GDP Now Q2 Forecast

April 29th, 2016 11:16 am

Via the Atlanta Fed:

Latest forecast: 1.8 percent — April 29, 2016

The first GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 1.8 percent on April 29. The final model nowcast for first-quarter real GDP growth was 0.6 percent, 0.1 percentage points above the advance estimate of 0.5 percent released on Thursday by the U.S. Bureau of Economic Analysis.

The next GDPNow update is Monday, May 2. Please see the “Release Dates” tab below for a full list of upcoming releases.

More Weak Data

April 29th, 2016 10:27 am

Via Millan Mulraine at TFDecurities:

TD SECURITIES DATAFLASH                   

US: Chicago PMI and Michigan Confidence Disappoint

·         The Chicago PMI fell well short of expectations, with the headline index falling to 50.4 from 53.6. This was a far weaker than expected performance, and the drop in the key forward-looking indicators suggests further downside ahead.

·         The weak tone of this report points to a relapse in the US manufacturing sector recovery.

·         Consumer confidence also soured, with the Michigan confidence index declining for the fourth consecutive month, falling to 89.7, signally further weakness in spending.

The Chicago PMI fell well short of consensus, with the headline number falling to 50.4 in April from 53.6 the month before. The market consensus was for a more modest drop to 52.6. The overall tone of this report was weak, suggesting further downside risks to the manufacturing sector outlook. The key forward-looking indicators were quite weak, with new orders (down from 55.6 to 51.0), order backlog (down from 49.7 to 38.7) and employment (down from 52.8 to 47.5) all declining. Production improved, rising to 54.0 from 53.7, though the new orders to inventory spread, a useful proxy for future production activity, drifted down to 1.4 from 11.6. The overall tone of this report was weak, providing some downside risks to our above-consensus call for a rise in the ISM manufacturing index to 51.8 from 51.5.

Consumer sentiment soured further in April, with the Michigan confidence index declining to 89.7 in April from 91.0. This marks the fourth consecutive monthly decline in this indicator, and while the level of the index remains relatively strong the direction matters, and household confidence continues to head in the wrong direction. To be sure, the exact cause of the rising anxiety among US consumer remains a bit of a mystery. However, what we do know is that the souring in moods appears to be translating in lower spending activity, even as the backdrop for consumption remains favorable. That said, this report augurs poorly for our expectation for a meaningful rebound in personal consumption activity in April.

Weak Data

April 29th, 2016 9:27 am

Via Millan Mulraine at TDSecurities:

US: Inflation Momentum Weakening, Consumption Stalls

·         The ECI rose at an on-consensus 0.6% q/q rate, with the annual pace of employment cost inflation decelerating to 1.9% y/y from 2.0% y/y..

·         The core PCE inflation rate was also on the weak side, rising at a meager 0.1% m/m pace. The annual pace of core PCE inflation declined to 1.6% y/y from 1.7% y/y.

·         On the consumption front, the news was quite disappointing as real personal spending ended the quarter on very flat footing, providing a very weak hand-off to Q2.

·         Overall, the tone of these reports was quite weak, playing into the current narrative of weakening growth and subdued inflationary momentum. This will continue to argue for caution at the Fed.

The US inflation picture appears a bit more benign, as the ECI rose at an on-consensus 0.6% m/m pace (up 0.64% m/m) in Q1, following a similar pace the month before. On a year ago basis, however, the annual pace of employment cost inflation slowed to 1.9% y/y from 2.0% y/y, marking the slowest pace of advance in this indicator since Q1-2014. Wages edged 0.7% m/m higher, though the annual pace of wage growth remained unchanged at 2.1% y/y. Benefits advanced 0.5% m/m, down from 1.8% y/y to 1.7% y/y. The core PCE inflation performance was also weak, rising at a very subdued 0.1% m/m pace (up 0.052% m/m at three decimal places), resulting in the annual pace of core PCE inflation also decelerating, falling to 1.6% y/y from 1.7% y/y. 

