€ Euro hit by growing threat of Contagion, the fears of Spanish rescue

Discussion points
Euro: Spain-German 10-year spread Hits Record - high, Cyprus rescue crafts Sterling: debt crisis drags UK PM Cameron meets with top officials US Dollar: struggles in holiday trade, RSI Falls Back From Overbought territory Euro: Spain-German 10 years spread Hits Record - high, looms bailouts for Cyprus
The Euro gives the advance of the 1.2623 night as the spread of 10 years between the Spain and the Germany, expanded to a record rate of 509bp and public finance of costs across the periphery European may continue to drag on the exchange rate as it raises the risk of contagion. In response to the current crisis in the financial system Spanish Prime Minister Mariano Rajoy assured that there is not any "rescue" of banks in the region, but argued that the EU bailout Fund could directly recapitalizing commercial banks as Nucula, fourth largest lender in the region, seeks fresh capital EUR 19(d).
The movement anti-austerity of sparks a rift increased in the European Union, we are likely to see Governments under the single currency became more more dependent on monetary aid and the Board of Governors may have little choice but to transport its easing cycle in the second half of the year the fundamental Outlook for the region is darker. Indeed, Panicos Demetriades, Member of the BCE Board warned of an imminent rescue for Cyprus must repair efforts fail to bear fruit, and we could attend the Central Bank employ a range of tools more later this year to contain the risk of a prolonged recession. As the EURUSD struggles to push above the tracing of Fibonacci 23.6% of the top 2009 2010 low around 1. 2630-50, the couple may continue to strengthen in the next 24 hours of trading, but we will keep a close eye on the relative strength index, it bounces back from a low of 30. As the RSI just oversold territory, we will need to see a movement of return over 30 to see a correction in the short term to take form, and we will seek to sell rallies in the EURUSD as European policy makers struggle to restore the confidence of investors.
Pound sterling: debt crisis drags UK PM Cameron to meet with government officials
The pound climbed to a maximum of 1.5716 Monday as Prime Minister David Cameron is expected to meet with the Governor of the Bank of England Mervyn King and Chancellor of the Exchequer George Osborne to further protect the United Kingdom of the crisis of debt, and we could attend the Central Bank to continue to strike a tone dovish monetary policy changes underway in the euro area limits the prospects for the "" United Kingdom BoE Chief Economist Spencer, said Dale casts for the Central Bank a "pessimistic" perspective for the region of the debt crisis "continues to act as a brake" for Britain and the Central Bank can preserve your Dove for monetary policy in the threat of Greek output growth. As the United Kingdom establishes an emergency plan for a breach of the euro area, public policy in Great Britain can continue to increase the attractiveness of the sterling and currency traders can treat the pound sterling as a safe haven that the Government will meet its budget-cutting measures. As the RSI on the GBPUSD bounces back oversold territory, the pound sterling-dollar may have found a floor towards the end of may, and upwelling of the oscillator certainly foreshadows a correction to short-term exchange rate that the couple continues to take over figure 1.2600.
US dollar: struggles over trade, RSI day falls territory surachat
The greenback is struggling to hold its ground Monday, with the Dow Jones - FXCM U.S. Dollar Index (Ticker: USDOLLAR) some 10 147 and we can see the reserve currency consolidate in holiday trade as the RSI falls surachat territory. Market participants seek Friday to the highly anticipated non-farm us report pay tap, we could see the dollar to maintain stable in June, but the market based on the headline may continue to keep the greenback as it benefits from flows of refuge. Nevertheless, as employment in the global economy should grow another 150 K in may, the progressive recovery of the labour market can sap speculation for additional monetary stimulus, and the Federal Reserve may continue to soften the dovish tone for the monetary policy as the Outlook for growth and inflation is accelerating.
-Written by David Song, currency analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @ DavidJSong
To be added to the list of electronic distribution of David, send an email with the subject "Distribution list" line to dsong@dailyfx.com.
The EUR/USD will resume the downtrend of 2011? Join us in the Forum
Related articles: weekly Currency Trading forecasts
Future FX
ECB Announces purchases of bonds (SMP)
Hometrack Housing Survey (MoM) (may)
Hometrack Housing Survey (YoY) (may)
Price of the Corporate Service (YoY) (APR)
Advances for the first time since September 2008.

