Bogusville

This series of charts speak a clear picture. Bogus is as bogus does. Some people are beyond shame.
 Unfortunately, for average Americans, a clutch of them reside in Washington DC.



To read more zerohedge.com/news/2016-06-03/funniest-bls-report-ever 

Dollar Takes Hit

The picture turned ugly for he U.S. dollar after the anemic jobs report today, falling against several currencies, a move that won't make Japanese officials, to name one, happy. To be sure, they'll be those who cite different reasons for the pathetic jobs report with the recent Verizon strike one of them.
                                
With Fed Chair Janet Yellen set to speak Monday for the last time before the next FOMC gathering investors will be scanning carefully her words looking for clues to see if a June hike is in the cards. The next hike, if and when there is one, will be the first of this year. China and the U.S. are already upset about trade sanctions and currencies differentials. A weaker dollar won't smooth things over there anytime soon.

The dollar index, which tracks the greenback against a basket of currencies, is down by 1.6% at 94.02 — its lowest level since mid-May.

The major currencies are all up against the US dollar. Here's the scoreboard as of 10:16 a.m. ET:

• The Japanese yen is stronger by 1.8% at 106.97 per dollar.
• The euro stronger by 1.7% against the dollar at 1.1341.
• The British pound is stronger by 0.8% against the dollar at 1.4543.
• The Australian dollar is stronger by 1.5% at 0.7334 per dollar.
• The Canadian dollar is stronger by 1.2% at 1.2948 per dollar.

Tellingly, three big "risk-off" trades stand out: the yen is stronger against the dollar, gold prices are up by 2.7%, and US Treasurys have rallied.

Gold rallied on the weaker dollar and the possibility of no rate hike soon that should push the dollar higher and Treasury prices usually react inversely to what interest rates do. There is more at stake here, however, as the Fed gets wedged into a higher possibility of doing the wrong thing at the right time. Jawboning can only carry them so far.  

Holding fast or raising rates will both be interpreted as doing something. Investors could decipher either one as a negative given the tight corner the Fed now finds itself sitting.

U.S. Non-Farm Payrolls

Here's a chart to compare the upcoming announcement on non-farm payrolls.

Slow Global Growth Here to Stay?

Slow global growth has been on the minds of many. Here's a chart. Despite all the monetary easing growth seems to be hard to find. Given that expect to hear more cries for fiscal stimulus since it's fairly obvious zero to negative zero rates hasn't done the job.

If we weren't before we're soon to be all Keynesian soon if certain folks get their way. Anybody smell stagflation?


advisorperspectives.com/commentaries/20160602-blackrock-the-narrowing-corridor-of-global-growth

Production Cut

Here's a chart you might find interesting, especially if you follow oil and are an investor.

 
US crude oil production looks set to slow sharply over the coming months, and that should keep prices well supported in the second half of the year.

That’s the view of Daniel Hynes, senior commodity strategist at ANZ Bank, who points to a reduced number of active drilling rigs, along with the prospect of heightened financial stress in the energy sector, as two factors suggesting output will fall “significantly”.

“Active or new drill rigs in the US have fallen from 1,600 to 316 (in May), the lowest level since September 2009,” says Hynes.

He believes that “this is only just being translated into a fall in US oil production”, adding “we believe the rate of falls in weekly US oil production is about to accelerate as the impact of the falling rig count will be compounded by forced closures and low prices biting.”
The chart above, supplied by Hynes, does nothing to undermine this view, demonstrating the lag effect US output has on changes in new and active drilling rigs in production.
 businessinsider.com/image/575114c952bcd023008c6ad9-680/us-crude-production-v-rig

Overnight

It's 20-60, that's what futures market is betting a rate hike will come either this month or in July as investors pushed Asian shares higher overnight awaiting news about U.S. job and wage warning numbers.

The Nikkei gained 0.2% cutting losses for the week to 1.5%,given the controversy over Abernomics and whether it's really working coupled with a postponed sales tax hike. The Shanghai Composite edged lower 0.2%  with it's expected to finish the week up 3.5%, the Hang Seng index rose a modest 0.3%, also expected to close out the week positive 1.7% and MSCI's broadest Asian-Pacific index outside Japan gained 0.4%. 

In other news, the WSJ reports that trade differences between the U.S. and China continue to flare as the yuan hits a five year low against the dollar.

The U.S. and China, facing mounting political pressures at home, are seeing economic tensions flare to their worst point in years over currency and trade practices.

China has pushed the yuan to a five-year low against the dollar, reviving charges from American firms of currency manipulation to gain a competitive advantage for Chinese goods. The Obama administration has fired off a series of trade complaints and levied duties on several Chinese industries, from chicken feet to cold-rolled steel used in appliances and auto parts.

Please Turn Off The Lights

It's over. That's the view of bond guru Bill Gross in his latest report. The last 40 years won't be repeated any time soon, according to the Sage of Newport Beach in this blurb from Business Insider from Gross' June newsletter.businessinsider.com/bill-gross-investment-outlook-june-2016-2016-6?

