Chillin' out till it needs to be funded
Whether there is QE or not, the exit of money out of bonds seem to be an undeniable fact as 3 month and 6 month auctions continued garnering interest at a coverage of more than 4 and yields just higher at 0.085% and 0.15% respectively
Alcoa is likely to start earnings season with continuing losses as Aluminium seems to be a beaten up story even at BHP and Rusal which dropped on 20% of its 2010 profits in 2011. Meanwhile giants China reportesd a small surplus in Global trade to $800 mln in the first three months of 2012, billing a $5.35 bln suprlus in the month of March with Imports down from a one year peak in February 2012 even as an extended weekend took its toll on European markets with French banks BNP and SocGen starting off trades 3% lower than Thursday, Car makers seemingly ruing the Jobs report across the pond on Good Friday too.
JP Morgan is likely to bounce back later in the week but spends the week boxed in by queries on its remaining “hedging” eligible business of trading thru the bank Treasury even as banks make a point about Volcker’s hit on returns and the difference for US banks
China nevertheless, seemed untouched by the global crisis at its door, managing a lower than 7.5% growth in imports while Exports continued growing 9% on year meaning a net addition to Q1 GDP from trade. however for 2012 as a whole the China surplus may not be more than $30 bln odd as Q1 is put behind them and surpluses become the order of the day. China reports GDP on Friday to 8.4%(expected) French Industrial Production was down 1.9% for the year but February was up 0.3%. German trade surplus surprisingly hung on to a more than $13.6 bln total despite the falling Industrial production. Emports and imports keeping pace with China data
Meanwhile Spain shot yields back witha EUR 27 bln austerity program whil eits own Economy responded to the coming pain with a lot of murmurs that sound like they were prespicuously prophesying a breakdown in the fiscal mechanisms without more aid.
No Atlanta did not engender any more comments on the elusive QE3.(The FEd Chairman spoke in Atlanta yesterday late after 7 pm)
Meanwhile Japan last expanded its QE program (Asset buying ) in February to 65 T yen and it was enough with rates (!) still between 0-0.1%
The verdict: This looks like the way it will be the rest of the year, not many more surprises coming.