SMRA PopUp Thompson WSJ
BOND MARKET Across the Curve Briefing Bonds Bloomberg Tsys SMRA Wrightson
Across: Beckner: Reverse Repo and the Federal Reserve SMRA: The week ahead will be dominated by activity surrounding the Refunding auctions. The data calendar is especially light and the week will be broken up by the Veteran's Day holiday on Wednesday. Curve flattening trades are likely to remain painful in the face of the Treasury supply, but we expect Treasury rates may remain within the months-long ranges through the end of the year nonetheless.
ANALYSIS BCA Big Pic Beat The Press CalcRisk CW Econoday EconPic MFGR MS
CalcRisk: TARP Loses $299 million Investment in United Commercial Bank BCA: Fed Policy: No Exit In Sight - A hesitant economic recovery, tame inflation and severe credit headwinds suggest that monetary policy will need to stay very easy for at least another year.
COMMENTARY Aleph Baseline Hutchinson Mauldin Naked Noland Pritchard Roseman
Naked: Einhorn: First, Let’s Kill All the Credit Default Swaps Nolan: The Bernanke Fed has now locked itself into a policy course that will ignore global reflation dynamics and instead fixate on specific U.S. economic indicators. Mauldin: For the last few months I have been addressing the choices in front of us, economically speaking. Today I am going to summarize them, and maybe we can look for some signposts that will tell us which path we're headed down.
COLUMNISTS Asia Times Bloomberg Crane Econ View David Goldman RealClear
David Goldman: The big issue in the US economy is the massacre of small business. That’s why the household survey shows that 558,000 Americans “became unemployed” during October, while the establishment survey of payrolls shows a decline of only 190,000 jobs. Asia Times: Evidence lacking -Contrary to academic economist Nouriel Roubini's claims of a thriving US dollar carry trade, there is NO evidence that the world is borrowing money to buy equities. American assets have gotten cheaper. - David Goldman Real: This Is Obama's Economic Crisis Now - And it carries political consequences. During Tuesday’s gubernatorial races in New Jersey and Virginia, nearly 9 in 10 voters said that they were worried about the direction of the nation’s economy in the next year. And the majority of those who held that view voted for the Republican candidates. This could portend a flashback to 1994.
GRUMPY GUYS Bail Cluster GW G's Mess Jesse Kedrosky Michaelson Ticker Martenson Ninja Zero
Bail: Leave it to the only avowed Socialist in the U.S. Senate to fight battles against Bailout Socialism. Bernie introduced a remarkably simple 2-page bill aptly named the "Too Big To Fail, Too Big To Exist Act." GW: Citigroup is ALREADY Being Broken Up ... But Not Enough Michaelson: In 1360, a Barcelona banker was executed in front of his failed bank, presumably as a way of discouraging future bankers from excessive risk-taking.
CURRENCIES Ashraf Laidi Laidi Twitter Bloomberg Brown Bros Spot FX
Spot Closes, Friday 15:00 Euro: 1.4834 vs 1.4869; range is 1.4913 to 1.4812 Dollar-Yen: 89.923 vs 90.754; range is 90.852 to 89.602 Euro-Yen: 133.40 vs 134.94; range is 135.13 to 133.20 Canadian dollar: 1.0777 vs 1.0644; the range is 1.0757 to 1.0607 Aussie dollar is 91.51 vs 91.03; the range is 91.97 to 90.90 Laidi: Expect Asian stocks to move lower on Monday, regardless of any rebound occurs in late Friday US. The 10.2% unemployment is too stark for the likes of the sluggish Nikkei-225. More Losses seen for CAD Daily FX Weekly Forecasts: US Dollar Remains in Downtrend After Fed Reiterates Dovish Stance Euro May Regain Fundamental Control with its Own With GDP Numbers Japanese Yen Awaits the Signal for Risk Appetite to Finally Reverse
STOCK MARKET Briefing Carl Futia Pragmatic Capitalist Nikkei Street Smart S&P Chart Yahoo
DJIA closed at 10,023.42 +17.46 +0.17% S&P closed at 1,069.30 +2.67 +0.25% Euro is 1.4845; low is 1.4812 and high is 1.4913
COMMODITIES Barchart List Bloomberg Energy Report Kitco Oil Z Gold Z Soy F Copper Z CRB Gas Z
See Clusterstock's article about buying gold from Harrods department store Fears as price of long-dated oil soars - The furthest forward oil contract traded on exchanges – the December 2017 futures – has risen $99.97 a barrel for the Brent benchmark -FT Oil key support stands at 75.50 (200-week and 38% retracement of 65-81.92 rally)-Laidi Dec Oil 77.37, (2.25) at 15:05 Friday Dec Gold 1094.60, 5.30 Dec Nat Gas 4.607, (0.175) Spot CRB 455.75, (6.75)
CURRENT EVENTS
