Business

On Friday, the US government's Bureau of Economic Analysis had some good and some not so good news: the good news was that the final estimate of Q4 GDP was revised higher from 1.0% to 1.4% (driven by an odd rebound in spending on Transportation and Recreational services). The bad news was that pre-tax earnings tumbled 7.8%, the most since the first quarter of 2011, after a 1.6 percent decrease in the previous three months, suggesting that while it is only the "strong" US consumer that is keeping the US economy afloat on their shoulders.

In February headline data for income modestly beat expectations (+0.2% MoM vs +0.1% MoM) and spending met expectations at +0.1% MoM respectively. However, income growth YoY slowed to 4.0% - near its weakest since Nov 2013. Spending growth also slowed to +3.8% YoY (from 2.9% in Jan) but the big story is the major downward revisions in spending. January's +0.5% 'surge' in spending was revised to a mere +0.1% trickle - the weakest in over a year.

Since QE3, income growth has been a one way street lower...

The one catalyst most responsible for sending the price of oil from its 13 year lows hit in early February some 50% higher in the following month, has been the recurring rumor about an "imminent" OPEC production freeze meeting which was initially supposed to take place in early March, then on March 20, and now on April 17 (we expect this to be rescheduled shortly as well).

Back in December, New York-based China Beige Book International released what they called a “disturbing” set of data that pointed to pronounced weakness in the Chinese economy.

With European markets closed across the continent on Monday as the Easter holiday continues, overnight Asia was busy with the Shanghai Composite letting off some steam, and closing down 0.7% at session lows on concerns the Shanghai and Shenzhen home bubble have been popped prematurely by the politburo.