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Powell to go financial stability or inflation ?...25bps pretty much priced in, very tricky presser. "This will be Powell's trickiest press conference yet. Either there is exogenous financial conditions tightening that the Fed leans against, or if the Fed keeps going, they have to be ready for a less stable financial system as a result." >>> does 25bps one way or another really matter ? probably not - all about CREDIT "The press is full of angry fund managers saying that the Swiss Government has mucked around with the order of creditors ... AT1 Bonds: (NOT all AT1 are the same, EU confirmed it early doors... hence risk-on since Monday) >>> it was in the main document, not even in the small print, see below ! “The Write-down may occur even if … ordinary shares of CSG remain outstanding”, the fund managers involved did not read the document, they made a mistake, plain and simple ? >>> CS bond holders preparing a lawsuit though it seems - lawyers dream land.. Electric Vehicle Battery Makers Test a Future Without Lithium. A test vehicle unveiled by Chinese carmaker JAC has the battery world buzzing about sodium-ion cells WSJ-Vladimir Putin and Xi Jinping have been cementing a decade-long bond, described by some analysts as a “strategic bromance” UK Annual inflation rates rise again following the easing in Jan 2023: Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 9.2% in the 12 months to Feb 2023, up from 8.8% in Jan 2022 CPI rose by 10.4%, up from 10.1% >>> more than sticky this inflation! It is Boris Johnson day for the Conservative Party, as he defends himself in the Privileges Cttee against the charge of recklessly lying to parliament and also votes against Rishi Sunak’s treasured compromise with the EU to fix Brexit arrangements for Northern Ireland UBS shares erase almost all of the losses made during the recent banking rout - quite clearly was the deal of the century for UBS... Swiss gold exports In February, gold exports to China reached 58 tons, valued at $3.5 billion, up from January's 26.1 tons In February, gold exports to India reached 25.6 tons, an increase from January's 3.2 tons Bundesbank chief says rate-setters must be ‘more stubborn’ in inflation fight Markets : Overall Eq markets been in recovery mode since UBS/CS take over, realization that not all AT1 bonds are the same and expectations that FED will go easy today on the dots / presser #Gold a little softer, #WTI crude a little higher for the same reasons FX land more about higher CROSSJPY's as rates correct higher from Monday morning lows All about Powell and #FOMC now - good luck with it - he won't be able to satisfy everyone.. wouldn't want to be in his shoes Catch 22 for the FOMC: market leans for a hike, but... | Saxo Market Call (podbean.com) and PowerPoint Presentation (podbean.com) Financial or Price Stability? - Bloomberg From Bank of America's Global Fund Manager Survey.. Question: What do you consider the biggest ‘tail risk’? 31% of global investors see a systemic credit event as the biggest risk for markets, up from only 8% last month and knocking inflation concerns (25%, down from 40%) off the first spot for the first time in nine months Recession risk is rising: BofA (yahoo.com) From JP Morgan: A recession seems to be a certainty given the banking crisis and the expectation for additional “unknown unknowns” to emerge. Combined, this feels like another bear market rally rather than the beginning of a new bull market Credit Suisse promises to pay bonuses to staff despite UBS rescue | Financial Times (ft.com) Folgen der Credit-Suisse-Übernahme: CS-Anleihenbesitzer sind frustriert: Anwälte bereiten Sammelklage vor | Tages-Anzeiger (tagesanzeiger.ch) -- They changed the law & basically stole 16 Bln francs worth of bonds." did they? Samantha LaDuc on Twitter: "Per @RJRCapital: Ackman’s $3B in losses can motivate one to call for a Fed pivot. But more deflation is needed first. And as I’ve shown clients, there is a credit event risk brewing Q2 - which is more likely to trigger Fed to actually pivot." / Twitter AT1 Bonds: when to abandon your fund manager (substack.com) excellent write-up - Furthermore, any Write-down will be irrevocable and, upon the occurrence of a Write-down, Holders will not (i) receive any shares or other participation rights in CSG or be entitled to any other participation in the upside potential of any equity or debt securities issued by CSG or any other member of the Group, or (ii) be entitled to any write-up or any other compensation in the event of a potential recovery of CSG or any other member of the Group or any subsequent change in the CET1 Ratio, Higher Trigger Capital Ratio or financial condition thereof. The Write-down may occur even if existing preference shares, participation certificates and ordinary shares of CSG remain outstanding. "Although the market for CoCos has yet to develop, we think the extended time horizon for implementation will enable these instruments to emerge over time. We also believe that Credit Suisse will be an attractive issuer of these new securities." Brady Dougan, Sept 2010 But of course they will try Credit Suisse bondholders prepare lawsuit after AT1 bond writedown in UBS deal (cnbc.com) Right thing to do, if they want to avoid a run into MM funds etc !! Australian banks finally passing on interest rate hikes to savers – but there’s a catch | Interest rates | The Guardian Smart savers are cashing in on higher CD rates right now (msn.com) According to Bankrate, the national average yield for savings accounts is 0.23 percent APY for the week of March 15. Many online banks have savings rates higher than the national average, though. >>>> quite ridiculous really The lithium bubble is bursting - chart - Lithium - 2023 Data - 2017-2022 Historical - 2024 Forecast - Price - Quote - Chart (tradingeconomics.com) Electric Vehicle Battery Makers Test a Future Without Lithium - Bloomberg Xi and Putin Rekindle ‘Strategic Bromance’ in Russia - WSJ Putin will be arrested if he comes to Ireland, Department of Justice says – The Irish Times That's going to be fun ! Boris Johnson hearing live: Dominic Cummings says ex-PM knew garden event was drinks party 'because I told him' - new evidence as he prepares to face MPs | Politics News | Sky News UK inflation leaps to 10.4 per cent smashing forecasts (cityam.com) UBS shareholders happy...as mentioned early Monday, it was the deal of the century.. #UBS

Did U.S banks really think they could keep deposits paying 0% or maybe up to 0.25% interest when bills were paying 4.5%?....this is what really went wrong...no wonder capital flew to MM funds and others... Did the Saudi Bank want to save CS with 5bn? According to a report, CS major shareholders had submitted a cash injection of $5bn and the Federal Council refused.. >>> worth noting this goes on for 2months, so plenty of legal challenges possible and/or other bid to appear, big could very well be improved by 1-2bn to be honest...but the Swiss authorities will very most likely want this strategic asset to remain within CH JPMorgan CEO Jamie Dimon Leading Efforts to Craft New First Republic Bank Rescue Plan Big-bank leaders are discussing a capital infusion in troubled lender This week the FED is likely to hike 25bps, and so are the BoE, SNB on Thursday. Having said all this, the speed of the hikes last 12months, is now beginning to break a few things in the market, so they may consider banking failures first... but on the other hand inflation is still far too high and had been showing the wrong signals again at the last look....tough call !! AfD party is ahead of the Greens for 1st time since 2018, acc to an INSA poll for BILD Farmers-led party set to prosper in key Dutch regional elections Macron to address Nation ffter Government survives No-confidence vote WSJ / What Gets Lost When You Rescue Markets. Throwing a lifeline to the financial system in times of crisis can have unintended consequences. Among them: Making the world feel safer can lull people into complacency and excessive risk-taking Apparently it's the day Trump gets arrested Asset invested in U.S. money market funds hit a record $5 Trillion this month. $120 Billion of that inflow was last week, the largest weekly increase in 3 years RBA Meeting Minutes Raise the Prospects of a Near Term Pause Japanese Prime Minister Fumio Kishida began a surprise visit to Ukraine early on Tuesday, hours after Chinese President Xi Jinping arrived in neighboring Russia for a three-day visit Markets : Broad equity markets, NQ mainly, loving the sight of low rates and liquidity injections from Ccentral Banks, usual function reaction. DAX breaking back up, 600pts of yesterday's lows USD and main FX pairs been fairly quiet in reality, and relative to bond vols (MOVE index), CHF a little softer all week on CS perhaps and a long-term loss of safe-haven, one could think so yes... and in short-term, higher 2y rates should support CROSSJPY's again Bonds all over the place, though SFR ranges would appear to narrow, as markets recover, rates can also QUICKLY recover higher! 