Morning all,

Last night we had a Bazooka fired at the market with a easing of rates in Zombieland,a stimulus injection into the UK of around $50bn and the Chinese interest rate being lowered. Central Banks all moved within an hour and nothing happened! Not enough the market cried..we want more…course didn’t help that Draghi,the ECB President opened his mouth..but things seem to be getting slightly worse on the World growth front and that is what is keeping things in check.

 

We have a big jobs number out from the US tonight so that will set the tone for the next week but I can’t help feeling that the US market has got a little ahead of itself and earnings season is around the corner..I expect some disappointment..

Few things to watch for in the US tonight

  • US Unemployment Claims   374K (385K e, 388K p)
  • US ISM Non-Manufacturing PMI   52.1 (53.1 e, 53.7 p)
  • US Crude Oil Inventories   -4.3M (-1.6M e, -0.1M p)

Our market looks neither massively cheap nor very expensive,Goldilocks markets, so suspect sideways is the order of the day at the moment. Low volumes as the sidelines seem to be a popular place to sit.

High yielders continue to find favour as do banks!There’s safety there and yield.

Things to make me go all bazooka!

1.Central Banks move last night. Stimulus has worked right?..wrong, not the last ten times and not now…They are running out of options..we need a hero!Are interest rates at 0.75% really working?

2.Lance Armstrong may have had a little help from his ‘friends’..Certainly not now from his ex teammates.

3.Flight Centre upgrade…everyone is leaving the country for their holidays..some businesses do well.

4.Aussie Dollar at a two month high.Euro gets whacked..good time to go to the Olympics.

5.Andy Murray to win Wimbledon this weekend! Fingers crossed!

6.The Rinehart cowboy ups the ante on FXJ by selling some of her shares…interesting move for sure…this gal means business..if they are not careful she will sell all her stock and then where would they be?

7.SPI down 9 so expect a little weakness today especially given that there are jobs numbers out from the US tonight. Volume is a joke $2.5bn..

8.Spanish 10-year yield climbed 37 basis points to 6.78%… Italy’s 10-year bond yield increased 21 basis points to 5.98%…Germany’s 10-year note yield fell seven basis points to 1.38% and that’s not what the ECB had in mind!!

9.Base metals and Gold eased on Central Bank news..here’s a thought Greece has spent almost half of the past 210 years in default or rescheduling debt.

10.Vix up 5% to 17 just below its long term average of 18.

11.We now have 80% of the world posting a contraction in industrial activity.” This is the second worst since the great financial crisis and only matched by last autumn, when in response Europe launched a $1.3 trillion LTRO and the Fed commenced Operation Twist.

12.’By paying the purchase price of 4.46 billion euros ($5.58 billion) plus 1 VW share for the 50.1 percent stake in Porsche automotive business it doesn’t already own, the Wolfsburg, Germany-based carmaker is avoiding an additional tax bill of more than 900 million euros. The share payment allowed VW to classify the deal as a restructuring rather than a takeover, a tax-saving plan approved by German tax authorities.’Bloomberg.

 

And nearly finally, and I am not making this up I swear , Barclays won the Best Global Debt House, Best Investment Bank, And Best Global Flow House Of The Year Awards at the Euromoney dinner last night! Should have been an award for best financial scam..they would have got that too with their LIEBOR efforts!

And Finally Sherlock Holmes and Dr Watson were going camping. They pitched their tent under the stars and went to sleep. Sometime in the middle of the night Holmes woke Watson up and said: “Watson, look up at the stars, and tell me what you see.” Watson replied: “I see millions and millions of stars.” Holmes said: “And what do you deduce from that?” Watson replied: “Well, if there are millions of stars, and if even a few of those have planets, it’s quite likely there are some planets like Earth out there. And if there are a few planets like Earth out there, there might also be life.” And Holmes said: “Watson, you idiot, it means that somebody stole our tent.”

Have a great weekend

Clarence

XXX

 

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