MACRO MORNING NOTE APRIL 10, 2017
SPX Flat, DXY Flat, WTI Up
SBA’s Alastair Williamson concludes the Macro Morning Note from Baltimore, Maryland.
Overnight, global markets are jittery following geopolitical fears flaring up in the Koreas after a US aircraft carrier was diverted to the Korean Peninsula. This comes days after the US fired 59 Tomahawk missiles in Syria. US neocon warmongers are pushing for war in North Korea and Syria as the fourth estate cheers on. US equity futures are flat with selling pressure in China and Europe. Contrary to the geopolitical tensions, lower Yen has stabilized the Nikkei225 +70bps.
Search Term: ‘Geopolitical’ surges to a 90 session high following flare ups in North Korea and Syria.
Syria is all about who builds the Pipeline to Europe first.
Today’s US Event’s Calendar will be relatively calm with the Fed’s favorite Labor Market Conditions Index (LMCI) change printing at 10:00 am est. Next on the list will be Fed Yellen speaking at University of Michigan.
US Event Calendar
- 10am: Labor Market Conditions Index Change, est. 1, prior 1.3
- 4pm: Fed’s Yellen Speaks at University of Michigan
Last week’s NFP March payrolls crumbled with only 98k with the expectations 180k. This was the lowest print since 2015.
- Nonfarm private payrolls rose 89k vs prior 221k; est. 170k, range 125k-270k from 42 economists surveyed
- Manufacturing payrolls rose 11k after rising 26k in the prior month; economists estimated 17k, range -5k to 32k from 22 economists surveyed
One year timeframe of NFP. Notice the declining trend.
Max timeframe of NFP depicts a probe underneath the trend line. Weakness to persist in the trend, which serves as a warning.
ATL GDPNOW Forecasts on April 7, 2017 reported .6% for 1Q17. The trend is crashing.
Barclays 1Q17 GDP tracking. Opps!
Revolving consumer credit tops 1 trillion again. Consumer is overextending at the wrong point of the cycle.
Commercial Bank Loan Creation Y/Y% Change Crashing. Systems break when credit spigots are turned off.
Hard data starts to deteriorate with the soft data stalling. Notice how SPX500 advances on soft data. This will eventually lead to a disappointment phase, ie a reversion.
Interesting chart from Martin Armstrong of the 78 year long wave in Real Estate calling the 2007 and 2015 the major tops. What follows next in his opinion is a deleveraging until 2032.
Global debt % of GDP has ballooned in DM and EM.
High period of National Debts %GDP usually leads to war. In the 1930’s the New Deal did not lift the US economy out of a Depression, it was World War 2. History seldomly repeats, but it rhymes.
via MarketTimer @MarketTim3r 3 high cycles in play, 29 May week is the first and probably the most interesting of the 3 upside targets after April low $SPX $DJIA #crash
Overnight, Asian and Europe declined the reflation trade, along with SPX500. Geopolitical flare ups has WTI surging to high point of the 52 handle.
60 minute timeframe of the US reflation trade with a downward slope post rate hike and health care bill denial. Daily timeframe of the US reflation trade has stalled. Waits for next market generated information for imbalance.
In forex, dollar surged late last week on geopolitical flare ups to the low 101 handle. EUR.USD rejected the 1.06 level with a downside imbalance to the midpoint of the 1.05 area. USD/JPY surged last week into the 111 handle with resistance met. GBP/USD rejects the midpoint of the 1.24 handle with a probe into the 1.23 area. Theme is dollar demand increases as geopolitical risks flare up.
In the commodity complex, WTI surges to the high point of the 52 handle on geopolitical tensions in Syria. Soft Agri remains in deflationary trends extending from March. Gold <1250 and Silver probes into the 17 handle. Copper continues to print at high timeframe resistance forced into the low 2.60 level.
SPX500 monthly/weekly R2 2398 resistance with downside projection R1 2287
UST10Y monthly/weekly R1 2.63 with downside projections of pivot 2.13 reversion
DXY monthly/weekly R1 103.73 resistance with bracketing on pivot 99.26 support. Major direction is on the horizon wait for imbalance out of bracket.
WTI monthly/weekly R1 55 resistance with downside projection pivot reversion 44.81