Common Dreams Drudge Beast Political Wire Buchanan Meme Truth Instapundit Raw Story Hines Sight 538 AmBlog Swamp P-Animal TruthDig Huff Time Atlantic Wire Harper's Atlantic A&L Slate Salon CounterPunch The Nation New Republic Last week's elections went badly for the Democrats. Victory in New York was the exception – unless Democrats expect their opponents to field two warring candidates in every seat. The Republican party is leaderless and incompetent, but not insane – and not, by the way, as divided as the Democrats. For the Republicans the New York loss was salutary, and the lesson inescapable: unite or lose, writes Clive Crook in FT Voters are already recognizing the writing on the wall and are falling away from Obama and the Democrats. Independents who gave Obama his comfortable victory have now swung against him, recently electing Republican governors in New Jersey and Virginia to succeed Democrats. This is a protest vote, not a confidence vote in Republicans. - CounterPunch (Paul Craig Roberts)
FOREIGN POLICY Afghan Anti-War Asia Times Cole Debka FP Brief Global Research Market Oracle Walt Wired
Anti-War: Obama Leaning Toward 34,000 Afghan 'Surge' Debka: Iran set to launch 200-kg spy satelite into orbit - Its success would mean that Iran has attained solid fuel-powered rockets with a range of 2,450-2,450 kilometers, which covers not only all of Israel but reaches as far as the Polish capital of Warsaw. Global: Official US Air Force Document Reveals the True Intentions Behind the US-Colombia Military Agreement - An official document from the Department of the US Air Force reveals that the military base in Palanquero, Colombia will provide the Pentagon with “…an opportunity for conducting full spectrum operations throughout South America…” || Both governments have publicly stated that the military agreement refers only to counternarcotics and counterterrorism operations within Colombian territory.
FOOD, FARM & SCIENCE - - - AlterNet - - - Contrary Farmer - - - MIT - - - Next - - - Pollan Video - - - Pollan NPR
NRP: Food writer Michael Pollan thinks food industry reform goes hand in hand with health care reform. Host Guy Raz talks to Pollan about how to improve America's eating habits and wean the country away from the cheap, unhealthy food produced by big agribusiness.
HISTORY - - - Fourth Turning - - - Neil Howe - - - History - - - New Geo - - - News from 1930
Archaeologists claim to have found the oldest known artefact in the Americas, a scraper-like tool in an Oregon cave that dates back 14,230 years. - History
SOUTH AMERICA - - - Merco - - - Ambito - - - AP - - - FT - - - Bloom - - - NYT - - - Economist - - - Strat
KR Commentary on Bond Technicals
Friday, Nov 3: The KR technical system remains in a sell signal, oversold conditions have been erased and this is the fourth consecutive weekly close below the 40-d average. The market saw a nice upside pop after the NFP number, but stalled and was then rejected by the the USZ 119.01-07, 9&18-d resistance zone. Supply, Supply, Supply! Support should continue to be solid in the USZ 117.25-00 area. It has been tested and held thus far. Both important support and resistance were tested Friday and both areas held. The curve remains steeper vs the 30Y though.
2Y/10Y YIELD CURVE: flatter by -0.4bp to 264.8 - - - Bloomberg Tsys
10Y is -2.7bp to 3.500% 2Y yld -3.2bp to 0.849% Tips is -2.3bp to 1.33% CPI INFLATION EXPECTATION is cooler by -0.4bp to 2.17% - Jun/Nov range is 1.55% on July to 2.17% on Nov 5 - Gauge was 0.135% on Dec 31; past decade average is 2.70% - All-time low is 0.010% on Nov 20 || The 2008 high was 2.613% on July 3
2Y YIELD SPREAD: Germany over US - - - Bloomberg Tsys Yields - - - Spread Dec10 - - - Euribor Dec10 - - - EDZ0
German Sept 2Y is 1.27% at 9:10 Friday US Oct 2Y yield is 0.85% The German 2Y and US 2Y yield spread is +42 vs +42; recent range is +46 to +34 ECB vs FRB: expectations for December 2010 Yesterday, the spread between Dec10 euribor and Dec10 eurodollars was 48.0bp, over the 18-day average is 33.1. The Aug/Nov range is 4.0bp to 48.0bp on Nov 5. A widening spread indicates a high degree of confidence that the Fed will leave the Fed funds rate unchanged. A wider interest-rate differential also favors a stronger euro relative to the US dollar.
Baltic Dry Index is +40 to 3,335 - - - Bloomberg - - - Google
BDI is one of leading indicators of international trade and economy and the authentic index weighting the international shipping situation. It reflects the global demand in primary commodities such as minerals, foods, coal, cements and etc. The index has surged upward for five consecutive days to a 3-month high on Nov 5. The Sept/Nov range is 3,335 on Nov 5, up sharply from its multi-month low of 2,163 on Sept 25. The 2009 peak is 4,291 in June and its 2008 high was 11,793. The 20 year average is near 2,300.
