It has been a busy weekend for mostly negative newsflow.

It all started with China which on Saturday reported yet another disappointing PMI print of 50.1, which both missed expectations and declined from the previous month; then we got the latest Iraq oil output and exports number which rose yet again, pushing it further into near record territory despite a weekend of political chaos in Baghdad which saw protesters loyal to al Sadr penetrate the fortified Green Zone; at the same time Russian total output dipped just 0.5% from its post-USSR record, suggesting the global oil glut is only set to deteriorate.

In M&A news the long awaited termination of the Halliburton-Baker Hughes merger finally took place when the companies announced last night they would not extend the termination deadline; more important was Puerto Rico’s announcement that it would default on a $422 million bond payment for its Government Development Bank while Atlantic City is also expected to announce a default later today; the US shale sector just had its two latest casualties after Ultra Petroleum filed for bankruptcy citing $3.9 Billion Debt; at the same time Midstates Petroleum also filed Chapter 11.

In sum, a bevy of negative news in the past 48 hours which perhaps explains why futures are fractionally in the green as of this moment.

Central planning humor aside, US – and certainly Japanese – equities continue to be driven mostly by the Yen, which has failed to decline substantially after last week’s surge, and as a result the USDJPY remains within several dozen pips of its post October 2014 lows of 106.2.

The yen soared almost 5 percent on the final two trading days of last week as the Bank of Japan unexpectedly refrained from boosting stimulus amid fading prospects for a U.S. interest-rate increase this summer.  As a result, Japan led a selloff in Asian equities, with the Topix index sliding for a fifth day as trading resumed after a break on Friday. The yen held its steepest back-to-back gains since the global financial crisis and the Stoxx Europe 600 Index reached a two-week low.

“To sum it up in a single phrase, there was a gap in the communication between the BOJ and the market,” Yoshinori Ogawa, a market strategist at Okasan Securities in Tokyo told Bloomberg. “There are concerns the yen may strengthen beyond 105 per dollar. As we are in the middle of long holidays, liquidity is thin, which makes it easier for speculators to whip markets around with their selling.”

This ongoing pressure on the dollar explains why gold has finally breached the $1,300 resistance level.

What is perhaps strange is that despite a weaker dollar, oil continues to fall for a second day due to the noted previously Iraqi exports which approached record high in April, adding barrels to worldwide supply glut.  Operations weren’t affected Sunday after protesters stormed parliament in Baghdad, threatening to paralyze govt of OPEC’s 2nd-largest producer; disruption broke up Sunday as protesters agreed to leave govt area. “The rally is running out of steam,” says Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. “Negative sentiment and negative fundamentals are becoming more obvious. Most of the problem surrounds oversupply in the market, and that’s not going away.”

A notable move in Italy has seen local banks all slammed lower following the previously reported news that Italy’s bank bailout fund would use up a third of its firepower already just to buy most of the shares in Banca Popolare di Vicenza’s EU1.5b capital increase through an initial public offering after institutional investors showed little interest, in effect bailing out the first bank under its remit just weeks after being activated.  (Harvey: see below commentary on Italian banks)

S&P 500 futures rose 0.1 percent after U.S. equities ended last week with their worst two-day drop since February, amid lackluster earnings and few signs of a pickup in economic growth.

Liquidity in the market will be particularly low today as markets are shut for holidays in China, Hong Kong and the U.K.

Latest Market Snapshot

• S&P 500 futures up 0.1% to 2061
• Stoxx 600 up less than 0.1% to 342
• DAX up 0.9% to 10131
• German 10Yr yield down 2bps to 0.25%
• Italian 10Yr yield down 2bps to 1.47%
• Spanish 10Yr yield down 2bps to 1.58%
• S&P GSCI Index down 0.5% to 358.4
• MSCI Asia Pacific down 1.2% to 130
• Nikkei 225 down 3.1% to 16147
• S&P/ASX 200 down 0.2% to 5243
• US 10-yr yield down 2bps to 1.82%
• Dollar Index down 0.23% to 92.87
• WTI Crude futures down 0.9% to $45.49
• Brent Futures down 1.3% to $46.77
• Gold spot up 0.5% to $1,299
• Silver spot down 0.2% to $17.81

Global Top News

• Halliburton, Baker Hughes Abandon $28 Billion Merger Agreement: Halliburton to pay Baker Hughes $3.5b termination fee
• Buffett Hits Hedge Funds While They’re Down, Faulting High Fees: At the annual meeting of his Berkshire Hathaway, he warned about the enduring risk of derivatives, defended stocks in his portfolio and signaled that some of the co.’s biggest subsidiaries are hitting speed bumps; Buffett Says Valeant Business Model Was ‘Enormously Flawed’
• Apollo-Led Consortium Increases Offer for Apollo Education: Consortium led by Apollo Global Management has increased its offer to buy Apollo Education to $10/share, or $1.14b
• Puerto Rico Will Default on Government Development Bank Debt: Will default on a $422m bond payment for its Government Development Bank; GDB and creditors reach tentative framework on 53% haircut
• Ultra Petroleum Files for Bankruptcy, Citing $3.9 Billion Debt: Principal assets are gas-producing properties in Wyoming
• Midstates Petroleum Co. files for bankruptcy protection
• Euro-Area Manufacturing Growing at ‘Anemic’ Pace, Markit Says: Growth was little changed last month as stronger readings in Germany, Italy and Spain were offset by contraction in France
• Energy Future Offers New Reorganization Plan Amid Deal Dispute: Proposal to sell Oncor unit to Hunt Consolidated in jeopardy
• JPMorgan Says Justice Department, SEC Probing Hires in Asia
• ‘Jungle Book’ Holds Off ‘Keanu’ to Stay No. 1 at Box Office: Collected $42.4m in its 3rd weekend in North American theaters
• Oil Bulls Bet the Waning U.S. Shale Boom Will Curb Global Glut: Hedge funds boost bullish wagers to highest in 11 months: CFTC
• AIG Raises $1.25 Billion Selling PICC Stock Near Bottom of Range: Sold 740 million PICC shares at HK$13.08 apiece
• Short Sellers Target Perrigo After CEO Exit as Goldman Says Sell: Short interest at highest since 2013 after forecast cut

Looking at regional markets, Asia stocks opened the week in negative territory with Nikkei 225 resuming its BoJ-triggered declines as JPY strength slams exporters.Nikkei 225 (-3.1%) was dragged lower by a firmer JPY as well as poor earnings & forecasts from several Japanese firms. In addition, auto names were also pressured with Takata shares plunging 10% following reports that US authorities are to call for an expansion of car recalls affected by faulty airbags. Elsewhere, ASX 200 (-0.2%) conformed to the downbeat tone after discouraging Chinese PMI data whilst uncertainty over the upcoming RBA policy meeting adds to the caution. Finally, 10yr JGBs saw a mild uptick in trade amid a risk-averse sentiment in the region, while the 20yr yields declined to a fresh record low of 0.24%.

Top Asian News

• China Factory Stabilization Shows Little Need for Added Stimulus: Official factory gauge, the manufacturing purchasing managers index, stood at 50.1 in April
• Macau Gaming Revenue Stabilizes, Falls Less Than Estimated: April gaming rev. decreased 9.5% versus 13.5% estimated decline
• JPMorgan Hires Ex-BOJ Officials for Research Business in Tokyo: Former BOJ deputy director Hiroshi Ugai recruited as senior economist, Rie Nishihara as senior analyst for banking
• Election Jitters Send Philippine Stock Investors to Sidelines: Rodrigo Duterte, who maintains lead a week before presidential vote, has given few details on economic policies
• Mitsubishi Motors’ Fraud Hits Nissan as Minicar Sales Plunge 51%: Nissan Japan sales of mini, standard vehicle fall 22% in April, Mitsubishi minicar deliveries drop 45%
• Beaches of Dead Fish Test New Vietnam Government’s Response: Thousands rally on Sunday calling for closing of Formosa plant in a nation where public protests, criticism are unusual
• Westpac Warns of Rise in Consumer Defaults on Mining Slowdown: Defaults inching up in mining states of Queensland, WA
• Ricoh Drops Most on Record After Forecasting Decline in Profits: Closes down 16%, most since Nov. 2008, after a record 17% drop during the day
• Takata Falls on Report Recalls May Rise to 100 Million Autos: Co. says no decision on additional recall in U.S. in response to Nikkei newspaper report

The European morning has seen equities kick-off the week in a tight range amid the holiday thinned trade, with UK markets closed and many across Asia also away.European equities trade marginally higher, led higher by exporters amid the EUR strength and with gains capped by the losses in financials, stemming from Italian banks as the NPL saga continues. Additionally, the tone has been somewhat dampened following soft Chinese Official PMI figures over the weekend, subsequently hinting at modest weakening in regards to the momentum of China’s economy.

From a fixed income perspective, Bunds are trading higher with the yield curve seeing some bull flattening, while notable outperformance has been observed in the long end with 30yr yields lower by 4.4bps. As such, some have noted that the price of German paper has been underpinned by residual month-end demand.

Top European News

• Air France-KLM Board Picks Janaillac as New CEO, Chairman: Selected veteran transportation manager Jean-Marc Janaillac as CEO and chairman, to start July 31
• Italian Bank Shares Tumble After Investors Snub Pop. Vicenza IPO: Bank stocks dropped after private investors snubbed an IPO by Banca Popolare di Vicenza and Atlante, Italy’s bank- rescue fund, had to buy almost all the shares; Italy Exchange to Rule on Pop. Vicenza Listing After Stock Sale
• Philips Said Disappointed With Lighting Bids, Leaning To IPO: Could seek valuation of about EU5.5b in potential listing
• Ferrari CEO Switch Said Imminent With Board Choosing Marchionne: Ferrari set to appoint Chairman Sergio Marchionne to replace Amedeo Felisa as CEO as early as Monday, according to people familiar with the matter
• Italy’s Intesa Sanpaolo Sells Payment Units in $1.2b Deal: To sell Setefi and Intesa Sanpaolo Card payment units to a group that includes Bain, Advent in deal valued at EU1.04b
• Deutsche Bank Said to Be Faulted by FCA Over Lax Client Vetting: Firm says it’s fixing lapses regulator cited in March letter
• Merkel’s $1.4b German E-Car Push Boosts Infineon, STMicro: Value of chips in e-cars, hybdrids double that in regular cars
• Spanish Politics Enters Uncharted Waters as Fresh Election Looms: Deadline for patching together a majority from the most fragmented parliament in Spanish history falls at midnight on May 2, triggering a repeat election for late June

In FX, there is not too much to report from early Europe, with the overnight session seeing a USD/JPY test lower but holding off 106.00 for now. A bid tone seen in the EUR with the lead spot rate taking out 1.1470-75 resistance — 1.1500 now targeted but digital out-strikes here said to be providing some supply ahead of the figure. EU manufacturing PMI’s saw the final read up slightly to 51.7, but notable weakness seen in the French component. Nevertheless, last week’s healthy EU wide GDP number adds to encouragement to a move beyond 1.1500. Elsewhere, Cable is shaking off some favour to the Brexit camp, but the EUR/GBP is pushing to new recent highs on the above EUR sentiment. An offered USD tone clearly continues, pushing AUD higher despite RBA risk ahead — outside calls for a rate cut. USD/CAD still eyeing 1.2500 lower down, but trade tight ahead of the North American open.

In commodities, in thin European trade WTI has managed to hang on to gains seen last week and continues to reside above the USD 45.00/bbl handle while Brent remains in close proximity to USD 47.00/bbl. Elsewhere, gold has continued its rally and has risen above the psychological USD 1300/oz as risk-averse sentiment and USD weakness underpinned the safe-haven, Silver printed just below USD 18/oz at USD 17.93/oz, while copper saw flat trade amid a lack of market participants as various nations including the world’s largest consumer China were away.

On today’s calendar we’ll get the final revision for the US this afternoon while the main focus will be the April data for ISM manufacturing and prices paid prints. March construction spending data will also be released.

