Thursday, January 15, 2015

Global financial Report ( January 15 , 2015 ) - Focus on Asia and Europe - Switzerland abandons cap on Euro and carnage ensues ..... Day after reaction to ECJ Opinion from AFD Party of Germany , Russia and ruble news , surprise RBI rate cuts sparks India markets and weakens rupee , China banking and shadow banking in focus , Greece in focus ..... additional matters of economic interest

Evening Tweets...




This 3-day chart of EURCHF is just just incredible.







One of the substantial risks facing investors is a collapse in faith in central banks’ ability to control events.








Factbox: CEE exposure to Swiss franc lending | Reuters









The entire Swiss curve below 9 years has negative interest rates. Highest negative rate is at 3 months for -0.80%










The SNB's balance sheet is 80% of GDP, a level three times the Fed or BoE-














“Today’s SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country” - CEO, Swatch








Volatility! RT : What a mad day. This oil move.
















After tripling CHF margins, CME just hiked most other FX margins, as well as copper, natgas, and crack spreads















SCHLUMBERGER SAYS CUTTING ABOUT 9,000 JOBS












Debt to GDP Since 2007, thanks China: 140 to 240% Singapore: 170 to 240% Hong Kong: 195 to 250% Malaysia: 150% to 190% CEIC data








In unretracted Greek news, tax revenues crash 80% Y/Y as Greeks stop paying their taxes






Chart: WTI crude futures give up most of yesterday's & last night's gains -








The cult of the bond is alive and kicking. 30-Year U.S. bond yield closes at record low for 2nd day.





















Early Morning Tweets....





UBS' Take On The Swiss Shocker: "The SNB's Standing Is Undermined... There Could Be A Significant Deflationary ...



Highlights....
***

Credibility cost
The other question is about the cost of today's decision for the SNB, both in monetary and credibility terms. The SNB is holding roughly half of their CHF 500 bn in euros, which implies a loss of possibly not dissimilar to the CHF 38 bn that the SNB made in profit last year. The monetary impact might thus be manageable. The credibility impact might be harder to gauge though. Domestically, many economic actors relied on what was seen as a 'promise' to hold the 1.20 floor. Internationally, following the negative rates confusion back in December today's decision might be further undermined the standing of the SNB among investors.





UBS says EURCHF rebounded above 1.00 due to SNB interventions. So the SNB basically just bought EVEN MORE EURCHF today





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Polish loans in foreign currency has fallen but is still sizeable. Most in CHF, but not all





SNB governor Jordan says shock franc move "was not a panic reaction, it was a well-considered decision".





JORDAN: EXPECTED BIG MARKET MOVEMENT IN REACTION TO CAP EXIT. That's reassuring for all the hedge funds who have to liquidate today





"A major buyer of the Euro leave the building and opens the way for further/faster EUR weakness.” - (ht )



For 1st time in yrs, a Greek bank did not participate in T-bill auction yday. Bank of had to intervene to save auction ~





keeps bleeding: Reserves hit lowest since May2009. Gold, FX Reserves down by $2.3bn to $386.2bn as of Jan9.



















First margin call casualty? BOFA HEAD OF FUTURES, OPTIONS UNIT PETER JOHNSON SAID TO RESIGN






Market Wrap: "It's Turmoil" - Overnight Gains Wiped Out, Futures Trade Below 2000 On SNB "Shock And Awe"


Highlights...

****

Over two decades ago, George Soros took on the Bank of England, and won. Just before lunch local time, the Swiss National Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted in September 2011, the day gold hit its all time nominal high, was no more.
What happened next was truly shock and awe as algo after algo saw their EURCHF 1.1999 stops hit, and moments thereafter the EURCHF pair crashed to less then 0.75, margining out virtually every single long EURCHF position, before finally rebounding to a level just above 1.00, which is where it was trading just before the SNB instituted the currency floor over three years ago.

****




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Oh dear RT : Hedge funds were short 3.1 billion Swiss francs through IMM futures as of Januar 6.










FTW - EU Calls on Gazprom to Stay Engaged in Europe. But why, the ECB can just print heat and electricity






This is just the first step in unwinding years of central planning and trillions in capital misallocations.




And took many smaller hedge funds with it RT : SNB the biggest hedge fund in history just blew up...



SMI -13%





Financial tsunami: Swiss govt bond yields out to 9years now negative. 10yr Swiss yield at 0.038%












Euro tumbles as Swiss central bank abandons cap – business live








NY GOLD FUTURES RISE 1.7% TO $1,256/OZ; TOUCHES 200-DMA





WOW! ": All Swiss government bill and bond yields out to 7 years are negative: "













"The central bank didn't prepare the market for it. It's sparking panic across all asset classes." - Akexandre Baradez, IG France










"Major losses in EURCHF trades are causing panic selling and deleveraging across the board." - Lex van Dam, Hampstead Capital





"They’ve stopped defending the 1.20 floor. It’s carnage." Darren Courtney-Cook, head of trading at Ctrl Markets Invst management



















Almost 65,000 Greeks have CHF-denominated mortgages. Dire news for them today.



Total chaos: EUROPEAN STOCKS REBOUND; STOXX 600 RALLIES 3.9%







's 10-year bond yields hit record low of 0.405% ~Tradeweb



Swiss franc rockets almost 30% as currency ceiling scrapped An absolute monster move...











in free fall vs Franc after SNB has ended minimum exchange rate. Drops 23%, below parity.





back where it started after surprise of Swiss National Bank removing floor this 
morning









CHFEUR knock-on effects in . Now down in the 1.15s... /via



That was fun: BRENT CRUDE EXTENDS DROP, FALLING AS MUCH AS 3.3% TO $47.07






BOOM: SNB SWISS NATIONAL BANK DISCONTINUES MINIMUM EXCHANGE RATE, SNB LOWERS INTEREST RATE TO –0.75%



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Anyone long EURCHF, it's been swell...







The SNB just blew up countless macro hedge funds








Whoa: EUR/CHF falls 13.5% to 1.03894 after SNB measures. /via







GDP grows at 1.5%, strongest rate in three years /via





'Why Draghi will watch as he launches eurozone QE' /by /via





should leave after ECJ backed ECB's bond buying program, says AfD’s Henkel. Means german govt has lost control over spending.





Brent has even dropped in Ruble terms: The new problem 's Putin has as Ruble rout eases





shares rally on surprise RBI rate cut. S&P Sensex up 1.7%. Rupee weakens 0.5% vs Dollar




Greece gov. revenues below budget - RT : ...3.2 bln short of 2014



target. Welcome gift for new gov't






China's shadow banking set to dominate credit growth - via :






Tourism losses will dwarf state collections from a VAT hike on hotel services




More layoffs than new jobs last month




China banks’ lending hits record $1.58 trillion in 2014




More negative inflation: Spain Dec. Harmonized CPI -1.1% Y/y; Prel. -1.1% Y/y.



Austrian Budget Has ‘Big Problems,’ Finance Minister Tells News:BBG



There go durable goods: AIR FRANCE TO DELAY BOEING 777 DELIVERIES TO CUT COSTS: ECHOS



"Russian Buyer Is A Thing Of The Past" - Oligarchs Rush To Sell US Real Estate