Business

There is an odd feeling of Deja QEu this morning, when with two hours to go until the February payrolls, global stocks are modestly higher, US equity futures are likewise slightly higher on the back of a weaker dollar (or perhaps stronger Euro following a Market News report according to which the ECB may disappoint, more on that shortly), but it is gold that is breaking out, and after entering a bull market yesterday when it rallied 20% from its December lows...

With all western eyes firmly focused on US payrolls tomorrow, China is preparing for the biggest leadership gathering of the year this weekend. Offshore Yuan (USDCNH) is soaring (up over 5 handles in the last 24 hours) ahead of The National People's Congress as PBOC Deputy Governor hinted at support for the currency saying that it isn't "strictly" pegged to the new basket.

This is the biggest surge in Yuan in a month...

Chart: Bloomberg

Pushing Yuan back to 3-week highs...

Chart: Bloomberg

At the end of January, when looking at some recent liquidating energy companies selling off their assets in "stalking horse" bankruptcy auctions, we found something disturbing: total recovery rates under liquidation of oil and gas companies were paltry, ranging anywhere between 5 and 20 cents on the dollar, and averaging a little under 15 cents.

Roughly four year after our readers were well aware that contrary to infantile suggestions that the US consumer is deleveraging, and was instead being burried under trillions in new auto and student loans...

... the Fed has finally "figured it out."

Consumers across the country are borrowing more to buy cars and go to school https://t.co/mkKAoVya2o pic.twitter.com/DxMiHo7kki

— St. Louis Fed (@stlouisfed) March 3, 2016

Having risen to its highest level ever in August 2015, the volatility of volatility has collapsed. As traders position increasingly for negative interest rates in the US, the last month has seen 'uncertainty' crash to its most complacent in over 18 months.. and all this as well-chosen data corners The Fed (if it was truly data-dependent) to hike rates (or at best make hawkish over tones). Perhaps this is peak complacency ahead of tomorrow's do-or-die jobs data?