Bulletin Headline Summary from Bloomberg and RanSquawk

• European bourses trade modestly higher, led by exporters as EUR/USD approaches 1.1500 to the upside
• Fixed income remains supported amid light volumes this morning, with the UK away for May Day Bank Holiday
• Highlights today include US Manufacturing PMI and scheduled comments from Fed’s Lockhart, ECB’s Draghi and Lautenschlaeger
• Treasuries rally in overnight trading as equity markets mixed in Europe, lower in Asia with many bourses closed due to holiday; economic data this week will be dominated by Friday’s nonfarm payrolls report.
• U.S. Treasury says China, Japan, Germany, S. Korea, Taiwan meet two of three criteria for pursuing FX policies that could provide unfair competitive advantage, under Trade Facilitation and Trade Enforcement Act of 2015
• In a world awash with debt, it’s hard to imagine that there may not be enough to go around. Yet, JPMorgan predicts record-low global yields ahead
• Italian bank stocks dropped in Milan trading after private investors snubbed an initial public offering by Banca Popolare di Vicenza SpA and Atlante, the country’s bank- rescue fund, had to buy almost all the shares
  Markit Economics in London said its monthly Purchasing Managers Index points to “anemic” factory growth in the Euro-area as stronger
• in Germany, Italy and Spain were offset by contraction in France
• Gold advanced above $1,300 an ounce as investors flood back to precious metals as risks to the global economy prompted the Federal Reserve to signal it will take a slower approach to further interest-rate increases
• Puerto Rico will default on a $422 million bond payment for its Government Development Bank, escalating what is turning into the biggest crisis ever in the $3.7 trillion market that U.S. state and local entities use to access financing
• Brazil’s President Rousseff promised increased spending on her party’s most popular social program and took other measures aimed at her electoral base, less than two weeks before the Senate is expected to vote in favor of the impeachment process she calls a coup d’etat
• After ratcheting up lending at the behest of President Dilma Rousseff, Brazil’s state-controlled banks may be in store for more pain as Brazil’s longest recession in a century sparks a surge in delinquencies
• Halliburton Co. and Baker Hughes Inc. called off their $28 billion merger that faced stiff resistance from regulators in the U.S. and Europe over antitrust concerns
• The hundreds of protesters who pulled down blast walls and forced their way into Baghdad’s Green Zone on Saturday laid bare growing political chaos that increasingly poses a threat to the country’s security and the economy
• Sovereign 10Y bond yields mixed; European equity markets mixed, Asian markets lower; U.S. equity-index futures rise. WTI crude oil drops, metals higher

DB’s Jim Reid concludes the overnight wrap

Earnings will again be a big focus for markets this week with 124 S&P 500 companies set to report, headlined by the likes of Merck, Pfizer and Kraft Heinz. We’ll also get the latest reports from 17% of the Stoxx 600 including some of the big banks. With the market firmly back to scrutinizing the data too, the big focus there this week comes on Friday when we’ll get the April employment report in the US. We’ll have a full preview of that closer to the date but as well as the labour market numbers it’s worth also keeping an eye on today’s ISM manufacturing print which, following on from softer regional readings, is expected to show a modest 0.4pt decline to 51.4. Our US economists are actually forecasting for a drop below 50 (to 49.0) and the data will give an early insight into what extent, if at all, growth is rebounding in Q2. We’ll also get the April PMI’s this week, so there’s plenty to keep us busy.

Over the weekend the main focus has been on the China data released on Sunday. The data showed a slight drop in the official manufacturing PMI for April, declining a modest 0.1pts to 50.1 (vs. 50.3 expected) while the non-manufacturing PMI was also lower, falling 0.3pts to 53.5. New orders subcomponents for both were softer, although especially in the latter where the component dropped back below 50. We’ll have to wait for the reaction from markets in China as bourses are closed for a public holiday (along with Hong Kong) today. The focus is more on Japan however where markets have reopened following a public holiday of their own on Friday. With the Yen unchanged this morning but hovering around 18 month highs, the Nikkei has plunged -3.62%, while the Topix is -3.55%. Elsewhere the ASX (-0.63%) and Kospi (-0.73%) are weaker too while moves for Oil aren’t helping with WTI down close to -1%.

Meanwhile the other headline grabber from the weekend is the news out of Puerto Rico with the confirmation that Governor Padilla has declared a debt moratorium on a $422m repayment due today by the island’s Government Development Bank, and so triggering a default. The bigger news now might mean what this means for the nation’s other general obligation bonds, of which according to Bloomberg $800m are due to be repaid by July. A story worth following.

Moving on. Earnings season is ticking along and in the US we’ve now had the latest quarterly earnings from 310 S&P 500 companies. There’s a familiar trend to what we’ve seen in the past with 77% beating at the EPS line and 57% at the revenue line – which largely matches previous quarters although the beat in sales is a bit better than what we’ve seen historically. As we’ve highlighted previously however, this masks what has been a significantly weaker period for earnings relative to last year. Our equity colleagues in the US highlight the important point that analysts have chopped their EPS forecast by over 9% for this quarter since the turn of the year, making it less of a surprise to see so many companies coming ahead of estimates. In fact our colleagues note that Q1 EPS should wrap up at about 5% lower YoY unless we see big beats from the remaining reporters. We’re currently down close to 6% on a YoY basis although ex-energy that’s only -0.5% yoy.

