Continuing claims dropped very modestly but have basically gone nowhere in four months but initial jobless claims limped higher last week (from 191k to 198k), which was slightly worse than expected (196k)…

Source: Bloomberg

But still under 200k, despite the ongoing wave of layoffs (and WARNings)…

Source: Bloomberg

Even more shockingly, given the concentration of the layoffs in the tech sector, California saw the largest DROP in claims last week while Indian saw the biggest rise…

The last time financial conditions were this tight, claims were in a completely different realm to the current near-record-low levels…

Source: Bloomberg

For now, this is certainly not what Powell wants to see…

Sooner or later, reality has to hit this data, and WARNings are growing louder.

Despite declining inflation prints in Spain, Italy, and Germany, short-end bund yields are rising this morning…

Source: Bloomberg

The slowing inflation prints, of course, are helped by the base effects of the collapse in energy prices is helping…

Source: Bloomberg

…but as is clear from the data below, there is more ‘stickiness’ to overall inflation than hoped (beyond energy)…

Spanish CPI plummeted as energy costs retreated. March’s headline reading came in at 3.1% YoY, down from Feb’s 6% YoY and much lower than the 3.7% YoY expected. However, core CPI – excluding volatile items like fuel and fresh produce — only dipped a smidge, to 7.5%.

Italy’s domestic producer prices fell 1.3% MoM in Feb, versus -9.9% MoM in Jan, with YoY PPI slowing to +10.0% from +11.6% in Jan.

German CPI eased significantly in preliminary March data with the headline (Eu Harmonized) print down to +7.8% YoY (from +9.3% YoY in Feb). However, the 7.8% print was considerably hotter than the expected +7.5% YoY (and is the second month in a row of hotter than expected inflation for Europe’s largest economy). Notably, Bloomberg reports that wages are a key factor that officials are monitoring for signs that price growth is becoming entrenched. Talks with workers in Germany’s public sector, who want a double-digit pay rise, ended without a deal overnight and will go to independent arbitration.

Interestingly, ECB rate-hike expectations have risen intraday as this inflation data hit

How the country-level figures feed through to the 20-nation euro zone will be revealed Friday, with analysts expecting the main measure of inflation to slow to 7.1% even as the core gauge ticks up to a record 5.7%… and none of today’s data helps to adjust that core print expectation lower.

Echoing recent comments from Goldman Sachs, Bloomberg macro strategist Simon White warns (forgive the pun) that Worker Adjustment and Retraining (WARN) Notices are picking up which points to unemployment claims soon rising and a deterioration in the jobs market, posing a risk to stocks.

Unemployment claims (the latest data is out this morning) have remained resilient in the downturn, reflecting a labor market that looks robust. However, that may be about to change in the coming weeks and months.

The WARN Act obliges employers with more than 100 full-time workers to provide written notice to the state and the workers themselves at least 60-90 days ahead of planned plant closings and mass layoffs.

In recent months, WARN notices have been steadily rising. As the chart below shows, this generally precedes sharp rises in unemployment claims, especially around recessions.

The Cleveland Fed has done analysis on WARN notices and they show lead other labor-market indicators, including claims, changes in the unemployment rate and changes in private employment, with the strongest lead relationship over one month.

The rise in WARN notices coincides with a sudden rise in the number of US states showing an least 25% annual rise in their claims.

Often when this measure hits its current threshold, it jumps considerably higher, culminating in a recession.

It’s clear stocks are not pricing in much chance of a recession, certainly not one that could hit quite soon, as they continue to rally towards 4,100.

But a rapid deterioration in job-market data, downwards revisions of previous data, poor liquidity and much tighter financial conditions in the wake of SVB would leave stocks facing potentially considerable further downside.

Reuters reported that two US Army HH-60 Black Hawk assault helicopters collided during a training exercise near the Kentucky-Tennessee border on Wednesday night, resulting in casualties.

🚨#BREAKING: Multiple fatalities after two US Army HH60 Blackhawk helicopters crashed

📌#TriggCounty | #Kentucky

Currently, Multiple authorities and other agencies are on the scene to the collision of Two U.S Army HH60 Blackhawk helicopters, which occurred during a routine… pic.twitter.com/zNHDTnKA4x

— R A W S A L E R T S (@rawsalerts) March 30, 2023

“We’ve got some tough news out of Fort Campbell, with early reports of a helicopter crash, and fatalities are expected,” Kentucky Governor Andy Beshear tweeted last night. 

We’ve got some tough news out of Fort Campbell, with early reports of a helicopter crash and fatalities are expected. @kystatepolice, @KentuckyEM and local officials are responding. We will share more information as available. Please pray for all those affected.