> Crude Oil, Gold May Recover as Greece Eurozone Exit Fears Digest

Oil, copper, similar in scope to recover Greece fears Digest
Gold and silver may rise as US dollar following the recent advance
Commodity prices are booming in the early European trade, with markets showing signs of tentative recovery in risk appetite. A corrective rebound seems reasonable. The prospect of Greece leave the euro zone - the catalyst behind the recent defeat in the entire spectrum of risky assets - seems exhausted, the strike force have provided that the dealer a repeat of the general elections of 15 expected in June to its key to make in a position. Meanwhile, the flow of negative messages out there, probably in the price and enter the promotion of a period of profit taking.
S & P 500 stock futures are a fixed point before the opening bell on Wall Street that the feeling-oriented crude oil and copper prices are expected to continue to recover all the gold and use means money to Haven demand for dollar the scene of a to relieve pull-up. The feelings of the U.S. economy may help too much. Initial jobless claims and expects to print, bottom, meets with the former the lowest level in six weeks to 365K, while the second provides a more than four years at 3225K. In addition, the indicator of the Philadelphia Fed's business climate index recovering May, since after reaching the lowest level in April in three months. Finally, the CLI increased by 0.1 percent seen in April, to mark the seventh consecutive year, hitting the highest level since June 2008.
WTI Crude (NY Close): $ 92.81 / / -1.17 / / -1.24%
Price put in a roundabout candlestick above support at 92.51, the December low of 16, suggesting a recovery on the rest. The lines of the initial resistance to 95.41 in February, 2 Session. Low also renewed with the sale of support exposes 90.49.


Graphic Journal - Created using FXCM MarketScope 2.0
Gold Point (NY close): 1,539.57 $ / / -4.64 / / -0.30%
Price put in a spinning chandelier over support in the area from 1532.45 to 1522.50, marked by the 26th September and 29 December pin minimum, which may suggest a rebound on the rest. The first line of resistance to 1561.03, Fibonacci retracement of 23.6%. In addition, a pulse, supported 1500/oz image.


Graphic Journal - Created using FXCM MarketScope 2.0
Silver Point (NY Close): $ 27.22 / / -0.51 / / -1.84%
The prices are supported by the recovery 6:27 closing session of 28 December marks, with a view to the recovery of the initial thickness ranging from 28.54 to 70 broken by a previous level of support and marks the bottom of a channel has been set up in early March. Moreover, thanks to a boost in support, makes the region from 26.05 to 15 of 26 September and 29 December marked minimum peak.

Graphic Journal - Created using FXCM MarketScope 2.0
E-mini COMEX Copper (NY Close): $ 3.478 / / -0040 / / -1.14%
The prices are mounting a storage area recreation 3459, 50% retracement Fibonacci, with the buyers to see the original strength of 3584 by the Fibonacci levels of 38.2% marks. In addition, an investment makes to the support of the decline from 61.8% in 3334th

_Crude Oil, Gold Sink as Euro Crisis Fears Grip Financial Markets

14 May 2012 09:00 GMT Talking Points
Crude Oil, Copper Follow Shares Lower on Greek-Linked Risk Aversion Gold and Silver Sold as US Dollar Rides Haven Demand to 2-Month High Commodity prices are trading broadly lower in European hours as Greece-linked jitters continue to weigh on risk sentiment trends. Growth-sensitive crude oil and copper prices following stocks lower while safe-haven flow buoy the US Dollar, applying de-facto downward pressure on gold and silver.
Lawmakers in Athens once again failed to come to terms on the structure of a ruling coalition at a meeting over the weekend. Markets are becoming increasingly concerned that a lingering impasse will push Athens to fall short of its obligations under the terms of the EU/IMF bailout, paving the way for Greece’s ejection from the Eurozone and possibly even the overall EU.This would be an unprecedented development with effectively unpredictable practical implications for financial markets, fueling a broadly defensive tone
S&P 500 stock index futures are pointing sharply lower ahead of the opening bell on Wall Street, arguing for more of the same as North America comes online. The US economic calendar is empty, putting the spotlight on a meeting of Eurozone Finance Ministers in Brussels. Traders on the lookout for any clues about a possible way forward beyond the Greek political stalemate.
WTI Crude Oil (NY Close): $96.13 // -0.95 // -0.98%
Prices are testing through support at 95.41, with a confirmed break exposing the December 16 low at 92.51. Near-term resistance lines up at 96.57, the 100% Fibonacci expansion level. A break above this barrier exposes the 76.4% Fib at 98.87.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1579.40 // -14.62 // -0.92%
Prices are testing through support at 1570.22, the 61.8% Fibonacci expansion level, with a break below that exposing the measured target implied by the Triangle pattern carved out since late March at 1548.21. For the time being, initial resistance is marked by the 50% Fib at 1591.15.
Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $28.91 // -0.15 // -0.52%
Prices are testing through support at 28.70 marked by a horizontal barrier as well as the bottom of a falling channel established since early March. A confirmed break on a daily closing basis exposes 27.06 as the next downside objective. Near-term resistance remains at 29.71 for the time being.
Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.648 // -0.042 // -1.14%
Prices took out rising trend line set from early October and are now testing though the 50% Fibonacci retracement at 3.606. A break below this boundary exposes the 61.8% level at 3.516. The trend line, now at 3.650, has been recast as near-term resistance.
Daily Chart - Created Using FXCM Marketscope 2.0

~~~ Commodities Drop on China Growth Fears, ECB and US Data Key Ahead

Crude Oil, Copper Sold on China Growth Fears – ECB and US Data Set Eyed Ahead Gold and Silver Look to Dollar’s Response to Risk Trends, QE3 Bets for Direction Commodity prices are extending Asia-session losses in early European trade, weighed down by a drop in China’s Non-manufacturing PMI index on fears that one the world’s top-two consumers of raw materials is slowing. Looking ahead, all eyes are on the European Central Bank interest rate decision. Traders are looking for guidance on steps policymakers are prepared to take to alleviate what appears to be deepening recession after yesterday’s sharp slump in final PMI readings and another record-high unemployment print.
An outright rate cut seems unlikely this time around with inflation stubbornly high at 2.6 percent. However, if Mario Draghi and company invoke the ECB’s singular mandate of price stability to justify inaction and fail to reassure markets with the prospect of forthcoming easing in the months ahead, worries about Eurozone-bornheadwinds facing global output threaten to weigh on risk appetite. This bodes ill for cycle-sensitive commodities including crude oil and copper, while gold and silver may follow lower as haven-seeking capital flows boost the US Dollar.
Later in the day, the spotlight turns to US Jobless Claims and the ISM Non-manufacturing Composite figures. These are likely to be interpreted in terms of their implications for the likelihood of Fed QE3, which means softer outcomes could counter-intuitively support risk appetite and weigh on the Dollar (both via sentiment trend and dilution fears) to the benefit of precious metals. With that in mind, significant follow-through on this front may be lackingas traders reserve judgment until after Friday’s all-important Nonfarm Payrolls data point crosses the wires. This means any negative carry-over from the ECB’s outing may have scope to hold sway over price action.
WTI Crude Oil (NY Close): $105.22 // -0.94 // -0.89%
Prices put in a Harami candlestick pattern below resistance at a falling trend line set from late February, hinting a pullback may be ahead. Initial support lines up in the 104.90-105.15 area, marked by a horizontal barrier and the 50% Fibonacci retracement level. A break below here exposes rising trend line support at 102.42. Resistance is now at 106.03 and bolstered by the 61.8% Fib at 106.27.

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Gold (NY Close): $1653.50 // -8.93 // -0.54%
Prices followed a Spinning Top candle below trend line resistance capping gains since late March with a push lower. Sellers face initial support at 1637.95, the 23.6% Fibonacci expansion, with a break lower exposing the 38.2% level at 1611.77. Trend line resistance is now at 1664.48.

 Daily Chart - Created Using FXCM Marketscope 2.0
Spot Silver (NY Close): $30.64 // -0.34 // -1.08%
Prices are recoiling from resistance at 31.36, a former support reinforced by a downward-sloping trend line set from the April 3 high. Sellers face initial barriers at 29.96, the April 25 low, followed by the bottom of a falling channel set from early March now at 29.50. Near-term resistance is at 31.08.

 Daily Chart - Created Using FXCM Marketscope 2.0
COMEX E-Mini Copper (NY Close): $3.788 // -0.056 // -1.46%
Prices turned lower as expected after putting in a Hammer candlestick below support-turned-resistance at a rising trend line set from mid-February. Initial support lines up at 3.713. Trend line resistance is now at 3.855.

