Asian Market Update: China trade data misses expectations, Australia records 1-yr low for "unemployment Have Market Intel?

CHINA APR TRADE BALANCE: $18.42B V $9.9BE >- (AU) AUSTRALIA APR UNEMPLOYMENT RATE: 4.9% V 5.3%E (1-yr low); EMPLOYMENT CHANGE: 15.5K V -5.0KE (2nd consecutive increase); PARTICIPATION RATE: 65.2% V 65.4%E
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 3.25%; AS EXPECTED
- (JP) JAPAN MAR CURRENT ACCOUNT TOTAL: ¥1.59T V ¥1.4TE; ADJUSTED CURRENT ACCOUNT TOTAL: ¥785.5B V ¥647BE; CURRENT ACCOUNT BALANCE Y/Y: -8.6% V -17.1%E; TRADE BALANCE: ¥4.2B V -¥43BE
- (NZ) NEW ZEALAND APR BUSINESS NZ PMI: 48.0 V 53.8 PRIOR
- (PH) PHILIPPINES MAR TOTAL EXPORTS: -1.2% V 11.0%E; TOTAL MONTHLY EXPORTS: $4.3B V $4.4B PRIOR
- (NZ) NEW ZEALAND APR QV HOUSE PRICES Y/Y: 3.1% V 3.0% PRIOR
- (JP) JAPAN APR BANK LENDING INCLUDING TRUSTS Y/Y: 0.3% V 0.8% PRIOR; BANK LENDING EX-TRUSTS Y/Y: 0.4% V 0.9% PRIOR
- (JP) JAPAN APR BANKRUPTCIES Y/Y: -7.5% V -1.9% PRIOR
- (JP) JAPAN APR ECO WATCHERS CURRENT SURVEY: 50.9 V 51.8 PRIOR; OUTLOOK: 50.9 V 49.7 PRIOR
- (MA) MALAYSIA MAR INDUSTRIAL PRODUCTION Y/Y: 0.6% V 3.3%E; MANUFACTURING SALES VALUE Y/Y: 3.1% V 12.1% PRIOR
- (JP) JAPAN APR TOKYO AVERAGE OFFICE VACANCIES Y/Y: 9.2% V 9.0% PRIOR
- (JP) Japan investors bought ¥56B in foreign bonds last week v ¥1.2T sold in prior week
- (CO) Colombia Mar Exports: $5.69B v $4.8B prior
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -0.1%
- S&P/ASX +0.1%
- Kospi -0.1%
- Taiwan Taiex +0.2%
- Singapore Straits Times Index -0.2%
- Shanghai Composite -0.2%
- Hang Seng -0.9%
- Jun S&P Futures +0.2% at 1,353
- June gold unchanged at $1,594/oz
- June Crude -0.2% at $96.57
***Overview/Top Headlines***
- Focus remains on European uncertainty. Bank of Korea after leaving rates unchanged mentioned it remains one of the top risks, noting that it thinks the EU is in a mild recession but not expected to get worse. China remained cautious with its yuan setting and it expected to continue to do so until the latest storm blows over. According to China Investment Corp President Gao, China sovereign wealth fund has stopped buying European government sovereign debt. Late in the US session, the Fed gave Chinese banks ICBC, Bank of China and Agricultural Bank of China approval to expand into the US market. Crude was weaker, Brent crude rose to $113.20, corn gained over 1% while wheat fell nearly 3% to $5.91 ahead of U.S. Department of Agriculture supply-demand report.
- Australia recorded a lower than expected unemployment rate at 4.9% in April, a 1-year low. Employment change rose for the second consecutive month. The news drove the AUD/USD higher above $1.0115, but will make an argument not to cut rates at the next RBA meeting. Full time jobs lost 10,500, however part time jobs added 26,000 close to March levels. Strength in the jobs market is mostly attributed to the mining boom and the huge investments from the major miners into expanding capacity to meet demand from India and China. Australia 10-year yields around 3.321% after the data.
- China April trade balance came in at a surplus of $18.4B, much higher than expected, exports at 4.9% were weaker than expected, imports rose only 0.3%. Some of the export weakness is attributed to the lack of recovery from European demand. China has increased its calls for the US to ease restriction on high tech exports in recent weeks in order to help imbalances. The yuan fell for a fifth consecutive day after a weaker setting by the PBoC. Shanghai Composite and Hang Seng both declined, iron ore imports say a huge fall off to 57.7M tons, -8% m/m, copper imports also fell 8% m/m, this sent the S&P ASX back towards unchanged territory after rebounding from employment data. Miners in Australia pared back some of their earlier gains as well. Surprisingly copper futures held on to their gains.
***Speakers/Geopolitical/In the press***
- (JP) BoJ's Shirai: Japan economic activity is more or less flat though there are indications of improvement
- (HK) Hong Kong govt may increase public housing rent by 10% - HK press
- (KS) South Korea Finance Min Bahk: Recent Won's moves not a concern, as the currency has been moving in a limited range
***Equities***
- Hynix, 000660.KR: Creditors planning to sell half of their 6.4% stake in the company, worth KRW576B - Korean press
- CHU: Expects 3G users to reach 90M by the end of 2012; Sees 3G rev at CNY70B v CNY40B in 2011
- RIO: CEO: Affirms it is more confident out its outlook than 6-months ago; Tackling rising costs, especially in Queensland is challenging - AGM
- STEL.SG: Reports FY12 Net S$3.99B v S$3.8B y/y; Rev S$18.8B v S$18.07B y/y
- ORG.AU: In talks with the United States' Export-Import Bank to acquire A$2.93 B in financing to help fund $6.0B expansion of Australia Liquefied natural gas facility in Gladstone - The Australian
***Fixed Income/Commodities/Forex***
- USD/INR: India Central Bank (RBI) fixes intra-day open position limit in forex at 5-times available limit; Only applies to rupee trades
- (CN) PBoC sells CNY24B in 7-day reverse repos at 3.30% v 3.53% on May 2nd

