Wednesday, March 2: Five things the markets speak of
Stateside, all eyes were on "super Tuesday. By nights end, it has produced few surprises in the US political landscape
Donald Trump swing gave him victories in all but three of the eleven states Republican primary holders - Texas / Oklahoma (Cruz) and Minnesota (Rubio).
On the Democratic side, Clinton secured victories in seven states in four to Sanders, with the most wins high level in Texas, Virginia and Massachusetts.
The rest of the capital markets continue to embrace 'risk' - is enjoying liabilities of the central bank stimulus measures to support global growth.
The rise in risk appetite helps relax recent "safe haven" flows (EUR rides his three-week low at € 1.0860, while the Yen downright printed two weeks over ¥ 114 45 level):
1. the stock markets in the black
global equities rallied hard over the last two trading sessions, with almost all major world indices in the "black." Asian markets have benefited from PBoC RRR cut, helping them overcome another round of dismal data in February, while in Europe, expectations for more easing from the ECB has offset a complete list of continental PMI manufacturing decreases. In the US, auto-strong sales and data on construction spending was able to slide the highest market indices.
Title in U.S open future, Wednesday's index erased an earlier decline to be little changed. The benchmark index jumped 2.4% yesterday, its biggest gain since January.
It is interesting to note that in terms of return on equity, the eighth year of presidency in the last row, and the first half of an election year is often even worse.
2. Negative interest rate yields remain dominant
Japan sold the 10-year debt on Tuesday with a negative return for the first time that the bond market, it continues to respond to the announcement of the BoJ negative rates in late January (Japan MoF sold ¥ 2.19T in 10 years + 0.1% JGB - yield: -0.024% against 0.078% prior; bid to cover: 3.20x against 3.14x prior)
in Europe. , Yields on German debt remain negative over eight years. Central banks understand that holding negative returns for too long will eventually change the future savings and investments -. Based on NIRP too will eventually bring more problems
Currently, futures prices indicate that investors expect the ECB to cut its deposit rate to 0.1% at its meeting next week, especially after negative Advanced January eurozone inflation reading Monday (-0.2% v + 0.3% m / m).
ECB President Mario Draghi reiterated on Wednesday that there was no limit 'on the bank's tools to achieve the inflation target, and said the policy review of the week next should take into account the context of higher risk of deteriorating outlook.
Stateside, Fed increased rates in March confirmed that the US data continues a series of positive surprises (ISM - 49.5 vs 48.2, construction spending + 1.5%). It is above the higher wages, retail sales and core-PCE (preferred inflation gauge the Fed).
Chances hike in March were the highest in a month, but still in doubt. Futures see chances of a meeting next move at 1 in 10 June to 4-for-10. The "doves" are still betting that international concerns and disinflation to the rule.
3. China cutting credit rating
Moody China cuts sovereign rating outlook to stable negative and affirmed its AA3 rating, citing the weakening of fiscal measures, the erosion of the strength and the risk of a loss of credibility and effectiveness of foreign policy.
The financial strength of the government "may come under pressure if it takes on the liabilities of firms in difficulty belonging to the state, while capital outflows limited the scope of policy makers to stimulate the economy lowest in a quarter century, "the ratings company said in a statement.
global investors' remain concerned that the Communist Party will struggle to revise the second largest economy in the world in a when capital flows on the levels of countries and debt soared to + 247% of GDP.
This weekend, Chinese leaders will begin ten days of political meetings to plan how to meet the challenges economic of the nation and meet the goal of doubling per capita income by 2020.
government 
4. gross supply glut weighs on prices
WTI crude prices tacked on another + 1.75% gain on Tuesday, but slipped late in the day after the American Petroleum Institute (API) reported a barrel build + 9.9m weekday crude stocks (much more than the expected increase of 3.6m bbl).
Before the open New York, Brent trades below -27c to $ 36.54 a barrel. On Tuesday, it reached $ 37.25, the highest in nearly two months. WTI is down -66c to $ 33.74.
Traders will be looking closely at the US weekly supply data today government for confirmation of inventory accumulation. The Energy Information Administration figures are due at 10:30 ET a.m..
Another rising stocks should resume some loons win outright (yesterday USD / CAD fell to a new three-month low - 1.3391 C $ - after the publication of figures of Canada December GDP and a slight increase in prices of raw materials).
5. RBA reduced the weight of EUR
The Reserve Bank of Australia (RBA) said the Korean won its foreign reserves (+ 5%). This is to the detriment of the euro, whose weighting is now at 20%. the weight allocated to the EUR was down by as much as 45% in 2012.
The RBA has also allocated 5% against the JPY, CAD, GBP and RMB. It is USD weighting remains at a constant 55%. This suggests that the Bank continues to have its own ideas "carry trade". Too many currencies now offer zero or negative returns.
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