- Moody’s downgrades Greece credit rating by three steps on rising default risk (Ba1 to B1)
- White House Chief Of Staff Daly suggested that the US administration is mulling a release of crude from the US Strategic Petroleum Reserve (SPR). – Reuters
- Wage demands in Germany are gaining momentum. – Handelsblatt
- IG BCE, the chemical sector union, demands a 7% pay rise for its 550k employees – such a pay rise demand was observed in 2007 for the last time.
- In the construction sector, IG Bau calls for a 5.9% pay rise for around 700k construction sector workers.
- Ver.di union demands a 5% pay rise for around 600k public sector employees plus 2mn public sector servants.
Saudi Arabia mobilizes up to 10k security personnel in anticipation of next week’s “day of rage” – Independent
China is holding 100 million tons of wheat stocks, around the same amount as its annual output, a top economic planning official said on Sunday. The country said it was holding grain reserves worth ~40% of its annual consumption. This was higher than the 17-18% considered normal globally. – Reuters
Chinese officials in the country said grain production may rise for an 8th consecutive year. “We may be able to get another bumper crop this year”. Irrigation is sufficient to ensure wheat output. Bloomberg
- EU Sentix Investor Confidence improved to 17.1 in March vs 17.2 expected and 16.7 previously
- Judging from broker commentary, the market seems fairly convinced that the SPR is in play. I’m not quite so sure. With the US pursuing two wars, it seems to me that the White House SPR statement was simply released to try to stabilize the market. The priority is likely to continue to make sure that the US has enough oil for crucial operations, not to maintain growth. Certainly, risks of an actual SPR release is more likely this year given where we are in the election cycle, but an actual release of significant reserves to support growth would seem quite reckless in my opinion. According to Wikipedia, the historical SPR releases are:
1990-91 – Desert Storm sale – 21 million barrels (3.3 million m³)
1996-97 total non-emergency sales for deficit reduction – 28 million barrels (4.5 million m³)
2005 – Hurricane Katrina sale – 11 million barrels (1.7 million m³) Katrina shut down 95% of crude production and 88% of natural gas output in the Gulf of Mexico. This amounted to a quarter of total U.S. output. About 735 oil and natural gas rigs and platforms had been evacuated due to the hurricane.
Note that the 101% oil spike in 2007 and the 70% oil spike in 2008 did NOT result in SPR releases, although the growth picture was of course much better then.
- Maudlin pointed out that a recent survey of Americans shows that there are widespread misconceptions about the state of the federal budget. A majority (60%) incorrectly believes problems with the federal budget can be fixed by just eliminating waste, fraud and abuse, and 40% strongly agree. Further, less than half (44%) believe Medicare and Social Security costs are a major source of problems for the federal budget (49% disagree).