Futures Soar On Swiss NIRP Stunner, "Considerably Patient" Fed

After drifting unchanged for much of the overnight session, US futures exploded higher shortly after the previously noted SNB's NIRP announcement, which took place at 2 am eastern, which made it explicit that yet another banks will herd the bouncing dead cats right into new all time stock market highs, and following the European open, were carried even higher as the global "risk-on" momentum ignition algos woke up, spiking all recently depressed assets higher, including energy as Brent rose almost 3% despite Saudi Arabia’s oil minister Ali al-Naimi once again saying "it is difficult if not impossible" for OPEC and his kingdom to reduce output.

Paradoxically, the Saudi also agreed with Janet Yellen in stating that the oil price drop was "temporary" suggesting that the oil price shock is not supply-driven, but is merely a function of the financialization of oil as collateral and an asset. And now that the SNB has made it clear that it too will urge depositors to put their money into risk assets, preferably stocks but crude also works, crude is once again becoming disconnected from recent supply (and demand) concerns and rising higher, in the process taking energy equities (and junk bonds) higher with it.

Elsewhere overnight, Chinese stocks took a breather last night (the SHCOMP was basically unchanged) from the breakneck surge in recent weeks that has seen the Shanghai Composite rise from under 2500 to over 3000 in one month on hopes of even more imminent central bank intervention. Ironically this happened even as the central bank offered short-term loans to commercial lenders as the benchmark money-market rate jumped the most in 11 months (yes, another central bank intervention).

European equities followed suit from their US counterparts and trade firmly in the green in the aftermath of yesterday’s FOMC release, whereby the Fed decided not to fully remove the ‘considerable time pledge’. Despite some hawkish undertones that left the door open to a potential rate hike as early as 2015, equity markets trade in positive territory in a pullback of this week’s heavy losses, with Fed rate lift-off still not immediately on the cards. The strength in equities saw flows out of USTs late in the US session yesterday, although have since pulled off their worst levels while Bunds ebbed lower after the German IFO report. Albeit in-line with analyst exp. release, it failed to deliver the dreary outlook that perhaps the market was positioned for. Further upside for European equities has stemmed from the surprise decision by the SNB to cut their key interest rate, with the SNB head Jordan attributing the move to act as a deterrent to CHF inflows. Additionally, positive sentiment from a stock perspective has also been enhanced by a seemingly stabilization of Russian asset classes and a bounce in oil prices.

Whatever the reason behind the latest epic, V-shaped move in stocks, US equity futures are now some 70 points higher from where they were just 48 hours ago, having recouped a week's worth of losses in 2 days, and are on route to recovering virtually all losses incurred since the first week of December. And while one can debate if the energy tumble is supply or demand driven, one thing is certain: markets are about to do what they do best - completely ignore yet another warning signal that not all is well. And why not: after all central banks will always be there to nudge and bail anyone out.

And while macro fundamentals remain completely irrelevant in a world where "markets" are purely the plaything of central banks, looking ahead algos will respond to flashing red headlines from US weekly jobs data, services PMI, Philadelphia Fed business outlook and EIA natural gas storage change

Bulletin headline Summary

• European equities follow suit from the US and enter the North American open in the green.
• SNB surprises markets by introducing negative rates in an unscheduled release.
• Looking ahead, attention turns towards the release of the US weekly jobs data, services PMI, Philadelphia Fed business outlook and EIA natural gas storage change
• Treasuries decline amid global surge in stocks and other risk assets after Fed yesterday pledged patience on raising rates; volumes may decline as Christmas holiday approaches.
• Putin said Russia shouldn’t waste currency reserves protecting the ruble as the country braces for a recession brought on by the collapse of the oil price and sanctions over the Ukraine conflict
• Swiss National Bank imposed the country’s first negative deposit rate since the 1970s as the Russian financial crisis and the threat of further euro-zone stimulus heaped pressure on the franc
• As Draghi signals he’ll override German-led concerns on government bond purchases if needed, the ECB is under attack in Germany amid concern that central bank is taking risks that the Bundesbank would never tolerate
• China’s central bank offered short-term loans to commercial lenders as the benchmark money-market rate jumped the most in 11 months
• China new-home prices fell y/y by the most in 2014 last month in Beijing, Shanghai, Guangzhou and Shenzhen, according to govt data released today.
• China is aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020, stepping up efforts to shift to Chinese suppliers, according to people familiar with the effort
• China is becoming more willing to let the yuan depreciate modestly and add flexibility to the currency’s trading, WSJ reports, citing unidentified Chinese officials and others familiar with China’s policy making
• German business confidence rose for a second month, with the Ifo institute’s index advancing to 105.5 in December from 104.7 in November, when it rose for the first time in seven months
• U.K. retail sales rose more than economists forecast in November as Black Friday boosted sales of electrical appliances and household goods
• Obese workers may claim discrimination in the work place, the European Union’s highest court said in a case that will pave the way for severely fat people to be protected as disabled
• Sony Pictures’ decision to let Seth Rogen make “The Interview,” a comedy about a plot to kill a head of state will potentially cost the studio hundreds of millions of dollars after a devastating cyber- attack linked to North Korea; Sony canceled to film’s release yesterday
• Sovereign yields mixed. Asian, European stocks, U.S. equity-index futures surge. Brent crude, gold and copper gain