Tuesday
Asian Market Update: Japan sees first trade deficit in more than 3 decades in 2011; Australia inflation at a multi-year low
***Economic Data*** - (JP) JAPAN DEC MERCHANDISE TRADE BALANCE: -#165;205B V -#165;170BE; ADJUSTED TRADE BALANCE: -#165;568B V -#165;385BE (multi-year low); 2011 Trade deficit #165;2.49T (1st deficit since 1980) - (AU) AUSTRALIA Q4 CONSUMER ......
KBC: Hungarian central bank surprises with keeping rates unchanged. Forint weakens only temporarily after the announcement
The Hungarian central bank surprised markets by keeping its base rate unchanged at 7.00% yesterday, while consensus expected a 50bps rate hike. ...
European Market Update: UK Q4 GDP contracts; German IFO survey mixed; All eyes now on FOMC statement and forecasts
***Economic Data*** - (EU) ECB: #8364;3.6B borrowed in overnight loan facility v #8364;3.4B prior; #8364;485.8B parked in deposit facility vs. #8364;490.5B prior - (FI) Finland Dec Preliminary Retail Sales Volume Y/Y: 1.8% v 2.5%e - (TH) ......
Monday
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
Today#8217;s support: - 1.2949 and 1.2874(main), where correction is possible. Break would give 1.2846, where correction also may be. Then follows 1.2822. Break of the latter would result in 1.2777. If a strong impulse, we would see 1.2758. ......
Asian Market Update: Fed comments give a boost, but markets cannot sustain with continued global uncertainties; Singapore GDP at multi-year low
***Economic Data*** - (KR) SOUTH KOREA Q4 PRELIM GDP Q/Q: 0.4% V 0.5%E; Y/Y: 3.4% V 3.5%E - (SG) SINGAPORE DEC INDUSTRIAL PRODUCTION M/M: 7.8% V 2.2%E; Y/Y: 12.6% V 6.4%E - (JP) JAPAN DEC CORPORATE SERVICE PRICE INDEX Y/Y: 0.1% V 0.0%E (1st ......
European Market Update: Risk appetite buoyed by reports that private lenders said to have accepted lower interest rate in Greek PSI deal
***Economic Data*** - (EU) ECB: #8364;3.5B borrowed in overnight loan facility v #8364;3.6B prior; #8364;484.1B parked in deposit facility vs. #8364;485.8B prior - (RU) Russia Gold Forex Reserve w/e Jan 20th: $499.7B v $497.1B prior - (DE) ......
Sunday
Asian Market Update: NZ reports trade surplus; Yen continues to strengthen
***Economic Data*** - (NZ) NEW ZEALAND DEC TRADE BALANCE (NZ$): +338M V -50ME (1st surplus in 5-months) - (JP) JAPAN DEC RETAIL TRADE M/M: 0.3% V 0.4%E; Y/Y: 2.5% V 2.1%E (16-month high); LARGE RETAILERS' SALES Y/Y: % V -0.6%E - (JP) JAPAN D...
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
Today#8217;s support: - 1.2949 and 1.2874(main), where correction is possible. Break would give 1.2846, where correction also may be. Then follows 1.2822. Break of the latter would result in 1.2777. If a strong impulse, we would see 1.2758. ......
KBC: Market no longer bets on rate cuts in Poland in 2012. Polish economy grew by 4.3 % in 2011
Central European currencies firmed again on Thursday. The Polish zloty extended its winning streak and strengthened against the single currency in a fourth consecutive session. The zloty posted gains in 15 of 19 sessions so far this year and the EUR/PLN c...
Saturday
European Market Update: EU's Rehn expresses optimism of a Greek PSI at some point before the weekend is over
***Economic Data*** - (EU) ECB: #8364; borrowed in overnight loan facility v #8364;3.5B prior; #8364; parked in deposit facility vs. #8364;484.1B prior - (RU) Russia Narrow Money Supply w/e Jan 23rd (RUB) 6.80T v 6.83T prior - (IN) India ......
Asian Market Update: Markets tumble on EU downgrades, Australia home loans climb for the 8th month
Asian equity markets traded to the downside after the SP cut several EU sovereign ratings on Friday. On renewed risk aversion saw the the dollar gain against all the majors, seeing the biggest gains against the A$. Euro held steady down 0.3% to the $1.26...
Friday
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
Today#8217;s support: - 1.2600(main), where correction is possible. Break would give 1.2585, where correction also may be. Then follows 1.2556. Break of the latter would result in 1.2528. If a strong impulse, we would see 1.2509. Continuation will ......
KBC: CEE currencies reverse gains after series of rating cuts acrross eurozone Hungarian
Hungarian talks with the IMF and EU reached stalemate as international lenders seem to keep a firm stance towards Budapest. According to comments after the meeting of Tamas Fellegi, Hungarian negotiator, and Christine Lagarde, IMF chief, there are several...
US Market Update: US equity Markets closed for Federal holiday
- (PE) Peru Dec Unemployment Rate: 7.0% v 7.0% prior - (PE) Peru Nov GDP Y/Y: 5.0% v 4.7%e - (BE) Belgium Nov Trade Balance: -#8364;679.5M v #8364;207.4M prior......
Thursday
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
Today#8217;s support: - 1.2600(main), where correction is possible. Break would give 1.2585, where correction also may be. Then follows 1.2556. Break of the latter would result in 1.2528. If a strong impulse, we would see 1.2509. Continuation will ......
KBC: EC set to unveil details of infringement action against Hungary
The Polish zloty outperformed its peers on Monday and slightly strengthened whereas the forint and the koruna posted some losses. Jerzy Hausner, the NBP#8217;s Monetary Policy Council member, said in the morning that the central bank should leave ......
European Market Update: Risk appetite finds footing aided by China GDP data and German ZEW survey
European shares recovered their losses taking cue from Asian trading even after China's data showed economic slowing. As expected, SP downgraded EFSF rating to AA+, an action which did not move markets. However, German ZEW data was the highest ......
Wednesday
Why You Should Stop Trading The USD/JPY Pair In 2012
I stopped trading the USD/JPY last year because it was proving to be very difficult and the big price swings were becoming less and less frequent. Well the bad news is that it seems to have got even worse in 2012, and the USD/JPY pair looks as if it is on a life support machine at the moment.
For this reason I don't think anyone should be trading the USD/JPY pair at the moment. The price movements are just too small to make any real money from.
To demonstrate this point, just look at the weekly chart of the average true range (as indicated by the ATR indicator) of the USD/JPY pair since 2009.
You can see that the average weekly range was around 430 points just prior to 2009, and since then it has fallen lower and lower, and now stands at a pitiful 117 points. Remember this is not 117 points a day, this is 117 points a week!
Furthermore on a daily basis, the story is equally as bleak. The average daily trading range has often been in the 50-60 points region, and sometimes more, but it has dropped off sharply to what must be close to an all-time low of just 31 points. Day trading is hard at the best of times, but trying to squeeze out a decent profit when the USD/JPY pair only moves within a 31 point range every day is near on impossible.
So as I say, I really don't believe it is worth trading the USD/JPY pair at the moment. Unless the daily ATR indicator returns to 50 or 60 points, it is probably best to concentrate on the other major currency pairs instead, such as the GBP/USD and EUR/USD pairs for example.
Filed under Blog by JamesW
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Permalink• Print• Email• CommentRelated EntriesThe Current Trading Range Of The GBP/USD And EUR/USD PairsA Review Of The Forex Markets In 20113 Ways You Can Use The Average True Range (ATR) IndicatorThe Average True Range (ATR) Technical IndicatorThe Average Daily Range Of The Major Forex Currency Pairs2 Comments on »January 11, 2012FXRebates@ 7:36 pm:
I was already avoiding this pair in the end of 2011 and stopped trading it completely at the end of the year.
Permalink• Reply January 12, 2012frank page@ 3:02 am:
Hi James!
Happy New Year! The usd/jpy is just one of many pairs not suitable for trading right now. I monitor the 8 major currencies which gives me 28 currency pairs. Using my currency strength meter (as a filter) shows the the usd.jpy to be wkly +2, daily +3 right now. I will not trade any pair with a reading less than 8 (actually prefer +10!). So yes the usd.jpy is out for now. Tip: try eur/nzd (dly 14), nzd/chf, eur/aud (all above 10!. Trading as above is a very safe way to trade but requires some practise.
For this reason I don't think anyone should be trading the USD/JPY pair at the moment. The price movements are just too small to make any real money from.
To demonstrate this point, just look at the weekly chart of the average true range (as indicated by the ATR indicator) of the USD/JPY pair since 2009.
You can see that the average weekly range was around 430 points just prior to 2009, and since then it has fallen lower and lower, and now stands at a pitiful 117 points. Remember this is not 117 points a day, this is 117 points a week!
Furthermore on a daily basis, the story is equally as bleak. The average daily trading range has often been in the 50-60 points region, and sometimes more, but it has dropped off sharply to what must be close to an all-time low of just 31 points. Day trading is hard at the best of times, but trying to squeeze out a decent profit when the USD/JPY pair only moves within a 31 point range every day is near on impossible.
So as I say, I really don't believe it is worth trading the USD/JPY pair at the moment. Unless the daily ATR indicator returns to 50 or 60 points, it is probably best to concentrate on the other major currency pairs instead, such as the GBP/USD and EUR/USD pairs for example.
Filed under Blog by JamesW
del.icio.us Digg Furl Reddit Ask blogmarks Google Netscape Socializer StumbleUpon Technorati Windows Live Yahoo! Help
Permalink• Print• Email• CommentRelated EntriesThe Current Trading Range Of The GBP/USD And EUR/USD PairsA Review Of The Forex Markets In 20113 Ways You Can Use The Average True Range (ATR) IndicatorThe Average True Range (ATR) Technical IndicatorThe Average Daily Range Of The Major Forex Currency Pairs2 Comments on »January 11, 2012FXRebates@ 7:36 pm:
I was already avoiding this pair in the end of 2011 and stopped trading it completely at the end of the year.
Permalink• Reply January 12, 2012frank page@ 3:02 am:
Hi James!
Happy New Year! The usd/jpy is just one of many pairs not suitable for trading right now. I monitor the 8 major currencies which gives me 28 currency pairs. Using my currency strength meter (as a filter) shows the the usd.jpy to be wkly +2, daily +3 right now. I will not trade any pair with a reading less than 8 (actually prefer +10!). So yes the usd.jpy is out for now. Tip: try eur/nzd (dly 14), nzd/chf, eur/aud (all above 10!. Trading as above is a very safe way to trade but requires some practise.
U.S. Trade Deficit Widens To $47.8 Billion In November
" /> 01/13/2012 08:34
Reversing a drop in October, the U.S. trade deficit increased notably in November, according to figures released Friday by the Commerce Department.
U.S. exports fell by 0.9 percent to a level of $177.8 billion while imports were up 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion - little changed from the $43.5 billion initially reported.
Most economists had predicted that October's narrowing of the deficit would be reversed but had generally forecast that the deficit would come in lower, at roughly $45 billion.
Reversing a drop in October, the U.S. trade deficit increased notably in November, according to figures released Friday by the Commerce Department.U.S. exports fell by 0.9 percent to a level of $177.8 billion while imports were up 1.3 percent to a level of $225.6 billion, according to the report. (Market News Provided by RTTNews)
Reversing a drop in October, the U.S. trade deficit increased notably in November, according to figures released Friday by the Commerce Department.
U.S. exports fell by 0.9 percent to a level of $177.8 billion while imports were up 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion - little changed from the $43.5 billion initially reported.
Most economists had predicted that October's narrowing of the deficit would be reversed but had generally forecast that the deficit would come in lower, at roughly $45 billion.
Reversing a drop in October, the U.S. trade deficit increased notably in November, according to figures released Friday by the Commerce Department.U.S. exports fell by 0.9 percent to a level of $177.8 billion while imports were up 1.3 percent to a level of $225.6 billion, according to the report. (Market News Provided by RTTNews)
U.S. Import Prices Edge Down Amid Drop In Fuel Import Prices
" /> 01/13/2012 08:41
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due to a notable decrease in prices for agricultural exports.
The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November. The drop was largely due to a 0.5 percent decrease in prices for fuel imports.
Additionally, the report showed that export prices fell by 0.5 percent in December following a 0.1 percent increase in November.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due to a notable decrease in prices for agricultural exports. (Market
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due to a notable decrease in prices for agricultural exports.
The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November. The drop was largely due to a 0.5 percent decrease in prices for fuel imports.
Additionally, the report showed that export prices fell by 0.5 percent in December following a 0.1 percent increase in November.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due to a notable decrease in prices for agricultural exports. (Market
Tuesday
Canada Records Surprise Trade Surplus As Exports Surge
" /> 01/13/2012 08:42
Surging exports helped Canada record an unexpected trade surplus in November, official data showed Friday morning.
The value of Canada's merchandise exports increased 3.2 percent on higher prices and volumes, while imports declined 0.8 percent, according to Statistics Canada.
As a result, Canada's trade balance with the world went from a deficit of C$487 million in October to a surplus of C$1.1 billion in November.
Exports rose to C$40.1 billion, as car manufacturers shipped out more automobiles and higher prices were paid for energy products.
Exports of energy products increased 6.4 percent to C$10.0 billion in November, as prices increased 6.3 percent.
Conversely, imports declined to C$39.0 billion, as both volumes and prices fell. Imports of automotive products declined 4.4 percent to C$5.7 billion in November, as volumes fell 4.0 percent.
Exports to the United States rose 1.9 percent to C$28.6 billion, on the strength of energy products. Perhaps most surprisingly, Canadian shipments to the European Union were strong despite the region's sovereign debt crisis.
(
Surging exports helped Canada record an unexpected trade surplus in November, official data showed Friday morning.
The value of Canada's merchandise exports increased 3.2 percent on higher prices and volumes, while imports declined 0.8 percent, according to Statistics Canada.
As a result, Canada's trade balance with the world went from a deficit of C$487 million in October to a surplus of C$1.1 billion in November.
Exports rose to C$40.1 billion, as car manufacturers shipped out more automobiles and higher prices were paid for energy products.
Exports of energy products increased 6.4 percent to C$10.0 billion in November, as prices increased 6.3 percent.
Conversely, imports declined to C$39.0 billion, as both volumes and prices fell. Imports of automotive products declined 4.4 percent to C$5.7 billion in November, as volumes fell 4.0 percent.
Exports to the United States rose 1.9 percent to C$28.6 billion, on the strength of energy products. Perhaps most surprisingly, Canadian shipments to the European Union were strong despite the region's sovereign debt crisis.
(
Poland Dec. Inflation Slightly Below Expectations
" /> 01/13/2012 08:45
Poland's consumer price inflation came in slightly below economists' expectations in December, data released by the statistical office showed Friday.
The consumer price index increased 4.6 percent on an annual basis in December, slower than the 4.7 percent growth economists expected.
Consumer prices of food and soft drinks rose 4.7 percent annually, while housing costs moved up 6 percent. There was a 9 percent annual growth in transportation costs, and a 2.1 percent decrease in clothing and footwear prices in December.
Month-on-month, consumer prices moved up 0.4 percent in December, faster than the 0.3 percent rise economists expected. Inflation in the whole of 2011 was 4.3 percent.
Poland's consumer price inflation came in slightly below economists' expectations in December, data released by the statistical office showed Friday.
The consumer price index increased 4.6 percent on an annual basis in December, slower than the 4.7 percent growth economists expected.
Consumer prices of food and soft drinks rose 4.7 percent annually, while housing costs moved up 6 percent. There was a 9 percent annual growth in transportation costs, and a 2.1 percent decrease in clothing and footwear prices in December.
Month-on-month, consumer prices moved up 0.4 percent in December, faster than the 0.3 percent rise economists expected. Inflation in the whole of 2011 was 4.3 percent.
U.S. Trade Deficit Widens Much More Than Expected In November
" /> 01/13/2012 09:20 
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department.
U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion - little changed from the $43.5 billion initially reported.
Most economists had predicted that October's narrowing of the deficit would be reversed but had generally forecast that the deficit would come in lower, at roughly $45 billion.
Paul Dales, Senior U.S. Economist at Capital Economics, said the notably wider deficit is "perhaps the first real sign that the crisis in Europe and the more general global slowdown is starting to take its toll on the U.S."
"The combination of a fairly deep euro-zone recession and a slowdown in activity in Asia means U.S. exports will grow only modestly this year and the trade deficit will probably continue to widen," he added.
The widening trade gap was largely driven by a $4.6 billion increase in the deficit between imports and exports of goods but slightly offset by a $100 million increase in the services surplus.
The November figures showed slowing exports of industrial supplies, capital goods, automotive supplies and agricultural goods, while imports of industrial supplies, autos and capital goods increased.
Those figures were somewhat offset by an increase in exports of consumer goods and a decrease in imports of foods, feeds and beverages.
The trade deficit with China fell somewhat in November to $26.9 billion from the October level of $28.1 billion. The decrease was driven in part by U.S. exports to China, which at $9.9 billion, were the highest since December of 2010.
The deficit in trade between the U.S. and the European Union increased to $9.7 billion from the October level of $8 billion, with the deficit with Germany of $4.7 billion marking the highest level since October of 2005.
