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Frontrunning: March 4

  • Rivals rip Trump but promise support if he is the nominee (Reuters)
  • Employment gains seen accelerating in February (Reuters)
  • Brazil's Lula Targeted in Police Raid Into Corruption Scandal (BBG)
  • Economist: For The ECB, It's No Longer About Oil (BBG)
  • China's premier says economy faces greater difficulties in 2016 (Reuters)
  • Copper Stockpiles in China Surge to Record as Metal Flows East (BBG)
  • Turkish court jails two Syrians over drowning of toddler Aylan (Reuters)

Chinese Plunge Protection Team To The Rescue Ahead Of Party Meeting

Chinese Plunge Protection Team To The Rescue Ahead Of Party Meeting

Last summer, millions of farmers, housewives, security guards and a litany of other newly minted daytraders, opened enough new stock trading accounts for evey man, woman and child in Las Angeles - in just one month.

The excitement was palpable - and before anyone knew it, the proliferasion of around a half back door margin lendings chanells pumpped an additional CNY1.5 trillion into an already frothy market. Without putting too fine a point on it, didn't work, it started to uravel and the party got concerned about social instability.

Junk Bond Funds Report Record Inflows

Junk Bond Funds Report Record Inflows

Two days ago, Credit Suisse reported something which had been rather visible in the markets: an onslaught of retail buying had entered the junk bond market in which institutions were delighted to sell to retail bagholders, in the process repricing the entire HY space if only briefly.

 

Overnight, fund flow tracking service EPFR confirmed this when it reported that US high yield funds recognized a $5.27bn (+2.8%) inflow for the week ended March 2nd, the largest ever in terms of $AUM and the 2nd largest on a percentage basis.

Futures Flat Ahead Of Payrolls As Gold Continues Surge After Entering Bull Market

Futures Flat Ahead Of Payrolls As Gold Continues Surge After Entering Bull Market

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...

 

Yuan Soars Most In A Month Ahead Of National People's Congress

Yuan Soars Most In A Month Ahead Of National People's Congress

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

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