Greetings,

Let's begin with China where exports rose at the fastest pace in a year in March.

Source: Investing.com

It's important to note however that the improvement in exports was more of a base effect - the absolute level is still below trend. Nevertheless, the figures are better than what some analysts have been projecting.

Copper prices which have been rising with oil on Tuesday jumped further in response to China's exports report.

Source: barchart

Here are a few other updates on China.

1. Bloomberg ran a story on China's scrap steel market which is expected to grow as the supply of junk increases. This rising pile is another reason scrap exporters in the US and elsewhere will continue to struggle.

Source: @business

2. Auto sales in China remain brisk.

Source:  Reuters

3. China's outbound M&A spikes over the past year. As discussed before, this is one way to take capital out of the country.

Source: ‏@Dealogic

4. China's small investors in the stock market who took a pounding last year (some losing their savings), are angry. Of course nobody complained when the market was rising 1-2% per day a year ago.

 

Source: WSJ 

Turning to other emerging markets, ...

1. India's CPI came in lower than expected. Also, the rain forecasts look good (which should help with the crops). Should we expect more rate cuts from the RBI?

Source: Investing.com

Separately, the nation's industrial production beat forecasts, showing a broad-based improvement.

Source: Goldman Sachs

2. The Russian ruble continues to rally on stronger oil prices, rapidly rising stock market and some hopes for improvements in relations with the West.

Source: barchart

3. Brazil's political mess continues as Dilma accused the Vice President of orchestrating a coup.

Source: Bloomberg.com

The stock market, of course, rallied as impeachment proceedings cleared some hurdles. Capital Economics and other analysts are skeptical that the changing of the guard in Brazil will help the economy. One thing that's certain - it will be hard for the new government to make the situation much worse.

 

Source: @CapEconEmerging, @FT

4. The Singapore dollar continues to rally as MAS (the nation's central bank)  seems to be on hold for now. MAS may be saving some dry powder for potential macro shocks - such as Brexit.

Source: barchart

5. Nigeria's CPI rises to a 4-year high on currency weakness.

6. Fitch downgraded Saudi Arabia, keeping its negative outlook as the prolonged oil price weakness takes its toll.

Source: Fitch Ratings

7. Bahrain's government debt is expected to rise sharply in the next few years.

Source: @IIF, h/t Jake 

8. Emerging markets corporate bond downgrades have accelerated.

Source: @IIF, h/t Jake 

The IMF has once again downgraded its global growth forecast.

Source:  ‏@RBS_Economics

In the developed markets, here is the latest IMF forecast by country. Is Japan moving back into recession next year? Perhaps.

Source:  ‏@RBS_Economics

Separately, the latest Merril Lynch investor survey suggests that concerns about the RMB devaluation and a US recession are receding while Brexit risks rise.

Source:  ‏ ‏@NickatFP, BAML

Japan's CGPI (similar to PPI) declined more than expected as disinflationary pressures persist.

Source: Investing.com

On the other hand, the UK inflation rate hits a 15-month high, with airfares being the largest contributor.

Source: Investing.com

In the Eurozone, Schaeuble continues to criticize the ECB's negative rate policy.

Source:  Reuters

In fact, money market rates in the Eurozone continue to move deeper into negative territory. Below is the 3-month Euribor.

Italian bank stocks lost ground again as investors became skeptical about the effectiveness of the EUR 3bn bailout fund. The second chart below shows the recent moves of European bank shares, with some of the worst hit being Italian firms.

Source: Investing.com

Source: @fastFT

France takes advantage of the ECB's QE by selling 50-year government debt (to lock in low rates). Here are the longest government bond maturities in the Eurozone. 

Source: @business

French 30-yr yield rose in response to the new 50-yr issue ("crowding out" effect).

Switching to the currency markets, here is the trade-weighted US dollar index. Once again, that has eased financial conditions in the US and globally.

The loonie hit a 9-month high vs. the US dollar (now above 78 US cents). The crude oil rally is the main reason.

Source: barchart

Similarly, the Aussie dollar extended gains on higher raw materials prices (particularly iron ore) and decent economic data from Australia.

Source: barchart

Now let's take a look at a couple of updates in the energy markets.

1. NYMEX crude oil rose above $42/bbl, a 2016 high. Is this rally a bit overdone?

Source: barchart

2. Barron's recent front cover ...

Source: ‏@StockCats, @Not_Jim_Cramer 

3. US banks have quite a bit of exposure to the energy sector - some of which is in the form of working capital/revolvers. Canadian banks may be even more exposed.

Source: @pdacosta 

Here are some observations on other commodity markets.

1. This is the BLS cash metals index. As we saw earlier, steel and copper prices have "woken up".

Source: barchart

2.  Soy meal futures continue to rally.

Source: barchart

3. The Baltic Dry shipping index bounced from the lows. The index is of course still a fraction of the highs (this is log scale) but the prices nearly tripled from the lows.

Source: stockcharts.com

Now on to the equity markets.

1. According to the latest BAML survey, we see "investor fatigue with financial engineering." Investors want to see improved balance sheets rather than more share buybacks.

Source:  ‏@NickatFP, BAML

2. The same survey points to relatively high cash balances - a bullish indicator.

Source:  ‏@NickatFP, BAML

3. The rally in iron ore continues to push up prices of mining shares. Here is Fortescue.

Source: Google

4. Chesapeake Energy is up 61% in 2 days. Apparently banks are cooperating and seem to be comfortable with their collateral package for the revolver. Default avoided?

Source: Google

5. Just when we thought the pharma sector is stabilizing ...

Source: barchart

Source: WSJ

Source: Ycharts.com

In US money markets, the Fed's RRP uptake has been the lowest since late 2013 when the program was first started.

The reason is that the Fed pays 25bp while there are far more attractive private market alternatives to the RRP.

Source: Reuters

Source: DTCC

US import prices continue to decline (chart shows the overall import price index and imports from China).

 

Finally, what's going on in Hartford, CT? The Fed's Economic Conditions Index there has collapsed. Is it the GE move to Boston? Is it the brain drain to Boston and NYC? Or is it the tax environment that has been somewhat hostile to business in recent years?

Turning to Food for Thought, we have 5 items this morning:

1. Plug-in vehicle sales globally.

Source: DOE

2. US farmers are getting "bailed out" again by the federal government this year as crop prices collapsed.

 

Source: ‏@markets

3. Aging population across select nations.

4. As people age past 55, their social contribution declines while the benefits they receive spike. Here is the breakdown for the US.

 

h/t Stan

5. The next 3 charts show the US gender pay gap by age, race, and by state.

Source: CNN

Source: CNN

Source: CNN