The November increase in the average price of crude oil, the first increase after five months of falling prices, likely contributed to the increase in the deficit between the U.S. and OPEC nations, which rose to $9.1 billion in November from $8.3 billion in October.
The U.S. continued to post trade surpluses with Hong Kong, Australia, Singapore and Egypt, though the surpluses with Australia and Egypt were somewhat smaller in November than in October.
U.S. trade deficits also grew with Mexico and Nigeria.
The U.S. economy also recorded a slowdown in exports of advanced technology, resulting in a $10.7 billion deficit, the highest on record for that sector, according to the Commerce Department.
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department.U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department.
U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion - little changed from the $43.5 billion initially reported.
Most economists had predicted that October's narrowing of the deficit would be reversed but had generally forecast that the deficit would come in lower, at roughly $45 billion.
Paul Dales, Senior U.S. Economist at Capital Economics, said the notably wider deficit is "perhaps the first real sign that the crisis in Europe and the more general global slowdown is starting to take its toll on the U.S."
"The combination of a fairly deep euro-zone recession and a slowdown in activity in Asia means U.S. exports will grow only modestly this year and the trade deficit will probably continue to widen," he added.
The widening trade gap was largely driven by a $4.6 billion increase in the deficit between imports and exports of goods but slightly offset by a $100 million increase in the services surplus.
The November figures showed slowing exports of industrial supplies, capital goods, automotive supplies and agricultural goods, while imports of industrial supplies, autos and capital goods increased.
Those figures were somewhat offset by an increase in exports of consumer goods and a decrease in imports of foods, feeds and beverages.
The trade deficit with China fell somewhat in November to $26.9 billion from the October level of $28.1 billion. The decrease was driven in part by U.S. exports to China, which at $9.9 billion, were the highest since December of 2010.
The deficit in trade between the U.S. and the European Union increased to $9.7 billion from the October level of $8 billion, with the deficit with Germany of $4.7 billion marking the highest level since October of 2005.
The November increase in the average price of crude oil, the first increase after five months of falling prices, likely contributed to the increase in the deficit between the U.S. and OPEC nations, which rose to $9.1 billion in November from $8.3 billion in October.
The U.S. continued to post trade surpluses with Hong Kong, Australia, Singapore and Egypt, though the surpluses with Australia and Egypt were somewhat smaller in November than in October.
U.S. trade deficits also grew with Mexico and Nigeria.
The U.S. economy also recorded a slowdown in exports of advanced technology, resulting in a $10.7 billion deficit, the highest on record for that sector, according to the Commerce Department.
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department.U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion
Monday
U.S. Import Prices Edge Down 0.1% In December
" /> 01/13/2012 09:25 
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due in part to a notable decrease in prices for agricultural exports.
The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November.
The drop was largely due to a 0.5 percent decrease in prices for fuel imports, which moved back to the downside after jumping by 3.7 percent in the previous month.
Excluding the decrease in prices for fuel imports, import prices inched up by 0.1 percent in December compared to a 0.2 percent drop in November.
The modest increase in prices for non-fuel imports reflected higher prices for each of the major finished goods categories.
Additionally, the report showed that export prices fell by 0.5 percent in December following a 0.1 percent increase in November.
Prices for agricultural exports showed a significant decrease during the month, falling by 2.6 percent after climbing by 1.7 percent in the previous month.
Non-agricultural exports prices fell by 0.2 percent in December, matching the decrease seen in November. The drop reflected lower prices for non-agricultural supplies and materials.
Compared to the same month a year ago, import prices were up by 8.5 percent in December, while export prices were up by 3.6 percent.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due in part to a notable decrease in prices for agricultural exports.The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due in part to a notable decrease in prices for agricultural exports.
The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November.
The drop was largely due to a 0.5 percent decrease in prices for fuel imports, which moved back to the downside after jumping by 3.7 percent in the previous month.
Excluding the decrease in prices for fuel imports, import prices inched up by 0.1 percent in December compared to a 0.2 percent drop in November.
The modest increase in prices for non-fuel imports reflected higher prices for each of the major finished goods categories.
Additionally, the report showed that export prices fell by 0.5 percent in December following a 0.1 percent increase in November.
Prices for agricultural exports showed a significant decrease during the month, falling by 2.6 percent after climbing by 1.7 percent in the previous month.
Non-agricultural exports prices fell by 0.2 percent in December, matching the decrease seen in November. The drop reflected lower prices for non-agricultural supplies and materials.
Compared to the same month a year ago, import prices were up by 8.5 percent in December, while export prices were up by 3.6 percent.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices. Export prices also fell during the month due in part to a notable decrease in prices for agricultural exports.The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November.
Euro Tumbles Below $1.27 On Talk Of Imminent Downgrades
" /> 01/13/2012 10:03 
The euro was under renewed pressure on Friday, amid reports suggesting that ratings agency S&P will downgrade a number of euro zone nations, including France and Germany.
Multiple sources say that the ratings agency will make the move later today, ahead of the three-day weekend in the U.S.
In December, S&P put 15 countries in the single currency bloc on negative creditwatch, citing concerns about "deepening political, financial and monetary problems with the European economic and monetary union."
In the meantime, Italy successfully sold EUR 4.75 billion of debt in its first bond auction of the year on Friday, meeting the maximum target set for the sale and at a lower cost.
The euro slipped below $1.27 versus the buck, nearing Tuesday's 16-month low of $1.2661.
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department.
U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion.
The euro slid back below GBP 0.83 versus the sterling, and dropped to Y97.80 from near Y99 versus the yen.
Eurozone's merchandise trade surplus increased significantly in November, data released by statistical office Eurostat showed Friday.
The trade surplus increased to EUR6.9 billion in November from EUR1 billion in October. In November 2010, the trade balance was a deficit of EUR2.3 billion.
The euro was under renewed pressure on Friday, amid reports suggesting that ratings agency S&P will downgrade a number of euro zone nations, including France and Germany.
Multiple sources say that the ratings agency will make the move later today, ahead of the three-day weekend in the U.S.
In December, S&P put 15 countries in the single currency bloc on negative creditwatch, citing concerns about "deepening political, financial and monetary problems with the European economic and monetary union."
In the meantime, Italy successfully sold EUR 4.75 billion of debt in its first bond auction of the year on Friday, meeting the maximum target set for the sale and at a lower cost.
The euro slipped below $1.27 versus the buck, nearing Tuesday's 16-month low of $1.2661.
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department.
U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion.
The euro slid back below GBP 0.83 versus the sterling, and dropped to Y97.80 from near Y99 versus the yen.
Eurozone's merchandise trade surplus increased significantly in November, data released by statistical office Eurostat showed Friday.
The trade surplus increased to EUR6.9 billion in November from EUR1 billion in October. In November 2010, the trade balance was a deficit of EUR2.3 billion.
U.S. Consumer Sentiment Jumps To Eight-Month High In January
" /> 01/13/2012 10:39 
Consumer sentiment in the U.S. has seen a significant improvement in the month of January, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index rising by much more than anticipated.
The report showed that the consumer sentiment index jumped to 74.0 in January from the final December reading of 69.9. Economists had been expecting the index to edge up to a reading of 71.5.
With the much bigger than expected increase, the consumer sentiment index reached its highest level since coming in at 74.3 last May.
Jennifer Lee, senior economist with BMO Capital Markets, said, "The University of Michigan's consumer sentiment index showed that American consumers walked with their heads held up a little higher at the start of 2012."
"It certainly helps that U.S. equity markets are (were) at 5-month highs, buoyed by better news on the U.S. economic front (that is, until yesterday)," she added. "But uncertainty and volatility do not help and there is still lots of that going around."
The notable increase by the headline index reflected solid gains by both the current economic conditions index and the consumer expectations index.
The current conditions index rose to 82.6 in January from 79.6 in December, while the expectations index climbed to 68.4 from 63.6.
The current conditions index advanced to its highest level since last February and the expectations index reached its best level since last May
The report also showed that one-year inflation expectations edged up to 3.2 percent from 3.1 percent, while the five-year inflation outlook inched up to 2.8 percent from 2.7 percent.
Consumer sentiment in the U.S. has seen a significant improvement in the month of January, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index rising by much more than anticipated.The report showed that the consumer sentiment index jumped to 74.0 in January from the final December reading of 69.9. Economists had been expecting the index to edge up to a reading of 71.5.
Consumer sentiment in the U.S. has seen a significant improvement in the month of January, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index rising by much more than anticipated.
The report showed that the consumer sentiment index jumped to 74.0 in January from the final December reading of 69.9. Economists had been expecting the index to edge up to a reading of 71.5.
With the much bigger than expected increase, the consumer sentiment index reached its highest level since coming in at 74.3 last May.
Jennifer Lee, senior economist with BMO Capital Markets, said, "The University of Michigan's consumer sentiment index showed that American consumers walked with their heads held up a little higher at the start of 2012."
"It certainly helps that U.S. equity markets are (were) at 5-month highs, buoyed by better news on the U.S. economic front (that is, until yesterday)," she added. "But uncertainty and volatility do not help and there is still lots of that going around."
The notable increase by the headline index reflected solid gains by both the current economic conditions index and the consumer expectations index.
The current conditions index rose to 82.6 in January from 79.6 in December, while the expectations index climbed to 68.4 from 63.6.
The current conditions index advanced to its highest level since last February and the expectations index reached its best level since last May
The report also showed that one-year inflation expectations edged up to 3.2 percent from 3.1 percent, while the five-year inflation outlook inched up to 2.8 percent from 2.7 percent.
Consumer sentiment in the U.S. has seen a significant improvement in the month of January, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index rising by much more than anticipated.The report showed that the consumer sentiment index jumped to 74.0 in January from the final December reading of 69.9. Economists had been expecting the index to edge up to a reading of 71.5.
Sunday
Dollar Rockets To Fresh 16-Month High Versus Euro; Euro Zone Downgrades Coming
" /> 01/13/2012 02:22 
The dollar surged to a fresh 16-month high versus the euro on Friday, amid numerous reports suggesting that S&P will downgrade 15 euro zone nations due to exposure to Italian, Greek, and Spanish debt.
France's finance minister just confirmed that the ratings agency is lowering the French credit rating by one notch.
In December, S&P put most of the single currency bloc on negative creditwatch, citing concerns about "deepening political, financial and monetary problems with the European economic and monetary union."
"There is talk now that Italy, Spain and Portugal will get a 2 notch downgrade. If so, Italy's credit rating will be BBB+, two notches below Moody's and 3 below Fitch. Spain's would be A, one notch below Moody's and two below Fitch," said Peter Boockvar, Managing Direct at Miller Tabak. "Portugal's rating would go to BB, junk and that would put them in line with Moody's and one notch below Fitch."
The news overshadowed a slew of economic data from the U.S., including a strong reading on consumer sentiment.
The dollar rose two cents to $1.2625 versus the euro, its highest since September 2010. A successful Italian debt auction gave the euro an early boost.
The buck hit an 18-month peak of $1.5232 versus the sterling, and edged up to C$1.0240 versus Canada's loonie.
Consumer sentiment in the U.S. has seen a significant improvement in the month of January, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index rising by much more than anticipated.
The report showed that the consumer sentiment index jumped to 74.0 in January from the final December reading of 69.9. Economists had been expecting the index to edge up to a reading of 71.5.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices.
Export prices also fell during the month due in part to a notable decrease in prices for agricultural exports. The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November.
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department. U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion.
(
The dollar surged to a fresh 16-month high versus the euro on Friday, amid numerous reports suggesting that S&P will downgrade 15 euro zone nations due to exposure to Italian, Greek, and Spanish debt.
France's finance minister just confirmed that the ratings agency is lowering the French credit rating by one notch.
In December, S&P put most of the single currency bloc on negative creditwatch, citing concerns about "deepening political, financial and monetary problems with the European economic and monetary union."
"There is talk now that Italy, Spain and Portugal will get a 2 notch downgrade. If so, Italy's credit rating will be BBB+, two notches below Moody's and 3 below Fitch. Spain's would be A, one notch below Moody's and two below Fitch," said Peter Boockvar, Managing Direct at Miller Tabak. "Portugal's rating would go to BB, junk and that would put them in line with Moody's and one notch below Fitch."
The news overshadowed a slew of economic data from the U.S., including a strong reading on consumer sentiment.
The dollar rose two cents to $1.2625 versus the euro, its highest since September 2010. A successful Italian debt auction gave the euro an early boost.
The buck hit an 18-month peak of $1.5232 versus the sterling, and edged up to C$1.0240 versus Canada's loonie.
Consumer sentiment in the U.S. has seen a significant improvement in the month of January, according to a report released by Reuters and the University of Michigan on Friday, with the consumer sentiment index rising by much more than anticipated.
The report showed that the consumer sentiment index jumped to 74.0 in January from the final December reading of 69.9. Economists had been expecting the index to edge up to a reading of 71.5.
With prices for U.S. fuel imports pulling back in December after showing a sharp increase in the previous month, the Labor Department released a report on Friday showing a modest drop in overall import prices.
Export prices also fell during the month due in part to a notable decrease in prices for agricultural exports. The Labor Department said imports prices edged down by 0.1 percent in December after rising by an upwardly revised 0.8 percent in November.
Reversing a drop in October, the U.S. trade deficit saw a notable increase in November, according to figures released Friday by the Commerce Department. U.S. exports fell by 0.9 percent to a level of $177.8 billion, while imports rose by 1.3 percent to a level of $225.6 billion, according to the report.
That put the trade deficit at $47.8 billion, a 10.4 percent increase from October's revised level of $43.3 billion.
(
Italy Budget Deficit Drops To 2.7% Of GDP In Q3
" /> 01/11/2012 04:28
Italy's public spending deficit decreased from last year in the third quarter, data released by statistical office Istat showed Wednesday.
Net borrowing fell to 2.7 percent of gross domestic product (GDP) in the third quarter form 3.5 percent a year earlier. In the second quarter, the public spending deficit was 3.4 percent of GDP.
Primary balance, which is debt net of interest expense, was positive and and had a 1.7 percent impact on GDP, the agency said.
In the first nine months of the year, total public spending decreased 0.3 percentage points from last year to 4.3 percent of GDP.
Italy's public spending deficit decreased from last year in the third quarter, data released by statistical office Istat showed Wednesday.
Net borrowing fell to 2.7 percent of gross domestic product (GDP) in the third quarter form 3.5 percent a year earlier. In the second quarter, the public spending deficit was 3.4 percent of GDP.
Primary balance, which is debt net of interest expense, was positive and and had a 1.7 percent impact on GDP, the agency said.
In the first nine months of the year, total public spending decreased 0.3 percentage points from last year to 4.3 percent of GDP.
German Economic Growth Slows In 2011
" /> 01/11/2012 04:31 
German economic growth slowed in 2011 as the ongoing debt turmoil that almost pushed Eurozone to the brink of collapse last year damped exports.
The price adjusted gross domestic product, or GDP, rose 3 percent in 2011, slower than the 3.7 percent growth in 2010. This was the second consecutive expansion in national output since the economy suffered a 5.1 percent contraction in 2009 due to global financial meltdown.
Meanwhile, Destatis officials were quoted by reports as saying that the fourth quarter GDP may have dropped by around 0.25 percent. The 2011 growth estimate matched economists' forecast.
The price and calendar-adjusted GDP also recorded an annual rate of growth of 3 percent last year compared to 3.6 percent in 2010.
The contribution from foreign trade reduced in 2011 compared to the previous year. Export growth eased to 8.2 percent in 2011 from 13.7 percent in 2010, while import growth also weakened to 7.2 percent from 11.7 percent. Despite the slowdown in exports, net trade contributed 0.8 percentage points to growth.
At the same time, domestic demand, particularly household spending, contributed positively to overall output. The growth in consumer spending accelerated to 1.5 percent in 2011 from 0.6 percent the year before. Public spending grew 1.2 percent.
The GDP growth also reflected a strong upward momentum in capital formation. Gross fixed capital formation in machinery and equipment grew 8.3 percent in price-adjusted terms and in construction, it was 5.4 percent higher than a year earlier.
In 2011, the country's net borrowing amounted to EUR 26.7 billion or 1 percent of the GDP. The ratio fell below the 3 percent reference value set by the Maastricht Treaty in 2011 after exceeding it in both 2009 and 2010.
The past year was indeed turbulent for the Eurozone powerhouse, but the fallout was limited compared to other big euro members like Spain and Italy. Germany enjoys low unemployment and a resounding export sector, though weak demand has started to bite recently.
The unemployment rate hit a record low of 6.8 percent in December, according to data from the Federal Labor Agency. The Federal Statistical Office said earlier this month that the number of employed individuals reached an all-time high of 41.04 million in 2011, breaching the previous record of 2010.
Nonetheless, many of the economic indicators signal Germany is nearing a soft patch as European leaders wrestle with the debt crisis.
The growth in factory orders eased more than expected in November due to a sharp contraction in foreign demand, while the latest Purchasing Managers' survey pointed to a contraction in the German factory sector in December.
Retail sales declined in November as consumers remained reluctant to spend amid a gloomy economic outlook. Industrial output slid 0.6 percent from a month earlier during the month.
