Despite promising more QQE if necessary (having said that more asset purchases threaten the nation's central bank's balance sheet just a week ago), it appears BoJ Governor Kuroda's comments on inflation expectations and oil prices have stalled the exuberant "global stimulus" rally (albeit briefly).
Kuroda muttered the following:
With all eyes on the overnight spike in crude oil prices (up 5% and back over $30, this must be the bottom right?), OPEC remains far from impressed with its basket price hovering at (or near) record low levels at $22.48. In fact, the collapse of the OPEC basket price in the last 3 weeks has been the fastest drop since October 2008. However, no matter the chaos occurring various oil instruments (OIL 40% premium to NAV), Citi has decided this is it and dubbed being long oil from here "the trade of the year."
With Chesapeake Energy hitting its lowest stock price since 2000 earlier this week, it was only a matter of time before US gas giant Chesapeake halted all "discretionary" cash payments, which it did moments ago when it announced it would halt dividend payments on its preferred stock.
From the release:
Chesapeake Energy Corporation (CHK) announced today that it has suspended payment of dividends on each series of its outstanding convertible preferred stock effective immediately.
When Portugal “surprised” senior Novo Banco bondholders with a €2 billion bail-in late last month, the market got an unwelcome reminder that euro periphery banks are far from “solid.”
Novo was supposed to house the “good” assets salvaged from the wreckage of failed lender Banco Espirito Santo, but as it turned out, a lot of those “good” assets were actually bad, and Novo ended up needing to plug a €1.4 billion hole. Initially, the plan was to sell assets but seizing €2 billion from bondholders ended up being a whole lot easier and far more efficient.
Earlier today we showed the three key headlines that summarized today's euphoric mood, and explain the general liftathon among massively oversold risk assets: