Asia

It certainly does feel like groundhog day today because while last week's near record oil surge is long forgotten, and one can debate the impact the result of last night's Iowa primary which saw Trump disappoint to an ascendant Ted Cruz while Hillary and Bernie were practically tied, one thing is certain: today's continued decline in crude, which has seen Brent and WTI both tumble by over 3% has once again pushed global stocks and US equity futures lower, offsetting the euphoria from last night's earnings beat by Google which made Alphabet the largest company in th

Following the Fed's disappointing "dovish, but not dovish enough" statement which effectively admitted Yellen had committed policy error by hiking just as the US economy "was slowing down" which in turn lowered the odds of a March rate hike to just 18%, it was up to oil to pick up the correlation torch, and so it did, rising in an otherwise mixed session which has seen European stocks slide on continued weakness surrounding Italian banks, many of which have been halted limit down, while Asia was unable to pick a direction after the resignation of Japan’s "Abenomics" minister Akira Amari to

In retrospect it appears Tom DeMark was spot on with his Wednesday prediction, made just as the Dow Jones was down some 500 points that that very day was "an interim low" to be followed by a 5-8% rebound (at which point the selling would resume). In fact, those trading Japanese stocks saw virtually the entire predicted rebound take place in just one day as the Nikkei soared by almost 6% overnight, or nearly 1000 points, the biggest jump in 4 months, while risk everywhere else around the globe has likewise exploded higher, as crude has stormed back over $31/barrel.

Only the most intellectually dishonest can claim that last night's Chinese economic data deluge was anything but miserable. As we showed last night, everything missed:

• Industrial Production +5.9% (MISS vs +6.0% YoY expectations)
• Retail Sales +11.1% (MISS vs +11.3% YoY expectations)
• Fixed Asset Investment +10.0% (MISS vs +10.2% YoY expectations),
• Q4 GDP growth +6.8% (MISS vs +6.9% YoY expectations).

Even as the real full year GDP of 6.9% was in line, it was still the lowest since 1990...

Once again, China was faced with the unpleasant task of deciding which asset class to intervene in: its plunging stock market, or its currency. It chose the latter, and as a result after a turbulent start the Shanghai Composite sank by 5.3% to close just above 3000 and down 15% in just the past 11 days, suggesting that the PBOC is increasingly seeing the CNY1.8 trillion (at least) spent to stabilize stocks as a sunk cost.