Business

In a note that may have been quite prescient, BofA's HY strategist Michael Contopoulos released a note last night titled "Fed acknowledges global growth concerns… again", in which he said that "we have to admit; today’s dovish comments by Yellen took us by surprise" and adds that "although the market’s initial reaction was positive, we think the longer run impact of a very dovish message is bad for risk assets. In fact, we’re a bit amazed by the initial response from high yield today."

• Global Stocks Slip Following Fed’s Cautious Tone (WSJ)
• Oil rallies towards $41, near 2016 high, on producer meeting (Reuters)
• Hamptons luxury home sales soften as Wall Street weakness takes a toll (Reuters)
• Obama picks centrist high court nominee; Republicans unmoved (Reuters)
• Allies See Challenges for Hillary Clinton in a General Election Campaign (WSJ)
• China’s Looming Currency Crisis (WSJ)
• China's biggest metals trader under pressure to cut staff amid reforms (BBG)

Moments ago Caterpillar, the company which as we promptly report every month, has never seen a "greater depression"...

... "surprised" markets with yet another reality check when it announced early this morning that it is slashing its Q1 revenue and EPS guidance, as follows:

We’ve long said the Norges Bank would ease in March in the face of falling crude prices and the continuation of the negative rates regime at the ECB, the Riksbank, and the NationalBank.

Indeed by the time of today’s announcement, the market was pricing in a ~75% chance that Oystein Olsen would cut rates by 25 bps. And he didn’t disappoint, slashing the depo rate to 0.50%. Incidentally, we’d hate to be the 1 economist out of 20 surveyed by Bloomberg that managed to miss this one.

Yesterday when summarizing the Fed's action we said that in its latest dovish announcement which has sent the USD to a five month low, the Fed clearly sided with China which desperately want a stronger dollar to which it is pegged (reflected promptly in the Yuan's stronger fixing overnight) at the expense of Europe and Japan, both of which want the USD weaker.

ECB, BOJ don't want a weak dollar; China does not want a strong dollarFed sides with China for now

— zerohedge (@zerohedge) March 16, 2016