Personal spending activity was also disappointing. In particular, real personal consumption activity ended the quarter on a flat footing, providing a very weak hand-off to the next quarter. As a result, our early tracking for Q2 is now closer to the lower end of the 1.5% to 2.0% range, suggesting a very weak rebound for growth from the disappointing +0.5% q/q performance in Q1. To be sure, we continue to have a very favorable outlook for consumption spending activity, given the constructive backdrop (buoyant labor market activity, high confidence and a formidable savings war chest). Nevertheless, unless we have a very strong rebound in spending momentum in April, the risks to our current GDP tracking will drift to the downside.

Overall, the tone of these reports was quite weak, playing into the current narrative of weakening growth and the subdued inflationary momentum. This will continue to argue for caution at the Fed, and our current base-case is for the Fed to remain on the sidelines until the September FOMC meeting – unless growth rebounds strongly in Q2, which could potentially bring the July meeting into play.

More FX

April 29th, 2016 6:32 am

Via Marc Chandler at Brown Brothers Harriman:

Dollar Losses Extended Ahead of the Weekend

  • Two main drivers, weak US dollar and strong yen, rippling through the capital markets
  • Market is not convinced that the Fed will hike this year
  • Japanese markets are closed, but the dollar was sold (briefly) through JPY107
  • Sterling is underperforming

The US dollar is broadly lower against most major and emerging market currencies.  Although Japanese markets were closed, the dollar was sold through JPY107 to new lows since October 2014.  The euro is well bid near $1.14 and the dollar-bloc is firm.  While many Asian currencies edged lower, we note that the PBOC fixed the yuan 0.6% higher, which is the most in many years (CNY6.4569 vs CNY6.4954 previously), the market sold yuan for dollars.  The South African rand is the leading emerging market currency (0.8%), followed closely by the Mexican peso and Russian ruble.   Brent oil is building on recent gains and is near session highs as the North American session is about to start.  Many are talking about $50 a barrel next week.  Global equities are falling after US losses yesterday.  MSCI Asia-Pacific, excluding Japan fell 0.5%, the third loss in a row.  European equities are posting their biggest loss in a few weeks, with the Dow Jones Stoxx 600 off 1.0%.  The US S&P 500 is broadly steady.  Global bond yields are narrowly mixed, though Portuguese bonds are under a bit of pressure ahead of DBRS decision.  A loss of investment grade status, which many think is unlikely, would remove the bonds from the ECB’s sovereign bond buying program.  

There are two main forces in the foreign exchange market that are rippling through the capital markets.  The first is the continued weaker dollar tone.  The combination of what appears to be a stagnating US economy (0.5% annualized pace in Q1) and a market that does not believe the Federal Reserve will hike rates in June, and is in fact, judging from the Fed Fund futures strip, skeptical of a single hike this year.  

The effect of this US dollar weakness help the commodities and emerging markets extend their recoveries that began 2-3 months ago.  Economic fundamentals and the reaction function of the Federal Reserve has also contributed to keeping US yields low, which has global knock-on effects as well.  

The second force is the strength of the yen.  Sure, part of the yen’s strength reflects the weakness of the US dollar.  However, part of it looks independent of US developments. Although many economists and observers try tying the yen’s strength to its alleged role as a safe, have, we think it is misunderstood.  Among the riskiest assets, emerging market equities, or high yielding bonds, or commodities, have been rallying.  

There is no compelling sign of panic, heightened anxiety, or need for a safe haven.  In addition, there is scant evidence that investors are flocking to Japanese assets.  Through mid-March, foreigners were net sellers of Japanese equities.  It is true they have turned net buyers in April, though the amounts are modest  (JPY1.7 trillion or ~$15 bln over the past four weeks, after being net sellers over the previous 13 weeks selling roughly $36.8 bln of Japanese shares).  

Foreigners have been steady buyers of Japanese bonds this year, except a few weeks in March.  It is a noteworthy development that has received very little attention.  Who are buying negative yielding Japanese government bonds besides the BOJ?  Foreign investors.  

