Greetings,

We begin with a few developments in the energy markets.

1. The US energy & mining investment growth has declined sharply. While this is bullish for oil in the medium term, there is no shortage of capital waiting on the sidelines that will be quickly redeployed should prices rise further.

Source: Macquarie

2. US oil rig count didn't decline last week - is it stabilizing?

Source: @SoberLook

3. Weak energy prices have taken their toll on North Dakota's economy.

4. Seeing oil prices stabilize, Iran is in no hurry to "freeze" production - as hard currency begins to flow in.

Source: ‏Reuters

Source: ‏@JavierBlas2, @IEA

5. As discussed on Friday, with crude oil contango declining sharply in recent weeks, storage (cash & carry) is no longer profitable. Nevertheless, floating cargo continues to increase. The physical crude supplies remain bloated, and they will hit the spot market at some point. 

Source: ‏@MarathonWealth, Reuters

In other commodities markets, gold speculative net long exposure remains highly elevated. Gold is vulnerable to a sharp correction, especially if the Fed becomes more aggressive in raising rates.

Moreover, demand for gold seems to be coming from the paper markets rather than the physical markets

Source: Macquarie

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US soy meal futures spike, following soy futures markets in China. This is driven by the demand for pig feed in China, where pork prices remain elevated. Speculative activity, both in China and the US, is also helping to drive this commodity higher.

Source: @barchart

1. Turing to emerging markets, Nigeria’s GDP growth falls to a 25-year low as the nation's oil dependence becomes more apparent.

2. Abu Dhabi shares experience the worst decline since last October as investors once again leave the Gulf markets. The strengthening US dollar is not helping.

Source: Bloomberg.com

3. It's painful to watch the "wag the dog" situation developing in Venezuela.

Source: Bloomberg.com

4. As discussed before, the strengthening US dollar renews concerns of accelerating capital outflows from China. While China's officials keep talking about the yuan being "linked" to a currency basket, the market is primarily focused on USD/CNY. Should this currency pair strengthen further, market jitters could return.

Source: @barchart

5. This next plot shows China's share valuations across different sectors of the economy. The markets put a significant premium on high growth internet/services firms. Some point to this as China's shift toward the "new economy."

Source: Goldman Sachs

6. China's rail freight volume growth jumps as fiscal stimulus kicks in.

Source:  ‏@swaptions

7. Below is the latest IMF forecast for BRIC governments' debt-to-GDP ratio over the next couple of years.

Source: Morgan Stanley

1. We now stitch to Japan, where the manufacturing contraction has worsened this month. This factory slowdown has been fairly broad, with production, new business, exports, and orders - all showing signs of weakness. The only stable component of the sector performance has been employment. Take a look at the summary below from Markit.

Source: @MarkitEconomics 

Source: @MarkitEconomics 

2. Japan's imports fell by the largest percentage since the Great Recession as domestic demand remains poor. As a result, Japan's trade surplus rose.

 

3. Japan's full-time employment growth has risen significantly this year as demand for labor remains strong.

Source: Deutsche Bank, @joshdigga

4. Related to the above comment, Japan's labor force has been increasing despite the drop in working-age population, as more women enter the workforce.

Source: Goldman Sachs

As discussed before, Australia's RBA has sharply revised down its inflation forecast. In fact, Australia's CPI growth projection is now below that of the US.

Source: Macquarie

In the Eurozone, the focus remains on Greece, with the IMF pointing out what Greek government debt trajectory will look like with and without the proposed debt restructuring. Similarly, the IMF sees debt servicing costs rising sharply without any "help". Is it time to convert Greek debt into a perpetual zero coupon bond?

Source: @fastFT

Source: @fastFT

1. In the UK, the focus remains on the EU referendum. Mentions of "Brexit" in the media have overshadowed the volume running up to the Scotland referendum as well as the UK elections.

Source: Deutsche Bank, @joshdigga

2. Similarly, Goldman Sachs' client survey puts Brexit ahead of other key concerns, including China's outflows/devaluation. Will this change as the dollar rises further?

Source: Goldman Sachs

3. The betting markets, on the other hand, are increasingly discounting the Brexit risk.

Source: @PredictWise

Now on to Canada where according to Macquarie, the nation is highly dependent on credit expansion.

Source: Macquarie

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Canada's CPI remains relatively brisk, as food and shelter prices rise. With further BoC easing seemingly out of the question now, the recently announced fiscal stimulus should support growth.

1. Back in the United States, existing home sales rose again while housing inventories remain tight.

2. The housing sector continues to benefit from extremely low mortgage rates. Here is the 15-year rate.

3. The next chart shows Conference Board's US "jobs plentiful" to "jobs hard to get" ratio. US labor markets continue to strengthen.

Source: Macquarie

Next, we take a look at some global trend comparisons for select economies.

1. The first chart shows the money multiplier for the US, the Eurozone, Japan, and the UK. Note that the decline in Japan's and the Eurozone's multipliers is driven by QE. Central banks' bond buying tends to raise deposits, therefore increasing the M1 money supply (lowering the multiplier). 

Source: Morgan Stanley

2. Here is the Capital Economics' CPI forecast for major DM economies. 

Source: @CapEconomics 

3. This chart compares the 2-year nominal government yield between the US and Germany.

Source: @acemaxx, @MorganStanley

4. Below are the real residential property prices over the past couple of decades for the US, the UK, and Canada.

Source: @SoberLook

5. Where does housing look overvalued? The next chart shows house-price-to-income ratio for select economies.

Source: Morgan Stanley

Next, we review some trends in the equity markets.

1. Which countries have the highest equity risk premium (relative to the government debt markets)? In addition to several other sectors, banks and energy firms keep risk premia elevated.

Source: @business

2. One measure of the lack of conviction in the equity markets is the difference between bullish and neutral equity investor sentiment.

Source: Barclays

3. Berenberg's target for Deutsche Bank shares is 9 euros. Several other firms have similar targets, expecting DB to be forced to raise additional capital in the near future.

Source: Berenberg

4. This chart shows the number of ETFs that risk being delisted as the so-called "death watch" list rises to 450. Large market moves, especially in commodities put many levered ETFs on life support.

Source: @NickatFP

5. Here is the updated chart on global corporate defaults.

Source: @lcdnews

Finally, let's look at a couple of trends in alternatives.

1. Hedge funds are increasingly becoming concentrated as investors demand alpha.

Source: ‏ @fastFT, Goldman Sachs

2. It's a bit surprising to see an increase in fund-of-funds allocations by institutional investors while other strategies decline.

Source: ‏‏@MarathonWealth, @fsinvestments 

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

1. Public transportation usage in the United States.

Source: @stlouisfed

2. The smaller the population of US counties, the worse the recovery from the Great Recession.

Source: ‏@NickatFP

3. Most shootings in the US take place in the poorest communities.

Source: @FactTank, @nytimes

4. According to Pew Research, "41% of US adults say they get their news from Facebook". The use of Facebook, however, varies by political affiliation.

Source: ‏@pewjournalism

5. The world’s most polluted cities. 

Source:‏ ‏@wef