 Daily Chart - Created Using FXCM Marketscope 2.0

::: French Election Stokes Investors ’ Fears for Future Europe’s

While French president Nicolas Sarkozy managed to eke out one of the top two spots in the first round of presidential voting, a second term is far from assured. Yesterday, French citizens took to the polls in the first round of presidential voting, and while the incumbent finished up among the top three, he was bookended by Socialist candidate Francois Hollande and far-right candidate Marine Le Pen; with the counting over, Hollande had received 28.6% of the total vote, Sarkozy 27.1%, and Le Pen a surprising 18.0%.
It is certainly a high probability that any French president would find his or her neck on the proverbial chopping block given the current economic situation in the Eurozone, in general and France, in particular. As is the case in many other Eurozone states, the people are angered over the lack of growth prospects, high unemployment and implementation of austerity measures to reduce sovereign debt. In the case of France, they are also frustrated, like their German counterparts, with having to bear the burden of driving the Eurozone’s collective economy.
Markets know where President Sarkozy stands as regards France’s economic future, though he has recently made some concessions to hopefully draw in Le Pen’s supporters. Meanwhile, candidate Hollande said it would be his job as president to “put Europe back on the path of growth and employment.” Further, he said that as president he would seek to renegotiate the E.U. treaty on fiscal discipline and monitoring which was strong-armed through the E.U. Parliament by both Nicolas Sarkozy and German Chancellor Angela Merkel and which remains a bone of contention among several of the E.U. member states.
Hollande’s declaration of that intent is giving markets cause for concern, as it would open the door for any or all of the other E.U. members, some of which had clearly been less than enamored by the Treaty, to withdraw their support. Markets are also keenly aware that, irrespective of the outcome and despite the oppositions’ disavowal, the winner will have little choice but to continue on with the unpopular austerity measures.
eToro’s Senior Analyst, Lior Alkalay, had this to say, “the fear among investors – which are also the Eurozone’s creditors – is simple and justifiable; the French election is just the latest event in an overall wave of socialism which will flood Europe and push austerity into the unknown.”
Indeed, given the unknown, equity markets had opened markedly lower in the first day of trading following French presidential voting. France’s CAC-40 had earlier been the loss leader among the Eurozone’s three major indices, and is currently down by 45.92 points, or 1.44%. By a ratio of 2 to 1, sentiment on OpenBook is bullish.
The EUR/USD pair is also lower at 1.3150, and sentiment appears to be nearly evenly split between bulls and bears on OpenBook. OpenBook guru pyruss has been placing sell orders over the past several hours, even as he’s had two short positions close with profits of 3.4% and 2.3% each. Several long positions opened earlier today are also nearing break-even as of this writing. This guru has allocated more than 86% of his portfolio to the EUR/USD pair which has provided a gain of 0.9% over the past six months to him and his 589 copiers. This guru’s recorded P&L for the week stands at 1.1%, for the month at 3.2%, quarter at 8.8% and six months at 41.8%. One of OpenBook’s most active and prolific traders, pyruss has executed 1323 trades over the past six months, with 99.7% of them resulting in a profit.
OpenBook trader berufstouri, who has two followers, closed a short position with a 10% gain earlier, which followed another that was copied from fellow German and OpenBook guru babczyk. This trader allocates 70% of his portfolio to the EUR/USD, which has provided a return of 5.6% over the past month. Overall, this trader’s P&L in the same period is 15.3% and improves to 33.3% for the quarter.
To analysts, the French President’s absence from the top spot sends a clear and loud signal that France’s citizens are looking for anyone other than Sarkozy to be country’s champion. What is next is a May 6th run-off of the top two candidates to determine the next French president. None of the other candidates have yet thrown their support to either of the front-runners, so the real question is how the constituents who did not support either will now cast their vote.

Japanese Yen Strength to Fizzle Amid Growth Fears, BoJ Pledge

 

Currency Analyst 14 April 2012 04: 19 GMT 

Fundamental Forecast for Japanese Yen: Neutral

The Japanese Yen extended the advance from earlier this month as the Bank of Japan stuck to its current policy in April, but the low-yielding currency may struggle to hold its ground next week as the economic docket is expected to cast a weakened outlook for the world's third-largest economy. As market participants see the adjusted trade deficit widening in March, the weakening outlook for growth could heighten expectations for additional monetary support, and we may see Japanese policy makers talk down the Japanese Yen in an effort to stem the risk for deflation.

Although the BoJ refrained from taking additional steps to shore up the ailing economy, central bank Governor Masaaki Shirakawa pledged to 'pursue powerful easing' just days after the rate decision, and said that the board will cooperate with the government to combat the risk for deflation. At the same time, the policy meeting minutes showed a push for increased purchases of Japanese Government Bonds (JGBS) as the board works to complete its asset purchases on schedule, and the dovish tone held by the BoJ continues to cast a bearish outlook for the Yen (USDJPY bullish) as the central bank pledges to carry out its easing cycle throughout 2012. As Governor Shirakawa is scheduled to speak next week, the central bank head may make attempt to talk down the Yen further, and we will preserve our bullish call for the USDJPY amid the shift in the policy outlook. As the Federal Reserve looks to bring its easing cycle to an end, the divergence in central bank policy should continue to prop up the dollar-yen, and we expect even the resume the upward trend from earlier this year as market participants see the FOMC raising the benchmark interest rate off the record-low over the next 12-months.

As the USDJPY continues to find interim support around the 50.0% Fibonacci tracing from the 2010 low to the 2011 high (76.00), the pair appears to be building a short-term base for a move higher, but we will keep a close eye on the relative strength index as it maintains the downward trend carried over from the previous month. In turn, we will wait for a bounce in the RSI to reinforce our bullish forecast for the dollar-yen, and we should see another run at 25.00 amid our projections for fresh yearly highs in the exchange rate. -DS

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and charts from FXCM.

14 April 2012 04: 19 GMT

Euro on the Verge of Another Massive Bear Leg as Crisis Fears Return

Fundamental Forecast for the Euro: Neutral

• Spain bond auction nearly fails following announcement of harsh budget cuts
• ECB holds rates, maintains its cautiously hawkish outlook
• Will EURUSD be swept up by a larger dollar recovery?

Fundamental Forecast for the Euro: Neutral

The euro took a painful tumble this past week against all of its major counterparts (even the ones with central bank-backed floors). The skeptical could chalk this up to natural ebb and flow as it is too early to label any specific pair as tipping into a clear euro-bear trend and the over-anxious have suffered false starts before. However, what significantly elevates the risk / opportunity of a major drive this time around is the fundamental pressure building behind the currency this time around. Not only are the risk winds picking up, but we are finding a serious return of crisis fears for the Euro Zone’s still sensitive periphery. And, this time, the fear of crisis is spreading more efficiently to larger and therefore more critical members.

It wasn’t too long ago that Greece was the top concern. We certainly shouldn’t write the country out of the fundamental picture for good; but when there is a critical decision that must be made on immediate risk trends, the something that is a problem later down the line can easily be ignored. We’ve seen this happen many times before with the euro – and with Greece specifically. With the market already talking about the possible need for a third rescue program as the optimistic forecasts for a return to growth fade, it is only a matter of time before this conversation returns.

In the meantime, we have new players at the forefront. And, these Euro Zone members are far more concerning. Since early 2010 when Greece received its first bailout, policy officials have consistently assured the market that this was a ‘unique situation’ and ‘one off’. This guarantee has survived two additional bailout programs for Ireland and Portugal, so it seems ludicrous that the further accommodations and restructuring that Greece drew are off limits. When looking for future threats, it is often best to look at those that have already fallen on hard times in the recent past. Ireland and Portugal are easy targets given their first round rescues.

Ireland recently won a postponement on repaying the promissory note used to bailout its banking system. The market didn’t see too much harm in this move, but this was a clear test of the EU’s rigidity with keeping the favorable terms to Greece’s ‘unique’ situation. More dangerous is the building speculation that Portugal will need another bailout of its own. Even EU officials and the IMF see a good chance that the country will need a ‘bridge’ when it returns to the market in 2013. If the euro is under fire for its financial health, these concerns will quickly turn into active selling points.

