Japan was downgraded from A+ to A by Fitch Ratings due to lack of sufficient structural fiscal measures in the FY15 budget to replace the deferred consumption tax increase. This caused the USDJPY to initially spike and then fall lower.
Just prior to the open, crude was trading down and I still expect it to make a move lower before a primary tend higher...
3C chart of Crude Futures (30) min.
However the rumors that the Greek Finance Minister Varoufakis who was savagely berated at that EU finance ministers' meeting in Riga on Friday called an amateur, Time waster and other assorted insults by EU finance ministers, appears to be sidelined as earlier rumors suggested that GreekT prime minister Tsipras was done with him and the lack of results.
As a result of that, the USD has seen some selling and crude has gained cents premarket.
As a reminder of how close Greece is cutting it with no deal they are using the deposits of local governments and cities to pay 1.5 billion euros in pensions and salaries due at the end of the month and are still €400 million short. In addition they have a €201 million euro I am F payment due May 6 Andy €766 million IMF payment due May 12.
Asian equities started off the week largely on the front foot in large part due to unsourced rumors that the PBoC "may" consider some sort of stimulus or QE. However an official economist from the PBoC has come out and said China does not need strong stimulus in response to the rumors.
The Nikkei was down -.20 ahead of Thursday's be OJ meeting.
The big events in the US this week our Q1 US GDP with consensus at 1%YOY, however the Atlanta Fed's real-time GDP tracker, GDPNow, has Q1 GDP coming in at 0.1%. We'll find out definitively Wednesday at 8:30 AM.
The other big event of course is the April F_O_M_C meeting starting tomorrow and ending with a policy statement at 2 PM, there will be no press conference. F_E_D Watchers are looking to see how much the F_O_M_C acknowledges Q1 weakness and how confident they are in its temporary nature. Otherwise no big changes are expected. However as always, beware of the F_E_D knee-jerk effect which I will cover in more detail later.
As I had mentioned on Friday, the breakout in QQQ as well as the triangle being allowed to simmer over the weekend should catch up additional attention and push the SPX, Dow and Russell too similar Head fake breakout moves.
Just for good measure, and most predictably, CNBC has ran articles on he large triangle consolidations in the market with a very bullish biased throughout the article. This was also accompanied by an interview in which JPM Notes the same triangles. Remember on April 2 we saw evidence and I posted the charts of these triangles not being organic but specifically created. I find it ironic now, or maybe not so much, that the retail mouthpiece, CNBC, is pointing out the triangles for anyone who may have missed them.
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