At the same time, there has been a surge in Japanese portfolio capital outflows.  It appears that Japanese investors were not repatriating their foreign holdings as the safe have hypothesis would suggest, but buying prodigious (record) amounts of foreign bonds in March.  Japanese investors were also consistent, even if less dramatic, buyers of foreign shares.  There are some seasonal patterns at the start of the new fiscal year (April 1) that may be distorting the recent weekly data, which is why we note the larger pattern, which does not suggest the yen has been bought as a safe haven.  

We suspect that flows that are less transparent, like repatriation of foreign earnings by Japanese or unwinding of hedges by foreign investors liquidating Japanese equities that have fallen in price, or Japan institutional investors hedging their currency risk (buying yen) played a role earlier this month.  

Using the futures market as a proxy for trend-following and momentum speculators, a buyer of yen is clear.  As of around 10 days ago, speculators in the futures had amassed a record long net and gross yen position.  However, the flows in the futures market seem to small compared with the spot market to be a key driver.   That said, we recognize this as a dynamic process and can feed it on itself, with money management considerations driving decision-making, allowing a move to take on a life on of its own, as it were.

Japanese markets were closed today, but the yen’s strength has continued.  The dollar traded below JPY107 for the first time since October 2014.  The JPY106.60 area may be the next technical target.  The market may draw more cautious if the JPY105 level is approached as some observers tout intervention there, though we suspect that such claims mistakenly see BOJ action (that would be ordered by the MOF) as defending a fixed level.  

The euro briefly poked through $1.14 for the first time since April 12.  It has recorded a higher and a higher low now for the fourth consecutive session after holding above $1.12 at the start of the week.  The euro, then, was already bid before reporting stronger than expected Q1 GDP.  The 0.6% quarter-over-quarter pace was above expectations and twice the pace of Q4 15.  However, it was necessary to sustain the year-over-year pace of 1.6%.  

We think that this is near trend growth for the eurozone.  It is uneven, and it may be fragile, but its quarterly growth bests the US, UK, and Japan (which may have contracted).  Of note France surprised on the upside with a 0.5% expansion, and Spain, despite the political morass that is leading do-over election in late-June, grew by 0.8%.   Separately, the final April CPI reading showed a minus 0.2% headline year-over-year rate, which is a little worse than the flash reading, and is the third consecutive month with deflation.  The core rate slipped to 0.8% from 1.0%.  

Germany is criticized by the EU, the ECB, the IMF and the United States for not bolstered domestic demand given its large current account surplus in excess of EC rules, given its low (mostly negative) interest rates, and the clear need to modernize its infrastructure.  Today’s data provides more fodder.  Retail sales in March slumped 1.1%.  The median estimate on Bloomberg was for a gain of 0.4%.  The fact that the 0.4% decline in February was revised to flat is helpful, but the year-over-year pace of 0.7% is poor and more telling.  

Given the market’s mood, we see scope for only a modest pullback in the euro ahead of the weekend, and peg support near $1.1360.  It takes a break of the $1.1325-$1.1335, coincidentally where the five and 20-day are moving averages can be found, to be anything noteworthy.  

Sterling is the laggard here today.  It initially rallied to $1.4665, stopping just shy of the early February high, before reversing lower.  Yesterday’s low was near $1.4425, and a move below there would sour the technical tone.  

Yesterday’s Q1 US GDP steals much of the importance from today’s report on March personal income and spending, though the core PCE deflator, the Fed’s preferred inflation measures, will receive attention.  It is expected to slip to 1.6% from 1.7%.   The April Chicago PMI is seen as a help guide to the national reading out next week.  It is expected to ease to 52.6 from 53.6.  University of Michigan’s consumer confidence’s final reading may tick up, but the inflation expectations measures are more important.     Canada reports February GDP.  It may have fallen by 0.2%, leaving the year-over-year rate steady at 1.6%.  The softer US dollar tone and the 20% rally in oil this month are helping the Canadian dollar extend its recovery gains.  

Eurozone Prices Fall

April 29th, 2016 6:14 am

Via Reuters:

The euro zone economy accelerated more than expected in the first quarter, preliminary data showed on Friday, but consumer prices also dropped by more than forecast in April because of a steep fall in energy costs.

The European Union’s statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.6 percent quarter-on-quarter in the January-March period, up from 0.3 percent growth in the previous three months.

Economic polled by Reuters had expected quarterly growth of 0.4 percent. On a year-on-year basis, euro zone GDP rose 1.6 percent in the first quarter, beating expectations of a 1.4 percent increase.

Eurostat does not provide a detailed breakdown of the numbers in its first GDP estimate.

Meanwhile, consumer prices fell 0.2 percent year-on-year in April, Eurostat said, after holding flat in March, a steeper drop than the consensus forecast for a 0.1 percent decline.

Falling energy prices, which tumbled 8.6 percent year-on-year in April, were the main drag on the overall index, while unprocessed food was the main positive, rising 1.2 percent.

Without those two most volatile items, in a measure that the European Central Bank calls core inflation — consumer prices rose 0.8 percent year-on-year in April, less than the 1 percent increase in March.

The ECB wants to keep headline inflation below, but close to 2 percent over the medium term and has been buying government bonds on the market since last year to inject more cash into the economy and make prices grow faster.

(Reporting By Jan Strupczewski; editing by Philip Blenkinsop)

 

Eurozone GDP Chugs Along

April 29th, 2016 6:09 am

Via the FT:

The eurozone has exceeded economists’ expectations, growing 0.6 per cent at the start of the year – its fastest quarterly pace since the same quarter in 2015.

The figures beat forecasts of 0.4 per cent and means the 19-country bloc has doubled its growth rate from the 0.3 per cent registered at the end of 2015. Annual GDP growth hit 1.6 per cent on the year.

It’s good news for European policymakers who have been forced to ramp up stimulus measures in a bid to revive the economy. The figures show the measures, coupled with low oil prices are finally providing some dividend.

Eurozone GDP also managed to outpace the rest of the EU, which expanded at 0.5pc in the first quarter.

The figures follow two sets of pleasant surprises from the eurozone’s second and fourth largest economies.

French growth hit a better than expected 0.5 per cent, while Spain continued its impressive recovery, expanding 0.8 per cent in the first three months of the year.

Goldman Sachs vs Morgan Stanley on Rates

April 29th, 2016 6:07 am

Via Bloomberg:

28, 2016 — 9:33 PM EDT
Updated on April 29, 2016 — 5:44 AM EDT

Goldman Sachs Group Inc. called Treasuries overpriced and said the Federal Reserve is poised to raise interest rates, clashing with Morgan Stanley’s forecast for a rally.

Ten-year Treasuries “look expensive,” based on Goldman’s assessment of a fair value, Francesco Garzarelli, the London-based co-head of fixed-income strategy, wrote in a report Thursday. Yields should be higher than 2.10 percent, based on the models the firm uses to analyze bonds, versus 1.84 percent Friday.

Morgan Stanley says U.S. government securities are poised to gain and the odds of a rate increase in June are declining. Ten-year yields will drop to 1.45 percent by Sept. 30, based on the firm’s “base case” forecast, according to a report Thursday by analysts including Matthew Hornbach, the head of global interest-rate strategy in New York.

The firms, which are among the 23 primary dealers that trade with the Fed, are at odds as investors decipher the central bank’s views on the economy in its statement this week. Morgan Stanley called the comment “slightly dovish.” Goldman forecasts rate increases in June, September and December. The U.S. plans to report on consumer spending Friday, after data Thursday showed the economy growing at its slowest pace in two years.
Looking for Growth

Central bankers used their statement to indicate growing confidence in the world economy while suggesting they’re still looking for the signs of growth, inflation and global stability to justify a move.

Treasuries were little changed Friday as of 10:42 a.m. in London, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in February 2026 was 98 1/8.

The Bloomberg U.S. Treasury Bond Index has fallen 0.3 percent in April, heading for its first monthly decline this year. It has returned 2.9 percent in 2016, with the 10-year yield falling from 2.27 percent at the close of 2015.

Treasuries were closed in Japan Friday for a holiday. They’re scheduled to trade as usual in the U.K. and the U.S., according to the Securities Industry and Financial Markets Association. U.S. government securities trading will be shut in the U.K. May 2 and in Japan for three days starting May 3, based on the association’s website.

Goldman Sachs has been calling for yields to rise, though it reduced its year-end forecast in February to 2.75 percent from 3 percent.

Morgan Stanley cut its own outlook in March and said 2016 may be known as the “Year of the Bull” for bonds. The firm’s March report also included the 1.45 percent prediction for the end of September.

Early in 2015, with the 10-year benchmark at about 1.9 percent, Goldman Sachs and Morgan Stanley both predicted it would jump to 2.85 percent by the close of the year — more than half a percentage point higher than the final level.

Helicopter Remains on Tarmac

April 29th, 2016 6:00 am

Via the FT:

“Helicopter” is a word that dare not speak its name in the corridors of the European Central Bank.

Peter Praet, the ECB’s chief economist, is the latest senior figure to douse talk of central bank helicopter drops, claiming the notion is not even discussed “informally” by policymakers.

In an interview with Spanish paper Expansión (republished by the ECB here), Mr Praet said:

Mario Draghi already pointed out that the use of this instrument would be very complex and fraught with legal difficulties. The option has not been on the table, not even informally.

It’s a change in tone from Mr Praet, arguably the ECB’s chief dove, who said last month that helicopter money – where a central bank injects money straight into the veins of an economy or the pockets of consumers – was possible in “principle”, telling La Repubblica:

All central banks can do it. You can issue currency and you distribute it to people. That’s helicopter money… The question is, if and when is it opportune to make recourse to that sort of instrument which is really an extreme sort of instrument.

There are other things you can theoretically do. There are several examples in the literature. So when we say we haven’t reached the limit of the toolbox, I think that’s true.

Still, in his more recent interview, Mr Praet suggested that the bar for further actioneven on negative rates is rather high:

interest rates remain part of a broader toolbox. But deploying negative rates again in the future would require a distinct worsening of the inflation outlook. As Mario Draghi himself said, I don’t think we’re going to see these conditions materialising in the near future. But the instrument is in the toolbox in case risks re-emerge.

Zero Hedge Unmasked

April 29th, 2016 5:57 am

Bloomberg has an interesting article about some discord at the Zero Hedge blog. Apparently there are three Durdens and one has left in an acrimonious departure. I never understood the site’s anonymity fetish and the founder was a bit of a megalomaniac as he compared it the anonymity of the authors of the Federalist papers. When the blog was first founded they had a penchant for spreading misinformation and factual errors and I tangled with them several times in the blogosphere which you can read here and here and here .

Via Bloomberg:

Colin Lokey, also known as “Tyler Durden,” is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.)

After more than a year writing for the financial website Zero Hedge under the nom de doom of the cult classic’s anarchic hero, Lokey’s going public. In doing so, he’s answering a question that has bedeviled Wall Street since the site sprang up seven years ago: Just who is Tyler Durden, anyway?

The answer, it turns out, is three people. Following an acrimonious departure this month, in which two-thirds of the trio traded allegations of hypocrisy and mental instability, Lokey, 32, decided to unmask himself and his fellow Durdens.

Lokey said the other two men are Daniel Ivandjiiski, 37, the Bulgarian-born former analyst long reputed to be behind the site, and Tim Backshall, 45, a well-known credit derivatives strategist. (Bloomberg LP competes with Zero Hedge in providing financial news and information.)

In a telephone interview, Ivandjiiski confirmed that the men had been the only Tyler Durdens on the payroll since Lokey came aboard last year, but he criticized his former colleague’s decision to come forward.