10y CHF hit a 70bps lows yesterday, which was a great opportunity/crazy, when you consider SNB will hike further. Plenty of other examples around, these markets are NUTS, and there should be no surprise if a few CTA's or macro fund are forced to shut down, given the magnitude of these moves German ten-year is 2.18% after falling below 2% yesterday, it was over 3pct 2-3weeks ago Crude should start to recover from here Crypto has certainly been benefiting from this banking crisis You never read On twitter about 'contagion' being used in positive moves in markets.. but it's also there in days like this (liquidity injection, bank bail-outs etc) https://s354.podbean.com/pb/793a69fe70631953d7cc071ba48c7594/64196fac/data1/fs56/5709963/uploads/2023_03_20_SaxoMarketCall.pdf?pbss=6b42ae6b-0ece-5b18-83cd-437a5b56562f & https://saxostrats.podbean.com/e/weekend-credit-suisse-deal-unsettles-markets-on-debt-wipeout/ Saxo update Saudi National Bank wollte Credit Suisse retten: Bundesrat lehnte ab - 20 Minuten How the Swiss ‘trinity’ forced UBS to save Credit Suisse - SWI swissinfo.ch JPMorgan CEO Jamie Dimon Leading Efforts to Craft New First Republic Bank Rescue Plan - WSJ and Holger Zschaepitz on Twitter: "When a falling share price triggers a negative spiral: First Republic Bank’s shares tumbled another 47% to an all-time low after S&P cut its credit rating deeper into junk as executives from major banks discussed fresh efforts to stabilize the lender. FRC is now worth just $2bn. https://t.co/JoQfWTo3nm" / Twitter 7 March 2023 | Minutes of the Monetary Policy Meeting of the Board | RBA Macro Digest: Implications of the UBS takeover of Credit Suisse. | Saxo Group (home.saxo) Was written early yesterday, so bear with Steen - it's about the macro not micro Macro Digest: Implications of the UBS takeover of Credit Suisse - This is a 250 billion bond market which was introduced post the GFC to help under-capitalized banks in Europe to reach a sound Tier-1 capital. Its actually called Additional-Tier-1, AT1, in common speech. Tier-1 capital is the highest ranked capital available to offset bad loans or other financial industry stress. Tier 1 is retained earnings, common stock and in many European banks also AT1. What Gets Lost When You Rescue Markets - WSJ Late 1880' period : Regulation relied more on individual responsibility. Back then, if a bank failed, its officers, directors—and shareholders—would not only suffer market losses on the value of their stock. They also faced double liability, a clawback of up to the par value of their shares, contributing to the reimbursement of depositors MS.. “This is exactly how bear markets end — an unforeseen catalyst that is obvious in hindsight forces market participants to acknowledge what has been right in front of them the entire time,” Wilson wrote. The ongoing turmoil in the banking system should lead investors to focus on the deteriorating growth outlook amid restrictive credit conditions, according to Wilson. “The events of the past week mean that credit availability is decreasing for a wide swath of the economy, which may be the catalyst that finally convinces market participants that earnings estimates are too high,” he wrote, adding that the risk of a credit crunch has increased materially. Holger Zschaepitz on Twitter: "Good Morning from #Germany where right-wing populist AfD party is ahead of the Greens for 1st time since 2018, acc to an INSA poll for BILD. Greens have fallen out of favor w/voters b/c of compulsory installation of heat pumps, which will apply from 2024 & be costly for Germans. https://t.co/jAbDwTMR2c" / Twitter Farmers-led party set to prosper in key Dutch regional elections | Netherlands | The Guardian Vladimir Putin wanted by International Criminal Court - Kremlin calls move 'outrageous and unacceptable' | World News | Sky News The Telegraph on Twitter: "🇯🇵 Japanese Prime Minister Fumio Kishida began a surprise visit to Ukraine early on Tuesday, hours after Chinese President Xi Jinping arrived in neighboring Russia for a three-day visit Follow our live blog for the latest updates ⤵️" / Twitter France pension reform: Macron's government survives no-confidence vote - BBC News Amazon layoffs: Company to cut 9,000 more workers (cnbc.com) It's painful for those who lose their jobs clearly, but it's a relatively small amount compared to the amount of people that were hired during 2022/22 period Trump Tries To Block Georgia Election Investigation As Criminal Charges Loom (forbes.com) Credit Suisse set to pay bonuses and boost salaries despite UBS takeover (cityam.com) why not double the bonus for management and board ! Fate of First Republic Uncertain as Shares Plummet Again - The New York Times (nytimes.com)

-FED priced 50/50 on 25bps, ie 13bps -Asian Markets were flat ish up to 2 hours ago or so -Rates all over already early this morning, SFR +30 suddenly -Bank credit in the open now.. -The Fed made joint announcement with BOE, ECB, BOC, BOJ and SNB to increase frequency of USD swap lines from weekly to daily. -China delivered a 25bps cut in RRR starting 17Mar, Xi to visit Russia -There will be question as to why shareholders get some and AT1 bond holders don’t..!! hierarchy etc etc .. more about it here : It is all about credit, particularly from here on. Polemic Paine on Twitter: "So UBS have, once guarantees and write downs are considered ($17bln AT1s at zero) bought CS for minus 15bln and been handed a free 9bln put option on top Deal of the century." / Twitter Federal Reserve Board - Coordinated central bank action to enhance the provision of U.S. dollar liquidity And final CUBS deal it’s not a merger clearly .. more like a botched rescue (Bloomberg) -- UBS Group AG agreed to buy Credit Suisse Group AG in a government-brokered emergency rescue announced on Sunday. Under the terms of the deal, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF0.76/share for a total consideration of CHF3 billion, UBS said in a statement The price represents a 59% discount to Credit Suisse’s closing price on Friday, according to Bloomberg calculations The takeover will create a global wealth manager with $5 trillion of invested assets across the group Both banks can obtain a liquidity assistance loan with privileged creditor status in bankruptcy for a total amount of up to CHF100 billion UBS is to get CHF25 billion downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets Colm Kelleher will be chairman and Ralph Hamers will be CEO of the combined entity The combination is expected to generate annual run-rate of cost reductions of more than $8 billion by 2027 UBS remains “strongly capitalized well above our target of 13%” and is committed to progressive cash dividend policy The Federal Council has established bankruptcy privilege rights for this additional liquidity assistance, which gives the SNB the necessary assurance to make available to Credit Suisse substantial additional liquidity The extraordinary government support will trigger a complete write-down of the nominal value of all AT1 shares of Credit Suisse in the amount of around CHF16 billion, and thus an increase in core capital The takeover will result in a larger bank, for which the current regulations require higher capital buffers Swiss regulator FINMA will grant appropriate transitional periods for these to be built up FINMA will very closely monitor the transaction and compliance with all requirements under supervisory law FINMA will coordinate continuously with national and international authorities in this regard, namely the US Federal Reserve and the British Prudential Regulatory Authority To ensure that all obligations can continue to be met at all times throughout the transaction, further liquidity assistance will be assured This means that the banks involved will have substantial additional liquidity available to carry out the takeover The liquidity provided by the SNB will include a loan covered by a federal guarantee

