The global markets are quite mixed with multiple events.
Starting in Japan, Retail Sales printed at -9.7% Y/Y which is the largest annual decline in their history. Consensus was for a drop of -7.3% which took in to consideration March demand in front of April tax hikes.
The PBoC's chief economist came out clearly and denied yesterday's unsourced rumors that China may consider QE, also noting that it is illegal under their Central Bank laws to specifically finance government.
In Greece local municipalities are refusing to hand over their money to the Greek Central Bank which is $400 mn short still for the end of month payment of salaries and pensions and still another $1bn short for May IMF payments. This has sent PM Alex Tsipras scrambling to change his tone and rush through a bevy of new "TROIKA" demanded laws in an effort to secure financing. If I understood the details, a preliminary agreement could be reached Mat 9th which would be too late for initial disbursements to cover the end of month salaries/pensions as well as the first of 2 IMF May payments. Furthermore Germany has said the deal must be comprehensive, not piece meal so Tsipras has thrown Fin Min Varoufakis under the bus and turned his back on all campaign pledges as Greece slides in to insolvency.
US futures are mostly a bit lower and mixed, however our view that we would see a market bounce today was strengthened overnight when the 1 min positive divergences in futures turned in to (migrated) to 5 min positive divergence, which makes it quite likely we bounce off yesterday's lows. This is good as there were a number of assets that looked as they would bounce a bit like Transports, Biotechs, etc. This gives us something to set up trades in to so far as the majority of watch list stocks as of yesterday.
So I believe our analysis from yesterday afternoon is on track, this does include the significant damage done to the market as well, but this entire move has been remarkably well timed with the F_O_M_C meeting which begins today and ends at 2 p.m. tomorrow with the policy statement and no press conference. Remember my warning every time, "BEWARE THE F_E_D KNEE JERK REACTION" it is almost always wrong and almost always retraced within a few days to weeks, sometimes even hours.
Somehow I suspect the end of this move will tie in to tomorrow's F_O_M_C, but we'll let the market tell us that.
I'm off now to take my mother to the hospital and will be online and working by the open. I'll see you soon.
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