He called Lokey’s parting gift a case of sour grapes. Backshall, meanwhile, declined to comment, referring questions to Ivandjiiski. A political science graduate with an MBA and a Southern twang, Lokey said he had a checkered past before joining Zero Hedge. Earlier this month, overwork landed him in a hospital because he felt a panic attack coming on, he said.

“Ultimately we wish Colin all the best, he’s clearly a troubled individual in many ways, and we are frankly disappointed that he’s decided to take his displeasure with the company in such a public manner,” Ivandjiiski said.

The Schism

Ivandjiiski worked for a hedge fund before being barred by the Financial Industry Regulatory Authority in 2008 for insider trading. He didn’t admit or deny wrongdoing, the agency said. Backshall is a familiar face on financial news networks who has been quoted by media outlets, including Bloomberg. His involvement with Zero Hedge, along with that of Lokey, hasn’t been widely known.

The schism between the men sheds light on a website popular among market professionals, one that mixes detailed financial analysis with sensational headlines such as “The Coming War Will Solve Our Unemployment & Growth Problem” and “Exposed—How Two Janet Yellen Phone Calls Saved The World.” 

Since being founded in the depths of the financial crisis, Zero Hedge has grown from a blog to an Internet powerhouse. Often distrustful of the “establishment” and almost always bearish, it’s known for a pessimistic world view. Posts entitled “Stocks Are In a Far More Precarious State Than Was Ever Truly Believed Possible” and “America’s Entitled (And Doomed) Upper Middle Class” are not uncommon.

The site’s ethos is perhaps best summed up by the tagline at the top of its homepage, also borrowed from Fight Club: “On a long enough timeline the survival rate for everyone drops to zero.” A paean to populism, the 1999 film is filled with loathing for consumerism and the financial system. Brad Pitt portrays Tyler Durden as hell-bent on bringing down the corrupt system of the global elite—an attitude often reflected in Zero Hedge’s content.

With that in mind, the website has argued that “pseudonymous speech” is necessary amid an atmosphere of stifled public dissent—hence the “Tyler Durden” alias was born. In earlier years, Durden was joined by “Marla Singer,” another Fight Club character, as one of the site’s most prominent authors.

“It reminds me of a successful information operation where you mix in the propaganda stories along with other legitimate stories,” said Craig Pirrong, finance professor at the University of Houston. “There are some interesting things on it, and then there are the crazy things.”

Profit Motive

Despite holding itself out as a town crier for market angst, transcripts from Zero Hedge internal chat sessions provided by Lokey reveal a focus on Web traffic by the Durdens. Headlines are debated and a relentless publishing schedule maintained to keep readers sated. Lokey said the emphasis on profit—and what he considered political bias at the site—motivated him to quit.

He pointed to the wealth of the Durdens as a factor. Ivandjiiski has a multimillion-dollar mansion in Mahwah, N.J., and Backshall lives in a plush San Francisco suburb—not exactly reflections of Pitt’s anticapitalist icon. “What you are reading at Zero Hedge is nonsense. And you shouldn’t support it,” Lokey wrote in an e-mail. “Two guys who live a lifestyle you only dream of are pretending to speak for you.”

Lokey adds: “Durden lives in a castle. If you’ve seen Fight Club, you know how ironic that is.”

A former “director of contributor success” at website Seeking Alpha, Lokey said he joined Zero Hedge for $6,000 a month and received an annual bonus of $50,000, earning more than $100,000 last year. His salary helped pay the rent on a “very nice” condominium on South Carolina’s Hilton Head Island, he said. Despite the compensation, he contends that he left because he disagreed with the site’s editorial vision. “Reality checks are great. But Zero Hedge ceased to serve that public service years ago,” Lokey wrote. “They care what generates page views. Clicks. Money.”

Zero Hedge founder Ivandjiiski defended the site, adding that it’s designed to be a for-profit entity. “Ultimately, the website makes money, and it’s profitable, which is also why we’ve never had to seek outside funding or any outside money—our only revenue is from advertising, always has been since day one,” he said. “Obviously, every publisher’s mission is to maximize revenue and page views, and we think that we do it in a way that is appropriate.”