Bill Gross doesn't think the future will look like the past. 

In his latest investment outlook, published on Thursday morning, Gross wrote that he thinks the stellar returns experienced by both bond and stock investors over the last 40 years are an anomaly that will not be repeated. 

Gross looks at two simple charts — the Barclays US Aggregate bond index and the S&P 500 — and says the steady upward march in bond prices and the rockier but still rewarding upward climb in stock prices can't happen again.

Will someone on their way out please turn off the lights. This party's over. Where is the late Cowboys' QB when you need him.

Credibility At Stake

Whether the Fed will choose to ignore what has been a spate of if not all bad certainly mediocre at best news on the global economic front in making its next interest rate decision remains to be seen. Our guess is they've misplayed their hand and now feel compelled to hike rates sooner than later.

They have reached a damned if you do and damned it you don't point largely of their own making. Either way they will get a reaction, possibly a market selloff whatever they do since if they sit tight after all their recent jawboning it will fire further questions about indecisiveness and incompetence.

Their credibility despite the naysayers is increasingly at stake.

businessinsider.com/global-manufacturing-has-stalled-pmi-jp-morgan-markit-2016-6?

Activity levels across factories the world over stalled last month, according to the latest JP Morgan-Markit global manufacturing purchasing managers’ index (PMI) released on Wednesday.

The PMI came in at 50.0, down from 50.1 in April, continuing the underwhelming start to the year for the global manufacturing sector.

Like PMI readings for individual nations, the survey measures changes in activity levels from one month to the next, with a reading of 50 signaling that activity levels neither expanded nor contracted during any given month.

It takes in responses from over 10,000 firms from 30 individual nations, providing the closest thing to a comprehensive report card for the global manufacturing sector as one can get.

And based on the tepid reading for May, the news on that front is not good.

JP Morgan

Markit notes that levels of expansion slowed in the Eurozone and US, the latter at the slowest pace since October 2009, while activity levels in Asia and South America continued to contract.

“The two largest Asian manufacturing economies – China and Japan – both contracted in May. PMI readings indicated that rates of decline were the sharpest since February 2016 and January 2013 respectively,” said Markit.

“The Brazil PMI sank to its weakest level in over seven years, placing it at the bottom of the global rankings.”

Overnight

Hard times can produce hard comments and that's what at least one member of the Bank of Japan offered today, according the WSJ.

TOKYO—A Bank of Japan board member on Thursday issued stern warnings about Japan’s negative rate policy, underscoring tension within the central bank over Gov. Haruhiko Kuroda’s escalating monetary experiment to end deflation.

In comments that briefly kicked the yen higher, Takehiro Sato, one of the BOJ’s nine policy-setting board members, said negative rates aren’t producing their intended effects and could do the economy more harm than good, in a direct challenge to Mr. Kuroda’s positive messages.

The measure is also “contradictory” with the bank’s massive asset purchase program—its main policy instrument—so “their combination lacks sustainability,” Mr. Sato said in a northern Japanese town of Kushiro.

A former Morgan Stanley economist, Mr. Sato is a well-known critic of Mr. Kuroda’s “what-ever-it-takes” approach and is generally seen as having limited influence over policy. Mr. Sato opposed both an asset purchase increase in late 2014 and the launch of negative rates in January this year. He believes that the BOJ should go more slowly in trying to achieve its 2% inflation target partly because price growth which wasn't backed by wage increases wouldn’t be sustainable.

But Mr. Sato’s latest remarks were so critical that traders took note of them and drove up the yen on speculation that there would be no additional easing measures soon.

In the meantime, more investors and others seem to be questioning the effectiveness of Abernonics as his decision to delay a sales tax hike for two and a half years brings open criticism. The rally in the yen hurt the Nikkei as is faded more than 2% overnight after more weak economic data from surveys on global manufacturing.  The dollar fell to two-week low against the yen.

In other markets, the Shanghai Composite  was off 0.2%, the Hang Seng flat, the ASX 200 up 0.02% and  the Korean Kospi flat. Gold was up $2.40 trading at 1,217.22.

The Vote

With the Brexit voting date drawing closer, here's an interesting article voters in the UK might want to read.

Polls at best have been confusing, especially the accuracy between those taken online versus those taken on the telephone.

British citizens seeking yet another reason to vote Brexit, have one in spades. The roots of this reason go back to last year when European Commission president Jean Claude Juncker hatched a 3-year plan to leverage €20 billion in seed capital to produce a €300 billion gain in Eurozone investment.

As one might expected, the results are nonexistent even though Juncker has already used up the €20 billion in seed capital. Juncker now wants to up the seed capital, make the plan permanent, and extend the plan outside the EU to immigration zones such as Syria and Africa!

Has there been any deception by government officials on this important issue leading up ton? That is the question voters need to answer for themselves before they mark those ballots later this month.