April 16. Breakout in crude oil and CAD
–Yesterday crude oil closed at the highest level so far for 2015, over $56/bbl. The Canadian dollar has pretty much the same pattern and broke out of a long term base (in futures terms). USDCAD at 122.82…looks like it could easily visit 120.
–US yields eased slightly lower with tens down 1/2 bp to 189.8 and fives down 1.7 to 132.3. The German bund continues to make new low yields, now 10 bps, with Portuguese two years flirting with zero. Greece, on the other hand, was downgraded again. US data softening further, with Industrial Production yesterday -0.6 vs expected -0.3. Today brings Jobless Claims, expected 281k, Housing Starts 1.04m and Philly Fed.
–Business Insider notes that EZ car sales are exploding higher, +13.3% yoy. So…QE is working? Or is it just that the populace understands the risks of bail-ins and of the central bank confiscating money through negative interest rate policies, so might as well buy some STUFF. Or maybe there’s a more visceral fear of the possibility of inflation down the road. Wait…that would mean that QE actually IS working.
–Japan now surpasses China as the largest owner of US treasuries. Great, that means the US doesn’t have to be as worried about China selling its reserves and roiling US financial markets. The Japanese have our back. Of course, maybe they will be hoping for reciprocation from the US as China makes additional South Sea incursions and expands its claims. Good luck.