More of a risk of turning into an active selling catalyst in its own right is Spain’s financial struggles. Over the past weeks, the Spanish Prime Minister rebuffed EU officials’ 4.4 percent deficit target for 2012 (expanding it to 5.3 percent instead), the country introduced severe budget cuts, the banking sector has come under greater scrutiny for its consolidation and real estate asset evaluation, and officials have said outright that the country was facing “extremely difficult” conditions moving forward. The possibility that this either is a warning of further deviation from requirements or a lead into a bailout request is high.

Aside from the return to surfing the financial headlines for the latest news of the regional financial crisis, euro traders should also keep a close eye on the general balance of risk appetite. For the euro itself, the ECB has kept its modestly hawkish bearing, but the past rate decision has shown that this doesn’t precede a quick return to hikes – merely a slower reaction to further stimulus needs (a risk in itself). Bigger picture, sentiment trends in the capital markets are coming under visible duress. If the broader markets are unwinding riskier exposure, the euro will certainly be cast in an unfavorable light. - JK 

$ New Zealand Dollar Vulnerable As Debt Fears Resurface

Currency Analyst 07 April 2012 00:34 GMT

Fundamental Forecast for New Zealand Dollar: Bearish

The New Zealand dollar regained its footing going into the holiday trade, but we may see the high-yielding currency come under pressure next week as fears surrounding the sovereign debt crisis drags on risk-taking behavior. Indeed, New Zealand’s reliance on international financing dampens the appeal of the kiwi as the threat for contagion resurfaces, and the ongoing turmoil in the world financial system instills a bearish outlook for the NZDUSD as the region remains vulnerable to external shocks.

The International Monetary Fund said that the Reserve Bank of New Zealand has the scope to lower its benchmark interest rate further ‘to help buffer against a downside scenario,’ and went onto say that the recovery is ‘likely to remain modest’ amid the ongoing slack within the private sector. As the RBNZ sees higher funding costs dragging on the real economy, we are likely to see Governor Alan Bollard maintain a cautious outlook for the region, and the central bank head may continue to talk down speculation for higher borrowing costs in an effort to shield the economy. However, as the central bank remains optimistic about the rebuilding efforts from the Christchurch earthquake, Credit Suisse overnight index swaps continue to reflect expectations for a rate hike in the next 12-months and speculation for a higher interest rate may continue to prop up the New Zealand dollar as market participants weigh the prospects for future policy.

As the NZDUSD maintains the range-bounce price action carried over from the previous month, the kiw

i-dollar should continue to track sideways in the week ahead, but it seems as though a downward trending channel is beginning to stake shape as the pair appears to be carving out a lower top around 0.8250. Should the bearish pattern continue to pan out, we would like to see a close below the 200-Day SMA (0.8096) to favor further declines in the exchange rate, and we may see market participants turn increasingly bearish against the NZDUSD should the shift away from risk-taking behavior gather pace. - DS

Asian Market Update: Risk returns to the markets and fears ease over China slowdown

(JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE RANGE UNCHANGED BETWEEN 0.0% TO 0.10%, AS EXPECTED; NO NEW MONETARY EASING ANNOUNCED >- (AU) AUSTRALIA JAN HOME LOANS M/M: -1.2% V -0.6%E (first decline in 10 months); INVESTMENT LENDING: -7.1% V 7.5% PRIOR; OWNER-OCCUPIED HOME LOAN VALUE: 0.1% V 2.0% PRIOR
- (AU) AUSTRALIA FEB NAB BUSINESS CONDITIONS: 3 V 2 PRIOR; NAB BUSINESS CONFIDENCE: 1 V 4 PRIOR (5-month low)
- (UK) UK FEB RICS HOUSE PRICE BALANCE: -13% V -14%E (19-month high)
- (JP) JAPAN JAN TERTIARY INDUSTRY INDEX M/M: -1.7% V +0.2%E (10-month low)
- (NZ) NEW ZEALAND FEB QV HOUSE PRICES Y/Y: 2.9% V 2.7% PRIOR (17-month high) >- (NZ) NEW ZEALAND FEB FOOD PRICES M/M: 0.6% V 0.0% PRIOR (7-month high)