In a quick recap of markets on Friday, it was a pretty soft close to the week for markets on both sides of the pond, with volatility across currencies and some fairly mixed data plaguing sentiment. A late bounce into the close helped limit the loss for the S&P 500 to just -0.51%, however European bourses moved the other way in the late stages of trading there, culminating with the Stoxx 600 closing with a -2.13% decline which was the biggest daily fall since February. There was a similar underperformance in credit markets with the iTraxx Main and Crossover indices ending 2.5bps and 11bps wider respectively, while in the US CDX IG ended the day just 1bp wider. Currency markets were dominated by weakness for the US Dollar. In fact the Dollar index closed the day down -0.72% meaning it weakened over 2% during the week with the index now back to trading at the lowest level this year. It’s the mirror image for the Euro with the single currency up +0.87% on Friday and a shade over 2% on the week.

In terms of the US data, the core PCE was confirmed as rising +0.1% mom in March as expected which has resulted in the YoY rate dipping a tenth to +1.6%. The employment cost index print was reported as increasing +0.6% qoq in Q1. Meanwhile, there was some mixed signals coming from the personal income and spending reports last month. Income rose +0.4% mom and a little more than expected (vs. +0.3% expected), while spending (+0.1% mom vs. +0.2% expected) was below consensus. The Chicago PMI for April declined a steeper than expected 3.2pts to 50.4 (vs. 52.6 expected) while there was similar weakness in the ISM Milwaukee (-6.7pts to 51.1). Finally later in the session we got confirmation of a downward revision to the final April University of Michigan consumer sentiment print, by 0.7pts to 89.0. More concerning perhaps was the 3pt downward revision to the expectations reading to 77.6 which is the lowest since September 2014.

There was plenty of data released in Europe on Friday too. The highlight was a better than expected Q1 GDP print (+0.6% qoq vs. +0.5% expected) for the Euro area. This had the effect of keeping the YoY rate unchanged at +1.6% and while the headline reads positive, our Macro colleagues in Europe noted that some caution is warranted, however. They highlight in particular that there are transitory factors at play and numerous forces – including global uncertainty, rising oil and political risk – to prevent underlying growth from accelerating. Meanwhile, there was some disappointment in the CPI headline estimate for the Euro area after printing at -0.2% yoy (vs. -0.1% expected), a decline of two-tenths. The core print was recorded as declining three-tenths to +0.7% yoy (vs. +0.9% expected). Elsewhere, German retail sales were reported as declining unexpectedly in March (-1.1% mom vs. +0.4% expected) and so shrinking annual growth to +0.7% yoy.

Staying in Europe, there was some focus also on Portugal on Friday after the nation retained its IG credit rating status from DBRS. The news is significant as the agency is the only one to rate Portugal investment grade and so according to the FT, this allows the country to continue to benefit from QE bond buying by the ECB.

We’ll also get the final revision for the US this afternoon while the main focus will be the April data for ISM manufacturing and prices paid prints. March construction spending data will also be released. Away from the data we’ll start to hear from a number of Fedspeakers again. Lockhart (today and Wednesday), Mester (Tuesday), Kashkari (Wednesday) and Bullard (Thurday) are all scheduled while Bullard, Kaplan, Lockhart and Williams are all due to take part in a panel interview on Friday. Meanwhile the ECB’s Draghi is scheduled to speak this afternoon, while Weidmann is also due to speak later in the week.

It’s another big week for earnings with 124 S&P 500 companies set to report, accounting for 16% of the index market cap. The highlights look set to be AIG (today), Pfizer (Tueday), Kraft Heinz (Wednesday) and Merck (Thursday). In Europe we’ll get reports from 17% of the Stoxx 600 including Shell, HSBC, BNP, UBS and BMW.

END

ASIAN AFFAIRS

i)Late  SUNDAY night/ MONDAY morning: Shanghai closed FOR HOLIDAY  /  Hang Sang closed FOR HOLIDAY. The Nikkei closed DOWN 518.67 OR 3.11%  . Australia’s all ordinaires  CLOSED DOWN 0.18% BUT RESOURCE STOCKS DOING WELL. Chinese yuan (ONSHORE) closed UP at 6.4705.  Oil FELL  to 45.59 dollars per barrel for WTI and 47.05 for Brent. Stocks in Europe MIXED . Offshore yuan trades  6.4830 yuan to the dollar vs 6.4705 for onshore yuan.

a) JAPAN ISSUES

Days before last week’s BOJ “stunner” in which the Japanese central bank ended up doing precisely nothing and smashing market expectations of further “bazooka” easing, we presented Goldman’s expectations why the Yen is set to “collapse” in the next 12 months, with Goldman’s FX strategist explaining why he believes the USDJPY will surge to 130 in the coming year. For those who missed it, the forecast was based on the assumption of much more aggressive easing including even more balance sheet expansion, something which clearly did not pan out (as we also warned) and the only “crushing” that took place was to the P&L of any Goldman clients who listened to the bank.

