Europe

Authored by Simon Black via SovereignMan.com,

To paraphrase that great scene from Airplane, it looks like I picked the wrong week to unplug from the Internet. Aside from a few hours when we docked in Honduras last week, I was on a self-imposed Internet exile and went several days devoid of any communication with the outside world. I missed a major scandal at the Fed, another terror attack in Europe, the start of a US military campaign in Syria, political chaos in South Africa, and more.

With Morgan Stanley's Adam Parker having left the investment bank to continue his career at Eminence Capital, it was up to his replacement, Michael Wilson to come up with the Initiation of coverage report for the "Classic Late Cycle." So, in keeping a stiff upper lip, and breaking away from the gloom that appears to have recently gripped his colleagues over at Goldman Sachs, Wilson had no choice but to keep a stiff upper lip and keep the Punch Bowl full (to paraphrase Bill Dudley's famous March 30 speech).

Roughly at the same time as today's French election narrative shifted again as traders started paying attention to the suddenly surging in the polls far-left candidate Jean-Luc Melenchon, which pushed the Euro to the lowest level in a month, Goldman has come out with a recommendation to short June OAT futures (OATM7) at 147-72, for an initial target of 144.00, and stops on a close above 150.00,

In this holiday-shortened week (markets closed for Good Friday), focus turns to several inflation prints in G10 in the week ahead, with US and UK inflation data likely to get the most attention. In addition, there are a few scheduled speaking engagements by Fed officials, including a speech by Fed Chair Yellen on Monday.

• Euro hovers above one-month low as French election nerves grow (Reuters)
• French Election Risk Reawakens as Bonds Drop, Volatility Jumps (BBG)
• Hopes fade for U.S. bank earnings despite rally in financial shares (Reuters)
• Skepticism Grows About Higher Fed Rates Helping Banks’ Margins (BBG)
• Record Bond Issuance Signals Doubts About Economy (WSJ)
• Price for Tax Overhaul Makes Bipartisan Deal Unlikely (WSJ)
• Congress Sinks Into Partisan Morass as Shutdown Threat Looms (BBG)