Business

As we warned all the way back in 2012, European NPL's are a ticking time bomb. Yesterday Italy announced that it had taken the long-anticipated first step to alleviate investor concerns surrounding the stability of the banking system, namely that Italian banks have roughly €360 billion in non-performing loans. Local banks, insurers, and asset managers have agreed to fund a €5 billion backstop for these troubled loans. Speculation of the imminent deal had sent Italian (and European) bank stocks soaring yesterday.

The latest confirmation of the pain global megabanks are suffering as a result of an abysmal trading environment, in no small part made even worse due to constant central bank tinkering, comes from Japan's largest brokerage, Nomura, which eight years after buying Lehman's European and Asian units has decided to fire 15% of its European staff and is abandoning most of its European equities business.

Over the weekend, we asked the question, Did the Canary of New York's Luxury Housing Market Just Die, following reports of the bankruptcy of a New York luxury real estate developet. Now, just two days later, we learn that another high-end real estate developer is having trouble closing out an ultra-luxury project in Manhattan.

• Gloomy start to results season hits shares (Reuters)
• Stocks Rise Around World as Commodities Advance; Bonds, Yen Drop (BBG)
• Oil hits 2016 high above $43 on producer meeting hopes (Reuters)
• Rosneft chief Igor Sechin says low oil prices will not last (FT)
• Banks Face Massive New Headache on Oil Loans (WSJ)
• Wells Fargo Misjudged the Risks of Energy Financing (BBG)
• Hedge Funds Abandoning Dollar's Biggest Bull Run in a Generation (BBG)
• Boeing Meets With Iranian Airlines to Discuss Jets, Aircraft Services (WSJ)

In recent days, we have observed a distinct trading pattern: a ramp early in the US morning, usually triggered by some aggressive momentum ignition, such as today's unexplained pump then dump in the EURUSD...

... with stocks rising after the European open, rising throughout the US open, then peaking around the time the US closed at which point it is all downhill for the illiquid market.