>> Rise in German Unemployment Further Discourages Euro Investors

The Takeaway: Germany unemployment increases 19 k, despite expectations for autumn 10 K-> positive labour said that the trend of the market were outweighed by slowing of the economic-> Euro drops dynamic as weak Manufacturing PMI also comes
Unemployment increased unexpectedly in April by a people of 19 000 seasonally adjusted to 2.87 million. The rise in unemployment is much greater than the expectations of analysts, for the rate of fall by 10,000 people. According to Nuremberg on the Federal Labour Agency, the current unemployment rate now stands at 6.8%, compared to 6.7% in March.
The positive trend on the labour market was offset by the loss of momentum in the economy, according to the Federal Labour Agency President Frank - Juergen Weise.
The weak employment data were released at the same time that the German PMI manufacturing survey came in lower than expected. High unemployment will generally not be consumer spending and drag down economic growth, and signs of this morning of a slowdown in the economy are because of anxiety over the European debt crisis.

EUR/USD has been a free fall in the half hour before the figures of unemployment, as weaker that expected data PMI came Italy and France. The Euro continued to weaken after release of employment, to the low 1.3155 last week.

Positive Turnaround in UK Unemployment Sparks Surge in Sterling

18 April 2012 09:15 GMT THE TAKEAWAY: UK unemployment comes in better than expected -> Signs of a stabilizing economy support PM’s budget deficit cuts -> Sterling gains against dollar and euro

UK unemployment dropped for the first time in almost a year, to 8.3% on the month, beating analysts’ expectations for an unchanged rate of 8.4%. Jobless-benefits claims rose by 3,600 during the month of March to a total of 1.61 million; but the rise in claims was much lower than analysts’ expectations of a monthly gain of 6 thousand.

The unemployment rate was measured by the International Labour Organization and the jobless claims were provided by the Office of National Statistics.

The better than expected unemployment rates can be seen as a sign of a stabilizing economy, and the data support Prime Minister David Cameron’s attempt to cut the budget deficit.

 Cable jumped on news of the positive jobs reports and the simultaneous Bank of England minutes release that signaled a smaller chance of raising quantitative easing. The pair made new weekly highs by crossing the 1.5900 mark and come closer to the resistance level 1.6061. Sterling also rose sharply against the Euro following the data release.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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18 April 2012 09:15 GMT 

TradeTheNews.com European Market Update: ISDA scheduled to meet to determine whether a Greek credit event occurred; Euro Zone Unemployment hits 15-year high

Thursday, March 01, 2012 5:43:19 AM

 TradeTheNews.com European Market Update: ISDA scheduled to meet to determine whether a Greek credit event occurred; Euro Zone Unemployment hits 15-year high