Projected Nikkei Close In Tokyo- - - Nikkei - - - NKZ9 - - - DJZ9 - - - NKZ vs DJZ
The Nikkei is expected to open up +21 Monday in Tokyo. The NKZ/DJZ spread closed at -158 and is very cheap relative to the Dow at -374 below the 21-day average of +235. The YTD spread range is -158 Nov 6 to +1,663. Nikkei continues to trade below the DJIA
Jack: Post your update in this same slot (don't change time, etc)
Eurobondonline - - - Fixed Income - - - Euro Curve - - - Eurex - - - Euribor - - - EquityIndex - - - SFE- - - Ratios EquityIndex we are long ESZ9, NQZ9, DJZ9 We have stop reversals, opposite Barchart's trendspotter.We are short Nov Vix CBT we are long ZBZ9, ZNZ9, ZFZ9, ZTZ9 We have stop reversals, opposite Barchart's trendspotter . we are short TBT and PST Fixed Income ETF's CBTSpreads We have steepners and flatners on. ZBZ9 - ZTZ9 trades 3.05 ;We are long 2 ZBZ9/short 7 ZTZ9 from 3.025 bp's ; ZFZ9 - ZTZ9 trades .925 bp's . We are long 5 ZFZ9/short 6 ZTZ9 from .93 based on daily moving average cross. CBT/Euro$ ZNZ9 - GEM12 trades .45 We are short 2 ZNZ9 / long 7 GEM12 at .39, based on daily moving average cross. Eurex we are short Bund , long Bobl , Schatz .We have stop reversals , opposite the moving averages. Eurex Curve We have steepners Dec9 Bund/Schatz trades 1.67. We are short 2 Dec9 Bund / long 9 Schatz at 1.53bp's ;Bobl/Schatz trades .86; We are short 5 BOBL/long 12 Shaz at .79 bp's Eurex/Euribor Bund/IM12 trades .33 We are short 3 Dec9 Bund/long IM12 at .32, based on daily moving average cross. CBTBond - GEZ9 trades 4.28 bp's, We are long 1 ZBZ9/short 5 GEZ9 from 4.24bp's ZNZ9 - GEZ9 trades 3.48 We are long 2 ZNZ9/short 7 GEZ9 at 3.53bp's Bund - Dec9 Euribor trades 2.77 bp's We look to buy 1 Bund/sell 3 IZ9 at 2.80bp's.We exited long 1 Bund / short 3 IZ9 from 2.83 bp's at 2.62bp's, based on daily moving average cross, and will reset near 2.84. Gilt - Dec9 Short Sterling trades 3.71 bp'sWe are long 1 Gilt/short 5 LZ9 at 3.71bp's. We exited long 1 Gilt / short 5 LZ9 from 3.60 bp's at 3.40bp's. In retrospect, I should have added to this position at 3.77bp's, the first day of the moving average cross. EURO$ We are long GEZ10 GEZ9 - GEZ0 trades 1.14 . We are short GEZ9/long GEZ10 at 1.26 Euribor We are long IZ10 IZ9 - IZ0 trades 1.21 . We are short IZ9/long IZ10 at 1.22 Short Sterling We are long LZ10. LZ9 - LZ0 trades 1.67. We are short LZ9/long LZ10 at 1.71 LM0/LM1 - IM0/IM1 We sell 10 LM0 / buy 10 LM1 at 1.97 and buy 6 IM10/sell 6 IM11 at 1.23 = .74, SFE we are long SFE 10yr, 3yr & IRU0 . We have stop reversals , opposite the moving averages.
CALENDAR Econoday SMRA Wrightson Any Date
13:00 $40 billion in 3-year notes, up from $37 billion at the last refunding Tuesday, 11/10 07:30 NFIB index 07:45 Weekly chain store surveys 10:00 IBD/TIPP 13:00 $25 billion in 10-year notes which is $2 billion more than in August 17:00 ABC Consumer Comfort Index Wednesday, Veterans' Day Holiday 07:00 MBA mortgage applications Thursday 08:30 Initial jobless claims are expected to fall to 505,000 from 512,000 08:30 Continuing claims 13:00 $16 billion in 30-year bonds, up from $15 billion in August. 14:00 US budget Friday 11/13 08:30 Trade deficit probably widened by $1 billion in September to $32 billion 08:30 Import prices are expected to rise 0.5% in October, led by higher fuel prices 10:00 UMich consumer sentiment probably rose slightly to 72 in November from 70.6
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ANALYSIS MFGR Wright Baum Naked SMRA Zero StSmart Fall St Cluster PruBear FinViz SMRA Popup POLITICAL Raw Hines Global Truth 538 Buch Strat Swamp AmBlog Politico P-Wire CQ Animal BONDS Briefing USZ TYZ 5-min 10-min 10Y 2Y/30Y TU/US Bund/TY STOCKS Briefing DJIA NKZ9 NK/DJZ S&P Nikkei Yahoo DJ Mini USD/FX SpotFX USD Euro Yen Aussie Loonie BL Cur Laidi Twitter BL Cur FXCM BBH Barchart OIL GOLD Oil CLZ Gold Z Soy F CopperZ Contango CRB Metals BL Commodities NGZ Energy
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