- (PH) PHILIPPINES JAN TOTAL EXPORTS Y/Y: 3.0% V -18.5%E; TOTAL MONTHLY EXPORTS: $4.1B V $3.3B PRIOR
- (PH) Philippines Dec Foreign Direct Investment (FDI); $43M v $366M prior
- (AR) Argentina Feb Trade Balance: $1.3B v $550M prior
- (NZ) New Zealand Feb REINZ house Price Index m/m: +0.8% v -1.4% prior (3-month high); House Sales y/y: 37.0% v 25.2% prior
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 +0.9%
- S&P/ASX +1.1%
- Kospi +1.3%
- Taiwan Taiex +1.4%
- Singapore Straits Times +0.8%
- Shanghai Composite +0.3%
- Hang Seng +1.3%
- S&P Futures +0.5% at 1,379
- April gold +0.3% at $1,704/oz
- April Crude +0.6% at $106.99
***Overview/Top Headlines***
- Markets saw a return of risk appetite today, ahead of US Fed policy meeting and key ZEW data from Germany. One of the major investment banks raised its 2012 GDP estimate on China, despite China itself lower its own estimate last week. Commodities were all stronger with silver and copper contracts both up over 0.8% to $33.69 and $3.86 respectively. In a Greece debt analysis report it saw debt-GDP ratio falling well below 120% by 2020 target if debt swap participation rose above 96%. EU's Juncker said he does not expect Greece to require a third bailout; A successful debt exchange will cut Greece debt to 117% of GDP in 2020. He also noted that the budget plan for Belgium could be evaluated in the coming days. It was also announced that Spain has agreed to an additional deficit cut of 0.5% of GDP beyond what has been announced. Reminder on March 2nd following the EU Leader Summit Spain PM Rajoy announced that Spain revised its 2012 deficit-to-GDP ratio higher to 5.8% from 4.4% prior target but did maintain 2013 deficit-to-GDP target of 3.0%. Rajoy stated at the time of the declaration: "This was a sovereign decision made by Spain.." EUR/USD held some mild strength in the session gaining about 0.1% which was similar for the pound and Swiss franc.
- The Bank of Japan leaves the target rate unchanged between 0.0 to 0.1%, as expected. However the BoJ did increase the size of loan scheme targeting growth sectors by ¥2T to ¥5.5T. Announces dollar denominated growth loans worth ¥1T and also said they would introduce loans worth ¥500B for small lot investments. Board member Miyao proposed increasing asset buying and loan scheme by ¥5T, proposal was rejected 8 to 1. As expected the volume of asset purchases unchanged at ¥65T. USD/JPY fell over 0.3% to around the ¥81 level. EUR/JPY also fell 0.3% to ¥107.95. In New Zealand economic data showed that both housing and food prices are rising, the NZD/USD gained half a percent $0.8221.
***Speakers/Geopolitical/In the press***
- (KR) Korea govt may issue credit cards offering oil tax rebates if global oil prices rise above $130/brl - Korean press
- (CN) S&P: China banks should be able to overcome any slump, performance will moderate in 2012 but stay healthy
- (KR) South Korea Fin Min Bahk: Reiterates rising oil prices and a possible slowdown in China are risks to South Korea
- (JP) Japan cabinet expected to approve consumption tax increase plans on Mar 23rd before submitting to Diet - Japan press
- (US) Fed criteria for latest round of stress tests to include unemployment rate as high as 13%, equity price decline of 50%, and housing price decline of 21%; Results will be released on Thur, Mar 15th at 16:30ET - financial press
***Equities***
- China Overseas Land, 688.HK: Reports Feb property sales HK$13.1B, +209% y/y
- Mongolian Mining Corp, 975.HK: China coking coal demand will increase 2-3% in 2012
- CHT: Reports Feb net NT$2.9B v NT$3.3B m/m; Rev NT$15.5B v $16.8B y/y
- MF: Customers reportedly have received offers for claims and will receive nearly all of the missing $1.6B in funds back - NYT Dealbook
- NEC, 6701.JP: Aims to raise its infrastructure business sales by 50% to ¥500B in the next 4-5 years - Nikkei News
- Cathay Financial, 2882.TW: In talks with larger Chinese banks of a cross stake agreement - Taiwan press
- HBC: Will focus on six core and 2 strategic markets in Asia outside of Hong Kong and sell or close retail operations in another 7 countries - FT
***FX/Fixed Income/Commodities***
- (TW) Taiwan sells 20-Year Bonds; Yield 1.708% v 1.733% prior
- (CN) PBoC offers CNY66B 28-day repos at 2.8% v 2.8% prior; does not sell bills
- (CN) China may raise fuel prices this week - Chinese press