Showing posts with label European. Show all posts
Showing posts with label European. Show all posts
Tuesday
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
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) ......
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 ......
Thursday
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 ......
Saturday
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
Wednesday
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
Tuesday
Monday
European Market Update: Germany moving closer to a technical recession
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Welcome, today is Wednesday, 11 Jan 2012, 16:17 Times around the world » New York (USA) 10:17:52 -6h 
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KBC: While Hungary’s delegation meets the IMF, the government is ready to change legislationDAILY FOREX AND DOW JONES RECOMMENDED LEVELSAsian Market Update: Quiet session ahead of Bund auction; China assures its banks are well positionedUS 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 12:40 Wednesday ***Economic Data***- (EU) ECB: €1.9B borrowed in overnight loan facility v €1.5B prior; €485.9B parked in deposit facility (fresh all-time record level) vs. €481.9B prior
-(DE) Germany 2011Maastricht Budget Level: -1.0% v -3.5% y/y
- (DE) Germany 2011Maastricht Annual GDP: 3.0% v 3.0%e
- (DE) Germany Q4 GDP -0.25% q/q - Stats Office
- (ES) Spain Nov Industrial Output WDA Y/Y: -7.0% v -5.4%e; Industrial Output NSA Y/Y: -7.0% v -4.5% prior
- (TU) Turkey Nov Current Account: -$5.2B v -$5.2Be
- (IT) Italy Q3 cumulative Deficit to GDP Ratio: 4.3% v 5.3% prior
- (UK) Nov Visible Trade Balance: -£8.6B v-£8.4Be; Total Trade Balance: -£2.6B v -£2.4Be; Trade Balance Non EU: -£5.0B v -£5.0Be
- (GR) Greece Dec Consumer Price Index Y/Y: 2.7%e v 2.9% prior; CPI EU Harmonized Y/Y: 2.7%e v 2.8% prior
- (PT) Portugal Dec Consumer Price Index M/M: 0.0% v -0.1% prior; Y/Y: 3.6% v 4.0% prior
- (PT) Portugal Dec CPI EU Harmonized M/M: 0.1% v 0.1%e; Y/Y: 3.5% v 3.5%e
- (PT) Portugal Nov Construction Works Index: 66.3 v 65.2 prior
Fixed Income:
- (EU) ECB allotted $5.7B in 7-Day USD Liquidity Tender at fixed 0.58% vs. $25.5B prior
- Slovakia Debt Agency (ARDAL): Plans to issue 5-year EUR-denominated Bonds; Guidance seen 305-315bps over mid-swaps
- (SE) Sweden sold SEK2.5B vs. SEK2.5B indicated in 3.5% 2022 Bonds; Yield 1.6835%
- (DE) Germany sold €3.15B in new 0.75% Feb 2017 BOBL; Avg Yield 0.90% v 1.11% prior; Bid-to-cover: 2.8x v 2.1x prior
- (UK) DMO sold £3.0B in 3.75% Conventional 2021 Gilts; avg yield 2.085% v 2.282% prior; Bid-to-cover:2.15x v 1.61x prior; Tail: 0.2bps v 0.9bps prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Germany heading towards a technical recession
- German Chancellor Merkel hosts Italian PM Monti later today
- Bank proposed Greek bond swap nears deal
- Germany 5-year BOBL auction yield below 1.0% for the first time ever
- Mitt Romney wins US New Hampshire Republican Party Primary
Equities:
FTSE 100 -0.20% at 5684, DAX -0.25% at 6149, CAC-40 +0.40% at 3223, IBEX-35 -0.20% at 8456, FTSE MIB +0.60% at 14,941, SMI -0.25% at 6035
- European shares were trading in positive territory but failed to make any impressive rally due to increasing concerns over the European debt crisis. Germany's first estimate of the Q4 GDP showed a contraction although Stats office noted that 2012 domestic growth could remain robust. However, German bond auction was well received, with a lower yield and higher bid-to-cover.