In its December monthly report, Bundesbank said the economic growth will slow notably in 2012 amid a deteriorating global outlook.
The central bank expects the economy to grow only 0.6 percent in 2012, slower than the 3 percent estimated for 2011. In 2013, the economy is seen expanding 1.8 percent. German exporters are likely to see a significant impact from slowing demand in Europe, according to the bank.
German economic growth slowed in 2011 as the ongoing debt turmoil that almost pushed Eurozone to the brink of collapse last year damped exports.
German economic growth slowed in 2011 as the ongoing debt turmoil that almost pushed Eurozone to the brink of collapse last year damped exports.
The price adjusted gross domestic product, or GDP, rose 3 percent in 2011, slower than the 3.7 percent growth in 2010. This was the second consecutive expansion in national output since the economy suffered a 5.1 percent contraction in 2009 due to global financial meltdown.
Meanwhile, Destatis officials were quoted by reports as saying that the fourth quarter GDP may have dropped by around 0.25 percent. The 2011 growth estimate matched economists' forecast.
The price and calendar-adjusted GDP also recorded an annual rate of growth of 3 percent last year compared to 3.6 percent in 2010.
The contribution from foreign trade reduced in 2011 compared to the previous year. Export growth eased to 8.2 percent in 2011 from 13.7 percent in 2010, while import growth also weakened to 7.2 percent from 11.7 percent. Despite the slowdown in exports, net trade contributed 0.8 percentage points to growth.
At the same time, domestic demand, particularly household spending, contributed positively to overall output. The growth in consumer spending accelerated to 1.5 percent in 2011 from 0.6 percent the year before. Public spending grew 1.2 percent.
The GDP growth also reflected a strong upward momentum in capital formation. Gross fixed capital formation in machinery and equipment grew 8.3 percent in price-adjusted terms and in construction, it was 5.4 percent higher than a year earlier.
In 2011, the country's net borrowing amounted to EUR 26.7 billion or 1 percent of the GDP. The ratio fell below the 3 percent reference value set by the Maastricht Treaty in 2011 after exceeding it in both 2009 and 2010.
The past year was indeed turbulent for the Eurozone powerhouse, but the fallout was limited compared to other big euro members like Spain and Italy. Germany enjoys low unemployment and a resounding export sector, though weak demand has started to bite recently.
The unemployment rate hit a record low of 6.8 percent in December, according to data from the Federal Labor Agency. The Federal Statistical Office said earlier this month that the number of employed individuals reached an all-time high of 41.04 million in 2011, breaching the previous record of 2010.
Nonetheless, many of the economic indicators signal Germany is nearing a soft patch as European leaders wrestle with the debt crisis.
The growth in factory orders eased more than expected in November due to a sharp contraction in foreign demand, while the latest Purchasing Managers' survey pointed to a contraction in the German factory sector in December.
Retail sales declined in November as consumers remained reluctant to spend amid a gloomy economic outlook. Industrial output slid 0.6 percent from a month earlier during the month.
In its December monthly report, Bundesbank said the economic growth will slow notably in 2012 amid a deteriorating global outlook.
The central bank expects the economy to grow only 0.6 percent in 2012, slower than the 3 percent estimated for 2011. In 2013, the economy is seen expanding 1.8 percent. German exporters are likely to see a significant impact from slowing demand in Europe, according to the bank.
German economic growth slowed in 2011 as the ongoing debt turmoil that almost pushed Eurozone to the brink of collapse last year damped exports.
Saturday
UK Trade Deficit Rises More Than Expected
" /> 01/11/2012 04:44
The U.K's visible trade deficit rose more than expected in November, data from the Office for National Statistics showed Wednesday.
The deficit on seasonally adjusted trade in goods amounted to GBP 8.6 billion in November. Economists expected the deficit to rise to GBP 8.4 billion from October's GBP 7.9 billion.
Compared to October, exports of goods fell 0.4 percent and imports dropped 0.2 percent.
The UK's deficit on seasonally adjusted trade in goods and services was GBP 2.6 billion in November, compared with the deficit of GBP 1.9 billion in October.
The U.K's visible trade deficit rose more than expected in November, data from the Office for National Statistics showed Wednesday.
The deficit on seasonally adjusted trade in goods amounted to GBP 8.6 billion in November. Economists expected the deficit to rise to GBP 8.4 billion from October's GBP 7.9 billion.
Compared to October, exports of goods fell 0.4 percent and imports dropped 0.2 percent.
The UK's deficit on seasonally adjusted trade in goods and services was GBP 2.6 billion in November, compared with the deficit of GBP 1.9 billion in October.
Portuguese Inflation Eases In December
" /> 01/11/2012 05:18
Portugal's annual inflation, measured under the EU methodology, slowed in December, data released by Statistics Portugal showed Wednesday.
The harmonized index of consumer prices (HICP) increased 3.5 percent year-on-year in December, in line with economists' expectations. In November, the inflation rate was 3.8 percent.
On a monthly basis, the HICP edged up 0.1 percent in December, and matched economists forecast. In November, the HICP recorded a 0.1 percent decline month-on-month.
The consumer price inflation eased to 3.62 percent in December from 3.95 percent in November. Month-on-month, consumer prices remained flat during the month, after edging down 0.1 percent in the previous month.
Portugal's annual inflation, measured under the EU methodology, slowed in December, data released by Statistics Portugal showed Wednesday.
The harmonized index of consumer prices (HICP) increased 3.5 percent year-on-year in December, in line with economists' expectations. In November, the inflation rate was 3.8 percent.
On a monthly basis, the HICP edged up 0.1 percent in December, and matched economists forecast. In November, the HICP recorded a 0.1 percent decline month-on-month.
The consumer price inflation eased to 3.62 percent in December from 3.95 percent in November. Month-on-month, consumer prices remained flat during the month, after edging down 0.1 percent in the previous month.
European Market Update: Hungary PM tries to calm market jitters over its central bank law and IMF discussions
06.01.2012 13:17 Friday ***Economic Data***- (EU) ECB: €1.9B borrowed in overnight loan facility vs. €4.8B prior; €455.3B parked in deposit facility (record high) vs. €443.7B prior
- (UK) Dec Halifax House Prices M/M: -0.9% v -0.9% prior; Y/Y: -1.3% v -1.0% prior
- (CZ) Czech Nov Industrial Output Y/Y: 5.4% v 0.5%e; Construction Output Y/Y: -2.3% v -8.0% prior
- (CZ) Czech Nov Trade Balance (CZK): 18.4B v 18.0Be
- (DK) Denmark Nov Unemployment Rate: 4.2% v 4.3%e; Gross Unemployment Rate: 6.2% v 6.3%e
- (HU) Hungary Nov Preliminary Industrial Production M/M: +4.2% v -0.9% prior; Y/Y: 3.5% v 1.5%e
- (HU) Hungary Nov Producer Prices M/M: 2.5% v 1.9% prior; Y/Y: 8.0% v 7.1%e
- (CH) Swiss Dec Foreign Currency Reserves (CHF): 254.2B v 231.6 prior
- (PH) Philippines Dec Foreign Reserves: $75.1B v $76.4B prior
- (CH) Swiss Dec CPI M/M: -0.2% v -0.1%e; Y/Y: -0.7% v -0.6%e
- (CH) Swiss Dec CPI EU Harmonized M/M: +0.3 v -0.4% prior; Y/Y: -0.4% v -0.8% prior
- (UK) Dec New Car Registrations Y/Y: -3.7% v -4.2% prior
- (CZ) Czech Dec International Reserves: $39.9B v $41.3B prior
- (IC) Iceland Dec Preliminary Trade Balance (ISK): 14.5B v 7.9B prior
- (NO) Norway Nov Industrial Production M/M: +1.2 v -1.8% prior; Y/Y: -1.2% v -5.7% prior
- (NO) Norway Nov Manufacturing Production M/M: +0.2 v-0.1%e; Y/Y: 0.4%t v 0.7% prior
- (NO) Norway Nov Retail Sales Volume M/M: 0.1% v 0.3%e; Y/Y: 0.9% v 1.2% prior
- (EU) Euro Zone Dec Business Climate Indicator: -0.31 v -0.48e; Consumer Confidence: -21.1 v -21.2e; Economic Confidence: 93,3 v 93.3e; Industrial Confidence: -7.1 v -7.5e; Services Confidence: -2.1 v -2.1e
- (EU) Euro Zone Nov Retail Sales M/M: -0.8% v -0.4%e; Y/Y: -2.5% v -0.9%e
- (EU) Euro Zone Nov Unemployment Rate: 10.3 % v 10.3%e
- (PO) Portugal Dec Consumer Confidence: -56.8 v -56.0 prior; Economic Climate Indicator: -4.4 v -3.9 prior
- (BE) Belgium Nov Unemployment Rate: 7.2% v 7.3% prior
Fixed Income:
- (IN) India sold total INR140B vs. INR140B indicated in 2018, 2021 and 2032 bonds
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
-France President Sarkozy to meet Italian PM Monti later today amid EU Talks
- ECB's Knot: Euro might collapse if Greece pushed out
- US Non-farm payroll data might present more good news for US but can it dispel concerns over Europe
- Iran said to be preparing for new round of naval exercise
Equities:
FTSE 100 +0.30% at 5641, DAX +0.50% at 6128, CAC-40 +0.80% at 3169, IBEX-35 +0.60% at 8383, FTSE MIB +0.40% at 14,821, SMI flat at 6028
- European shares traded higher despite ongoing concerns over the crisis and rampant rumors over a French sovereign downgrade. Euro cross was hit by debt woes but bourses were resilient ahead of US nonfarm payrolls report which is expected to rise by 150K. Investors are optimistic that the world number one economy is showing signs of strengthening, especially after a strong fourth quarter. Banks shares were higher during the session.
Speakers:
- ECB's Noyer commented that the recent French bond sale was a very good sign and that sovereign bond sales across Europe were going well since the ECB introduced the long-term liquidity operation. He noted that the ECB could massively refinance banks without risks and no doubt of France's capacity to repay its debt obligation. He did not agree that France had effectively lost its AAA sovereign status. The Euro was a strong currency and would continue to exist but the recent decline in Euro was supportive of exports.
- IMF chief Lagarde reiterated the view that 2012 would be challenging and that its global economic forecast was likely to be revised lower (Currently at 4.0%). She noted that the IMF was keen on having all the necessary tools to combat the current crisis and was ready to help all members and not just Europe. Lastly she noted that 2012 would not be the end of the Euro
- Hungary PM Orban commented that the govt and central bank to cooperate in the future and hold daily consultations between them and added that central bank independence was a 'starting point'. The PM reiterated that the Govt would do everything to reach an agreement with IMF and saw a good chance for swift discussions with IMF. Hungary seeks to clarify row with EU Commission on central bank law (Comments after a Hungarian cabinet meeting involving Hungary PM, Central Bank Gov, Econ Min and IMF negotiator Fellegi)
- Greece's second bailout might have to exceed the original expected €130B according sources in "euro-zone circles". According to the article, the exact amount of aid needed by Greece depended on the ongoing private sector involvement (PSI) talks.
- Portugal PM reiterated the view that country woldl achieve 2012 bailout target of 3.0%; to create the conditions necessary for economic growth
- Switzerland's Social Democrats party seek the SNB to raise the EUR/CHF floor from the current 1.20 level
- Czech Central Bank Gov Singer commented that there was no reason to lose confidence in CZK currency
- Hungary Govt official Giro-Szasz stated that the Govt rejected press speculation that it planned to seize bank deposits and added that it would guarantee bank deposits
- Turkey Central Bank Gov Basci commented that the Lira currency would gain and the central bank would support such a move. He noted that the corridor was useful tool for TRY currency management. The recently announced new USD sales were an offensive tool to manage TRY currency and allowed Lira to compete with USD and added that the TRY currency overvalued might become a problem in 2012. The central bank acted strongly to quell lira currency speculation. Interest rates would normalize again once current tightening phase is completed. Turkey's current account was driven by credit growth and not caused by the exchange rate
- India Fin Min Mukherjee reiterated the view that FY12 fiscal deficit might be slightly more than the 4.6% target of GDP
- Japan Finance Ministry Official stated that it purchased €300M of the 3-year EFSF bond issuance held on Jan 5th (equal to approx 10% of the issuance)
- EU govt discussing grace period of up to one year on prospective Iranian oil ban
Currencies:
- The FX market consolidated its recent moves during the session but the greenback saw some late Asian firmness on rumors that North Korean suffered a nuclear incident at one of its facilities (South Korean, Japanese official both downplayed the chatter). The EUR/USD hovered around the 1.28 handle throughout the session. The ECB was again rumored to be again buying peripheral bonds via its SMP program with Italian and Spanish debt mentioned.
- The HUF currency rebounded off its record lows of 325.00 against the Euro as PM Orban spoke to calm investors concerns over the country's financing amid the ratification of the central bank law. The PM pledged to cooperate with the central bank in the future and sought to have swift discussions with the IMF on a precautionary credit line. The EUR/HUF was at 317 as the NY morning approached
Political/ In the Papers:
- The FT Deutschland reported Greece's second bailout might have to exceed the original expectation of €130 billion. According to sources cited in 'euro-zone circles', the exact amount of aid needed by Greece depends on the ongoing private sector involvement or PSI discussion. Note on January 2nd, it was reported that Germany might seek to have Greece's private creditors take larger write downs on their Greek debt holdings. There has also been speculation that Greece could require additional austerity measures.
- So far in 2012, banks have issued at least €10 billion in unsecured senior bonds per FT report. The banks which have issued unsecured debt include Rabobank, Nordea and ABN Amro. In 2011, European banks were having difficulty selling unsecured debt and thus increased their reliance on secured debt and covered bond sales
- Certain hedge funds, believed to be based in the UK, have found ways to circumvent Italy's ban on the short selling of financial stocks. It is suggested that these hedge funds could be helping drive down the stock prices of Italian banks. The story comes as Unicredit has declined more than 30% over the past two trading sessions.
- Following Spain's cabinet meeting yesterday to discuss further austerity, the Spanish region of Catalonia rejected the government imposed budget controls, and accused Madrid of taking over authority of the of the 17 autonomous regions. The Catalan Fin Min Andreu Mas-Colell said that they would consider, as a red line, anything looking like previous line-by-line approval of our budget proposals.
- The Monster Employment Index Europe demonstrates a y/y growth of 11% in December, the slowest rate of growth seen in the Index since mid- 2010. Germany continued to report the strongest growth trend of 32%, followed by 6% growth in UK and 4% in Sweden. Belgium, France, Italy and Netherlands weigh down the Index with negative annual growth.
- In response to US pressure, both Japan and Korea are looking for new crude oil suppliers to lower dependence on Iran. Japan's largest refinery JX Nippon Oil & Energy said it was in discussions with Saudi Arabia and other countries for alternative supplies. In addition South Korea said it would lower imports of Iran crude oil. South Korea's main purchasers of crude, SK Group and Hyundai Oilbank, reported that no instructions were received to switch Iranian supply lines but would do so if ordered by the government.