Then moments ago Robin Brooks came out with his much anticipated mea culpa in which he admits he misjudged the BOJ which has reverted to a “patient” narrative, saying “this is a fateful miscalculation in our view” but admitting that while “we hold to our structural view that $/JPY ultimately will go a lot higher… in the short term, it will fall.”

Seen in isolation, last week’s decision by the Bank of Japan (BoJ) to stay on hold is understandable. After all, the January move into negative rates produced a massive flattening in the JGB yield curve, exceeding anything seen in Apr. 2013 or Oct. 2014. We therefore have some sympathy for Governor Kuroda who said in the press conference that “we decided to watch the effect of QQE with negative rates this time.” But this meeting did not happen in isolation. The market interpreted the January shift to negative rates as validating fears that JGB scarcity limits QQE. $/JPY crashed from 120 – its equilibrium level following the QQE augmentation in 2014 – to below 110 in the run-up to last week, pushing inflation break-evens in Japan sharply lower. Our view going into last week was that the BoJ needed to grab the bull by the horns and dispel the notion that it is running “out of bullets.” We thought it could do this by shifting the emphasis back to balance sheet expansion by, for example, taking concrete steps to lift housing loans off banks’ balance sheets, something Governor Kuroda floated in a recent speech. Instead, the BoJ seemed intent on teaching the markets to be “patient,” downgrading the inflation forecast yet again while taking no action.This is a fateful miscalculation in our view. Unconventional easing is above all an expectations game, where it is necessary to shock markets again and again, until they have no reason to question a central bank’s commitment to its inflation target. Preaching “patience” is the opposite, telling markets they expect too much. There is little doubt in our minds that $/JPY will keep falling in the near term, until Governor Kuroda is forced to respond with overwhelming force. We therefore hold to our structural view that $/JPY ultimately will go a lot higher. But in the short term, it will fall.

Goldman then adds what Kuroda should be doing:

There remains the question what the BoJ can and should do. As we argued in the run-up to last week’s meeting, the BoJ needs to shift the emphasis of easing back to balance sheet expansion and QQE. While we do not believe that fears over JGB scarcity are well founded – there is plenty of scope for the BoJ to lift JGBs from non-banks (Exhibit 5) where the allocation to JGBs is high compared to government bond allocations elsewhere (Exhibit 6) – we think the BoJ needs to signal that it is not afraid to expand QQE beyond JGBs if needed by, for example, taking concrete steps to lift housing loans off banks’ balance sheets. We think such a step would cause $/JPY to rapidly move back above 120, as market fears over limits to QQE abate. Unfortunately, Governor Kuroda last week only floated additional rate cuts as the possible next easing step, something the market at this point disdains and, rightly, sees as incremental easing.

Until Governor Kuroda is willing to grab the bulls by the horns and confront market fears over the BoJ’s balance sheet, the path of least resistance for $/JPY is down. Our biggest anxiety is over intervention. In our opinion, this would throw out the rule book from recent years – that monetary policy is domestically focused – and the market could respond by pushing $/JPY down to an even greater degree. Of course, a lot rides on the price action in comings days. An emergency BoJ meeting may become necessary if Yen appreciation gets out of control.

It will be hardly encouraging for Goldman clients to hear that only an emergency central bank meeting will be the catalyst that delivers the long awaited move higher in the USDJPY, even as Goldman actively fails to note that according to the recent G-20 statements and last Friday’s Treasury warning an aggressive devaluation by the BOJ will henceforth be actively frowned upon.

But more importantly, Goldman’s admission that “the path of least resistance for $/JPY is down” may be just the “all clear” signal the market has been waiting for to go long the USDJPY, and judging by this morning’s reaction which has seen the currency pair spike higher, it is doing just that.

Another “Conspiracy Theory” Confirmed: ECB Finds Widespread Trading On Leaked Inside Information

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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This afternoon, the Euro was UP by 73 basis points to trade at 1.1517

The Yen FELL to 106.48 for a LOSS of 25 basis points as NIRP is STILL a big failure for the Japanese central bank/

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate: