Not much is happening today as Europe is closed for their Holiday Weekend now but we did have bad news out of Japan (remember how we were shorting /NKD futures last week) as the Nikkei plunged 2.12% as the BOJ's Tankan Survey (their Beige Book) still down at -8 and, much worse, Domestic Auto Demand fell 15.6% from last year in Japan as subsidies for fuel-efficient cars wound down. The fact that Japan's removal of stimulus immediately leads to a slump in demand is a warning shot across the bow to all that this "recovery" is NOT self-sustaining – by a long shot.
China's PMI was weaker than expected, but still an 11-month high at 50.9. The China Daily has an article this morning that Chain Store Sales are having their lowest levels of growth in the past decade BUT, that's still 8% – a level of growth that's triple our best single month of US growth – so it's all relative.
And mainly it's foreign retailers who are having difficulty growing this year as overall retail sales were up a very strong 14.3%, to $2.9Tn – like US retailers, however, a lot of the money goes from consumers' pockets straight into the gas tank. "There are too many hypermarkets in large cities and the market is saturated. They might consider moving into smaller cities or consider smaller formats such as community stores to better meet market demand," said Peng Jianzhen, deputy secretary-general of CCFA.
Hedge funds and other large speculators increased net-long positions across 18 U.S. futures and options by 10 percent to 679,191 contracts in the week ended March 26, according to data from the CTFC. The bets surged 67 percent in three weeks, the biggest advance since May 2009. Wagers on higher oil prices climbed the most this year, while those for cattle are at a six-week high.
We went into the weekend slightly bearish, expecting a bit of a pullback but, so far (8 am), it's not indicated…
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