***Looking Ahead***
- (MX) Mexico Dec Consumer Confidence: 91.7e v 89.5 prior
- (EU) EFSF chief Regling
- 6:00 (PO) Portugal Nov Industrial Sales M/M: No est v -2.5% prior; Y/Y: No est v 2.5% prior
- 6:00 (BR) Brazil Dec IBGE Inflation IPCA M/M: 0.5%e v 0.5% prior; Y/Y: 6.5%e v 6.6% prior
- 6:00 (CL) Chile Dec CPI M/M: 0.1%e v 0.3% prior; Y/Y: 3.9%e v 3.9% prior; CPI Ex Perishables & Fuel M/M: 0.1%e v 0.2% prior
- 6:00 (DE) Germany Nov Factory Orders M/M: -1.6%e v +5.2% prior; Y/Y: -1.3%e v +5.4% prior
- 7:00 (CA) Canada Dec Net Change in Employment: +20.0Ke v -18.6K prior; Unemployment Rate: 7.4%e v 7.4% prior
- 8:30 (US) Dec Change in Nonfarm Payrolls: 150Ke v 120K prior; Change in Private Payrolls: 175Ke v 140K prior; Change in Manufacturing Payrolls: +5Ke v +2K prior
- 8:30 (US) Dec Unemployment Rate: 8.7%e v 8.6% prior; Underemployment Rate: No est v 15.6% prior
- 8:30 (US) Nov Avg Hourly Earning M/M: +0.2%e v -0.1% prior; Avg Weekly Hours: 34.3e v 34.3 prior
- 9:00 (US) Fed's Dudley
- 9:45 (IT) Italy PM Monti
- 10:00 (EU) ECB member Costa
- 10:20 (US) Fed's Rosengren speaks on economy in Connecticut (non-voter)
- 11:00 - (FR) Italy PM Monti meets French President Sarkozy
- 11:00 (EU) ECB Orphanides
- 12:40 (US) Fed's Duke
- 13:00 (US) Fed's Raskin
- (UK) Dec Halifax House Prices M/M: -0.9% v -0.9% prior; Y/Y: -1.3% v -1.0% prior
- (CZ) Czech Nov Industrial Output Y/Y: 5.4% v 0.5%e; Construction Output Y/Y: -2.3% v -8.0% prior
- (CZ) Czech Nov Trade Balance (CZK): 18.4B v 18.0Be
- (DK) Denmark Nov Unemployment Rate: 4.2% v 4.3%e; Gross Unemployment Rate: 6.2% v 6.3%e
- (HU) Hungary Nov Preliminary Industrial Production M/M: +4.2% v -0.9% prior; Y/Y: 3.5% v 1.5%e
- (HU) Hungary Nov Producer Prices M/M: 2.5% v 1.9% prior; Y/Y: 8.0% v 7.1%e
- (CH) Swiss Dec Foreign Currency Reserves (CHF): 254.2B v 231.6 prior
- (PH) Philippines Dec Foreign Reserves: $75.1B v $76.4B prior
- (CH) Swiss Dec CPI M/M: -0.2% v -0.1%e; Y/Y: -0.7% v -0.6%e
- (CH) Swiss Dec CPI EU Harmonized M/M: +0.3 v -0.4% prior; Y/Y: -0.4% v -0.8% prior
- (UK) Dec New Car Registrations Y/Y: -3.7% v -4.2% prior
- (CZ) Czech Dec International Reserves: $39.9B v $41.3B prior
- (IC) Iceland Dec Preliminary Trade Balance (ISK): 14.5B v 7.9B prior
- (NO) Norway Nov Industrial Production M/M: +1.2 v -1.8% prior; Y/Y: -1.2% v -5.7% prior
- (NO) Norway Nov Manufacturing Production M/M: +0.2 v-0.1%e; Y/Y: 0.4%t v 0.7% prior
- (NO) Norway Nov Retail Sales Volume M/M: 0.1% v 0.3%e; Y/Y: 0.9% v 1.2% prior
- (EU) Euro Zone Dec Business Climate Indicator: -0.31 v -0.48e; Consumer Confidence: -21.1 v -21.2e; Economic Confidence: 93,3 v 93.3e; Industrial Confidence: -7.1 v -7.5e; Services Confidence: -2.1 v -2.1e
- (EU) Euro Zone Nov Retail Sales M/M: -0.8% v -0.4%e; Y/Y: -2.5% v -0.9%e
- (EU) Euro Zone Nov Unemployment Rate: 10.3 % v 10.3%e
- (PO) Portugal Dec Consumer Confidence: -56.8 v -56.0 prior; Economic Climate Indicator: -4.4 v -3.9 prior
- (BE) Belgium Nov Unemployment Rate: 7.2% v 7.3% prior
Fixed Income:
- (IN) India sold total INR140B vs. INR140B indicated in 2018, 2021 and 2032 bonds
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
-France President Sarkozy to meet Italian PM Monti later today amid EU Talks
- ECB's Knot: Euro might collapse if Greece pushed out
- US Non-farm payroll data might present more good news for US but can it dispel concerns over Europe
- Iran said to be preparing for new round of naval exercise
Equities:
FTSE 100 +0.30% at 5641, DAX +0.50% at 6128, CAC-40 +0.80% at 3169, IBEX-35 +0.60% at 8383, FTSE MIB +0.40% at 14,821, SMI flat at 6028
- European shares traded higher despite ongoing concerns over the crisis and rampant rumors over a French sovereign downgrade. Euro cross was hit by debt woes but bourses were resilient ahead of US nonfarm payrolls report which is expected to rise by 150K. Investors are optimistic that the world number one economy is showing signs of strengthening, especially after a strong fourth quarter. Banks shares were higher during the session.
Speakers:
- ECB's Noyer commented that the recent French bond sale was a very good sign and that sovereign bond sales across Europe were going well since the ECB introduced the long-term liquidity operation. He noted that the ECB could massively refinance banks without risks and no doubt of France's capacity to repay its debt obligation. He did not agree that France had effectively lost its AAA sovereign status. The Euro was a strong currency and would continue to exist but the recent decline in Euro was supportive of exports.
- IMF chief Lagarde reiterated the view that 2012 would be challenging and that its global economic forecast was likely to be revised lower (Currently at 4.0%). She noted that the IMF was keen on having all the necessary tools to combat the current crisis and was ready to help all members and not just Europe. Lastly she noted that 2012 would not be the end of the Euro
- Hungary PM Orban commented that the govt and central bank to cooperate in the future and hold daily consultations between them and added that central bank independence was a 'starting point'. The PM reiterated that the Govt would do everything to reach an agreement with IMF and saw a good chance for swift discussions with IMF. Hungary seeks to clarify row with EU Commission on central bank law (Comments after a Hungarian cabinet meeting involving Hungary PM, Central Bank Gov, Econ Min and IMF negotiator Fellegi)
- Greece's second bailout might have to exceed the original expected €130B according sources in "euro-zone circles". According to the article, the exact amount of aid needed by Greece depended on the ongoing private sector involvement (PSI) talks.
- Portugal PM reiterated the view that country woldl achieve 2012 bailout target of 3.0%; to create the conditions necessary for economic growth
- Switzerland's Social Democrats party seek the SNB to raise the EUR/CHF floor from the current 1.20 level
- Czech Central Bank Gov Singer commented that there was no reason to lose confidence in CZK currency
- Hungary Govt official Giro-Szasz stated that the Govt rejected press speculation that it planned to seize bank deposits and added that it would guarantee bank deposits
- Turkey Central Bank Gov Basci commented that the Lira currency would gain and the central bank would support such a move. He noted that the corridor was useful tool for TRY currency management. The recently announced new USD sales were an offensive tool to manage TRY currency and allowed Lira to compete with USD and added that the TRY currency overvalued might become a problem in 2012. The central bank acted strongly to quell lira currency speculation. Interest rates would normalize again once current tightening phase is completed. Turkey's current account was driven by credit growth and not caused by the exchange rate
- India Fin Min Mukherjee reiterated the view that FY12 fiscal deficit might be slightly more than the 4.6% target of GDP
- Japan Finance Ministry Official stated that it purchased €300M of the 3-year EFSF bond issuance held on Jan 5th (equal to approx 10% of the issuance)
- EU govt discussing grace period of up to one year on prospective Iranian oil ban
Currencies:
- The FX market consolidated its recent moves during the session but the greenback saw some late Asian firmness on rumors that North Korean suffered a nuclear incident at one of its facilities (South Korean, Japanese official both downplayed the chatter). The EUR/USD hovered around the 1.28 handle throughout the session. The ECB was again rumored to be again buying peripheral bonds via its SMP program with Italian and Spanish debt mentioned.
- The HUF currency rebounded off its record lows of 325.00 against the Euro as PM Orban spoke to calm investors concerns over the country's financing amid the ratification of the central bank law. The PM pledged to cooperate with the central bank in the future and sought to have swift discussions with the IMF on a precautionary credit line. The EUR/HUF was at 317 as the NY morning approached
Political/ In the Papers:
- The FT Deutschland reported Greece's second bailout might have to exceed the original expectation of €130 billion. According to sources cited in 'euro-zone circles', the exact amount of aid needed by Greece depends on the ongoing private sector involvement or PSI discussion. Note on January 2nd, it was reported that Germany might seek to have Greece's private creditors take larger write downs on their Greek debt holdings. There has also been speculation that Greece could require additional austerity measures.
- So far in 2012, banks have issued at least €10 billion in unsecured senior bonds per FT report. The banks which have issued unsecured debt include Rabobank, Nordea and ABN Amro. In 2011, European banks were having difficulty selling unsecured debt and thus increased their reliance on secured debt and covered bond sales
- Certain hedge funds, believed to be based in the UK, have found ways to circumvent Italy's ban on the short selling of financial stocks. It is suggested that these hedge funds could be helping drive down the stock prices of Italian banks. The story comes as Unicredit has declined more than 30% over the past two trading sessions.
- Following Spain's cabinet meeting yesterday to discuss further austerity, the Spanish region of Catalonia rejected the government imposed budget controls, and accused Madrid of taking over authority of the of the 17 autonomous regions. The Catalan Fin Min Andreu Mas-Colell said that they would consider, as a red line, anything looking like previous line-by-line approval of our budget proposals.
- The Monster Employment Index Europe demonstrates a y/y growth of 11% in December, the slowest rate of growth seen in the Index since mid- 2010. Germany continued to report the strongest growth trend of 32%, followed by 6% growth in UK and 4% in Sweden. Belgium, France, Italy and Netherlands weigh down the Index with negative annual growth.
- In response to US pressure, both Japan and Korea are looking for new crude oil suppliers to lower dependence on Iran. Japan's largest refinery JX Nippon Oil & Energy said it was in discussions with Saudi Arabia and other countries for alternative supplies. In addition South Korea said it would lower imports of Iran crude oil. South Korea's main purchasers of crude, SK Group and Hyundai Oilbank, reported that no instructions were received to switch Iranian supply lines but would do so if ordered by the government.
***Looking Ahead***
- (MX) Mexico Dec Consumer Confidence: 91.7e v 89.5 prior
- (EU) EFSF chief Regling
- 6:00 (PO) Portugal Nov Industrial Sales M/M: No est v -2.5% prior; Y/Y: No est v 2.5% prior
- 6:00 (BR) Brazil Dec IBGE Inflation IPCA M/M: 0.5%e v 0.5% prior; Y/Y: 6.5%e v 6.6% prior
- 6:00 (CL) Chile Dec CPI M/M: 0.1%e v 0.3% prior; Y/Y: 3.9%e v 3.9% prior; CPI Ex Perishables & Fuel M/M: 0.1%e v 0.2% prior
- 6:00 (DE) Germany Nov Factory Orders M/M: -1.6%e v +5.2% prior; Y/Y: -1.3%e v +5.4% prior
- 7:00 (CA) Canada Dec Net Change in Employment: +20.0Ke v -18.6K prior; Unemployment Rate: 7.4%e v 7.4% prior
- 8:30 (US) Dec Change in Nonfarm Payrolls: 150Ke v 120K prior; Change in Private Payrolls: 175Ke v 140K prior; Change in Manufacturing Payrolls: +5Ke v +2K prior
- 8:30 (US) Dec Unemployment Rate: 8.7%e v 8.6% prior; Underemployment Rate: No est v 15.6% prior
- 8:30 (US) Nov Avg Hourly Earning M/M: +0.2%e v -0.1% prior; Avg Weekly Hours: 34.3e v 34.3 prior
- 9:00 (US) Fed's Dudley
- 9:45 (IT) Italy PM Monti
- 10:00 (EU) ECB member Costa
- 10:20 (US) Fed's Rosengren speaks on economy in Connecticut (non-voter)
- 11:00 - (FR) Italy PM Monti meets French President Sarkozy
- 11:00 (EU) ECB Orphanides
- 12:40 (US) Fed's Duke
- 13:00 (US) Fed's Raskin
Friday
Asian Market Update: Tense markets react to geopolitical events ahead of US Payrolls
06.01.2012 13:19 Friday ***Economic Data***- (CO) COLOMBIA DEC CPI M/M: 0.4% V 0.3%E; Y/Y: 3.7% V 3.6%E
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -0.9%
- S&P/ASX -0.7%
- Kospi -1.6%
- Taiwan Taiex -0.1%
- Singapore Straits Times -0.2%
- Shanghai Composite -0.3%
- Hang Seng -1.4%
- S&P Futures -0.4% at 1,268
- Feb Gold +0.3% at $1,625/oz
- March Crude -0.2% at $101.65
***Overview/Top Headlines***
- Markets were mostly subdued through the session, seemingly not concerned ahead of the US non-farm payrolls and more concerned over the future of Europe. EUR/USD extended its decline below $1.2765, fresh 15-month lows. Gold has resumed its safe haven status testing $1,628, a 2-week high. Near the end of the Asia session a report came across that there was an incident at a North Korea nuclear facility, details were very limited. KRW fell to session lows testing KRW1,155, the yen gained 0.3% against the won and Kospi fell 2% below 1,825. About 30 minutes later officials from Japan and South Korea said they had not heard of any incidents in North Korea.
- China's major oil companies, Sinopec, CNOOC and PetroChina had a boost after China Ministry of Finance raised the threshold on which mainland oil companies will have to pay a windfall tax to $55/barrel from $40. It is expected that this new measure may offset the extra cost brought on by the resource tax in Oct. The govt also took measures to support the banking sector announcing that the CBRC will delay higher capital requirements for big banks until July 1st v Jan 1st prior. The CBRC is calling for capital adequacy ratio of 11.5% and a core ratio of 9.5% v the current capital adequacy ratio requirement of 5-8% depending on the bank.
- Samsung Electronics reported their preliminary Q4 guiding operating profit at KRW5.2T, beating expectations and prior quarter. Sees Rev at KRW47.0T much higher than Q3 and also beating expectations. Both Singapore Air and Qantas confirmed that they had found small cracks in the A30 wing ribs, both said that they did not present a flight risk and they would repair the planes.
***Speakers/Geopolitical/In the press***
- (JP) Japan Fin Min Azumi: EU needs to make efforts to win investors' trust; Would like to see the EU establish a firewall
- (CN) New deposits at China's top 4 banks in December saw an increase of CNY1.25T; New loans were about CNY210B - Chinese press
- (JP) Japan PM Noda: Cabinet will endorse sales tax increase plan
- (EU) ECB's Knot: Crisis of confidence unfolding in Europe; EU aid fund is not large enough, largest hurdle for increasing the EFSF is Germany - Dutch media
- (CN) China Housing Min Weixin: To set up a housing database to track prices and homeownership for 40 cities
***Equities***
- Samsung Electronics, 005930.KR: Reports Prelim Q4 Op profit KRW5.2T (record high) v KRW4.7Te (KRW4.25T q/q) ; Rev KRW47.0T v KRW46.2Te (KRW41.3T q/q)
- Lenovo Group, 992.HK: Preparing a global restructuring plan by reorganizing geographical business units - US financial press
- ASX.AU: Reports Dec capital raised A$9.0B, -45% y/y; 2011 capital raised A$48.6B, -11% y/y
- SNP: Reports 2011 crude output +0.4% y/y; Natural gas output +16.8% y/y
- TM: Targeting to sell more than 1M cars in China in 2012, +10% y/y (+4% y/y in 2011) - Chinese press
- Guangzhou Automobile, 2238.HK: May only make 80-90% of forecasted profit in 2011 - filing
- APOL: Reports Q1 $1.28 (adj) v $1.18e, R$1.18B v $1.2Be; +2.0% afterhours
- AA: TO CLOSE OR CURTAIL 531K METRIC TONS OF SMELTING CAPACITY (12% of total capacity); sees charges of $0.15-0.16 in Q4; -1.7% afterhours
- FDO: Reports Q1 $0.68 v $0.68e, R$2.15B v $2.2Be; -2.9% afterhours
***FX/Fixed Income/Commodities***
- (IN) India Dec tea production 90.3M kilos v 93.9M kilos prior
- (AR) Argentina Agriculture Min Solis: Will eliminate export quotas for wheat, will sell under a new system; Likely to do the same for corn but no decision has been made
- SLV: iShares Silver Trust ETF daily holdings fall to 9,547.0 tons from 9,605.8 tons (lowest level since 9,500 on July, 2011)
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -0.9%
- S&P/ASX -0.7%
- Kospi -1.6%
- Taiwan Taiex -0.1%
- Singapore Straits Times -0.2%
- Shanghai Composite -0.3%
- Hang Seng -1.4%
- S&P Futures -0.4% at 1,268
- Feb Gold +0.3% at $1,625/oz
- March Crude -0.2% at $101.65
***Overview/Top Headlines***
- Markets were mostly subdued through the session, seemingly not concerned ahead of the US non-farm payrolls and more concerned over the future of Europe. EUR/USD extended its decline below $1.2765, fresh 15-month lows. Gold has resumed its safe haven status testing $1,628, a 2-week high. Near the end of the Asia session a report came across that there was an incident at a North Korea nuclear facility, details were very limited. KRW fell to session lows testing KRW1,155, the yen gained 0.3% against the won and Kospi fell 2% below 1,825. About 30 minutes later officials from Japan and South Korea said they had not heard of any incidents in North Korea.
- China's major oil companies, Sinopec, CNOOC and PetroChina had a boost after China Ministry of Finance raised the threshold on which mainland oil companies will have to pay a windfall tax to $55/barrel from $40. It is expected that this new measure may offset the extra cost brought on by the resource tax in Oct. The govt also took measures to support the banking sector announcing that the CBRC will delay higher capital requirements for big banks until July 1st v Jan 1st prior. The CBRC is calling for capital adequacy ratio of 11.5% and a core ratio of 9.5% v the current capital adequacy ratio requirement of 5-8% depending on the bank.
- Samsung Electronics reported their preliminary Q4 guiding operating profit at KRW5.2T, beating expectations and prior quarter. Sees Rev at KRW47.0T much higher than Q3 and also beating expectations. Both Singapore Air and Qantas confirmed that they had found small cracks in the A30 wing ribs, both said that they did not present a flight risk and they would repair the planes.