- UK supermarket J Sainsbury [SBRY.UK] fell after reporting strong Christmas sales but noted that 2012 will see consumers spending cautiously.
Speakers:
- Germany's Stat Office commented that German economy started 2012 on a weaker step but domestic growth could remain robust in 2012
- Spain's new government said to force banks to cut the values of foreclosed homes by as much as half as part of its plan to clean up lenders' balance sheets
- China Premier Wen reiterated the view that the global economic situation was extremely complicated and that cooperation between US and China is beneficial while confrontation hurt both countries
- US Tsy Sec Geithner commented that he did have productive talks with Chinese leaders and was encouraged by China's growth trajectory. He also noted that there has been encouraging signs of strength in US economy recently
- US Official commented that China did recognize its excessive reliance on external demand
And spoke about continued appreciation of the CNY currency
- EU's Rehn reiterated his view that might be only at the beginning of the end in dealing with EU crisis but still had chance of resolving the crisis but bold decisions were needed. He hoped to conclude discussions on new treaty in coming weeks and added that a fiscal stimulus in Germany was not the answer the situation in the Euro Zone. Confident that Greece would reach an agreement with its creditors in the coming weeks and the country would remain a member of the EMU
- EU's Rehn also reiterated that Hungary needed to amend its central bank law as a precondition for any new loan agreement
- Greece Econ Min Chrisochoides commented that the country's 2011 Budget Deficit expected to reach 9.6% of GDP (target is 9.0%)
- UAE Foreign Min commented that its sovereign wealth fund could raise its presence in Greece and also noted that
UAE businesses were also interested in the country
- Spain Budget Min Montoro commented that Spain's economy was on the verge of recession
- Ireland Fin Min Noonan reiterated the view that it was absurd to consider a second bailout for Ireland as the country was meeting all targets in current bailout program
- Spain Debt Treasury (Tesoro) stated that it planned to reduce its 2012 net issuance by €12B to now total €36B. The Tesoro stated that 2012 Gross issuance seen at €86B compared to €95.6B issued in 2011. It added that no new net funding from T-bill issuance and that bond auctions to be published weekly in 2012
- Denmark Central Bank published its stress tests on lenders and concluded that liquidity of banks were at a good level. The most significant challenge in coming years was expiration of State-guaranteed senior debt issued in 2009-10 period.- Banks should continue adjustment without guarantees
- Moody's commented on Turkey and noted that the country was more prone to shifts in investor appetite and the EU crisis could limits Turkey's corporate funding ability. The agency forecasted 2012 GDP growth between 2.5% to 3.5% range
- Hungary gov't spokesperson reiterated that it was open to discussion regarding its central bank laws with EU
- Czech Public Affairs (VV) Party to support return of property to churches in a move that was said to avert risk ofruling Govt from collapsing
- Goldman Chief Economist Hatzius stated that he expected US growth to be below trend in 2012 with further possibility of Fed easing further in 2012
- Vietnam Central Bank Gov Van Binh commented that the Dong currency to depreciate between 2-3% during 2012
- India might not seek waiver under US sanctions against Iran oil imports and telling its refiners to reduce Iranian oil imports and seek alternatives
- Explosion said to have occurred in northern Tehran section of Iran. Nuclear scientist who supervised a department at Natanz uranium enrichment facility was reported to have been killed in explosion
Currencies:
- FX markets were quiet for the majority of the European morning ahead of the Sarkozy-Lagarde and Merkel-Monti meetings in Paris and Berlin. Dealers did note that overnight weakness in EUR/USD still appeared reluctant to test immediately lower and was vulnerable to any headline excuse for to rally. The pair did remain within is recent hourly range
- The GBP was softer following its wider Trade deficit data and was probing the 1.5420 area against the greenback as the NY morning ap[proached. Dealers did note that GBP/USD did have difficulty to close above 1.5490 yesterdayand this was a technical warning ahead of today's session.