Quadruple witching day - can get some funky vol during day ECB hiked 50bps, stayed the course, confirmed/displayed strength/confidence in EZ banking system, data dependent (and they only should be..), get over the current bump in markets and continue course of hiking, however if problem persists we are on hold... BofA, JPMorgan lead bank group to infuse First Republic with $30B in deposit >>> so depositors take money out of small banks to put into big banks, big banks puts money back into small banks..(big banks too big to fail..)...madness really - see Yellen interview below, market shuffling deposits to where liquidity is needed Macron’s defiant show of force in parliament exposes a weakened president FedEx jumped after hours, smashing earning forecasts Deal! NHS unions strike pay pact with ministers after months of UK strikes, Teachers unions also having more serious talks with Govt Volkswagen to invest in mines in bid to become global battery supplier China's Xi to visit Russia next week Markets : FED action, let's be clear, technically this is not QE, FED is not buying assets per say, other banks are borrowing funds pledging collateral (same for CS and SNB..) >>> all of which gave some air yesterday to markets, NQ recovered, CS recovered although trading back below 2CHF again, JPY and CHF weakened etc, but all this should not stop FED from hiking 25bps next week (priced) or even 50bps Equity markets, main indexes pretty dull, big rotations, recession calls vs utilities, and NQ rallies on lower rates. But let's sit back, I read headlines such as ''stocks rising in the midst of a banking crisis'.. in many ways it's about liquidity is the wrong places/issues, but beware, things can turn quickly Crude jumps back a few pct in sympathy with the above FX land, CROSSJPY's initially decently lower, EURJPY hit a 139.25 low yesterday, bouncing back to 142+ this morning, so decent moves in crosses, CHF a smidge weaker too. GBPCHF long-term? BOND 'settling' a little, rates VOL lower, helping the whole risk complex settle too >>> bond, rates VOL THE key.. Again high vols create great opportunities to enter into 'desired' position, we have purchased a few stocks this week for our clients that came to our levels, for this though we need 'room' to step in, use those 'deleveraging dips from other participants' to enter into new positions Market sees a glass that is half full of liquidity for now. | Saxo Market Call (podbean.com) BofA, JPMorgan lead bank group to infuse First Republic with $30B in deposits (msn.com) What's happening with First Republic Bank after SVB collapsed (qz.com) Lisa Abramowicz on Twitter: "Did quantitative tightening just end? The Fed’s balance sheet grew by about $300 billion in the past week as the U.S. sought to backstop deposits at regional banks. https://t.co/rDYuLzqmTm" / Twitter Senator from Oklahoma asks Yellen asks if deposits in his community banks are all insured - they are seeing outflows to big banks. Yellen basically says sorry - you ain't part of the club! LIVE: Treasury Secretary Yellen testifies before the Senate on Biden's 2024 budget — 3/16/23 - YouTube French Senate adopts contested pension reform, final vote set for lower house (france24.com) - Macron’s defiant show of force in parliament exposes a weakened president – POLITICO if you think UK parliament is fun watch this : French MPs sing Marseillaise and boo as PM forces through pension reform bill - YouTube FedEx optimistic after 3Q earnings, but more cost-cutting measures on the way (yahoo.com) Tiger Global Writes Down Venture Funds’ Bets by 33% in 2022 - WSJ Credit Suisse sued by US shareholders over finances, controls | Reuters tmnxeq on Twitter: "swiss news outlet claims CS tweaked their CET1 in 3Q22 to remain solvent; finma & snb approved change" / Twitter Seven ways in which Credit Suisse isn’t SVB | Financial Times (ft.com) agreed - however, the issue is its fundamental business, and how one can operate with so much debt!! (ever checked the annual report?..) >>> and those thinking UBS and CS should merge, have those people ever asked UBS management and major shareholders ? major restructuring is required, has been for 10years... get rid of IB business, reduce worldwide bizz to wealth management, focus on wealth management, reduce staff drastically in CH too, reduce amount of branches dramatically, sell some to cantonal banks and/or Raiffeisen group etc Deal! NHS unions strike pay pact with ministers after months of UK strikes – POLITICO Teaching unions and government to hold ‘intensive talks’ after strikes | The Independent Volkswagen to invest in mines in bid to become global battery supplier | Reuters Peter Stefanovic on Twitter: "Wow. After introducing his guest as “a particularly distinguished professor of economics at Kings college London” Jacob Rees-Mogg squirms as he’s told some hard truths about the damage of Brexit. Watch in disbelief at what comes next https://t.co/YIgvFptOeh" / Twitter DUP leader tells Chuck Schumer to 'read a history book' as Brexit jostling continues in Washington | World News | Sky News More Democrats sympathize with Palestinians than Israelis for first time: Gallup | The Hill Western allies must ‘act faster’ on weapons, says Ukraine | Evening Standard At Virgin Orbit, it never should’ve come to a staff furlough | TechCrunch when financing is plenty and funding is at zero it all made sense Michael Pettis on Twitter: "1/2 "China is likely to work on smaller, less risky and more profitable trade-linked infrastructure projects overseas in the coming years after a number of larger ones under the Belt and Road Initiative encountered financial problems." https://t.co/5MRcRXdJYb via @scmpnews" / Twitter Five years into the trade war, China continues its slow decoupling from US exports | PIIE GBPCHF - forget about the next 3-5pct - the point here is....for the right reasons (Brexit), GBP has been hammered. There are a few positives to look for long-term and CHF could lose its safe heaven statis (partly) due to CS ?.. 'swissmade' status could be weakened have a wonderful Friday and week-end Team PVM

Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets. Credit Suisse also announces offers by Credit Suisse International to repurchase certain OpCo senior debt securities for cash of up to approximately CHF 3 billion ECB decision time, will SVB and CS news change anything to the most likely 25bps ? market pricing sees about 50% chance of 50bps, plenty of rumors going around that the ECB should chicken out today despite core inflation trending over 5.5% because of the banking stress European regulators criticise US ‘incompetence’ over Silicon Valley Bank collapse-FT JPMorgan Says Fed’s Loans Will Provide $2 Trillion of Liquidity Top Japanese manufacturers agree to big wage hikes amid inflation Hydrogen will be bigger than the Industrial Revolution. Clean, green fuel for all sounds too good to be true, but this entrepreneur’s new airship could make the hydrogen economy a reality Iran has agreed to halt covert weapons shipments to its Houthi allies in Yemen as part of a China-brokered deal to re-establish diplomatic relations with Saudi Arabia, U.S. and Saudi officials said New EIA Report Reveals Massive Downward Reductions In US Shale Oil Output Markets : Crude WTI 68$ - recession calls increasing - you could argue (I will..) that