***Speakers/Geopolitical/In the press***
- (JP) Japan Fin Min Azumi: EU needs to make efforts to win investors' trust; Would like to see the EU establish a firewall
- (CN) New deposits at China's top 4 banks in December saw an increase of CNY1.25T; New loans were about CNY210B - Chinese press
- (JP) Japan PM Noda: Cabinet will endorse sales tax increase plan
- (EU) ECB's Knot: Crisis of confidence unfolding in Europe; EU aid fund is not large enough, largest hurdle for increasing the EFSF is Germany - Dutch media
- (CN) China Housing Min Weixin: To set up a housing database to track prices and homeownership for 40 cities
***Equities***
- Samsung Electronics, 005930.KR: Reports Prelim Q4 Op profit KRW5.2T (record high) v KRW4.7Te (KRW4.25T q/q) ; Rev KRW47.0T v KRW46.2Te (KRW41.3T q/q)
- Lenovo Group, 992.HK: Preparing a global restructuring plan by reorganizing geographical business units - US financial press
- ASX.AU: Reports Dec capital raised A$9.0B, -45% y/y; 2011 capital raised A$48.6B, -11% y/y
- SNP: Reports 2011 crude output +0.4% y/y; Natural gas output +16.8% y/y
- TM: Targeting to sell more than 1M cars in China in 2012, +10% y/y (+4% y/y in 2011) - Chinese press
- Guangzhou Automobile, 2238.HK: May only make 80-90% of forecasted profit in 2011 - filing
- APOL: Reports Q1 $1.28 (adj) v $1.18e, R$1.18B v $1.2Be; +2.0% afterhours
- AA: TO CLOSE OR CURTAIL 531K METRIC TONS OF SMELTING CAPACITY (12% of total capacity); sees charges of $0.15-0.16 in Q4; -1.7% afterhours
- FDO: Reports Q1 $0.68 v $0.68e, R$2.15B v $2.2Be; -2.9% afterhours
***FX/Fixed Income/Commodities***
- (IN) India Dec tea production 90.3M kilos v 93.9M kilos prior
- (AR) Argentina Agriculture Min Solis: Will eliminate export quotas for wheat, will sell under a new system; Likely to do the same for corn but no decision has been made
- SLV: iShares Silver Trust ETF daily holdings fall to 9,547.0 tons from 9,605.8 tons (lowest level since 9,500 on July, 2011)
KBC: Forint erases some losses as Hungary promises quick IMF Deal
06.01.2012 13:25 Friday The Hungarian forint recouped part of its losses as comments from Hungarian government officials brought some hope that a deal on a new IMF loan could be reached soon.
Recall that minister without portfolio Tamás Fellegi, who is to head Hungary’s delegation at the talks, said the government’s was ready to conclude an agreement as quickly as possible. It is worth noting that Fellegi leaves for Washington to meet IMF officials for talks about a new stand-by loan this weekend, while the talks should be held next week.
While the Fund might listen to Hungarian official more quietly, it seems that the EU still plays a hawkish tone. A European Commission spokesman told the Wall Street Journal yesterday that the EC would still require to change a controversial law about the central bank. At this moment the Hungarian government is not ready to make such a concession. Interestingly, both the Czech Republic and Hungary have released industrial production data for November this morning.
Both export-oriented industries posted surprising strong gains. While for instance in the case of the Czech industry some positive one-off factors could play some role, it is evident that the above mentioned gains clearly do not track the weak regional PMI’s. It rather seems that the (currently strong) German Ifo is a better leading indicator for both Czech and Hungarian industrial output.
Recall that minister without portfolio Tamás Fellegi, who is to head Hungary’s delegation at the talks, said the government’s was ready to conclude an agreement as quickly as possible. It is worth noting that Fellegi leaves for Washington to meet IMF officials for talks about a new stand-by loan this weekend, while the talks should be held next week.
While the Fund might listen to Hungarian official more quietly, it seems that the EU still plays a hawkish tone. A European Commission spokesman told the Wall Street Journal yesterday that the EC would still require to change a controversial law about the central bank. At this moment the Hungarian government is not ready to make such a concession. Interestingly, both the Czech Republic and Hungary have released industrial production data for November this morning.
Both export-oriented industries posted surprising strong gains. While for instance in the case of the Czech industry some positive one-off factors could play some role, it is evident that the above mentioned gains clearly do not track the weak regional PMI’s. It rather seems that the (currently strong) German Ifo is a better leading indicator for both Czech and Hungarian industrial output.
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
06.01.2012 13:40 Friday EUR/USD
Today’s support: - 1.2758 and 1.2735(main), where correction is possible. Break would give 1.2690, where correction also may be. Then follows 1.2673. Break of the latter would result in 1.2655. If a strong impulse, we would see 1.2630. Continuation will give 1.2611.
Today’s resistance: - 1.2845 and 1.2877(main). Break would give 1.2904, where a correction is possible. Then goes 1.2931. Break of the latter would result in 1.2968. If a strong impulse, we’d see 1.3005. Continuation will give 1.3047 and 1.3094.
USD/JPY
Today’s support: - 76.87 and 76.52(main). Break would bring 76.39 where correction is possible. Then 76.15, where a correction may also happen. Break of the latter will give 75.94. If a strong impulse, we would see 75.68. Continuation would give 75.44
Today’s resistance: - 77.37 and 77.88(main), where a correction may happen. Break would bring 78.12, where also a correction may be. Then 78.30. If a strong impulse, we would see 78.47. Continuation will give 78.72.
DOW JONES INDEX
Today’s support: - 12325.37, 12253.20, 12205.70 and 12135.94(main), where a delay and correction may happen. Break of the latter will give 12116.14, where correction also can be. Then follows 12071.20. Be there a strong impulse, we shall see 12043.50. Continuation will bring 12014.00 and 11985.28.
Today’s resistance: - 12487.50 and 12512.82(main), where a delay and correction may happen. Break would bring 12528.62, where a correction may happen. Then follows 12556.40, where a delay and correction could also be. Be there a strong impulse, we’d see 12584.13. Continuation would bring 12605.57.
Today’s support: - 1.2758 and 1.2735(main), where correction is possible. Break would give 1.2690, where correction also may be. Then follows 1.2673. Break of the latter would result in 1.2655. If a strong impulse, we would see 1.2630. Continuation will give 1.2611.
Today’s resistance: - 1.2845 and 1.2877(main). Break would give 1.2904, where a correction is possible. Then goes 1.2931. Break of the latter would result in 1.2968. If a strong impulse, we’d see 1.3005. Continuation will give 1.3047 and 1.3094.
USD/JPY
Today’s support: - 76.87 and 76.52(main). Break would bring 76.39 where correction is possible. Then 76.15, where a correction may also happen. Break of the latter will give 75.94. If a strong impulse, we would see 75.68. Continuation would give 75.44
Today’s resistance: - 77.37 and 77.88(main), where a correction may happen. Break would bring 78.12, where also a correction may be. Then 78.30. If a strong impulse, we would see 78.47. Continuation will give 78.72.
DOW JONES INDEX
Today’s support: - 12325.37, 12253.20, 12205.70 and 12135.94(main), where a delay and correction may happen. Break of the latter will give 12116.14, where correction also can be. Then follows 12071.20. Be there a strong impulse, we shall see 12043.50. Continuation will bring 12014.00 and 11985.28.
Today’s resistance: - 12487.50 and 12512.82(main), where a delay and correction may happen. Break would bring 12528.62, where a correction may happen. Then follows 12556.40, where a delay and correction could also be. Be there a strong impulse, we’d see 12584.13. Continuation would bring 12605.57.
Thursday
Market Week Wrap-up
However S&P's threat to downgrade the sovereign ratings of leading euro zone nations, especially France, continue to cast a long shadow and have curtailed greater risk appetite in the market. Rumors that the S&P downgrades were imminent contributed to equity downdrafts all week. In addition, there were reminders of weakness in Italy and Spain, as yields on the 10-year debt of both nations remained elevated (the Italian yield exited the week above 7%). Italian bank UniCredit was forced to sell new shares at a steep discount to shore up its credit base, driving big declines among European banking names. In addition, there were reports that the Spanish region of Valencia would delay a bond payment. On Friday the US December non-farm payroll report came in at +200K and the private payrolls number was +212K, topping both consensus estimates and the November numbers (+120K and +140K, respectively).
These totals are still not near the levels many analysts say are needed to begin really replacing the jobs lost over the last several years, but the upward trend of new job growth is encouraging. There was a flurry of new developments at the Fed. In the minutes of the Dec 13th FOMC meeting, the Fed disclosed that it would provide a Summary of Economic Projections (SEP) four times a year starting in January. Later the Fed's Bullard said the FOMC is very close to implementing an inflation target. The four recent Fed dissenters rotated off the FOMC (hawks Fisher, Plosser and Kocherlakota, and the dove Evans), to be replaced by a more dovish slate of voters (Pianalto, Lacker, Lockhart and Williams). Chairman Bernanke commented that it would be appropriate to bring foreclosed homes into the rental market to help dampen downward price movements. Note that there were also rumors that the White House was planning a large-scale mortgage refinance plan, which was later denied. Late Friday, however, Freddie Mac announced that the FHFA had directed it to extend forbearance to unemployed borrowers for up to 12 months, which could affect up to 10% of delinquencies on mortgages administered by Freddie. Front-month WTI crude spent most of the week above the $100 handle as the Europeans prepared fresh sanctions against Iran, which held naval exercises in the Strait of Hormuz and generally rattled its scimitar. Brent hit $113. For the week the DJIA gained 1.2%, the NASDAQ rose 2.7%, and the S&P 500 tacked on 1.6%, thanks largely to big gains on the first trading day of the year.
- Another group of companies discloses troubling pre-earnings guidance this week. Barnes & Noble slashed its FY12 outlook to a fairly large loss. The change was due primarily to a shortfall in the expected sales of NOOK ebook readers coupled with more investment in the technology as management lays plans to spin off the NOOK business. Eli Lilly offered a grim look at 2012, warning that both its earnings and revenue totals would disappoint market expectations. Executives further warned about patent expirations on some of the company's largest products, most notably the antipsychotic Zyprexa and the antidepressant Cymbalta. Refiner Tesoro said it would report a big loss in its Q4 and slashed its FY11 outlook. Contributing to the net loss was an extremely weak margin environment in California and the collapse of the WTI-Brent spread. Alcoa announced that it would close or curtail 12% of its total aluminum smelting capacity, with a charge to Q4 earnings of $0.15-0.16. The company also said it would accelerate actions to reduce the escalating cost of raw materials.
- The December same-store sales (SSS) were on the whole better than expected, however promotional discounts ate into profits and many firms lowered guidance for the final quarter of the year. The discount chains TJX and Ross Stores attracted thrifty Christmas shoppers and beat comparable store expectations by wide margins. Meanwhile, the Gap continues to bleed away sales, reporting its sixth straight month of y/y same store sales contraction. Interestingly American Eagle Outfitters, which abandoned providing monthly SSS reports, said its comps were up 12% in the Nov-Dec period. AEO also slashed its Q4 guidance by about 25%, citing promotional activity. Target had a very bad month, with comps dropping to +1.6%, their lowest level since spring. Target also cuts its Q4 guidance, on softer holiday sales. Department stores also generally outperformed expectations, with the notable exception of Kohl's, whose comps were in the red for the second consecutive month.
- US Treasury yields finished the week above where they closed out 2011, but the selling was subdued considering the better US jobs data. The benchmark 10-year yield briefly topped 2% following both the ADP and non-farm payrolls figures, but weakness emanating out of Europe kept an underlying bid in US government paper. Corporate issuance was particularly robust with more than $12B in paper coming to market, for the most active week since last summer. Banks on both sides of the pond were aggressive in their efforts to get out ahead of more than $230B in US corporate debt roll-overs coming due in 2012 (this compares to $195B in 2011). According to data from Barclays, approx €794B of European sovereign bonds will need to be issued in 2012 (above the long-term average, but less than 2010's record €952B in sovereign issuance). The Independent reported that the world's top economies will need to roll over a combined total of $7.6T in 2012, with Japan requiring the most at $3T and the US needing $2.8T.
- Currency traders cannot tear themselves away from the deepening crisis in Europe, where everyone is nervously waiting for the rating agencies to pull the trigger. Absent the looming sovereign downgrades, there was the potential for more risk appetite, in the form of some slightly improved final December manufacturing PMI data in European and Asian nations, plus the good showing in the December US employment data. As the first week of the year rolled on, dealers became keenly aware of a breakdown in the risk on/weak dollar trend -- typically throughout 2011 the dollar was sold on any return of risk appetite, however this correlation appears to be falling apart as investors have bought the greenback on any sign of overall strength.
- EUR/USD began 2012 with an updraft taking the pair back above 1.30, from the 2011 year-end closing level of 1.2970. However, the continued focus on the sovereign situation hammered the euro in the back half of the week, as pessimism and the shifting dynamic with the dollar sent the pair down to 1.2700 level last seen in August of 2010. In a sign of the stress, the ECB deposit facility continued to hit record highs, closing the week with a whopping €455B parked in the facility. With the prospective of weeks and months of further consultations over Europe's new fiscal integration plans ahead even as yields on Spanish and Italian debt remain elevated, there is plenty of pessimism. The Centre for Economic and Business Research (CEBR) began the year by forecasting that the euro would lose a member in 2012. Reports that the Spanish region of Valencia was late in making a bond payment also highlighted these concerns. The EUR/JPY cross continued to hover at 11-year lows, unable to sustain any momentum above the 100 level. The cross tested 98.30 by the end of the week.
- Europe's emerging economies were also in focus this week. In Turkey, the central bank is maneuvering to aid a soft landing for the nation's cooling economy while also warding off the shocks from Europe. The Turkish Central Bank was selling elevated amounts of USD for TRY in order to support the lira throughout the week. After ratifying a new law that weakened its central bank, Hungary's government took heat all week from both markets and European Union officials. In addition, there were growing questions about the nation's ability to finance itself in public markets. This week the forint was testing fresh record lows against the euro, approaching the 325 level on Wednesday, before backing off again. The yield on 10-year Hungarian sovereign paper hit its highest level in two and a half years, testing above 11.20%, while 5-year CDS hit fresh all-time highs above 725bps.
Notable economic data out of Asia was limited to Australia's November trade report, which showed continued deceleration in basic materials shipment activity. Coming in at a 9-month low surplus of A$1.38B, the trade report's components also revealed a 4-month low in exports to China and a 7-month low in the exports of iron ore. The Reserve Bank of Australia is not meeting this month, while fixed income markets are pricing in a slight probability of another cut in February.
Asian Market Update: Markets cautious ahead of meeting between Germany and France; China 2011 yuan loans fail to top 2010
09.01.2012 08:47 Monday ***Economic Data***- (AU) AUSTRALIA NOV RETAIL SALES M/M: 0.0% V 0.4%E (5-month low)
- (CN) CHINA DEC NEW YUAN LOANS (CNY): 640.5B V 575BE (8-month high); 2011 NEW LOANS CNY7.47T V CNY7.95T IN 2010
- (NZ) NEW ZEALAND NOV TRADE BALANCE (NZ$): -308M V -300ME (4th consecutive deficit)
- (CN) CHINA DEC M2 MONEY SUPPLY Y/Y: 13.6% V 12.9%E (5-month high); M1 Y/Y: 7.9% V 7.8% PRIOR
- (KR) SOUTH KOREA DEC PRODUCER PRICE INDEX (PPI) Y/Y: 4.3% V 5.1% PRIOR (15-month low)
- (UK) UK DEC LLOYDS EMPLOYMENT CONFIDENCE: -75 V -75 PRIOR (matches multi-month-low)
- (AU) AUSTRALIA NOV HIA NEW HOME SALES M/M: 6.8% V 2.8% PRIOR (21-month high)
- (AU) AUSTRALIA DEC AIG PERFORMANCE OF CONSTRUCTION INDEX: 41.0 V 39.6 PRIOR (10-month high; 19th consecutive month of contraction)
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 closed
- S&P/ASX unchanged
- Kospi -1.2%
- Taiwan Taiex -0.7%
- Singapore Straits Times -0.9%
- Shanghai Composite +1.4%
- Hang Seng -0.9%
- S&P Futures -0.4% at 1,269
- Feb Gold -0.5% at $1,609/oz
- March Crude -0.5% at $101.02
***Overview/Top Headlines***
- Markets were very cautious today, after several opened slightly to the upside they quickly fell into negative territory despite stronger US economic data on Friday. Europe's debt crisis continues to weigh on the markets ahead of today's meeting of German Chancellor Merkel and French President Sarkozy. There are several sovereign bond auctions this week in Europe starting with Greece on Monday and Germany on Tuesday, Spain will sell debt maturing in 2015 and 2016 on Thursday, while Italy will auction three-, five- and 15-year bills on Friday.
- The situation in Iran continues to drive Brent prices higher, testing $113.30 as the UK announced it was sending its newest warship to the Gulf in response to Iranian threat to close the Strait of Hormuz. Iran announced that it had replaced the USD with the Russian ruble for some of its oil transactions with Moscow. SocGen analysts look at situation in Iran: Would be relatively easy for Iran to shut down the Straits of Hormuz; but would need to be able to keep it closed for a long period of time to inflict any economic impact on Western countries relying on the oil. "In the event of a shutdown of the Straits of Hormuz, disrupting 15 Mb/d of crude flows, we would expect Brent prices to spike into the $150-200 range for a limited time period. The disruption would definitely result in an IEA strategic release."