Outside the Bubble

Any website’s focus on traffic and revenue certainly isn’t unusual. But Lokey said he was irked by what he saw as the hypocrisy of Zero Hedge and how it runs counter to its antiestablishment image. In the chat transcripts, Ivandjiiski refers to America’s “silent majority” as “beastly,” while Backshall acknowledges life in the U.S. is bad “outside of my bubble.”

Ivandjiiski disagreed with the suggestion that personal worth or lifestyle precluded them from donning the mask of Durden (the character who quipped “the things you own end up owning you”) to deride the prevailing order. “We’ve never said that we are pro-socialist,” he said.

Lokey, who said he wrote much of the site’s political content, claimed there was pressure to frame issues in a way he felt was disingenuous. “I tried to inject as much truth as I could into my posts, but there’s no room for it. “Russia=good. Obama=idiot. Bashar al-Assad=benevolent leader. John Kerry= dunce. Vladimir Putin=greatest leader in the history of statecraft,” Lokey wrote, describing his take on the website’s politics. Ivandjiiski countered that Lokey could write “anything and everything he wanted directly without anyone writing over it.”

Working at Zero Hedge was also exhausting, Lokey said, and typically involved early morning starts and writing as many as 15 posts a day of as many as 1,500 words each. The work didn’t stop on the weekends, either. Text messages exchanged between Lokey and Ivandjiiski, screen shots of which were provided by the latter, paint the picture of a work environment that ranged from exhilarating to exasperating.

For instance, Lokey says he’s “scared to even ask for an hour off,” while Ivandjiiski replies that “if you ever need time off for whatever reason, never hesitate to just ask.” In February, Lokey says, “I love this company and this website,” and tells Ivandjiiski “you saved my life,” expressing thanks for the job.

By April 2—the day Lokey left Zero Hedge—their relationship had deteriorated significantly, according to the messages provided by Ivandjiiski.

“I can’t be a 24-hour cheerleader for Hezbollah, Moscow, Tehran, Beijing, and Trump anymore. It’ s wrong. Period. I know it gets you views now, but it will kill your brand over the long run,” Lokey texted Ivandjiiski. “This isn’t a revolution. It’s a joke.”

Early FX

April 29th, 2016 5:38 am

Via Kit Juckes at SocGen:

Good morning. Link to the FX weekly is below. A long (apologies) ramble on real rates, the Fed, the dollar the Euro and the yen. The Fed really doesn’t like the dollar – and the desire to see higher inflation before raising rates any further, combined with the inability of central banks elsewhere to drive nominal or real yields lower, continues to undermine it. The upshot – USD/JPY will need to be closer to 100 before intervention is a realistic threat, and  even if Japanese capital outflows (large) and positioning (long yen) argue for a move back up, it’s not likely before an overshoot. I’m sidelined. DXY is poised right on the edge of a chart precipice (92.50-93.25 depending on how sharp your pencil is).  10:am sees Q1 GDP (exp 0.5), April CPI (-0.1) March Unemployment (10.3) and at the same time, Jens Weidmann will speak in Munich. That could be enough to trigger a break through 1.14 and towards 1.20. I want to sell if we get up closer to there. Here, I want to go on watching.                                                                                          While I watch, I want to buy breakeven inflation (in the US) because the Fed wants that higher and that’s what undermines the dollar. In fx-land, no change to trades – short GBP/NOK, EUR/RUB, USD/CAD as oil finds its feet; Short NZD/USD as a (premature?) toe in the long dollar water; Short DKK/SEK ‘cos I love the SEK.  As for today, as well as the European data, we get UK mortgage approvals, US Q1 ECI, March Personal income/spending, April Chicago PMI.                                      [http://email.sgresearch.com/Content/PublicationPicture/224835/1]                                                                                              See the link for more detail. <http://www.sgmarkets.com/r/?id=h10633ee2,16c8d9a7,16c8d9a8&p1=136122&p2=8e4dd433164d6604c179be6a6a447ac6>