Monday, May 26, 2014

MONDAY 5/26/14; Memorial Day Holiday; US Markets Closed

The pro-Russian separatists take over an airport near Donetsk which may prohibit a trip to the region by the new leader-elect Poroshenko. The pro-Russian separatists maintain a strong wedge between East Ukraine and West Ukraine and do not recognize the election results where Poroshenko is the winner with about 55% of the vote. Crude oil remains flat with WTIC sticky at 104 and Brent sticky at 110.




[Text is Redacted: Purchase May 2014-05 to Read the Complete Chronology]








As Italy’s 10-year yield teases 3%, Spain is already under at 2.91%. France’s 10-year yield is 1.82% and Germany 1.42%. The US 10-year yield sits at 2.54%.

ECB’s Draghi speaks and says he “will not permit inflation to stay low for long.” (It should be worrisome to world citizens that arrogant central bankers believe they can ‘permit’ and ‘not permit’ the way so-called ‘free’ markets and the economy function). He says stay alert for “disinflationary conditions” and a “negative spiral.” Draghi can still not bring himself to utter the ‘D’ word; deflation. He says he is “prepared for action” if any risks develop. The euro is 1.3636 floating higher so his lip service no longer weakens the euro. Traders appear to have the pending Draghi easing announcement on 6/5/14 priced into markets so the risk appears to be that Draghi under delivers.

US markets are closed today in observance of Memorial Day. The US celebrates the day with parades, ceremonies for veterans at the cemeteries and of course, hot dogs, apple pie, fireworks and plenty of flag-waving. The California wild fires are wrestled under control but the Arizona wild fires are only 25% contained and expected to continue burning for a few days or weeks. S&P futures +6. Dow +60. Nasdaq +12. Gold 1293. Global markets are revved up and ready to print more record-breaking all-time highs. Ukraine, schmoocraine.

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