- Yen had strong early gains, testing below ¥76.80 and EUR/JPY extended its decline to an 11 year low of ¥97.50. Japan was closed for a holiday and no comments came from officials or the central bank. EUR/USD fell to a 16-month low below $1.2690. A$ lost over 0.5% against the USD after retail sales came in at a 5-month low with a flat reading m/m.
- China reported December new yuan loans of CNY640.5B, this was an 8-month high after the PBoC loosened lending requirements amid slowing economic growth towards the end of the year. However, 2011 new yuan loans were still below 2010 levels. According to analysts, 2012 new yuan loans will rise about 14% from CNY7.47T in 2011. PBoC Gov Zhou said that China may widen Yuan trading band when capital flows become more balanced; Not a good time to liberalize interest rates now. Reiterated will continue implementation of "prudent" monetary policy with some fine-tuning in 2012.
***Speakers/Geopolitical/In the press***
- (CN) Shanghai new home sales -42% w/w; New home prices -17.03% w/w - Uwin
- According to global central bank governors, banks in EU, Japan, and US to be subject to tests for compliance with Basel standards starting in early 2012 0 financial press
- (CN) PBoC to implement a deposit security system, requiring financial institutions to contribute to a fund that would protect customers in case of a bank became insolvent - Chinese press
- (KR) Bank of Korea (BOK) may raise reserve requirement ratio - Korean press
- (HK) According to Centaline Property Agency the secondary market over the weekend saw only 5 home sell v 11 last weekend; Primary market sales remain "brisk" - HK Standard
***Equities***
- SNP: Targeting to double oil output to 50M tons by 2015 v 22.9M tons in 2011 - Chinese press
- BYD, 1211.HK: China Finance Ministry to suspend sales tax on electric vehicles made by domestic automakers BYD and SAIC Motor - China Daily
- Hyundai Motor, 005380.KR: Production suspended at engine factory in South Korea's city of Ulsan after employee set himself on fire in protest of anti-union activity - financial press
- AVM.AU: Minmetals Resources' A$1.2B takeover bid for Anvil will expire on Wednesday, with no acceptance from shareholders expect the largest one Trafigura - Australia Financial Review
***FX/Fixed Income/Commodities***
Supplies of arabica beans are limited due to rain in Colombia and Central America damaging crops; Brazil harvest is months away from being ready - financial press
- (CN) CHINA DEC NEW YUAN LOANS (CNY): 640.5B V 575BE (8-month high); 2011 NEW LOANS CNY7.47T V CNY7.95T IN 2010
- (NZ) NEW ZEALAND NOV TRADE BALANCE (NZ$): -308M V -300ME (4th consecutive deficit)
- (CN) CHINA DEC M2 MONEY SUPPLY Y/Y: 13.6% V 12.9%E (5-month high); M1 Y/Y: 7.9% V 7.8% PRIOR
- (KR) SOUTH KOREA DEC PRODUCER PRICE INDEX (PPI) Y/Y: 4.3% V 5.1% PRIOR (15-month low)
- (UK) UK DEC LLOYDS EMPLOYMENT CONFIDENCE: -75 V -75 PRIOR (matches multi-month-low)
- (AU) AUSTRALIA NOV HIA NEW HOME SALES M/M: 6.8% V 2.8% PRIOR (21-month high)
- (AU) AUSTRALIA DEC AIG PERFORMANCE OF CONSTRUCTION INDEX: 41.0 V 39.6 PRIOR (10-month high; 19th consecutive month of contraction)
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 closed
- S&P/ASX unchanged
- Kospi -1.2%
- Taiwan Taiex -0.7%
- Singapore Straits Times -0.9%
- Shanghai Composite +1.4%
- Hang Seng -0.9%
- S&P Futures -0.4% at 1,269
- Feb Gold -0.5% at $1,609/oz
- March Crude -0.5% at $101.02
***Overview/Top Headlines***
- Markets were very cautious today, after several opened slightly to the upside they quickly fell into negative territory despite stronger US economic data on Friday. Europe's debt crisis continues to weigh on the markets ahead of today's meeting of German Chancellor Merkel and French President Sarkozy. There are several sovereign bond auctions this week in Europe starting with Greece on Monday and Germany on Tuesday, Spain will sell debt maturing in 2015 and 2016 on Thursday, while Italy will auction three-, five- and 15-year bills on Friday.
- The situation in Iran continues to drive Brent prices higher, testing $113.30 as the UK announced it was sending its newest warship to the Gulf in response to Iranian threat to close the Strait of Hormuz. Iran announced that it had replaced the USD with the Russian ruble for some of its oil transactions with Moscow. SocGen analysts look at situation in Iran: Would be relatively easy for Iran to shut down the Straits of Hormuz; but would need to be able to keep it closed for a long period of time to inflict any economic impact on Western countries relying on the oil. "In the event of a shutdown of the Straits of Hormuz, disrupting 15 Mb/d of crude flows, we would expect Brent prices to spike into the $150-200 range for a limited time period. The disruption would definitely result in an IEA strategic release."
- Yen had strong early gains, testing below ¥76.80 and EUR/JPY extended its decline to an 11 year low of ¥97.50. Japan was closed for a holiday and no comments came from officials or the central bank. EUR/USD fell to a 16-month low below $1.2690. A$ lost over 0.5% against the USD after retail sales came in at a 5-month low with a flat reading m/m.
- China reported December new yuan loans of CNY640.5B, this was an 8-month high after the PBoC loosened lending requirements amid slowing economic growth towards the end of the year. However, 2011 new yuan loans were still below 2010 levels. According to analysts, 2012 new yuan loans will rise about 14% from CNY7.47T in 2011. PBoC Gov Zhou said that China may widen Yuan trading band when capital flows become more balanced; Not a good time to liberalize interest rates now. Reiterated will continue implementation of "prudent" monetary policy with some fine-tuning in 2012.
***Speakers/Geopolitical/In the press***
- (CN) Shanghai new home sales -42% w/w; New home prices -17.03% w/w - Uwin
- According to global central bank governors, banks in EU, Japan, and US to be subject to tests for compliance with Basel standards starting in early 2012 0 financial press
- (CN) PBoC to implement a deposit security system, requiring financial institutions to contribute to a fund that would protect customers in case of a bank became insolvent - Chinese press
- (KR) Bank of Korea (BOK) may raise reserve requirement ratio - Korean press
- (HK) According to Centaline Property Agency the secondary market over the weekend saw only 5 home sell v 11 last weekend; Primary market sales remain "brisk" - HK Standard
***Equities***
- SNP: Targeting to double oil output to 50M tons by 2015 v 22.9M tons in 2011 - Chinese press
- BYD, 1211.HK: China Finance Ministry to suspend sales tax on electric vehicles made by domestic automakers BYD and SAIC Motor - China Daily
- Hyundai Motor, 005380.KR: Production suspended at engine factory in South Korea's city of Ulsan after employee set himself on fire in protest of anti-union activity - financial press
- AVM.AU: Minmetals Resources' A$1.2B takeover bid for Anvil will expire on Wednesday, with no acceptance from shareholders expect the largest one Trafigura - Australia Financial Review
***FX/Fixed Income/Commodities***
Supplies of arabica beans are limited due to rain in Colombia and Central America damaging crops; Brazil harvest is months away from being ready - financial press
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
Today’s support: - 1.2758 and 1.2735(main), where correction is possible. Break would give 1.2690, where correction also may be. Then follows 1.2673. Break of the latter would result in 1.2655. If a strong impulse, we would see 1.2630. Continuation will give 1.2611.
Today’s resistance: - 1.2845 and 1.2877(main). Break would give 1.2904, where a correction is possible. Then goes 1.2931. Break of the latter would result in 1.2968. If a strong impulse, we’d see 1.3005. Continuation will give 1.3047 and 1.3094.
USD/JPY
Today’s support: - 76.87 and 76.52(main). Break would bring 76.39 where correction is possible. Then 76.15, where a correction may also happen. Break of the latter will give 75.94. If a strong impulse, we would see 75.68. Continuation would give 75.44
Today’s resistance: - 77.37 and 77.88(main), where a correction may happen. Break would bring 78.12, where also a correction may be. Then 78.30. If a strong impulse, we would see 78.47. Continuation will give 78.72.
DOW JONES INDEX
Today’s support: - 12325.37, 12253.20, 12205.70 and 12135.94(main), where a delay and correction may happen. Break of the latter will give 12116.14, where correction also can be. Then follows 12071.20. Be there a strong impulse, we shall see 12043.50. Continuation will bring 12014.00 and 11985.28.
Today’s resistance: - 12487.50 and 12512.82(main), where a delay and correction may happen. Break would bring 12528.62, where a correction may happen. Then follows 12556.40, where a delay and correction could also be. Be there a strong impulse, we’d see 12584.13. Continuation would bring 12605.57.
Wednesday
KBC: Hungary to junk, CNB governer rules out bond buying
We believe finally the Hungarian government should start to cooperate with IMF/EU, but the agreement on new Flexible credit line (FCL) is not going to be easy to find despite the fact that PM Orban said the country set no preconditions to IMF/EU credit talks. Recall that a delegation of the Hungarian government holds talks with the Fund this week. Meanwhile Czechs continue to be in opposition towards any unorthodox policies. Central bank governor Singer ruled out any direct bond buying programs.
He added that he favours classical repo-operation to provide liquidity for the Czech banking sector. Beside that he also remains critical towards European plan to boost the contributions in IMF. Nevertheless the koruna still remains under the pressure despite rather conservative stance of both the Central bank and the government, which is willing to implement new austerity measures in reaction to deteriorating global outlook.
Meanwhile the series of Czech macro-figures only confirms weaker prospects for domestic demand. The unemployment rate spiked higher to 8.6% and the retail sales are growing only on auto-sales, which may be partly due to foreign demand. Obviously the Czech consumer still remains very cautious.
European Market Update: Euro currency consolidates its recent losses ahead of Merkel-Sarkozy meeting later today
***Economic Data***- (EU) ECB: €1.4B borrowed in overnight loan facility v €1.9B prior; parked in deposit facility (fresh record high) vs. €455.3B prior
- (IT) ECB Dec funding to Italian banks m/m: €210B v €153B prior
- (ZA) South Africa Dec Net Reserves: $47.9Bv $48.6B prior; Gross Reserves: $48.9B v $48.8Be
- (CH) Swiss Dec Unemployment Rate: 3.3% v 3.2%e v 3.1% prior; Unemployment Rate Seasonally Adj: 3.1 v 3.1%e
- (DE) Germany Nov Current Account: €14.3B v €11.0Be; Trade Balance: €16.2B v €12.0Be; Exports M/M:+2.5% v +0.5%e; Imports M/M: -0.4% v +0.5%e
- (FR) France Nov Trade Balance: -€4.4B v -€6.0Be
- (CZ) Czech Dec CPI M/M: 0.4% v 0.5%e; Y/Y: 2,4% v 2.5%e
- (CZ) Czech Dec Unemployment Rate: 8.6% v 8.5%e
- (CZ) Czech Nov Retail Sales Y/Y: +0.5% v -1.0%e
- (DK) Denmark Nov Current Account (DKK): 12.6B v 9.1Be; Trade Balance (ex-shipping): 7.1B v 7.0Be
- (HU) Hungary Nov Preliminary Trade Balance: €666.0M v €790.0Me
- (TU) Turkey Nov Industrial Production WDA M/M: -2.5% v +4.2% prior; Y/Y: 7.2% v 7.4% prior; Industrial Production NSA Y/Y: 8.4% v 10.0%e
- (TW) Taiwan Dec Total Trade Balance: 2.3B v $2.7Be; Total Exports Y/Y: 0.6 v 3.7%e; Total Imports Y/Y: -2.7 v -1.0%e
- (CH) Swiss Nov Real Retail Sales Y/Y: +1.8% v +0.2%e
- (SE) Sweden Nov Service Production M/M: 0.1% v 0.0%e; Y/Y: 2.6% v 2.3%e
- (NO) Norway Nov Credit Indicator Growth Y/Y: 6.6% v 6.8%e
- (SG) Singapore Dec Foreign Reserves: $237.7B v $241.0B prior
- (EU) Euro Zone Jan Sentix Investor Confidence: -21.2 v -24.0 prior
- (GR) Greece Nov Industrial Production Y/Y: -7.8% v -12.3% prior
- (BR) Brazil Dec FGV Inflation IGP-DI: % v -0.2%e v -0.2% prior
Fixed Income:
- (NO) Norway sold NOK6.0B vs. NOK6.0B indicated in 6.5% 2013 Bonds; Yield 1.390%
- (SO) Slovakia Debt Agency (ARDAL) sold €237.1M in 3-month Bills, Avg Yield 1.4313% v 1.8010 prior; bid-to-cover: 2.04x vs. 2.09x prior
- (HU) Hungary Debt Agency (AKK) sold HUF40B vs. HUF40B targeted in 6-Week Bills; Avg Yield 7.77% v 7.34% prior; Bid-to-cover: 3.71x
- (DE) Germany sold €3.9B in 6-month Bubills; avg yield -0.122% v +0.0005% prior; Bid-to-cover: 1.8x v 3.8x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Moody's: Spain Fiscal Slippage In 2011 Is Credit Negative
- Germany Chancellor Merkel to meet French President Sarkozy later today and then INF chief Lagarde on Tuesday
Equities:
FTSE 100 flat at 5648, DAX -0.30% at 6041, CAC-40 +0.10% at 3141, IBEX 35 +0.90% at 8365, FTSE MIB flat at 14,652, SMI -0.10% at 6007
- European shares edged higher ahead of the Merkozy meeting today in Berlin. The two leaders are expected to discuss the future of the Eurozone and markets are up with optimism that the leaders will pave the way to a solution and prepare for next summit of January 30th.
- Individual shares traded mixed during the session. Unicredit [UCG.IT] fell in the red before the shares were halted and resumed trading again, lower by 7% as investors are monitoring and trading bank's capital increase. Glaxosmithkline [GSK.UK] also traded lower after reporting mixed clinical results for its Relovair asthma drug. BMW [BMW.DE] rose after reporting record high vehicle sales for 2011.
Speakers:
- IMF Chief Lagarde commented that Europe might avoid recession in 2012 as she saw reasons to be more upbeat about the region's prospects
- China Vice Commerce Minister Zhong Shan reiterated that China faced a more difficult trading environment in 2012 but would maintain trade policies. China would implement targeted measures to maintain trade with the US and Japan, while expanding the share of exports to emerging markets
- China Xinhua commentary piece stated that the European common currency would not collapse despite the current situation
- German Fin Min Schauble urged faster progress was needed for Greece in its negotiations with the IMF
- Czech Central Bank Gov Singer commented that Greece should quit the euro-zone and devalue its new currency unless Europe was willing to give "massive" funding to the country
- Italy PM Monti reiterated that there would be no new austerity plan, that the measures already announced were enough
to guarantee the country will reach its economic targets
- Investor George Soros commented that Europe was in a more serious situation at this time compare to the 2008 crisis
- Spain's Budget Min was said to be planning to meet with regional governments this week regarding the deficits of the regions.
- Swiss Government Official commented that Switzerland Unemployment Rate would rise to 3.9% by end of 2012 compared to the 3.3% rate registered in December
- EU Steel Industry Association (EUROFER) was said to have filed anti-subsidy complaint regarding Chinese steel products
- EU Commission commented that Hungary needed to recover HUF64B in illegal state aid paid to Malev Airlines for the 2007-10 period
- UAE Oil Min commented that oil prices between $85-95 was good for country's investments and noted that the IPIC pipeline bypassing the Strait of Hormuz seen operational within six months with capacity between 1.5-1.8M bpd
- Philippines Central Bank Gov Tetangco commented that he saw monetary easing in Q1 2012 period (Move would follow two hikes in 2011). The governor was confident of manageable inflation in the coming months and would continue to monitor negative developments overseas and its possible impact on domestic prices
- EU plans to sell bonds through the EFSM; guidance seen 130-140bps over mid-swaps
Currencies:
- Bearish sentiment for the Euro seemed a bit overdone ahead of the key Merkel-Sarkozy meeting later today. The most recent CFTC data showed that euro short positions hit record highs as the EUR/USD hit 16 month lows while EUR/JPY was at 12-year lows. The session saw a mild reprieve for the Euro. The pair tested 1.2785 as the NY morning approached
- Overall the USD was a touch weaker against the major pairs in a move regarded as consolidation following the gains after the US payroll data release last week.
Political/ In the Papers:
- According to a survey of 14 bank economists, Germany is already in recession. There are expectations the economy contracted in the fourth quarter, and that the pace of the contraction may speed up in the first quarter. Germany is due to issue 2011 GDP data on Wednesday.
- Data from the Confederation of British Industry (CBI) indicated that fourth quarter business volumes in the UK financial sector grew at its fastest pace since 2007. The industry was supported by higher equity prices and bond market transactions. CBI added that it has concerns about the 2012 outlook for financial services due to the EU debt crisis.
