As
The Saudi Economy Implodes, A Fascinating Solution Emerges: The Aramco IPO - (www.zerohedge.com) Earlier today we reported that when it comes to Saudi Arabia, things are
going from bad to abysmal, with the market is clearly aware of it. Saudi riyal
forwards hit their highest level in almost two decades as oil plummeted:
twelve-month forward contracts for the riyal climbed 260 points, and set for
the steepest close since December 1996 on growing speculation the world’s
biggest oil exporter may allow its currency to slide against the dollar for the
first time since 1986 (incidentally, Bank of America's "Number One Black Swan Event For The Global Oil Market In 2016"). Alongside this, Saudi default risk has
also been rising, and as of this morning Saudi CDS traded wider than Portugal:
Japan's Nikkei 225 Extends Retreat After Worst
Start Since 1970 - (www.bloomberg.com) Japanese
stocks fell as China’s decision to maintain the level of its currency for
the first time in nine days failed to stop the Nikkei 225 Stock Average posting
its worst first week of a year since 1997. The Topix index dropped for a fifth
day, losing 0.7 percent to 1,447.32 at the close in Tokyo. It swung from a 1
percent advance as tire makers led gains and utilities fell. The Nikkei 225
Stock Average lost 0.4 percent to 17,697.96, taking its weekly retreat to 7
percent. Fast Retailing Co., which is the gauge’s biggest stock, slumped after
cutting its earnings forecasts. The yen weakened 0.6 percent to 17.70 per yuan
in offshore trading, the first decline since Dec. 30.
Rail
Shipments Plummet to Recessionary Levels - (www.wolfstreet.com) “Weaknesses in energy and manufacturing, as
well as world economic softening, had a negative impact on both carload and
intermodal traffic in 2015.” Those were the encouraging words of John T. Gray,
Senior VP of Policy and Economics at the Association of American Railroads
(AAR). Transportation is a measure of how well the real economy is
clicking. Alas rail traffic is getting clobbered. The deterioration in the
second half of 2015 dragged the whole year down from 2014: carloads fell 6.1%, according to the AAR, while intermodal containers and trailers
edged up 1.6%, for a total decline of 2.5%. But the deterioration late in the
year was a doozie. In December, total volume dropped 8.9% year over year,
with both components down: even intermodal containers and trailers,
which had been holding up for much of the year, edged down 0.7%;
and carloads (bulk commodities, autos, and the like) plunged 15.6%.
Bond Insurers File Suit to Halt Puerto Rico
Revenue Diversion - (www.bloomberg.com) Insurance companies that guarantee Puerto Rico
municipal debt filed a lawsuit challenging the commonwealth’s decision to
divert revenue designated for some bonds to pay other creditors. Ambac
Financial Group Inc. and Assured Guaranty Ltd. said the clawback of revenue
pledged to bond issues violates the U.S. Constitution by interfering with
debt-holders’ contractual rights. The suit filed in U.S. District Court in
Puerto Rico seeks to have the clawback declared unlawful and asks the court to
issue an injunction against implementation, according to a statement. Puerto
Rico Governor Alejandro Garcia Padilla announced in December that the
commonwealth would divert the revenue in order to fund its general-obligation
debt payments, which have the highest priority under the island’s constitution.
Puerto Rico defaulted on about $37 million in agency bond payments at the start
of the year, saying it would focus on providing essential services as the
commonwealth’s financial situation worsened.
Noble Group Bonds at 53 Cents Push Debt From
Junk to Distressed - (www.bloomberg.com) Bond
investors are indicating they expect Noble Group Ltd.’s troubles to get worse
as a selloff in its notes sent them into distressed territory. The commodity
trader’s dollar bonds due in 2020, its most liquid, rose 1.4 cents on the
dollar to 55.2. They dropped below 53 earlier to their lowest on record,
implying a yield of about 26 percent for the company’s debt. That puts it on
par with issuers such as the Republic of Venezuela and U.S. retailer Toys “R”
Us Inc., which rating firms have indicated are likely to miss debt payments in
the short term. Noble Group has also become the riskiest company in Asia to
hedge against nonpayment of debt based on credit-default swaps contracts.
People's Bank of China sets yuan fix at 6.5636 versus 6.5646 Thursday - (www.cnbc.com)
Asian Stocks Rout Deepens as China Abandons New Circuit Breakers - (www.bloomberg.com)
U.S. stock funds bleed: see biggest outflows since September - Lipper - (www.reuters.com)
China Flip-Flops on Stock Crash Rule and Adds to Chaos - (www.bloomberg.com)
Late-Night U.S. Futures Trading Soars on China Fixation: Chart - (www.bloomberg.com)
China Woes Send Traders Running From Germany's Once-Mighty DAX - (www.bloomberg.com
No comments:
Post a Comment