***Economic Data*** - (IN) India Trade Balance: -$14.8B v -$14.7Be; Exports Y/Y: 10.1% v 6.7% prior; Imports Y/Y: 20.3% v 19.8% prior
- (FR) France Q4 ILO Unemployment Rate: 9.8% v 9.7% prior; Mainland Unemployment Rate: 9.4 v 9.6%e; ILO Mainland Unemployment Change: +50K v +37K prior - (CH) Swiss Q4 GDP Q/Q: +0.1% v -0.1%e; Y/Y: 1.3% v 1.0%e
- (UK) Feb Nationwide House prices M/M: 0.6% v 0.2%e; Y/Y: 0.9% v 0.3%e
- (IE) Ireland Feb NCB Manufacturing: 49.7 v 48.3 prior
- (SE) Swedbank Feb PMI Survey: 50.3 v 51.4 prior
- (HU) Hungary Feb PMI: 50.5 v 49.8 prior
- (PL) Poland Feb Manufacturing PMI: 50.0 v 52.2 prior
- (TR) Turkey Feb Manufacturing PMI: 49.6 v 51.7 prior
- (DK) Denmark Jan Retail Sales M/M: 0.4% v 0.1%e; Y/Y: -2.6% v -1.2% prior
- (DK) Denmark Jan Unemployment Rate: 4.0% v 4.1%e; Gross Unemployment Rate: 6.0% v 6.2%e
- (HU) Hungary Jan Producer Prices M/M: +0.3% v -0.5% prior; Y/Y: 7.8% v 8.2%e
- (NO) Norway Feb PMI: 56.9 v 53.8e
- (ES) Spain Feb Manufacturing PMI: 45.0 v 45.1 prior (10th straight month of sub-50 reading)
- (PH) Philippines Central cut the Overnight Borrowing by 25bps to 4.00%; as expected
- (CZ) Czech Feb Manufacturing PMI: 50.5 v 48.8 prior (four month high)
- (HK) Hong Kong Jan Retail Sales Value Y/Y: 14.9% v 24.0%e; Retail Sales Volume Y/Y: 9.1% v 16.8%e
- (SE) Sweden Q4 Current Account (SEK): 50.1B v 76.1B prior
- (CH) Swiss Feb PMI Manufacturing: 50.5 v 48.5e
- (IT) Italy Feb PMI Manufacturing: 47.8 v 47.1e - (FR) France Feb Final PMI Manufacturing: 50.2 v 50.2e
- (DE) Germany Feb Final PMI Manufacturing: 50.2 v 50.1e (second monthly reading over 50)
- (EU) Euro Zone Feb Final PMI Manufacturing: v 49.0e
- (GR) Greece Feb PMI Manufacturing: 37.7 v 41.0 prior (record low)
- (IT) Italy Jan Preliminary Unemployment Rate: 9.2% v 9.0%e (highest since 2001)
- (NO) Norway Feb Unemployment Rate: 2.7% v 2.7%e
- (PL) Poland Q4 GDP Q/Q: 1.1% v 1.0% prior; Y/Y: 4.3% v 4.1%e
- (ZA) South Africa Feb Kagiso PMI: 57.9 v 52.3e
- (DE) Germany Jan Plant/Machinery Orders Y/Y: -6.0% v -10% prior - VDMA
- (UK) Feb PMI Manufacturing:51.2 v 52.0e
- (RU) Russia Gold & Forex Reserve w/e Feb Feb 24th: $509.6B v $504.4B prior
- (EU) Euro Zone Feb CPI Estimate Y/Y: 2.7% v 2.6%e - (EU) Euro Zone Jan Unemployment Rate: 10.7% v 10.4%e (15-year high)
- (BE) Belgium Jan Unemployment Rate: 7.4% v 7.2% prior
- (DK) Denmark Feb PMI Survey: 54.9 v 54.6 prior
- (IT) Italy Feb Preliminary CPI (NIC incl. tobacco) M/M: 0.4% v 0.2%e; Y/Y: 3.3% v 3.1%e
- (IT) Italy Feb Preliminary CPI EU Harmonized Y/Y: 3.4% v 3.4%e