it is very welcome news for consumers and inflation! Rates, SOFR madness has to calm down first, for rest of markets to calm down GOLD making new highs vs major currencies Equity markets short cover of headline news like CS 'lifeline' last night, and/or other liquidity injections, stick to quality still, no need to be too brave in these volatile times, but these markets bring new opportunities! USD not doing too much, CHF weakened fairly sharply on the day yesterday, maybe a CS related move ? let's see. In relative terms to rates market, FX, major equity indices pretty ''quiet'', but beware if they awaken (and become as volatile as rates - clearly won't be welcome sign) 20230315 mm statement.pdf SNB statement on CS Credit Suisse Group takes decisive action to pre-emptively strengthen liquidity and announces public tender offers for debt securities (credit-suisse.com) Market turmoil tests ECB rate hike appetite (yahoo.com) Holger Zschaepitz on Twitter: "In at least one respect, we are witnessing the re-emergence of 2008. The MOVE Index, which tracks implied volatility in US Treasury yields, has reached December 2018 levels. https://t.co/qZvGfigEqP" / Twitter Warren says $250,000 cap in deposit insurance for banks should be reexamined | The Hill Guaranty all deposit ? ok , but then it's all but nationalized...would have some big impact on share prices over time European regulators criticise US ‘incompetence’ over Silicon Valley Bank collapse | Financial Times (ft.com) JPMorgan Says Fed’s Loans Will Provide $2 Trillion of Liquidity - Bloomberg SVB collapse may be start of ‘slow rolling crisis’, warns BlackRock boss | Silicon Valley Bank | The Guardian Goldman Sachs bought the SVB bonds whose $1.8 billion loss set off the startup lender's meltdown (yahoo.com) GS..had to be How Switzerland’s once-feted banking industry became a national embarrassment (yahoo.com) Stripe raises $6.5 billion at sharply reduced $50 billion valuation (cnbc.com) Top Japanese manufacturers agree to big wage hikes amid inflation - Nikkei Asia Best of Bitcoin’s Latest Rally Is Over. Watch This Key Level for the Next Move. | Barron's (barrons.com) Rinaldo Brutoco - Financial Times - Partner Content by Withers (ft.com) UK budget worth extra £320m to Scotland, Hunt says - BBC News For Chancellor of the Exchequer Jeremy Hunt, the conditions are ripe to deploy fiscal drag, allowing the government to extract more revenue from taxes without a single policy change. The stealth tax hike comes into play when thresholds are frozen but pay goes up, pushing more people into higher tax bands. While the use of fiscal drag is hardly unique to this government, it will have a much bigger impact this year as inflation runs near its highest level in 40 years and employers raise compensation to help their staff battle spiraling costs Iran Agrees to Stop Arming Houthis in Yemen as Part of Pact With Saudi Arabia - WSJ Oil Traders Ignore EIA Data And Focus On Banking Crisis (fxempire.com) XAU vs EUR making new highs very similar vs most major currencies

´´You cannot take -fiscal responsibility- for granted anymore, governments, corporations, private, banks, hedge funds and financial institutions in particular, this is what higher interest rates do´´ >>> magnitude of the moves in rates are insane.. ´´Sep SFR -40, that´s 85 off highs and 100 or so off lows, Monday´s move like 1982 and yesterday like during 2008 period´´ Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’...(and we have the debt ceiling issue coming up, CDS prices, see thresd below) >>> Elizabeth Warren and Katie Porter are reportedly taking the first step in repealing the Trump-era banking law they blamed for Silicon Valley Bank's collapse U.S CPI came in line (a net acceleration really), combined with HH speech last week, this would have been a clear 50bps next week, but Silicon Valley Bank moment came along and probably change the whole outcome, whether it is for weeks, months or a year >>> FED still 25bps most likely.. KPMG gave Silicon Valley Bank a clean audit report 14 days before it collapsed. It blessed Signature Bank’s books 11 days before. Did they fail overnight or was it a long time coming? Like regulators, KPMG has many questions to answer Meta cuts 10ß000 jobs again, stock up 6% on the day UK budget day, give something away to create jobs and not push inflation! EU natural gas demand fell by 55 bcm in 2022, the largest reduction in its history (equivalent to gas use in >40 million homes). There’s been a lot of debate what the main drivers were (see Thread and IEA report) - good news for inflation Goldman Sachs was the buyer of the $21 billion portfolio Silicon Valley Bank sold at a loss, which started SVB's collapse - Thread Markets : Rates world calming down - in relative terms ! USD not doing a whole lot, risk currencies and JPY moving around with rates Main equity indexes not doing much either, MUCH more around sectors most dependent on leverage and lower rates... Higher rates is doing the job they are supposed to do, namely look through the good, the bad and the ugly ´´badly run, too concentrated, heavily indebted, too leveraged´´ kind of names.. Crude higher/off lows (chart), a sign that we might get a ´financial recession´ but not a real recession, plenty of jobs openings out there..!! ...IEA's Bosoni: Oil market could quickly shift back to deficit later in year Credit, credit and credit : JNK, HYG is what it is ALL about, ´´the good, the bad and the ugly´s´´, the uglýs used to bailed out and survived last 10years or more, the risk now, after SVB, is that it is different this time...higher rates are doing what they were intended to do Triplewitching Friday coming up too Global Market Quick Take: Europe – March 15, 2023 | Saxo Group (home.saxo) US stocks rise as bank shares rebound and CPI shows inflation continues to cool (yahoo.com) Moody’s cuts outlook on U.S. banking system to negative (nbcnews.com) Holger Zschaepitz on Twitter: "Cost of insuring against US default (CDS Price) has jumped due to debt ceiling stand-off and bank bailouts BUT market-implied probability of default w/3.5% is way lower today than in former episodes – particularly the summer of 2011, or autumn of 2013, https://t.co/3XFBreQ2OW" / Twitter KPMG Gave SVB, Signature Bank Clean Bill of Health Weeks Before Collapse - WSJ Silicon Valley Bank: the implications for central banks and crypto markets (thearmchairtrader.com) >>> broadly speaking tighter access to funding and higher costs, as many other banks will not be as aggressive as SVB was... FTAV’s further reading | Financial Times here is the whole list of prominent dudes´ thinking on the subject, Dalio : What I Think About the Silicon Valley Bank Situation | LinkedIn Genevieve Roch-Decter, CFA on Twitter: "BREAKING: Goldman Sachs was the buyer of the $21 billion portfolio Silicon Valley Bank sold at a loss, which started SVB's collapse https://t.co/JsnBZbz3bZ" / Twitter Robinhood Users Say The Trading App Won’t Cash In Their Profitable Bets Against Silicon Valley Bank (forbes.com) Meta's big job cuts aren't about the tricky economy or rising inflation. They're about Mark Zuckerberg's mistakes. (yahoo.com) A Russian warplane struck a US drone over the Black Sea (qz.com) Warren, Porter Take First Step to Repeal Trump-Era Law Blamed for SVB Collapse (businessinsider.com) Chancellor set to deliver ‘back-to-work’ Budget amid push for growth | The Independent France faces fresh round of strikes over highly contested pension reforms (france24.com) Volkswagen to make electric vehicle batteries in Canada – DW – 03/13/2023 How Switzerland’s once-feted banking industry became a national embarrassment (msn.com) Charity: Swiss support of Ukrainian refugees fading (theswisstimes.ch) Peter Zeniewski on Twitter: "EU natural gas demand fell by 55 bcm in 2022, the largest reduction in its history (equivalent to gas use in >40 million homes). There’s been a lot of debate what the main drivers were, and so today the @IEA released a commentary exploring how all this happened. Quick thread. https://t.co/1LqRpWKVHi" / Twitter WTI - is it slowly time to get some crude on board ?