— Governor Andy Beshear (@GovAndyBeshear) March 30, 2023

The helicopters were from the 101st Airborne Division, based at Fort Campbell and the Army’s only air assault division. The unit confirmed, “two aircraft from the 101st were involved in an accident last night resulting in serveral casualties.” 

Here’s an update from the local police: 

BREAKING: Two Black Hawk helicopters have crashed in Trigg Co., KY leaving multiple soldiers from 101st Airborne Division dead. Happened after 10pm in Cadiz off Route 68 & Old Canton Pk. @NC5 pic.twitter.com/Z7NXF6Dhv4

— Amelia Young (@ameliayoung) March 30, 2023

A few images of the incident area have surfaced on Twitter. 

Two HH60 Black Hawk military helicopters crashed in Kentucky while on a training flight.

According to media reports, nine people died.

The reasons for the crash are still unknown.

-The New York Times pic.twitter.com/si4iVsZU19

— MARIA (@its_maria012) March 30, 2023

Further information about the crash, such as the number of soldiers onboard the helicopters, was not immediately available.  

Authored by Ven Ram, Bloomberg cross-asset strategist,

The US economy may be on the brink of a recession if an early sign of distress in the credit markets is anything to go by.

The spread between high-yield dollar-denominated corporate bonds and those on investment-grade securities widened to touch 367 basis points this month.

That level has been a sufficient trigger to herald a contraction of the world’s largest economy in data going back to the start of the millennium.

The average differential that coincided with the onset of a recession was 354 basis points in December 2007 and 276 basis points in February 2020.

Federal Reserve Bank of Minneapolis President Neel Kashkari said over the weekend that the recent bank turmoil has raised the risk of a US recession, remarking that the tumult “definitely brings us closer” to one.

Fed Chair Jerome Powell said after last week’s policy review that a significant number on the open market committee “expect credit tightening” following the failure of Silicon Valley Bank and Signature Bank. It didn’t help investor sentiment that Credit Suisse, a systemically important entity, was on the brink before its takeover by UBS.

Even so, while the Fed lowered its economic-growth estimate for 2023, it has only dropped it a notch to 0.4% from 0.5%. Rather than underscoring optimism, the latest projection may reflect the fact that it’s too early for the FOMC to assess the fallout of systemic stress.

While the Bloomberg Financial Conditions Index has gone from signaling a loose policy backdrop at the end of last month to one that is sharply tight now, it is nowhere near what it was telegraphing during, say, the onset of the pandemic-led recession. However, Powell acknowledged that financial conditions may have tightened more than traditional indexes show because they don’t capture lending metrics.

Meanwhile, the differential between 10- and two-year Treasury yields has gone to -50 basis points from -110 basis points.

That steepening after a long period of flattening usually signals an economy on the cusp of a contraction.

Still, it’s useful to keep in mind that dating recessions is far from a linear function and hence tricky to call in real time. If we are on the threshold of a contraction, we won’t know for sure right away. The National Bureau of Economic Research, tasked with determining the date, usually declares the onset with a considerable lag.

Regardless, there is little doubt that the banking failures in the US and the ripple effect of Credit Suisse’s takeover have tightened financial conditions considerably.

That’s had an adverse impact on consumer sentiment, which may be enough to hobble the US economy.

To what degree is the key question.

The Federal Security Service of Russia arrested Evan Gershkovich, a journalist from the Wall Street Journal, on allegations of spying.

The Federal Security Service, known as FSB, said in a statement it detained Gershkovich, a US citizen, in the eastern city of Yekaterinburg, about 900 miles east of Moscow in the Ural Mountains.

FSB said the reporter was “on the instructions of the United States, he was collecting information about one of the enterprises of the Russian military-industrial complex, which constitutes a state secret.”

WSJ released this statement about Gershkovich’s arrest: 

“The Wall Street Journal vehemently denies the allegations from the FSB, and seeks the immediate release of our trusted and unbiased reporter, Evan Gershkovich.” 

Gershkovich has worked for WSJ in Moscow for more than a year. He previously worked in Russia for Agence France-Presse and The Moscow Times. 

Over the past year, the reporter has authored articles about the effects of Western sanctions on Russia’s economy and the faltering relations between Moscow’s elite and the Wagner paramilitary group.

The FSB said it had “stopped the illegal activities” that Gershkovich was conducting and opened an espionage case against him in Yekaterinburg.

Gershkovich’s arrest follows the high-profile arrest of now-freed WNBA star Brittney Griner. In December, she was released from a Russian prison in a swap deal for arms dealer Viktor Bout. 

Andrei Soldatov, an expert on Russia’s security services, tweeted that Gershkovich’s arrest “is a frontal attack on all foreign correspondents who still work in Russia.” 

How much is the Biden administration considering carrying out another prisoner swap to secure the release of the American journalist?

Authored by Kyle Anzalone via The Libertarian Institute,

The European Union is developing proposals on what to do with assets of the Russian central bank that were seized by member states. According to European officials, the bloc may invest the money and give the returns to Ukraine. 

Anders Ahnlid, a Swedish diplomat who leads the commission exploring what to do with the Kremlin’s money, told Politico that whatever decision is made will be without precedent. “There is a consensus among [EU] member states that it’s important to examine very, very carefully, what can be done under the instructions that we’ve been given, including that what is going to be done will have to be in compliance with EU and international law,” she said. “We are in an exceptional situation and probably any solution that we will come up with will be of a nature that hasn’t been there before.”

The diplomats believe the bloc will be able to legally invest the funds because Russia’s invasion of Ukraine is an “exceptional and gross violation” of international and humanitarian law. 

However, the commission admits it will have to change sanctions regulations to carry out the plan. The current statutes say once funds are unfrozen, then the target will get access to their capital as well as any returns that accrued during the sanctions period. 

The bloc hopes other Western nations will join in on the scheme. The EU said taking steps in coordination with the Group of 7 (G7) was vital to not spooking investors. The commission estimates that EU and G7 countries have frozen about $300 billion in Russian central bank assets. It believes if the money is invested, it can earn about a 2.6% return. 

The EU is not sure how it would handle losses. “Losses can never be excluded,” and so the question of “who bears any residual risk in case [of] such losses … will require a clear legal answer,” the commission admitted. Adding, losses have “political and financial implications.”

The commission was created last month at the direction of Sweden. “The mandate is to contribute to mapping which funds have been frozen in the European Union … and secondly how to legally proceed to access those funds,” Swedish Prime Minister Ulf Kristersson said.

The Swedish Prime Minister stated that Russian citizens must bear the cost of the war in Ukraine. Kristersson said that it’s “Russian taxpayers, not all other taxpayers, who must bear the cost of the necessary reconstruction work.”

China has just completed its first trade of liquefied natural gas (LNG) settled in yuan, the Shanghai Petroleum and Natural Gas Exchange said on Tuesday. As OilPrice notes, the Chinese state oil and gas giant CNOOC and TotalEnergies completed the first LNG trade on the exchange with settlement in the Chinese currency, the exchange said in a statement carried by Reuters.

The trade involved around 65,000 tons of LNG imported from the United Arab Emirates (because China will never admit that it is re-exporting Russian LNG even though it now does it all the time) the Shanghai Petroleum and Natural Gas Exchange added.

The French supermajor, one of the world’s top LNG traders, confirmed to Reuters that the trade involved LNG imported from the UAE, but declined to comment further on the deal. 

France bought 65,000 tons of LNG using the Chinese yuan

The liquified natural gas was bought from the UAE, the payment is settled in the Shanghai Petroleum and Natural Gas Exchange, using Chinese yuan

We are witnessing the end of the US dollar hegemony. pic.twitter.com/GfX17nKxA1

— Zhao DaShuai 无条件爱国🇨🇳 (@zhao_dashuai) March 29, 2023

China has been looking for years to establish more trade deals in yuan to increase the relevance of the petroyuan (or LNG-yuan as the case may be) on the global markets and challenge the U.S. dollar’s dominance in international trade, including in energy trade. During a landmark visit to Riyadh in December, Chinese President Xi Jinping said that China and the Arab Gulf nations should use the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trades.

“China will continue to import large quantities of crude oil from GCC countries, expand imports of liquefied natural gas, strengthen cooperation in upstream oil and gas development, engineering services, storage, transportation and refining, and make full use of the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trade,” Xi said in December, as carried by Reuters. 

Still, Beijing has a ways to go before it dethrones the greenback as the global reserves: while the Chinese currency has made inroads in global trade, the yuan accounts for just 2.7% of the market, compared to the U.S. dollar’s share of 41%. 

On the other hand, China’s currency has lots of momentum: over the past year, Russia has turned to trade in yuan in the wake of the Western sanctions on its exports, imports, and energy trade, as the Chinese currency has become Putin’s only alternative to reduce exposure to the U.S. dollar and the euro.

This week, Amsterdam will launch a digital campaign to discourage young British men from organizing parties centered around excessive alcohol and drug consumption.

The new campaign, called “Stay Away,” will target British men between the ages of 18 and 35 searching “stag party Amsterdam,” “cheap hotel Amsterdam” or “pub crawl Amsterdam” online, with advertisements dissuading them of the consequences of drinking too much, taking drugs or causing mayhem in Netherlands’ capital. 

“These advertisements will show the risks and consequences of anti-social behaviour and excessive drug and alcohol (ab)use, such as being fined, being arrested by the police, getting a criminal record, hospitalization and health damage.

“The warnings about the risks and possible consequences will discourage some of the visitors to come. The campaign will be evaluated and possibly further developed during the coming months,” the municipality said in a statement.

The campaign is expected to expand to “potential nuisance-causing visitors from the Netherlands and other EU countries,” the municipality continued. 

Drunk Brits stumbling around the red light district, some throwing up in canals, urinating in public, and even engaging in drunken brawls isn’t a new phenomenon. 

Deputy Mayor Sofyan Mbarki (Economic Affairs and Inner City Approach) stated, “Visitors will remain welcome, but not if they misbehave and cause a nuisance.”

Amsterdam is one of the world’s most visited cities. Around 20 million visitors – including a million Brits – visit the city annually. However, BBC pointed out, “the targeted ad campaigns are discriminatory and based on unfair stereotypes.”

By Michael Msika, Bloomberg Markets Live reporter and analyst

Growing worries over a recession and the cumulative effect of months of interest rate hikes mean equity investors have plenty on their minds. Violent protests in France have added an extra layer of concern in one of Europe’s top-performing markets.

The CAC 40 is up 9.5% this year, trailing only Italy’s FTSE MIB among the major European benchmarks, with a stellar lineup of luxury names boosted by bets on China’s economic reopening. Now, the case for French stocks is being challenged by days of confrontations on the streets over pension reform that could damage investor sentiment.

“Surveys suggest the economy is holding up well so far and may even manage to expand slightly in the first quarter,” says Bloomberg economist Maeva Cousin. “But as social tensions persist, adding to the tightening of monetary conditions and heightened financial uncertainty, risks for the rest of 2023 appear increasingly tilted to the downside.”

Anger over the plan to raise the retirement age to 64 from 62 — which has won support from the OECD — boiled over when the government said March 16 it would push the bill through parliament without a vote. Judging by past episodes of national protest, like the Yellow Vest movement which started in 2018, the hospitality and transport industries will be worst affected, while the overall result representing a loss of roughly than 0.1% of GDP in the first quarter, according to

Domestic stocks are likely to feel the most pain. A Goldman Sachs basket of French companies with a high reliance on the local economy has underperformed internationally exposed peers by more than five percentage points since March 13. This group includes the likes of Carrefour, Vinci, Bouygues, Gecina, Getlink and Orange.

The other problem for the French equity market is that it has become among the most expensive in Europe, based on relative valuations compared with 10-year averages and measured against several metrics, according to Morgan Stanley strategists.

French blue chips have little exposure to their home country. CAC 40 members generate only 16% of their sales domestically, according to Goldman strategists. The index has a high weighting in companies with a global reach, like luxury, commodities and health care stocks. Locally focused utilities, telecoms, real estate and financials make up just 13% of the benchmark. Still, while luxury stocks get a modest 10% of their sales in France, tourists account for a healthy slice of that.

“Disruption to the economy is so far limited but could rise as we are now seeing more strikes,” says Bloomberg Intelligence strategist Laurent Douillet, adding that April’s readings on economic activity will be revealing. “Given that a large portion of merchandise transport is done by road, protests by truck drivers and road/refineries blockades are important to watch.”

Tourism has started to be affected, Douillet says, with hotels reporting cancellations running as high as 25% over the past two weeks as television images of clashes in Paris and piles of rubbish on the streets prompt foreigners to postpone trips. While a strike by refuse collection workers is due to be suspended Wednesday, France has asked airlines to cancel 20% to 25% of flights on Thursday and Friday. 

In February, France’s national statistic agency published a note in which it said past social movements such as in 1995 and 2019 had little impact on economic output with activity catching up during the quarter following the disruption. It added that home working introduced during the Covid lockdown was also likely to mitigate the effect of disruptions.

“It is too early to fully assess the impact of French strikes on economic dynamics, but we can already assume that the government will come out weaker from this episode, making other key reforms or budget deficit reduction difficult to pass in the next year or so,” says Stephanie de Torquat, chief economist at SILEX. “Anyhow, the context of high inflation and rapid monetary policy tightening by the ECB will likely remain the most important driver of slower growth in the quarters to come.”