Fixed Income: - (ES) Spain Debt Agency (Tesoro) sold €3.5-4.5B in 2014, 2015 and 2016 Bonds
- Sold €1.06B in 3.4% April 2014 Bono; Avg Yield 2.069% v 3.589% prior; Bid-to-cover: 2.81x v 1.8x prior; Maximum Yield 2.213% v 3.633% prior
- Sold €1.91B in 4.00% July 2015 Bono; Avg Yield 2.617% v 3.332% prior; Bid-to-cover: 2.37x v 2.19x prior; Maximum Yield 2.748% v 3.470% prior
- Sold €1.53B in 4.25% Oct 2016 Bono; Avg Yield 3.367% v 3.455% prior; Bid-to-cover: 2.59x v 3.57x prior; Max Yield 3.478% v 3.557% prior- (RU) Russia Gold & Forex Reserve w/e Feb Feb 24th: $509.6B v $504.4B prior
- (FR) France Debt Agency (AFT) sold total €7.99B vs. €7.0-8.0B indicated in 2017, 2019, 2022 and 2026 bonds
- Sold €825M in 4.25% Oct 2017 OAT; Avg Yield 1.91% v 2.42% prior; Bid-to-cover: 4.12x v 4.40x prior
- Sold €1.25B in 3.75% Oct 2019 OAT; Avg Yield 2.48% v 3.51% prior; Bid-to-cover: 2.74x v 2.09x prior
- Sold €3.91B in 3.00% April 2022 OAT; Avg Yield 2.91% v 3.13% prior; Bid-to-cover: 2.19x v 1.71x prior
- Sold €2.00B in 3.50% April 2026 OAT; Avg Yield 3.30% v 3.65% prior; Bid-to-cover: 2.17x v 3.24x prior
- (HU) Hungary Debt Agency (AKK) sold HUF60B in 12-Month Bills; Avg yield 7.46% v 7.69% prior; Bid-to-cover: x v 1.58x prior
- (UK) DMO sold £2.75B in 4.0% March 2022 Gilts; Avg Yield 2.181% v 2.210% prior; Bid-to-cover: 2.07x v 1.77x prior; Tail: 0.3bps v 0.4bps prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Fed Chairman Bernanke provides no hint of QE3; has a change again today to clarify hisviews
- Dealers note that ECB's 3-year LTRO constitute an easing of monetary conditions with €313B net add; ECB balance sheet now amounts to 32% of euro area GDP, compared with 21% in the UK, 19% in the US and 30% in Japan
- Italy 2-year Govt bond moves below 2.0% (first time since Oct 2010)
- European PMI Manufacturing data mixed
- Spain has completed almost 40% of gross 2012 issuance
- Euro Zone Jan Unemployment Rate surges to record EMU levels
Equities: FTSE 100 +0.50% at 5898, DAX +0.50% at 6888, CAC-40 +0.30% at 3463, IBEX-35 +0.40% at 8500, FTSE MIB +1.2% at 16,547, SMI +0.10% at 6117
-- European shares were higher during the session even after FOMC's minutes showed that the Fed was not planning a third round of QE. However, China and US PMI rose above expectations while jobless claims, expected during NY morning, are expected at a four-year low.
- In individual names, Vivendi [VIV.FR] which reported after the EU close last night, fell sharply after announcing that it sees no growth until 2014. Company guided Net profit for 2012 to be just above €2.5B but expects strong competition in France and Morocco to hurt its profitability in 2012 and 2013. Continental [CON.DE] reported below the estimates even though it guided its Q1 revenue to rise sequentially.
Speakers: - There were 2 questions said to have been asked to the ISDA about Greece's credit default swaps (CDS). The first question related to whether the use of a collective action clause (CAC) was a credit event. - The second question related to if the Greek debt swap represents a credit event. The ISDA meets today with a decision expected before Monday, March 5th
- ECB's Makuch reiterated the central bank view of not expecting another 3-year lending LTRO and that funds from second LTRO to go to non-financials
- Netherlands Bureau for Economic Policy Analysis (CPB) cuts 2012 and 2013 GDP outlook. It trimmed the 2012 GDP view to -0.75% from -0.50% prior Dec forecast and cuts its 2013 GDP view to 1.25% from 1.3% seen in Dec. The CPB also raised the deficit to GDP for the period putting the 2012 Deficit at 4.5% from 4.1% prior and the 2013 Deficit to GDP to 4.5% from 3.0% prior.
- Brazil said to have raised IOF tax on some currency operations to curb BRL strength (as speculated) - US financial press
- BOE Miles: Aggressive loosening of monetary policy might help economy and make it easier to normalize interest rates sooner. He noted that too much attention has been paid to the impact of QE on gilt yields while focus on corporate yields was more important. Low UK Govt bond yields were likely due to safe-haven flows. He reiterates the view that inflation would likely keep slowing