FED have now 'broken' a few things with their powerful hiking cycle, will they show signs of pausing/easing off on hiking.. (Crypto, coins, LDI, housing, commercial REIT's, leveraged/weak balance-sheets, VC space now etc), IMHO they still do 25bps, definitely not 50bps, but honestly anything goes.. Today is U.S CPI >>> Doubleline’s Gunlach: The Fed will hike next week in order to save their credibility but shouldn’t, Barclays no hike next week and Nomura goes for a cut next week and Fed to stop QT...anything goes, FED caught between a rock and a hard place (should still hike on Inflation vs financial conditions perhaps calling to stop or cut potentially..) >>> The events over the last three trading days is “expansionary” in monetary sense -ie, printinting money, likely stopping QT and Terminal rates were probably for this mini-cycle reached/Saxo-Steen Moral hazard :... if you are/were a small financial institution/bank, you can/could take as much risk to boost your share price 15years, forget about hedging anything, if (when..) it goes wrong, they get a bailout... >>> all this goes all the way back to the LTCM days, the system should have never bailed them out...it allowed too many institutions to not care much about anything, as Central Banks and Governments would be here to bail them out eventually >>> the fastest rate hike cycle ever, is forcing the issue with too lightly/non-regulated, too concentrated businesses and weak/leverage balance-sheet balance-sheets FT-How could regulators have missed the risks at Silicon Valley Bank? that IS the question.. Pfizer has agreed to pay USD 43 billion for biotech Seagen and its pioneering class of targeted cancer drugs, The Wall Street Journal reported Credit Suisse said it had identified “material weaknesses” in its internal controls over financial reporting, the latest blow to a bank battling to revive its fortunes A deal to restart Ukraine grain exports will be signed today. Ukraine, Russia, Turkey, and the UN have arrived to an agreement that will free up 20 million tons of grain trapped in Odessa Quantitative easing apparently is re-accelerating: The BoJ revealed on Monday evening that it had stepped into the Tokyo equity market for the first time since early December 2022, buying $5.2bn worth of exchange traded funds GS-Blankfein : A few banks may have issues like SVB, but only a few/thread below Markets : UST 2year yields down to 4%, a full 1% below last week's levels, just an incredibly HUGE rates move, broken every records, and not just in the U.S >>> Historic moves in the bond markets y'day, biggest decline in 2Y UST yields since 1982 (-60bps).... and the biggest decline in the 2Y German bond yields since 1990 (-40bps).... Swiss even bigger & wilder GOLD naturally does well in these conditions, rates, QE, credit risks etc Equity markets actually pretty stable, all things considered, few NASDAQ names liked lower rates yesterday, though internally, moves(swings were huge, depending on quality of names/balance-sheets/credit etc....as it should, it's not all good or all bad anymore...! Main indexes in the U.S stable, Europe readjusted 2% lower (was still near recent cycle highs) BTC loved the Fed action (QE) Stuff happening very fast these days, no queue outside forming at banks to take cash out, it's all done in few minutes/hours on the phone...on the back of a few tweets.. FX been remarkably stable really, a few crowded trade like long MXN, long CROSSJPY's and GBPCHF (briefly sub 1.10) came under pressure last few days. EURCHF down a little too, CHF, JPY and Gold always do well during these kind of periods.. Could the move in JGB's (now back to 28bps!), revive a little bit of a weaker JPY scenario (or...might be a perfect time for the BoJ to abandon YCC with JPN sovereign curve out to the 10yr trading comfortably below the 50bp cap... Specs short-squeezed (JGB's and JPY) after last week's meeting Risk and equity rallied/held well, on lower rates/QE, but from here on, the real driver is and will remain credit, this is the most important thing in days, weeks and months ahead, it is all about CREDIT, like in 2009 period, equity do not necessarily need to go down big, but in credit and macro definitely ! so much more about specifics https://saxostrats.podbean.com/e/careening-toward-a-credit-crunch/ and https://s356.podbean.com/pb/3fd05f2ec7da1793121b243156ee3fbc/64103cf0/data1/fs56/5709963/uploads/2023_03_14_SaxoMarketCall.pdf?pbss=13cf189c-4657-59a8-a15e-f60c4e634e94 .. Historical moves in 2y bonds (not just US..) - well worth a listen Lloyd Blankfein on Twitter: "A few banks may have issues like SVB, but only a few. Govt actions removed reasons for bank runs. Biggest banks have much tougher regulation and stress testing. Anxiety and volatility high, but sharply lower interest rates, fed likely on hold, are strong positives for markets." / Twitter Bank share sell-off spreads to Japan as SVB collapse shakes markets | Financial Times (ft.com) >>> The BoJ revealed on Monday evening that it had stepped into the Tokyo equity market for the first time since early December 2022, buying $5.2bn worth of exchange traded funds. Collapse of Silicon Valley Bank, Signature Bank Calls Fed Interest Rate Path Into Question - WSJ >>> There is a saying that the Federal Reserve raises interest rates until something breaks. A big surprise over the past year had been that nothing broke. Things have broken now... SVB shows the perils of regulators fighting the last war | Financial Times (ft.com) After all, the fact that SVB was sitting on a massive, unhedged portfolio of long-term Treasuries was no secret; last year, JPMorgan circulated shocking calculations to its clients (which were recirculated this week) that showed that these (then) unrealised losses could wipe out tier one capital. Signature Bank Closure Deals Another Blow to Crypto Industry (yahoo.com) If you can't cash in casino chips after gambling and go home then folks will stop going to the casino... Credit Suisse finds ‘material weaknesses’ in financial reporting controls | Financial Times (ft.com) >>> In its annual report on Tuesday, Credit Suisse said “management did not design and maintain an effective risk assessment process to identify and analyse the risk of material misstatements in its financial statements” >>> CDS market a big spot of bother.. Credit Suisse Finds ‘Material’ Control Lapses After SEC Prompt - Bloomberg Barney Frank Sat on Board for Collapsed Signature Bank (breitbart.com) Couldn't make this up Pfizer Agrees To Buy Seagen For 43 Bn - BW Businessworld A deal to restart Ukraine grain exports is on its way (qz.com) Good news ! Budget 2023: Jeremy Hunt to create 12 new low-tax ‘investment zones’ across UK (msn.com) best stay calm and steady on spending Controversial small boats bill clears first Commons hurdle amid Tory calls for changes (msn.com)

Looks like the FED has 'finally' broken a few things with all their hikes...for those arguing that they will only stop when things break, a few are breaking now.. This week : markets will deal with SVB fall outs and consequences on rates policy and other 'moral hazards' out there, initial reaction positive in Eq markets (from oversold levels), but watch out. UK Budget coming up, the market will be all over what the FED will do or not do next week, 25bps still most likely IMHO, let's see. The ECB should do 50bps still on Thursday SVB closure & receivership is going to have a big impact on the tech ecosystem. SVB was not just a dominant player in tech but were highly integrated in some non-traditional ways Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors Project Icebreaker, a joint initiative from the Bank for International Settlements and the central banks of Israel, Norway, and Sweden, has successfully concluded a study on the potential benefits and challenges of using retail central bank digital currencies (CBDC) in international payments “With 311k jobs added in February after an exceptionally strong January increase, we think the Fed will continue to see the labor market as still too tight….We continue to expect a 50bp hike and policy rates reaching 5.50-5.75%:” Citi’s Hollenhorst Gary Cohen : This is not 2008. Then every bank had a similar portfolio - mortgages - and home prices were falling. SVB has a very unique balance sheet. And unlike 2008, banks today are very highly capitalized and operate with significant regulations. The SVB matter is a classic run on a bank Bailouts : everyone calls on every governments to bail them out, government's money comes from 'everyone' (in other words : us, taxpayers..), they keep telling us that 'no public money' has or will be used.. ..sounds like a lot of cobblers to me ! GS : "In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March."....this will be the ongoing discussion amongst ALL players.. did we see the top ? has the FED finally broken something, which is what will tell them to ease-off/stop the hiking cycle ..?.. Markets : Fastest FED hiking cycle in decades >>> should not be too much of a surprise that most ''leveraged'' parts of the investment community gets hit first, LDI, REIT's, housing, Crypto and parts of VC world, related banks >>> we pointed out recently that JNK, HYG was perhaps (still) too richly priced lately, again not all credit are bad, home work needs to be done on individual bonds, stocks and so on! Terminal rate from 5.7 in Sep to 5.06 in June now..curve steepener (or less inverted..) 2s10s 75bp not -110 anymore Markets are unlikely to just settle nicely and quietly, they will be 'hunting' for the weak stories, weak balance-sheet stories, no need to be too brave at the moment, anyone who says they know exactly what will happen is not realistic about things. Many will push the contagion risk, again weakest balance-sheet, asset-liability mismatch stories will be looked at...it is not all bad! Investors will (should have done long ago) dump vulnerable names and buy quality GOLD either way should do rather well from here (credit risk and rates topped), credit risks always bring Gold, CHF and JPY higher Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC | U.S. Department of the Treasury Federal Reserve Board - Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors Where Were the Regulators as SVB Crashed? - WSJ Silicon Valley Bank CEO Tells VC Clients to ‘Stay Calm’ — The Information Last Thursday, CEO was telling clients 'stay calm'... couldn't make this up, this is exactly what you say when you want to trigger a panic... Rick Palacios Jr. on Twitter: "Unfortunately, home prices in tech and venture capital hubs are already down the most from 2022 peaks for markets we track across the country. Any additional setbacks for tech & VC (now brewing) aren't ideal. https://t.co/7K1H2gvTxO" / Twitter Coinbase Gave Silicon Valley Bank Stock Warrants for Access to USD Payments - CoinDesk Lack of diversification the big issue for these kind of banks (any business for that matter) Alf on Twitter: "SVB does not deserve a bailout. A deep look at their financial statement reveals how horrific they were at risk management. And in my opinion incompetence explains only part of it. Moral hazard must have been at play. A thread. 1/" / Twitter Prisoner ends life in Zug - WRS (worldradio.ch) Lordstown Motors founder cashed in before electric truck stalled | Automotive News (autonews.com) why or how can the 'system' let these things happen nowadays... BBC will not broadcast Attenborough episode over fear of rightwing backlash | BBC | The Guardian world (UK) definitely gone mad, good grief The Crooked House: Britain's 'wonkiest pub' to be sold - BBC News Love it! Central banks conclude cross-border CBDC experiment, Project Icebreaker (finextra.com)

SVB crisis sends jitters through start-up world UK : HS2 construction to be delayed in bid to cut costs - other countries might have to take similar moves too (slow things down, good for softer inflation!) The US has "successfully blocked or frozen more than $58 billion worth of sanctioned Russians’ assets": US Dept of Treasury 0DTE options : An explosion in trading in a type of equity derivative security in recent months has prompted Wall Street players and a major clearing house to examine the potential risks it poses, according to two sources familiar with the matter >>> best have a little look at it before there is a down day of 10% ( or up) - leverage kills eventually.. FT - 'Cathie Wood's Ark Investment Management has earned more than $300mn in fees on its flagship exchange traded fund since its inception nine years ago, while wiping out almost $10bn of investors' cash in the same period.' China’s Xi Wins Unanimous Votes For Third Term As President.. Credit Suisse postponed publication of its annual report after a last-minute call from the SEC about its earlier financial statements. It is not currently clear when last year's report will be released instead Macron and Sunak seek to overcome years of Franco-British feuding Mexico Inflation Undershoots Forecasts, Giving Banxico Space (better news,like Australia, Canada and China this week..) Markets : SPX is now below both the 50 and the 200 day moving average, as well as trading below the short term trend line that has been in place since October lows. A close below the 3950 level and this could get much more dynamic to the downside, have a look at where we are in the bank ETF KBW below - long-term perspective ( I would add that is is very much a stock picking market, same on way down, some banks more at risk, many others, that are perfectly fine..) USDollar not really higher on this risk-off move last few days (mind..it's not lower either..all about NFP next, after slightly weaker/higher Claims yesterday, BoJ unch, all about the new guys in Q2 2023 to possibly change YCC etc.. HIGHER rates kills leverage eventually, this is where risk and issue pops up, long duration assets, ARKK and the likes, some banks like SVB (not all banks), housing (some REIT's, commercial mainly, where borrowing and leverage is used, not all REIT's..), and so on IF, this becomes a CREDIT risk (as it would eventually..with curve inversion, overtightening etc), then CHF, JPY, GOLD...will do well, and so will bonds, particularly with the HUGE short in TY out there, biggest short since 2018.. SVB crisis sends jitters through startup world: Here's what we know | Business Standard News (business-standard.com) Alf on Twitter: "Why this sudden meltdown in bank stocks? A couple of interesting theories and charts are doing the rounds, so let's have a look under the hood. A thread. 1/" / Twitter Good thread Bill Ackman on Twitter: "The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered." / Twitter it matters clearly Peter Thiel’s Founders Fund Tells Companies to Pull Money From SVB - Bloomberg Mexico Inflation Undershoots Forecasts, Giving Banxico Space (yahoo.com) Better news too there, like Canada, Australia, China, all softer inflation data lately, the battle is not won yet, but we are getting there! Bank of Japan keeps low rates as Kuroda sticks to script at swan song meeting (msn.com) The last BIG dovish Central Banker has now retired Macron and Sunak seek to overcome years of Franco-British feuding (thelocal.fr) Boris Johnson criticised for making millions while rarely appearing in Commons | Boris Johnson | The Guardian good for him, as we always said, he only ever cared about himself, no-one else, not other MP's, not folks, not the party, not the country, just himself HS2 construction to be delayed in bid to cut costs - BBC News Economy ‘bounces back’ in another signal a recession is off table (cityam.com) >>> The post-Brexit agreement between the UK and the EU on Northern Ireland is a "really good deal overall," according to the Irish finance minister Holger Zschaepitz on Twitter: "#QT is much slower than #QE. Central banks reduce total assets much more slowly than they have accumulated them. https://t.co/93s9liawBi" / Twitter Dubai's record property demand is creating a nightmare for some residents (cnbc.com) Why poverty might be far worse in the U.S. than it's reported (cnbc.com) pretty terrible! Biden's budget complicates coming debt fight: expert (yahoo.com) The West must not give up on Georgia again (emerging-europe.com) Where is Georgia and is it a Nato member? | The Independent Vinyl Record Sales Surpassed CDs for First Time in 35 Years (businessinsider.com) That's a come back ! I might dig my old ones out now.. KWB banks-financial ETF - This is where we are long-term SVB trading down to around 80 in overnight trade

Kuroda's last meeting at BoJ tomorrow - no change expected this time round, but you never know with. Changes to YCC more likely in April-June, when Fed will peak, which 'should' support softer USDJPY going into Q2 “There’s a reasonable chance that the Fed will have to bring the Fed Funds rate to 6% & then keep it there for an extended period to slow the economy & get inflation down to near 2%:” BlackRock's Rieder...(we are nearly there already...?, Fed Beige Book survey: US businesses see moderation in inflation ahead, JOLTS : The number of US job openings fell to 10.8mln in Jan, down from 11.2 in Dec but exceeding consensus estimates of 10.5mln, meaning labor market is still tighter than anticipated (..but..with construction openings down 240k, a 49% decline m/m-leading? China continues to experience domestic disinflation. In February CPI prices rose 1.0% y-o-y (versus 2.1% in January), while actually declining 0.5% m-o-m (versus rising 0.8% in January). PPI prices declined 1.4% y-o-y, their fifth decline in a row, maybe a good sign for things to come in US and Europe BoC : For the first time in about a year, the Bank of Canada kept its main interest rate unchanged at a scheduled policy decision, arguing economic data point to inflation sharply decelerating this year toward its 2% targe Biden to propose 5.2% Federal pay increase Johnson Redbook same-store sales have hit the lowest growth rate in 2 years .This proxy for physical retail activity confirms other data suggesting recent consumer weakness "A French company has won the contract for post-Brexit border checks, in a blow to hopes that domestic businesses would be prioritised in public procurement." The Brexit pennies dropped, as the gentle rain from heaven upon the journalists beneath "US 10-yr yields are consistent with the prevailing narrative of a gently does it, soft-landing scenario. As a result, the probability of a hard landing is perhaps being under-estimated in our view...We have not changed our view that bond yields will be lower by year end:" HSBC BMO: "Our take is that Powell was simply hedging against the potential that another massive upside surprise in NFP and/or CPI forces the Fed’s hand to move 50 bp as it continues the credibility chase." SNB posts biggest loss in its 115-year history (every CB is in a similar position...) ECB balance sheet drops by another €8.6bn to €7,830.8bn in the past week, the lowest level since Jun2021 as QT continues. Total assets now equal to 59% of Eurozone's GDP vs Fed's 32%, SNB's 113% and BoJ's 132%. Turkey's six-party opposition coalition, Nation Alliance, has chosen Kemal Kilicdaroglu as its joint presidential candidate. He will seek to unseat President Recep Tayyip Erdogan in the upcoming presidential and parliamentary election Taiwan suspects Chinese ships cut islands’ internet cables. Residents of Taiwan's outlying islands near the Chinese coast have been without the internet for the past month ECB officials have rightly pointed to the role that fiscal policy plays in inflation, and encouraged governments to exercise restraint. The Fed should at least acknowledge this reality. It plays an essential role to achieving their mandate European Central Bank president Christine Lagarde said Wednesday she would do whatever it takes to restore price stability in the face of high inflation Credit Suisse Group AG delayed the publication of its annual report and compensation details for 2022 after US regulators raised last-minute technical queries on previous statements Georgia : For days, thousands of protesters have taken to the streets in Tbilisi in anger as a Russian-style law began its passage through parliament Markets : NFP tomorrow, U.S CPI next week, bottom line the data is and will remain volatile, markets will continue to gyrate, this week the 50bps in March probability moved/got priced to 80%, was about 30pct probability on Monday.. SPX is trading at the same levels we traded at in May last year. Some bigger ups and downs, but we are still lacking the new bigger trend. During this period the index has moved closer and closer towards a big dynamic like formation. We are right at the 200 day and the 100 day is coming in slightly lower. We are getting closer to a break out move...MS found that “the gap between reported earnings and cash flow for the S&P 1500 is at its widest in 25 years”, mainly due to high working capital spend (Thread) USDollar firmed up this week on Powell, next short-term direction will come from BoJ and NFP tomorrow, last NFP was a huge surprise (ADP was much lower vs actual NFP, will we reverse some now ?) Crude stable to lower, Copper similar ECB chief vows to do 'whatever it takes' to tame inflation - Digital Journal Holger Zschaepitz on Twitter: "#ECB balance sheet drops by another €8.6bn to €7,830.8bn in the past week, the lowest level since Jun2021 as QT continues. Total assets now equal to 59% of Eurozone's GDP vs Fed's 32%, SNB's 113% and BoJ's 132%. https://t.co/fFAZEKbAiR" / Twitter The Fed - Beige Book - March 8, 2023 (federalreserve.gov) Fed Beige Book survey: US businesses see moderation in inflation ahead (yahoo.com) SNB posts biggest loss in its 115-year history - The Swiss Times Not a record to be proud of ! strewth ! At the beginning of 2022, SNB had CHF204.2 billion in equity. By the end of the year, the bank’s equity had shrunk to CHF65.8 billion. For reference, SNB posted a profit of CHF26 billion in 2021 Swiss president appears sceptical about Leopard tank sale - SWI swissinfo.ch Wasteland Capital on Twitter: "MS found that “the gap between reported earnings and cash flow for the S&P 1500 is at its widest in 25 years”, mainly due to high working capital spend. Current earnings are overestimating (not underestimating, as many believe) how much cash companies are actually generating. https://t.co/NanSxh1I9r" / Twitter Michael Pettis on Twitter: "1/4 China continues to experience domestic disinflation. In February CPI prices rose 1.0% y-o-y (versus 2.1% in January), while actually declining 0.5% m-o-m (versus rising 0.8% in January). PPI prices declined 1.4% y-o-y, their fifth decline in a row. https://t.co/MTVKIcqCBu" / Twitter Ukraine war live updates: Latest news on Russia and the war in Ukraine (cnbc.com) Turkish opposition finally unites against Erdogan ahead of May presidential elections (lemonde.fr) Taiwan suspects Chinese ships cut islands’ internet cables - ABC News (go.com) Trial of Gazprombank managers underway in Switzerland - SWI swissinfo.ch Georgians protest on streets and in parliament over 'Russia-style' bill - BBC News Silvergate Collapse Dragging Down Bitcoin Volume (coindesk.com) Long been over, it is now Silvergate short seller says he’s betting against Signature: ‘Binance is next’ – DL News Georgia to drop 'foreign agents' law after protests (msn.com) Nomura cuts entertainment budget as rising costs hurt profit (afr.com) Signs that monetary tightening working.. BTP's 10year - yields have gone form 93bp in early 2022 to 4.50% now

French nationwide strike to extend as pension reform fight intensifies Powell : “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated", the historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.", last speech Powell mentioned 'disinflation' a few times... changing his mind like a headless chicken..>>> overall, we still think we could see approx. 6 % Fed peak rate, sticky inflation, services inflation, more resilient inflation etc, but Fed will keep to 25bps (extending for longer into July perhaps..)... markets putting a 50/50 probability of 50bps in March (up from zero in Feb and 30% yesterday morning) >>> The speed and severity of this Fed tightening over the last year is the boldest most of us have seen in our 30-40y+ careers U.S : Cox Automotive on Tuesday reported wholesale used vehicle prices increased 4.3% in February from January — marking the largest increase between the two months since 2009 RBA : The Reserve Bank of Australia is “closer” to pausing its record series of interest rate rises, its governor, Philip Lowe >>> AUD broken down on charts 0DTE options could turn 5% intraday market decline into 25% rout -JPMorgan Chinese mutual funds suffer biggest net outflow in 31 months. Market split on financial measures announced at National People's Congress. China’s energy transition sees ‘staggering’ progress on renewables — and a coal power boom The UK’s RMT union has called off a strike next week against Network Rail after receiving a new pay offer Markets : U.S : Terminal up about 18bps yesterday, to about 5.6%, inflation moving from transitory/passing soon to Structural (more resilient) >>> higher for longer, inversion deepest since 1981, all sorts of record broken, BoJ event and NFP next SPX500 chart below, no drama for now, more weakness overnight in HSI Techs, long duration type names still more likely to suffer/struggle in months ahead Crude Oil struggling again, the likes of XAG broken down technically (too much weight from real yields), key level XAUUSD around here $1800 USD firmer again, CABLE broken down, USDJPY continues in the absence of BoJ action (more likely in April-Mai), though clearly meeting starting tomorrow could lead to a surprise! HYG, JNK yield spread look too low Jerome Powell Says Fed Is Prepared to Speed Up Interest-Rate Rises - WSJ Bank of Japan (BoJ) preview: what to expect | IG SG Lee is always a bull, but here is the other side CNBCOvertime on Twitter: "Despite today's action @Fundstrat's Tom Lee remains bullish "The reason we're constructive has a lot to do with leading indicators showing us that #inflation could be a lot softer..." https://t.co/BB5In8Z80y" / Twitter And : Every time the Philly fed manufacturing index dipped below -25, a recession took hold of the economy We’re now at -24.3... overall there are 'signs' that we could be near turning point - but we won't know for a few months "The question Fed Chair Powell needs to be asked is “what do you think you are doing?”