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Wednesday, April 6

6th Apr - Minutes show timid Fed





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EUROPE
Dutch Referendum: Devil is not in the Details Marc Chandler


UNITED STATES
How low will US profits go?ABN AMRO
Corporate profit growth has been falling, partly as a result of the downturn in the energy sector and stronger US dollar. Pressure from these factors should ease somewhat in the coming time. However, higher labour costs, which have been holding down profits are likely to persist in the near term. We expect profit growth to continue to decline in the coming year, albeit at a more modest pace than in 2015. However, declining profit growth in the coming year is not signalling the start of a recession.

How long can the US companies keep hiring?ABN AMRO
US service sector shows signs of expansion but underlying components continue to show uncertainty. US job report shows hiring reaches highest level since before the recession but we think that job growth will slow. Weakness in eurozone’s industry compensated by strong consumption.

Fed Has Little Reason to Hike RatesTim Duy
The Fed is on hold for at least a few months until the data provides a more definite reason to justify another hike. With any luck, if the Fed continues to hold steady now, maybe they will get the chance to chase the long-end of the curve higher later - which is exactly what they need to be able to "normalize" policy.

  MINUTES
5 Things to Watch for in the Fed Minutes – WSJ
El-Erian: What to Watch For in the Fed Minutes – View / BB
Minutes of March FOMC meeting – FED
Minutes: Some "Favored April Hike", Everyone Blamed "Global" Risks – WSJ
Fed uncertain when it will raise interest rates again, documents show – WaPo
Many participants argued "asymmetry made it prudent to wait” – Bill McBride
Fed's Cautious Approach on April Hike Raises Stakes for June – BB
Fed Officials Leaning Against Rate Rise in April – WSJ
Fed debated April hike but caution reigned due to global fears – Reuters

OTHER
April financial forecasts: Fed tightening postponedNordea
The Fed’s Yellen has taken a surprisingly dovish stance, and we postpone our next Fed hike until December. In response to Fed’s soft message, we lower our bond yield forecasts but see a steeper curve and now expect less USD strengthening than before. The rebound in emerging market currencies is still not complete.

EM FX: April 2016 financial forecastsNordea
EM FX has continued to improve since our latest update and our EM10FX spot index is now up more than 4% on the year. We stick to our forecast that the worst weakening is behind us, that the trend in the first half of 2016 will be more sideways and that most EM currencies will strengthen towards more fundamental equilibrium levels from the second half of this year.

Majors & Scandies: April 2016 FX forecastNordea
We continue to think DM will continue to perform decently despite headwinds from EM, but we have been forced by a surprising shift in the Fed’s reaction function to reassess our USD forecast. Our FX forecasts are revised as we now see the Fed/ROW policy divergence theme going for vacation – but only for a while. We have therefore postponed our forecast for further USD strength.

World Economic Outlook, April 2016: Analytical ChaptersIMF
Press Briefing of the WEOIMF

  PANAMA PAPERS
Panama partners in crime – Golem XIV
Why Murray Needs the Scorecard Before He Can Name The Players – naked capitalism
Nordea, Panama and the ”automatic” exchange of information – Matti Ylönen
EU vows to act quickly on Panama Papers – Politico
Who you trust with the data and who you don’t – FT
Panama Papers And Greece – Klaus Kastner

REGULARS
Danske DailyDanske Bank

Euro rates updateNordea

Eye-OpenerNordea
New financial forecast: Fed tightening postponed * Classic risk off in bonds * Safe haven currencies ended the day higher

Morning MarketsTF
Risk-off remains in effect but Asian stocks have managed to apply a tourniquet in the form of a positive Chinese services reading for March which saw the world's second-largest economy report a strong showing from its factory belt despite ongoing slowdown fears.

Daily Market Comment Marc Chandler
Greenback Finds A Little Traction

Daily CommentMacro Man
Once more unto the breach, dear friends

Daily CommentPolemic’s Pains
EU - Image is Everything.

Daily ShotTF
Signals from Russia point at a possible change in sentiment. Russian business sentiment remains terrible but at least it is no longer worsening.

Matt Levine’s Money Stuff – View / BB

Daily Press SummaryOpen Europe
Hollande: Whatever the result of the UK referendum, EU needs to adopt more flexible model of integration * EU to present radical shake-up of EU asylum policy as Frontex warns of terrorists exploiting porous borders * ECJ rules extradition must be delayed if suspects face risk of inhuman treatment * Icelandic PM resigns amidst fall out from Panama Papers tax avoidance revelations * ESM Chief eyes agreement on Greek bailout review by “early May” as Germany reiterates desire to keep IMF involved * Timmermans hopes for resolution to Polish constitutional crisis without further EU involvement

Brussels PlaybookPolitico
Brussels commuter hassle — Dutch have their say

US OpenZH
Stocks Rebound In Calm Trading On Back Of Stronger Crude, Dollar

FrontrunningZH

FX UpdateTF
The JPY remains strong even as the recent risk appetite downdraft eased overnight as Abe comments supported. Elsewhere market conviction is lacking and defaulting to reacting to swings in risk appetite.

From the FloorTF
Shinzo Abe has come out firmly against any intervention on the stronger yen and that is likely to propel JPY stronger against its major peers.


FINLAND & FINNISH
AamukatsausNordea
Brexit & EURUSD: dollariin turvaan, vai dollarille turpaan? * Fedin kokouksen pöytäkirja julkaistaan * USA:n palvelusektorin luottamus piristyi * Intian keskuspankki leikkasi ohjauskorkoa