Business

This morning the WSJ leads with an article that summarizes the prevailing market confusion at the moment, namely that global currencies are soaring, "defying central bankers" despite a flurry of easing around the globe in the past month, all of which have been undone by one Fed dot plot which cut the number of rate hikes forecast by Yellen & Co., from 4 to 2. To wit: "efforts by many of the world’s central banks to weaken their currencies are failing, raising concerns about whether policy makers are losing the ability to wield control over financial markets."

• Dow's Freakish Bounce Makes Investors Whole, Can't Erase Doubts (BBG)
• R.I.P. Dollar Rally as Dovish Fed Spurs Worst Slump Since 2011 (BBG)
• Global Currencies Soar, Defying Central Bankers (WSJ)
• Oil hits 2016 high above $42 on production and demand outlook (Reuters)
• The U.S. Is Exporting Its Oil Everywhere (BBG)
• Hillary Clinton’s Allies Launch Plan to Undercut Donald Trump Now (WSJ)
• Sanders calls notion he should quit Democratic race 'absurd' (Reuters)
• Turns Out a 'Lie' Lurked Beneath the Bookends of the BRICS (BBG)

As of this moment, the DXY dollar index currently just above 95, is lower than where it was a year ago, but that does not stop companies from using it as an excuse for continuing earnings weakness.  Case in point, Tiffany & Co (which once used to be a bellwether for the luxury consumer and the overall market, but lately not so much) which moments ago reported Q4 earnings of $1.46, beating consensus expectations of $1.40, on inline revenues of $1.21bn, 6% lower than a year ago, as sales in the US, Asia Pacific and Europe all declined in the mid-single digits, offset by a 9% rebound in Ja

It was just last week when we observed and reported a highly amusing example of what excessive central bank meddling hath wrought in DM government bond markets.

Last Tuesday, yields on JGB 10s hit an all-time low of negative 10bps and yields on the 30Y plunged 21bps (the biggest percentage drop ever), as the post-NIRP curve crush continued unabated.

It may be option expiration day (always leading to abnormal market activity) but it remains all about the weak dollar, which after crashing in the two days after the Fed's surprisingly dovish statement has put both the ECB and the BOJ in the very awkward position that shortly after both banks have drastically eased, the Euro and the Yen are now trading stronger relative to the dollar versus prior.