Political/ In the Papers:
- The FT reported that there are signs that the strains in the European funding markets are easing. The benchmark short-term EU bank lending rates (3-month Euribor) have declined for 14 straight sessions. In addition, the extra premium EU banks must pay to swap Euros into US dollars has hit the lowest level since late October. This suggests the ECB's three-year lending program has helped improve money market conditions.
- The concerns among euro zone government officials that Greek bailout costs could eventually rise is one of the factors which has slowed the debt talks. There are concerns that EU governments might have to refinance Greece until the country is able to return to the markets.
- Certain Spanish banks are developing more properties, despite the declines in housing prices. There are concerns that the moves to develop additional properties could worsen Spain's property glut. Certain banks have been refinancing loans to developers which are unlikely to be repaid in order to avoid write downs. Some analysts believe that Spanish banks have yet to markdown their property assets to realistic levels.
- The Telegraph reported that analysts at UBS have criticized the Bank of England (BoE) for not having an emergency support plan for the banking system. The analysts believe that the lack of a backstop for the banking sector has already led to higher funding costs for UK banks. Some British banks are paying more to issue debt than their EU peers.
- IMF inspectors returned to Ireland to ensure bailout conditions related to €67.5 billion are met. The fifth report, expected to be completed by mid-February, is to focus on the government's reluctance to sell off many state-owned assets and initiating deep financial sector reforms promised in prior agreements. The IMF inspectors will meet with government ministers, Central Bank, NTMA and various think tanks.
***Looking Ahead***
- (CN) US Tsy Sec Geithner continues Far East visits (China, Japan)
- (PL) Poland Central Bank Interest rate Decision: Expected to leave the Base Rate unchanged at 4.50%
- (HU) Hungary Govt officials in Washington DC meeting with IMF
- 6:00 (FR) France President Sarkozy meets IMF chief Lagarde in Paris
- 6:00 (PT) Portugal Nov Construction Works Index: No est v 65.2 prior
- 7:00 (UK) Prime Minister's question time in House of Commons
- 7:00 (DE) German Chancellor Merkel hosts Italian PM Monti for talks in Berlin
- 7:00 (US) MBA Mortgage Applications w/e Jan 6th: No est v -4.1% prior
- 8:00 (HU) Hungary Central Bank Minutes
- 8:40 (US) Fed's Evans speaks on U.S. economy in Illinois
- 9:00 (US) Fed's Lockhart to speak on economy in Atlanta
- 9:00 (MX) Mexico Nov Industrial Production M/M: +0.6%e v -0.5% prior; Y/Y: 3.6%e v 3.3% prior
- 9:00 (MX) Mexico Nov Final Trade Balance: No est v -$232M prelim
- 9:45 (UK) BOE to buy £1.7B in 2022-2036 Gilts in reverse auction
- 10:00 (EU) Major European institutes (INSEE, IFO, ISAE) publish Q1 Economic forecasts
- 10:00 (DE) German Chancellor Merkel
- 10:00 (MX) Mexico Dec Vehicle Production: no est v 231.1K prior; Vehicle Domestic Sales: No est v 83.1K prior; Vehicle Exports: No est v 199.1K prior
- 10:30 (US) Weekly DOE Energy Inventories
- 11:20 (DK) EU Commission's Barroso meets Danish Premier Thorning-Schmidt
- 12:00 (EU) EU President Van Rompuy speaks at Manager Conference in Brussels
- 12:30 (US) Fed's Plosser speaks on economy in Rochester, NY
- 13:00 (US) Treasury to sell $21B in 10-Year Notes Reopening
- 14:00 (US) Fed's Beige Book
- 20:30 (CN) China Dec Producer Price Index Y/Y: 1.6%e v 2.7% prior
- 20:30 (CN) China Dec Consumer Price Index Y/Y: 4.0%e v 4.2% prior
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