news12may11
COMMODITIES
White House passed legislation on Wed that would require US decisions on drilling permits within 60 days. The measure is unlikely to pass through the Senate. Bloomberg
More signs Washington getting involved to clamp down on prices - a group of senators sent a letter to the head of the CFTC saying they wanted it to unveil a plan by May 23 to impose position limits on all energy futures products, starting w/crude. The Senators say the recent action in crude defy supply/demand logic and regulators need to take action as a result. "The wild fluctuation could only be the result of rampant oil speculation, plain and simple," said Senator Ron Wyden. Reuters
IEA cut its’11 global crude oil demand forecast for the first time as high prices are expected to cause demand destruction (the main area of demand destruction is expected to come from North America drivers; the IEA says the US will drive less this summer). The IEA cut its ’11 demand forecast by 190K BPD, or just 0.2%. “High oil prices have finally begun to dent demand,” the agency said. “Four dollar a gallon is likely to yield an anemic U.S. driving season. This is the main change to our demand forecast - a weaker 2011 profile in North America.” Bloomberg
CME raises gas margins - the CME Wed night raised margins on gasoline contracts for the second time this week. CME increased gasoline margins for speculators to $11,475 per contract - Bloomberg
Ethanol -
the ethanol industry's main trade group, and its most reliable champions in the Senate, are endorsing legislation to reduce a credit for refiners who blend ethanol into gasoline. WSJ
Cotton - China cotton imports fell 35% y/y or 24% m/m in Apr. Bloomberg
USA
Tax Holiday Bill Sets Off a Fight A bipartisan group of lawmakers introduced legislation that would allow companies to repatriate overseas cash at a reduced rate (a max of 5.25%) in either ’11 or ’12 in the hope that firms would ramp up hiring and capital investments. However, it doesn’t seem like there is much appetite in the Senate or White House for such a proposal in its current standalone form (Geithner has said he would welcome this as part of a broader corporate tax code overhaul but not by itself). WSJ
Treasury Auctions To Take US Over Debt Ceiling On Monday - Treasury auctioned $56 billion in new debt Tuesday and Wednesday, enough to take the U.S. over its federal debt ceiling when the three- and 10-year notes settle on Monday. DJ
Obama will give a major speech, possibly as early as next week, laying out his new Middle East strategy; Obama will meet Israeli Prime Minister Benjamin Netanyahu at the White House on May 20 and is considering giving the speech before he leaves on a trip to Europe early in the week of May 22 - Reuters
CSCO - provides some evidence of inventory hoarding during their conf call Wed night - "We had inventory purchase commitments of $4.3 billion, which was up approximately 10% or $382 million quarter over quarter, and this increase in purchase commitments was driven primarily by securing supply components in Japan, which contributed approximately $300 million of that increase"
EUROPE
Portugal's Aid Plan Advances - officials in Helsinki sign off on Portugal aid - Finland's caretaker government struck an agreement with opposition lawmakers to win the country's backing of an aid package for Portugal - WSJ
Greece - Germany’s Finance minister said Greece will have to carry out extra savings before more int’l aid is freed up. Bloomberg
Greece Can Sell More Assets, Hasn't Asked For More Aid- the IMF said the country has a major property portfolio (worth some EU280B) that it could sell to raise cash. DJ
Franceto ban fracking of fossil fuels - will become the first country to ban hydraulic fracturing - FT
ASIA
China resumes bill sales as means to control liquidity AND still raises its bank RRRs again - PBOC (as expected) sold 40B yuan worth of 3-year bills on Thurs and at 6:30amET they came out hiked bank RRRs 50bp (this was the 5th hike this year) - Reuters
China economic growth - Goldman’s Jim O’Neill said China’s growth could slow to 8% - Reuters
TEPCO agreed on conditions for aid; the Japanese utility said it would accept a government role in its mgmt and won’t cap total compensation for those hurt by Japan’s nuclear crisis. A ~$60B+ fund may be established to help pay compensation claims. WSJ
TEPCO says damage worse than feared - amount of water leaking from one of the reactors at its Daiichi plant is much greater than previously thought; the update points to severe damage to the reactor and could force a change in plans for stabilizing the unit. WSJ
MEA
Libya - senior Libyan rebel leaders are urging the White House to provide quick financial aid. The rebels are focused on having Washington hand over some of Qadaffi’s seized assets. DJ
Libya - rebel forces continue to make progress against Qadaffi; rebels are now pushing westward from Misrata and are advancing on Brega - Bloomberg
Syria - another article discussing how pressure is building on the White House to speak out directly against Assad. NBC says the White House is coming under more pressure to take action to speak out against Assad.
Iran has shipped conventional weapons to Syria in violation of an arms-export ban, a U.N. report said - WSJ
Afghanistan - David Cameron in the UK is calling for troop withdrawals from Afghanistan to start within weeks. Cameron has apparently told British defense chiefs he wants UK troops to start leaving the country this summer. London Telegraph.
Libya - Qadaffi has made an appearance on TV, refuting speculation that he had been killed by NATO strikes. London Telegraph