- Britain's PM Cameron was said to have moved away from plans to remove the 50% income tax rate until at least 2015. The Telegraph noted that the decision to cancel the planned elimination of the tax rate comes amid political hurdles and rising tax revenues attributed to the tax rate. UK Chancellor Osborne is expected to disclose in the March Budget that a decision to maintain the top tax rate until 2015 remains under review.
- The Irish Independent reported that Ireland Q4 house prices are down 8%, and down 18% for the 2011. According to Daft.ie, for 2011 prices dropped 18%. House prices are down over 50% from the boom of 2007, with suggestion that an additional 15-20% fall may be possible based on the theory that a home is worth 15 times what somebody would pay for it in rent over a year.
- German Social Democrats have indicated that they will work with Chancellor Angela Merkel to find a consensus candidate for the German presidency. As a reminder, President Wulff is facing calls to resign for allegedly taking a low-interest loan arranged by the wife of a businessman during his tenure as minister president in the state of Lower Saxony.
- Greek bondholders were reported to be prepared to accept higher losses, as negotiations are to continue this week.
***Looking Ahead***
- (EU) EU to price 30-year bonds (guidance was around 130bps over mid-swaps)
- 6:00 (FR) France PM Fillon makes New Year's vows in Paris
- 6:00 (DE) Germany Nov Industrial Production M/M: -0.5%e v +0.8% prior; Y/Y: 4.0%e v 4.1% prior
- 6:00 (PT) Portugal Nov Trade Balance: No est -€932M prior
- 6:00 (ZA) South Africa Electricity Consumption Y/Y: No est v -0.8% prior; Electricity Production Y/Y: No est v -1.4% prior
- 6:00 (IS) Israel to sell 2014, 2016, 2022 and 2042 Bonds
- 6:00 (PL) Poland to sell up to PLN2.0B in 12-month Bills
- 6:30 (CL) Chile Dec Trade Balance: $750.0Me v $657.0M prior;
- 6:30 (CL) Chile Dec Copper Exports: No est v $3.7B prior
- 7:30 (DE) German Chancellor Merkel and France President Sarkozy hold Talks in Berlin
- 7:45 (EU) EU President Van Rompuy
- 8:30 (CA) Canada Nov Building Permits M/M: -3.0%e v +11.9% prior
- 9:00 (MX) Mexico Dec Consumer Prices M/M: No est v 1.1% prior; Y/Y: No est v 3.5% prior; CPI Core M/M: No est v 0.3% prior
- 9:00 (FR) France Debt Agency to sell up to €7.7B in 3-month, 6-month and 12-month Bills
- 9:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 9:30 (EU) ECB announces weekly settlements in its Govt Bond Buying Program (SMP)
- 9:45 (UK) BOE to buy £1.7B in 2015-2020 Gilts in reverse auction
- 10:00 (HU) Hungary Dec YTD Budget Balance (HUF): No est v -1.248T
- 10:30 (CA) Canada Q4 Business Outlook Future Sales: 10.0e v 6.0 prior; BoC Senior Loan Officer Survey: No est v -26.9 prior
- 10:30 (DE) German Chancellor Merkel holds Speech on demographics at Cologne Congress
- 11:30 (US) Treasury to sell $29B in 3-Month and $27B in 6-Month Bills
- 12:00 (EU) EU Parliament's Buzek speaks at Press Club Brussels
- 12:30 (DE) German Chancellor Merkel attends IHK Chamber of Commerce Event in Dusseldorf
- 12:40 (US) Fed's Lockhart to speak on economy in Atlanta
- 15:00 (US) Nov Consumer Credit: $7.0Be v $7.7B prior
- (IT) ECB Dec funding to Italian banks m/m: €210B v €153B prior
- (ZA) South Africa Dec Net Reserves: $47.9Bv $48.6B prior; Gross Reserves: $48.9B v $48.8Be
- (CH) Swiss Dec Unemployment Rate: 3.3% v 3.2%e v 3.1% prior; Unemployment Rate Seasonally Adj: 3.1 v 3.1%e
- (DE) Germany Nov Current Account: €14.3B v €11.0Be; Trade Balance: €16.2B v €12.0Be; Exports M/M:+2.5% v +0.5%e; Imports M/M: -0.4% v +0.5%e
- (FR) France Nov Trade Balance: -€4.4B v -€6.0Be
- (CZ) Czech Dec CPI M/M: 0.4% v 0.5%e; Y/Y: 2,4% v 2.5%e
- (CZ) Czech Dec Unemployment Rate: 8.6% v 8.5%e
- (CZ) Czech Nov Retail Sales Y/Y: +0.5% v -1.0%e
- (DK) Denmark Nov Current Account (DKK): 12.6B v 9.1Be; Trade Balance (ex-shipping): 7.1B v 7.0Be
- (HU) Hungary Nov Preliminary Trade Balance: €666.0M v €790.0Me
- (TU) Turkey Nov Industrial Production WDA M/M: -2.5% v +4.2% prior; Y/Y: 7.2% v 7.4% prior; Industrial Production NSA Y/Y: 8.4% v 10.0%e
- (TW) Taiwan Dec Total Trade Balance: 2.3B v $2.7Be; Total Exports Y/Y: 0.6 v 3.7%e; Total Imports Y/Y: -2.7 v -1.0%e
- (CH) Swiss Nov Real Retail Sales Y/Y: +1.8% v +0.2%e
- (SE) Sweden Nov Service Production M/M: 0.1% v 0.0%e; Y/Y: 2.6% v 2.3%e
- (NO) Norway Nov Credit Indicator Growth Y/Y: 6.6% v 6.8%e
- (SG) Singapore Dec Foreign Reserves: $237.7B v $241.0B prior
- (EU) Euro Zone Jan Sentix Investor Confidence: -21.2 v -24.0 prior
- (GR) Greece Nov Industrial Production Y/Y: -7.8% v -12.3% prior
- (BR) Brazil Dec FGV Inflation IGP-DI: % v -0.2%e v -0.2% prior
Fixed Income:
- (NO) Norway sold NOK6.0B vs. NOK6.0B indicated in 6.5% 2013 Bonds; Yield 1.390%
- (SO) Slovakia Debt Agency (ARDAL) sold €237.1M in 3-month Bills, Avg Yield 1.4313% v 1.8010 prior; bid-to-cover: 2.04x vs. 2.09x prior
- (HU) Hungary Debt Agency (AKK) sold HUF40B vs. HUF40B targeted in 6-Week Bills; Avg Yield 7.77% v 7.34% prior; Bid-to-cover: 3.71x
- (DE) Germany sold €3.9B in 6-month Bubills; avg yield -0.122% v +0.0005% prior; Bid-to-cover: 1.8x v 3.8x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Moody's: Spain Fiscal Slippage In 2011 Is Credit Negative
- Germany Chancellor Merkel to meet French President Sarkozy later today and then INF chief Lagarde on Tuesday
Equities:
FTSE 100 flat at 5648, DAX -0.30% at 6041, CAC-40 +0.10% at 3141, IBEX 35 +0.90% at 8365, FTSE MIB flat at 14,652, SMI -0.10% at 6007
- European shares edged higher ahead of the Merkozy meeting today in Berlin. The two leaders are expected to discuss the future of the Eurozone and markets are up with optimism that the leaders will pave the way to a solution and prepare for next summit of January 30th.
- Individual shares traded mixed during the session. Unicredit [UCG.IT] fell in the red before the shares were halted and resumed trading again, lower by 7% as investors are monitoring and trading bank's capital increase. Glaxosmithkline [GSK.UK] also traded lower after reporting mixed clinical results for its Relovair asthma drug. BMW [BMW.DE] rose after reporting record high vehicle sales for 2011.
Speakers:
- IMF Chief Lagarde commented that Europe might avoid recession in 2012 as she saw reasons to be more upbeat about the region's prospects
- China Vice Commerce Minister Zhong Shan reiterated that China faced a more difficult trading environment in 2012 but would maintain trade policies. China would implement targeted measures to maintain trade with the US and Japan, while expanding the share of exports to emerging markets
- China Xinhua commentary piece stated that the European common currency would not collapse despite the current situation
- German Fin Min Schauble urged faster progress was needed for Greece in its negotiations with the IMF
- Czech Central Bank Gov Singer commented that Greece should quit the euro-zone and devalue its new currency unless Europe was willing to give "massive" funding to the country
- Italy PM Monti reiterated that there would be no new austerity plan, that the measures already announced were enough
to guarantee the country will reach its economic targets
- Investor George Soros commented that Europe was in a more serious situation at this time compare to the 2008 crisis
- Spain's Budget Min was said to be planning to meet with regional governments this week regarding the deficits of the regions.
- Swiss Government Official commented that Switzerland Unemployment Rate would rise to 3.9% by end of 2012 compared to the 3.3% rate registered in December
- EU Steel Industry Association (EUROFER) was said to have filed anti-subsidy complaint regarding Chinese steel products
- EU Commission commented that Hungary needed to recover HUF64B in illegal state aid paid to Malev Airlines for the 2007-10 period
- UAE Oil Min commented that oil prices between $85-95 was good for country's investments and noted that the IPIC pipeline bypassing the Strait of Hormuz seen operational within six months with capacity between 1.5-1.8M bpd
- Philippines Central Bank Gov Tetangco commented that he saw monetary easing in Q1 2012 period (Move would follow two hikes in 2011). The governor was confident of manageable inflation in the coming months and would continue to monitor negative developments overseas and its possible impact on domestic prices
- EU plans to sell bonds through the EFSM; guidance seen 130-140bps over mid-swaps
Currencies:
- Bearish sentiment for the Euro seemed a bit overdone ahead of the key Merkel-Sarkozy meeting later today. The most recent CFTC data showed that euro short positions hit record highs as the EUR/USD hit 16 month lows while EUR/JPY was at 12-year lows. The session saw a mild reprieve for the Euro. The pair tested 1.2785 as the NY morning approached
- Overall the USD was a touch weaker against the major pairs in a move regarded as consolidation following the gains after the US payroll data release last week.
Political/ In the Papers:
- According to a survey of 14 bank economists, Germany is already in recession. There are expectations the economy contracted in the fourth quarter, and that the pace of the contraction may speed up in the first quarter. Germany is due to issue 2011 GDP data on Wednesday.
- Data from the Confederation of British Industry (CBI) indicated that fourth quarter business volumes in the UK financial sector grew at its fastest pace since 2007. The industry was supported by higher equity prices and bond market transactions. CBI added that it has concerns about the 2012 outlook for financial services due to the EU debt crisis.
- Britain's PM Cameron was said to have moved away from plans to remove the 50% income tax rate until at least 2015. The Telegraph noted that the decision to cancel the planned elimination of the tax rate comes amid political hurdles and rising tax revenues attributed to the tax rate. UK Chancellor Osborne is expected to disclose in the March Budget that a decision to maintain the top tax rate until 2015 remains under review.
- The Irish Independent reported that Ireland Q4 house prices are down 8%, and down 18% for the 2011. According to Daft.ie, for 2011 prices dropped 18%. House prices are down over 50% from the boom of 2007, with suggestion that an additional 15-20% fall may be possible based on the theory that a home is worth 15 times what somebody would pay for it in rent over a year.
- German Social Democrats have indicated that they will work with Chancellor Angela Merkel to find a consensus candidate for the German presidency. As a reminder, President Wulff is facing calls to resign for allegedly taking a low-interest loan arranged by the wife of a businessman during his tenure as minister president in the state of Lower Saxony.
- Greek bondholders were reported to be prepared to accept higher losses, as negotiations are to continue this week.
***Looking Ahead***
- (EU) EU to price 30-year bonds (guidance was around 130bps over mid-swaps)
- 6:00 (FR) France PM Fillon makes New Year's vows in Paris
- 6:00 (DE) Germany Nov Industrial Production M/M: -0.5%e v +0.8% prior; Y/Y: 4.0%e v 4.1% prior
- 6:00 (PT) Portugal Nov Trade Balance: No est -€932M prior
- 6:00 (ZA) South Africa Electricity Consumption Y/Y: No est v -0.8% prior; Electricity Production Y/Y: No est v -1.4% prior
- 6:00 (IS) Israel to sell 2014, 2016, 2022 and 2042 Bonds
- 6:00 (PL) Poland to sell up to PLN2.0B in 12-month Bills
- 6:30 (CL) Chile Dec Trade Balance: $750.0Me v $657.0M prior;
- 6:30 (CL) Chile Dec Copper Exports: No est v $3.7B prior
- 7:30 (DE) German Chancellor Merkel and France President Sarkozy hold Talks in Berlin
- 7:45 (EU) EU President Van Rompuy
- 8:30 (CA) Canada Nov Building Permits M/M: -3.0%e v +11.9% prior
- 9:00 (MX) Mexico Dec Consumer Prices M/M: No est v 1.1% prior; Y/Y: No est v 3.5% prior; CPI Core M/M: No est v 0.3% prior
- 9:00 (FR) France Debt Agency to sell up to €7.7B in 3-month, 6-month and 12-month Bills
- 9:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 9:30 (EU) ECB announces weekly settlements in its Govt Bond Buying Program (SMP)
- 9:45 (UK) BOE to buy £1.7B in 2015-2020 Gilts in reverse auction
- 10:00 (HU) Hungary Dec YTD Budget Balance (HUF): No est v -1.248T
- 10:30 (CA) Canada Q4 Business Outlook Future Sales: 10.0e v 6.0 prior; BoC Senior Loan Officer Survey: No est v -26.9 prior
- 10:30 (DE) German Chancellor Merkel holds Speech on demographics at Cologne Congress
- 11:30 (US) Treasury to sell $29B in 3-Month and $27B in 6-Month Bills
- 12:00 (EU) EU Parliament's Buzek speaks at Press Club Brussels
- 12:30 (DE) German Chancellor Merkel attends IHK Chamber of Commerce Event in Dusseldorf
- 12:40 (US) Fed's Lockhart to speak on economy in Atlanta
- 15:00 (US) Nov Consumer Credit: $7.0Be v $7.7B prior
Asian Market Update: Equities rally, USD weakens with some risk appetite returning
***Economic Data***- (CN) CHINA DEC TRADE BALANCE: $16.5B V $8.8BE
- (AU) AUSTRALIA NOV BUILDING APPROVALS M/M: 8.4% V 6.0%E (3-month high); Y/Y: -18.9% V -19.8%E
- (UK) UK DEC RICS HOUSE PRICE BALANCE: -16% V -19%E (17-month high)
- (UK) UK DEC BRC SALES LFL Y/Y: 2.2% V 0.4%E (8-month high)
- (NZ) NEW ZEALAND DEC QV HOUSE PRICES Y/Y: 2.4% V 1.7% PRIOR (15-month high)
- (NZ) NEW ZEALAND NOV BUILDING PERMITS M/M: -6.4% V +3.3%E
- (PH) PHILIPPINES NOV TOTAL EXPORTS: -19.4% V -10.0%E; TOTAL MONTHLY EXPORTS: $3.3B V $4.1B PRIOR
- (MA) MALAYSIA NOV INDUSTRIAL PRODUCTION Y/Y: 1.8% V 3.5%E; MANUFACTURING SALES VALUE Y/Y: 6.3% V 11.8% PRIOR
- (JP) Japan investors sell ¥155B in foreign bonds last week v ¥146B bought in prior week
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +0.4%
- S&P/ASX +1.2%
- Kospi +1.7%
- Taiwan Taiex +1.2%
- Singapore Straits Times +0.8%
- Shanghai Composite +1.6%
- Hang Seng +0.6%
- S&P Futures +0.5% at 1,281
- Feb Gold +0.6% at $1,617/oz
- March Crude +0.5% at $101.78
***Overview/Top Headlines***
- Markets were buoyant today, with Alcoa kicking off the US earnings which helped to boost Australian miners. The Kospi rose supported by electronic and tech names. EUR/USD leveled off around $1.2780, coming off its 16-month low. China Securities Regulatory Commission (CSRC) said it would "actively" push pension and housing funds to invest in capital markets; To encourage long-term investors such as insurers and corporate pension plans to buy more shares.
- China's softer import data in the December trade balance (also a multi-month low) at 11.8% v 18.0%e v 22.1% prior supported the popular belief that the RRR would be cut before the Lunar New Year holiday. With Europe still a big question mark and the crisis reducing external demand, China will need to find ways to boost its trade, since its largest destination, Europe, is such an uncertainty. This fed the Shanghai Composite's rise to 2,284 since it is now even more likely that the PBoC will have to take action. December headline trade balance was nearly double analyst estimates at $16.5B v $8.8Be. Exports were in line at 13.4%. 2011 Trade Balance $155.1B v $183B y/y, this was in line with Chinese government official comments in the past.
- Australia November building approvals hit a 3-month high at 8.4% ahead of the 6%e, y/y also was better than expected -18.9%. AUD/USD extended its gains to session highs above $1.0270 it then went on to test $1.0320 on China's trade balance data. NZD/USD followed suit testing 2-month highs above $0.7940
- PBoC Gov Zhou quoted in the Chinese press said that more downside pressure on the economy will require China's policymakers to use a wider range of tools to maintain a prudent monetary policy this year. The government needs to prepare not only quantitative measures, pricing tools, but also other "innovative prudent tools," in a bid to meet the current challenges.
***Speakers/Geopolitical/In the press***
- (CN) HSBC's Qu expects 3 Reserve Ratio Requirement (RRR) rate cuts over 6-months
- (PH) Philippines Central Bank Gov Tetangco: Reiterates the central bank has room for policy easing
- (KR) According to Bank of Korea (BOK) review, benchmark rates will have to raise to 6% from current 3.25% in order to lower CPI to 3% - Korean press
- (CN) CSRC chairman Guo Shuqing: China may introduce sovereign bond as well as commodity futures - financial press
***Equities***
- TSM: Reports Dec Rev NT$30.6B v NT$35.2B m/m v NT$33.8B y/y
- JSTL.IN: Will buy Q4 coking coal at $230/ton v $290/ton in Q3; Do not expect steel prices to fall in the short term
- Nikon, 7731.JP: Resuming some of the suspended production in Thailand - financial press
- Kia Motors, 000270.KR: Exec: Expects US sales to grow in 2012 despite the absence of new model launches; Aims to surpass 500K vehicles in sales
- Longfor Properties, 960.HK: Reports Dec contracted sales CNY2.65B, -52.6% y/y; 2011 contracted sales CNY38.3B v CNY40B target, +14.8% y/y
- PBG.AU: Entered preliminary talks with KKR after unsolicited approach
***US Equities***
- LIZ: Affirms FY11 pro-forma adj EBITDA at the low end of $80-90M; Cuts 2012 adj EBITDA $125-140M from $130-150M prior; CFO resigns; -12.9% after hours
- JNPR: Lowers Q4 guidance to $0.26-0.28 v $0.34e, R$1.11-1.12B v $1.2Be (guided $0.32-0.36; R $1.16-1.22B prior); -2.1% after hours
- WDFC: Reports Q1 $0.42 v $0.54e, R $84.9M v $86Me; -8.1% after hours
- OCZ: Reports Q3 $0.06 v $0.06e, R$103.1M v $100Me; -3.6% after hours
- AA: Reports Q4 -$0.03 v -$0.03e, R $5.99B v $5.7Be; +0.8% after hours
***FX/Fixed Income/Commodities***
- EUR/JPY: (JP) BoJ supplied $12.6B in 3-month US dollar funding operation (highest amount since 2010)
- (AU) Newcastle Coal Exports -11.7% to 2.36M tons in week ended Jan 9th
- According to Goldman the rubber market is expected to have the largest glut since 2004 which will cut costs for tire makers - financial press
- (VE) Venezuela Oil Min: OPEC will not get involved with any dispute with Iran; OPEC has not planned an extraordinary meeting at this time
- (KR) South Korea Finance Ministry: Will increase food supply to meet demand and control inflation ahead of Lunar New Year
- (AU) AUSTRALIA NOV BUILDING APPROVALS M/M: 8.4% V 6.0%E (3-month high); Y/Y: -18.9% V -19.8%E
- (UK) UK DEC RICS HOUSE PRICE BALANCE: -16% V -19%E (17-month high)
- (UK) UK DEC BRC SALES LFL Y/Y: 2.2% V 0.4%E (8-month high)
- (NZ) NEW ZEALAND DEC QV HOUSE PRICES Y/Y: 2.4% V 1.7% PRIOR (15-month high)
- (NZ) NEW ZEALAND NOV BUILDING PERMITS M/M: -6.4% V +3.3%E
- (PH) PHILIPPINES NOV TOTAL EXPORTS: -19.4% V -10.0%E; TOTAL MONTHLY EXPORTS: $3.3B V $4.1B PRIOR
- (MA) MALAYSIA NOV INDUSTRIAL PRODUCTION Y/Y: 1.8% V 3.5%E; MANUFACTURING SALES VALUE Y/Y: 6.3% V 11.8% PRIOR
- (JP) Japan investors sell ¥155B in foreign bonds last week v ¥146B bought in prior week
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +0.4%
- S&P/ASX +1.2%
- Kospi +1.7%
- Taiwan Taiex +1.2%
- Singapore Straits Times +0.8%
- Shanghai Composite +1.6%
- Hang Seng +0.6%
- S&P Futures +0.5% at 1,281
- Feb Gold +0.6% at $1,617/oz
- March Crude +0.5% at $101.78
***Overview/Top Headlines***
- Markets were buoyant today, with Alcoa kicking off the US earnings which helped to boost Australian miners. The Kospi rose supported by electronic and tech names. EUR/USD leveled off around $1.2780, coming off its 16-month low. China Securities Regulatory Commission (CSRC) said it would "actively" push pension and housing funds to invest in capital markets; To encourage long-term investors such as insurers and corporate pension plans to buy more shares.
- China's softer import data in the December trade balance (also a multi-month low) at 11.8% v 18.0%e v 22.1% prior supported the popular belief that the RRR would be cut before the Lunar New Year holiday. With Europe still a big question mark and the crisis reducing external demand, China will need to find ways to boost its trade, since its largest destination, Europe, is such an uncertainty. This fed the Shanghai Composite's rise to 2,284 since it is now even more likely that the PBoC will have to take action. December headline trade balance was nearly double analyst estimates at $16.5B v $8.8Be. Exports were in line at 13.4%. 2011 Trade Balance $155.1B v $183B y/y, this was in line with Chinese government official comments in the past.
- Australia November building approvals hit a 3-month high at 8.4% ahead of the 6%e, y/y also was better than expected -18.9%. AUD/USD extended its gains to session highs above $1.0270 it then went on to test $1.0320 on China's trade balance data. NZD/USD followed suit testing 2-month highs above $0.7940
- PBoC Gov Zhou quoted in the Chinese press said that more downside pressure on the economy will require China's policymakers to use a wider range of tools to maintain a prudent monetary policy this year. The government needs to prepare not only quantitative measures, pricing tools, but also other "innovative prudent tools," in a bid to meet the current challenges.
***Speakers/Geopolitical/In the press***
- (CN) HSBC's Qu expects 3 Reserve Ratio Requirement (RRR) rate cuts over 6-months
- (PH) Philippines Central Bank Gov Tetangco: Reiterates the central bank has room for policy easing
- (KR) According to Bank of Korea (BOK) review, benchmark rates will have to raise to 6% from current 3.25% in order to lower CPI to 3% - Korean press
- (CN) CSRC chairman Guo Shuqing: China may introduce sovereign bond as well as commodity futures - financial press
***Equities***
- TSM: Reports Dec Rev NT$30.6B v NT$35.2B m/m v NT$33.8B y/y
- JSTL.IN: Will buy Q4 coking coal at $230/ton v $290/ton in Q3; Do not expect steel prices to fall in the short term
- Nikon, 7731.JP: Resuming some of the suspended production in Thailand - financial press
- Kia Motors, 000270.KR: Exec: Expects US sales to grow in 2012 despite the absence of new model launches; Aims to surpass 500K vehicles in sales
- Longfor Properties, 960.HK: Reports Dec contracted sales CNY2.65B, -52.6% y/y; 2011 contracted sales CNY38.3B v CNY40B target, +14.8% y/y
- PBG.AU: Entered preliminary talks with KKR after unsolicited approach
***US Equities***
- LIZ: Affirms FY11 pro-forma adj EBITDA at the low end of $80-90M; Cuts 2012 adj EBITDA $125-140M from $130-150M prior; CFO resigns; -12.9% after hours
- JNPR: Lowers Q4 guidance to $0.26-0.28 v $0.34e, R$1.11-1.12B v $1.2Be (guided $0.32-0.36; R $1.16-1.22B prior); -2.1% after hours
- WDFC: Reports Q1 $0.42 v $0.54e, R $84.9M v $86Me; -8.1% after hours
- OCZ: Reports Q3 $0.06 v $0.06e, R$103.1M v $100Me; -3.6% after hours
- AA: Reports Q4 -$0.03 v -$0.03e, R $5.99B v $5.7Be; +0.8% after hours
***FX/Fixed Income/Commodities***
- EUR/JPY: (JP) BoJ supplied $12.6B in 3-month US dollar funding operation (highest amount since 2010)
- (AU) Newcastle Coal Exports -11.7% to 2.36M tons in week ended Jan 9th
- According to Goldman the rubber market is expected to have the largest glut since 2004 which will cut costs for tire makers - financial press
- (VE) Venezuela Oil Min: OPEC will not get involved with any dispute with Iran; OPEC has not planned an extraordinary meeting at this time
- (KR) South Korea Finance Ministry: Will increase food supply to meet demand and control inflation ahead of Lunar New Year
Tuesday
DAILY FOREX AND DOW JONES RECOMMENDED LEVELS
Today’s support: - 1.2758 and 1.2735(main), where correction is possible. Break would give 1.2690, where correction also may be. Then follows 1.2673. Break of the latter would result in 1.2655. If a strong impulse, we would see 1.2630. Continuation will give 1.2611.
Today’s resistance: - 1.2845 and 1.2877(main). Break would give 1.2904, where a correction is possible. Then goes 1.2931. Break of the latter would result in 1.2968. If a strong impulse, we’d see 1.3005. Continuation will give 1.3047 and 1.3094.
USD/JPY
Today’s support: - 76.87 and 76.52(main). Break would bring 76.39 where correction is possible. Then 76.15, where a correction may also happen. Break of the latter will give 75.94. If a strong impulse, we would see 75.68. Continuation would give 75.44
Today’s resistance: - 77.37 and 77.88(main), where a correction may happen. Break would bring 78.12, where also a correction may be. Then 78.30. If a strong impulse, we would see 78.47. Continuation will give 78.72.
DOW JONES INDEX
Today’s support: - 12325.37, 12253.20, 12205.70 and 12135.94(main), where a delay and correction may happen. Break of the latter will give 12116.14, where correction also can be. Then follows 12071.20. Be there a strong impulse, we shall see 12043.50. Continuation will bring 12014.00 and 11985.28.
Today’s resistance: - 12487.50 and 12512.82(main), where a delay and correction may happen. Break would bring 12528.62, where a correction may happen. Then follows 12556.40, where a delay and correction could also be. Be there a strong impulse, we’d see 12584.13. Continuation would bring 12605.57.
Asian Market Update: Quiet session ahead of Bund auction; China assures its banks are well positioned
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Welcome, today is Wednesday, 11 Jan 2012, 16:17 Times around the world » New York (USA) 10:17:57 -6h 
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European Market Update: Germany moving closer to a technical recessionKBC: While Hungary’s delegation meets the IMF, the government is ready to change legislationDAILY FOREX AND DOW JONES RECOMMENDED LEVELSUS Market Update: Dow +98 S&P +13 NASDAQ +29European Market Update: Fitch noted that France seen holding onto AAA rating for this year aids risk appetite; Euro nations sovereign review likely to be resolved by end of JanuaryKBC: Hungary’s budget deficit probably below 3% of GDP in 2011DAILY FOREX AND DOW JONES RECOMMENDED LEVELS Najpopularniejsze World-Signals.com: Negative US fundamental data moved EUR/USD with 80 pips.Forex linksEnergy Market PreviewForex hedge fund managementKBC: Higher US PPI extends negative correction in the regionFXCM: Yen Recovers; Euro Marks TimeKBC: CE currencies weaken on global equity sell offNasdaq (qqqq), still working to perfection.... Navigator FXtraders.eu » Article Articles menu Print Print directly Print preview Add to bookmarks Tell a friend Adjust font Enlarge Decrease Article content 11.01.2012 08:40 Wednesday ***Economic Data***- (JP) JAPAN DEC OFFICIAL RESERVE ASSETS: $1.3T V $1.3T PRIOR
- (KR) SOUTH KOREA DEC UNEMPLOYMENT RATE: 3.1% V 3.2%E
- (JP) JAPAN NOV PRELIMINARY LEADING INDEX CI: 92.9 V 92.9E; COINCIDENT INDEX CI: 90.3 V 90.3E
- (MA) MALAYSIA NOV TRADE BALANCE (MYR): 9.5B V 11.9BE; Exports y/y: 8.0% v 12.9%e, Imports y/y: 8.4% v 9.4%e
- (JP) JAPAN NOV CONFERENCE BOARD LEADING ECONOMIC INDEX: -0.2% V +1.2% PRIOR
- (UK) UK DEC BRC SHOP PRICE INDEX Y/Y: 1.7% V 2.0% PRIOR (16-month low)
- (LK) SRI LANKA CENTRAL BANK LEAVES REPURCHASE RATE UNCHANGED AT 7.00%, AS EXPECTED
- (AU) Australia Nov-end Job Vacancies: -3.3% v 3.2% prior
- (NZ) New Zealand Q4 Westpac Employment Confidence Index: 99.6 v 104.2 prior
- (CN) China State Administration of Foreign Exchange (SAFE): Lowers Q3 Current Account surplus to $53.4B vs $57.8B prior
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 +0.2%
- S&P/ASX +0.8%
- Kospi -0.4%
- Taiwan Taiex +0.3%
- Singapore Straits Times +0.3%
- Shanghai Composite -0.5%
- Hang Seng +0.1%
- S&P Futures -0.2% at 1,283
- Feb Gold +0.4% at $1,637/oz
- March Crude -0.4% at $101.84
***Overview/Top Headlines***
- Markets were mixed, with no major driver for the session. Republican Presidential candidate Mitt Romney won the New Hampshire primary, as expected. Australia job vacancies declined 3.3% after rising nearly the same in the last month. South Korea saw its December unemployment rate hold steady. Commenting ahead of his first meeting in China, US Treasury Sec Geithner said that the main focus of the talks would be on growth, including growing US exports to China. China Vice Premier ahead of the talks indicated that China was willing to increase its trade with the US.
- EUR/USD traded with a bearish tone for the session ahead of the 5-year Bund auction later today and France's meeting with the IMF's Lagarde. USD/JPY was in a tight range for the session trading to the upside. AUD was weaker as many of the major miners were forced to close operations in Western Australia due to cyclone Heidi.
- PBoC Head of Research expects that the global financial crisis will last for another 2-3 years, saying that China banks may face challenges if rate policy is liberalized. PBoC's Zhang affirmed that Chinese banks are in good shape with low non-performing loan ratios; 2012 CPI may remain at 4%, may not decline quickly. PBoC Advisor Li commented to the press that any help for Europe should be linked to IMF quota reform. EU debt crisis will have a short term impact on China's economic because of steps taken to reduce reliance on external demand.
***Speakers/Geopolitical/In the press***
- (AU) Australia Foreign Min Rudd: If Australia does not invest in Indonesia it runs the risk of missing a Brazil scale economic opportunity - The Australian
- (CN) China Academy of Social Sciences (CASS) researcher Fan Mingtai: Local debt problem will not be solved in the next 2-3 years; Looser policy needed to ease pressure on local govts - China Daily
- (HK) Hong Kong banks increasingly concerned over borrowers' ability to make mortgage payments - SCMP
- (CN) China top 4 banks total yuan loans in the first week of Jan exceeded CNY50B v CNY130B estimated for entire Dec
- (CN) According to Goldman Sachs, PBoC may start to cut key 1-year rates starting in H2 of 2012 - financial press
***Equities***
- Kirin Holdings, 2503.JP: Reports 2011 beer sales 160.3M v 165.9M target, -5.7% y/y; Guides 2012 beer sales at 163.5M cases
- CHT: Reports Dec Net NT$2.2B, Rev NT$16.4B
- Hon Hai Precision, 2317.TW: Reports Dec Rev NT$316.9B, +3.2% m/m and 29.5% y/y
- BXB.AU: Received offer of A$2.2B for paper unit, Recall - financial press
- Shimao Property, 813.HK: Expects Beijing to lift some of the property purchase restrictions imposed in 2011 in mid-2012 - SCMP
***US Equities***
- SMCI: Cuts Q2 guidance $0.24-0.25 v $0.29e; Rev $249-250M v $272Me (previously guided EPS $0.27-0.32; Rev $260-280M on Oct 25th); -5.9% after hours
- DLA: Lowers FY12 guidance due to record high cotton prices; Guides Q2 -$1.62 to -$1.58 v $0.02e; Guides FY12 $0.50-0.60 v $2.05e, R$480-500M v $515Me (guided $2.00-2.15, R$500-520M prior); -22.4% after hours
- SYK: Reports prelim Q4 R$2.2B v $2.23Be; FY11 $3.72-3.74 v $3.73e; R$8.3B v $8.3Be; Guides initial FY12 EPS growing double digits over 2011 (implies at least $4.09 v $4.11e); +1% after hours
- CWTR: Guides Q4 -$0.24 to -$0.18 v -$0.17e (-$0.21 to -$0.13 prior guidance); -5.8% after hours
- CROX: Guides FY11 Rev to exceed $1B v $1.0Be; guides Q4 Rev to high end of prior $200-205M v $204Me; +5.6% after hours
***FX/Fixed Income/Commodities***
- (US) API PETROLEUM INVENTORIES CRUDE: +400K V +1ME; GASOLINE: +1.89M V +2ME; DISTILLATE: +850K V +2ME; UTILIZATION: 84.8% V 83.7% W/W
- (CN) China MoF sells 1-yr bills at 2.78% v 3.90% on Sept 13th
- PKX: According to Korea Iron and Steel Association (KOSA), exports of steel from South Korea in 2011 reached a record high at 28.5M tons, +9.3% y/y - Korean press
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