. Powell has yet to explain how raising rates will tackle profit-led inflation. Pursuing higher unemployment seems an ineffective response." - UBS Christophe Barraud🛢🐳 on Twitter: "🇺🇸 High Frequency Data point to weakness in the U.S. employment market. *They show that job openings are weaker than JOLTS suggests. *Charts from @MacroAlf and @zerohedge https://t.co/A1ZqfeuRpk" / Twitter >>> SOFT NFP on Friday ? would force unwind a few things from yesterday... Inflation and Recent Economic Data | Speeches | RBA Ed Bradford on Twitter: "Even including the crazy early '80s Volcker money supply targeting regime, this is next level. Fed is crazy jacking up interest rates with a huge balance sheet. Curve has no choice but invert and flatten. The reversal when it happens will be sudden and non-stop https://t.co/IECHxY5JQY" / Twitter long-end eventually should/will move sharply! Used vehicle prices rising at an unseasonably strong rate (cnbc.com) Jim Bianco biancoresearch.eth on Twitter: "Powell just finished, and here is the updated probability that the Fed will hike 50 next week. https://t.co/TYCv9t5PXm" / Twitter BOJ's move to curb bond short-selling is working, with side effects - Nikkei Asia - more manipulation from BoJ '''it's less profitable for short-sellers'' 0DTE options could turn 5% intraday market decline into 25% rout -JPMorgan (yahoo.com) This may sound crazy, far-fetched and to be ignored. It is not possible to ignore, given their size in daily trading these days GammaLab on Twitter: "Happy that this 0DTE tweet had 50K views, but feelings are very mixed about it. I love micro very much, don't get me wrong, but why do people care so much about occult market structure issues, when macro is magnitudes more fragile? We are dancing on a volcano and '0DTE' could…" / Twitter Energy: China's renewables progress comes alongside a coal power boom (cnbc.com) Berkshire Hathaway resumes Occidental purchases, stake reaches 22.2% (msn.com) Santander's Ana Botin: Rotating roles will help women get to the top (cnbc.com) Mass rallies and strikes in France over Macron's pension reform (yahoo.com) Peter Stefanovic on Twitter: "The elephant in the room the Government doesn’t want to mention is that the skyrocketing rise in small boat crossings is in large part a consequence of the Brexit deal championed by both the Prime Minister & the Home Secretary & now they plan to use it to trample on human rights https://t.co/RJuBNze9Y1" / Twitter Russia's Advancement Past Bakhmut Could Come at a High Price: ISW (newsweek.com) SPX500 - still looks ok for the bulls... it won't on a close below 3940 area

Markets did not like the rise in the ISM manufacturing prices paid (51.3 vs 44.5) and took the 2y UST yields to 5.25pct >>> margins being squeezed, clear risk to earnings lower >>> UST 2year hit 4.92%, SPX500 technically soft through support (Nasdaq, TSLA.. does bit more on rates) and talks of further U.S sanctions on China BoE's Andrew Bailey signals no pressing need for more UK interest rate rises....GBP reacted as you would expect... >>> RoW see inflation accelerating and Bailey talks dovish.. South Korea's Yoon says Japan has transformed into a partner The Bundesbank's annual report : In short, financial losses will increase substantially in coming years, but the provisions and other buffers look large enough for now. Nagel: "The burdens from rising rates are likely to increase considerably in the years to come", probably in excess of financial buffers, leading to an outright loss. Zeroing in on 0DTE: A Trading Tool to Try or a Trigger to Volmageddon?These options contracts that void just hours after they're traded have taken the investing world by storm China increasingly ambitious with 2023 growth target, may aim for up to 6% Fed's Kashkari responded to the question about the size of rate hikes, indicating he is open-minded to either 25bp or 50bp, which lends support to our call for a 50bp rate hike in March. However, he also said the March dots are much more important than how much the Fed will raise at the March meeting Bank of Mexico says inflation taking longer than expected to recede, same story everywhere Blackstone Blocked Investor Withdrawals From $71 Bn REIT In February Italy and Germany seek to postpone EU transition to electric cars The two countries want to block EU’s ban on new combustion-engine vehicles from 2035, potentially threatening the bloc's green goals (this is a consequence of tight federal budgets, higher rates and higher costs overall...) Rare earth miners in China fall Thursday as Tesla said it plans to abandon use of the minerals in its next-generation “magnet” motor due to the health and environmental risks that come with mining: BBG Billionaire investor David Einhorn says the Fed wants stock prices to go down and will hike rates higher than markets expect (he's all about 'financial conditions' that are still to favorable in his view) Markets : Peak US rates now seen near 5.5% - clearly a lot priced in the bond market by now (mortgage demand at 28y lows), 10y UST 4% etc Asian equities turned lower again, after initial +ve response to China PMI y'day, SPX500 3940 was big on way up, pushed markets to 4150, now rates and inflation higher, we breaking through key supports..Risk is that Bonds have repriced, equity markets haven't done enough. DAX - chart below - only to put things in perspective - we have had a monster rally since Oct 2022 USD remains firm (but not higher), same same, CABLE at risk of breaking down again (dovish BoE), AUDUSD couldn't find much of a bid on positive China growth news (commodities lagging though). Watch out for BoJ (#USDJPY) have a funny feeling they are preparing the ground for some sort of a change, or the market will force them to.. Crude Oil inches up on China rebound, but global demand concerns weigh (commods lagging when everyone is bullish China reopening - that trade already done it seems) Few days skiing now, sorry folks, need a little bit of quality time with Fam. Back on Tuesday Ex-BOJ governor Shirakawa urges re-examination of monetary framework and inflation targets | The Japan Times The DUP must decide what Brexit they want - or Northern Ireland will be stuck (cityam.com) Seems we are heading for a positive development there, will believe it when I see it ! Eli Lilly Slashes Insulin Prices Up To 70% And Caps Out-Of-Pocket Costs At $35 (forbes.com) Good news Bundesbank taps its risk provisions for 2022 | Deutsche Bundesbank same goes for all CB's let's be honest...Bundesbank recorded a loss of €0.972bn in 2022 due to rising deposit rates for commercial banks & losses on FX securities. Losses were offset by capitalization of reserves. Bottom line: Buba recorded ZERO profit, 3rd year in row Buba has not transferred profit to federal budget. Thread : Frederik Ducrozet on Twitter: "🇩🇪 The @bundesbank's annual report is a harbinger of things to come. In short, financial losses will increase substantially in coming years, but the provisions and other buffers look large enough for now. https://t.co/lQNpyNxPo2" / Twitter China and Belarus express 'extreme interest' in Ukraine peace - BBC News let's hope so! China calls for faster push into 5G, IoT and supercomputing engines of growth in new grand digitalisation plan | South China Morning Post (scmp.com) Andrew Bailey signals no pressing need for more UK interest rate rises | Financial Times (ft.com) pretty ridiculous dovish stance, while everyone else in the globe is/has to be hawkish The EU has discovered that it needs Britain more than it thought (telegraph.co.uk) South Korea's Yoon says Japan has transformed into a partner - Nikkei Asia Zeroing in on 0DTE: A Trading Tool to Try or a Trigger to Volmageddon? - RealMoney (thestreet.com) News zum Russland-Ukraine-Krieg: Das geschah in der Nacht zu Donnerstag (2. März) - DER SPIEGEL Exclusive: US seeks allies' backing for possible China sanctions over Ukraine war | Reuters Blackstone blocked investor withdrawals from $71 bn REIT in February (vccircle.com) the kind of things investors don't want to see to often! Europe's 2035 combustion-engine ban opposed by Germany, Italy | Automotive News Europe (autonews.com) IEA: Global clean energy growth offset rise in CO2 emissions last year (cnbc.com) Taylor Wimpey profits up nearly 22 per cent at £827m as builder notes signs of housing market 'improvement' Taylor Wimpey sees shares slump as investors confidence in housing market reaches new low (cityam.com) Subprime car loan delinquencies are surging (axios.com) Low-income households are falling behind on car bills, sadly always the ones to suffer first Housing Crash: Mortgage Applications Fall to Lowest in Nearly 30 Years (businessinsider.com) hardly a surprise with rates up here! Rivian Is Alienating Its Most Important Customers at Critical Time (businessinsider.com) Rivian lost $5bnlast year, forecast to lose another 4bn this year..nuts Déforestation au supermarché: Des labels pour le bois «écologique» trompent le consommateur suisse | 24 heures ‘Joyful’ portrait of Picasso’s daughter Maya sells at auction for over £18m | The Independent DAX - only to put things in perspective - we have had a monster rally since Oct 2022 have a great day team pvm