- Asia Development Bank (ADB) chief Kuroda commented that there could be a slowdown in Asia as the Euro crisis and high oil prices were a risk to the region's growth outlook
- Poland Central Bank Zielinska-Glebocka: Hard to determine if PLN currency gains would continue and added that Polish bond yields might stay lower due to confidence
- Ireland Dep PM Gilmore commented that he saw its citizens supporting the EU compact and that Ireland would not require ESM
- Hungary Central Bank released its lending survey which noted that tighter funding weakened bank lending. Household lending might pick up in early 2013 after mortgage scheme ends while corporate lending might pick up from end-2013
- Hungary PM Orban might reshuffle its gov't around end of April (earlier than expected) with Econ Min Matolcsy expected to remain with gov't
- Germany Chemical Assoc VCI guided its 2012 production flat and sales growth of 1.0%; producer prices +1.0% y/y
Currencies:
- US data and Fed Chairman Bernanke lack of signal more policy stimulus continued to aid the greenback during Asia today but entered into a consolidation mode during the European morning. The European currencies were off their morning lows and shock off a spat of mixed PMI manufacturing data and a surge in the Euro Zone unemployment data.
- The EUR/USD was trading around the 1.3340 leve and slightly positive from its Asian opening level. The current resistance was seen at the 1.3365 level, which was a former hourly support line earlier in the week.
- The JPY currency maintained its soft tone. The USD/JPY remained above the 81 handle with EUR/JPY cross hovering around the 108 level.
- The CHF was little changed despite better Q4 GDP data. The EUR/CHF cross seemed cemented at the .12050 area.
- The Brazilian Central Bank renewed its tactics to curb the strength of the BRL currency via the IOF tax.
Political/ In the Papers:
- Despite the ECB's three-year LTRO operations conducted yesterday, there has been only tepid demand for longer dated EU peripheral bonds. In terms of the Italian yield curve, the two-year yields have declined more than 10-year yields. The shape of the curve could mean that Italian bonds still have credit risks.
- The FT reported that the German Bundesbank continues to have concerns about the ECB's lending programs. In a letter to the ECB president, the head of the Bundesbank Weidmann raised concerns about the risks related to the ECB's lending measures.
- The Telegraph's Ambrose Evans-Pritchard made positive and negative remarks about the ECB's LTROs. While the operation has lowered the risks of a credit crunch, it has led to the EU's weakest banks in increasing their holdings of the sovereign debt of the weakest countries.
- Germany's Chancellor Merkel was said to have acknowledged international pressure related to the limit for the ESM. According to the German press, which cites government officials, the Chancellor could soften her opposition to increasing the limit of the ESM to €750B from €500B. It was said that both the ESM and EFSF could function simultaneously for about one year.
***Looking Ahead***
- (EU) EU Leaders Summit in Brussels
- (CZ) Czech Feb Budget Balance (CZK): No est v 21.0B prior
- (US) Feb ICSC Chain Store Sales Y/Y: No est v 4.8% prior
- (PE) Peru Feb Consumer Price Index M/M: 0.3%e v -0.1% prior; Y/Y: 4.2%e v 4.2% prior; Wholesale Prices M/M: No est v -0.5% prior
- (RU) Russia Feb Reserve Fund: No est v $61.4B prior; Wellbeing Fund: no est v $88.3B
- 6:00 (GR) Expected ISDA ruling if Greek sovereign credit event occurred
- 6:00 (PT) Portugal Jan Industrial Production M/M: No est v -1.5% prior; Y/Y: No est v -8.7% prior
- 6:00 (PT) Portugal Jan Retail Sales M/M: No est v 2.3% prior; Y/Y: No est v -10.3% prior
- 6:00 (ZA) South Africa Jan Electricity Consumption Y/Y: No est v 1.1% prior; Electricity Production Y/Y: No est v 0.4% prior
- 6:00 (CZ) Czech Republic to sell CZK9.0B in 9-month Bills
- 7:00 (EU) EU Conservative Leaders hold Pre-Summit Meeting
- 7:00 (IE) Ireland Feb Consumer Confidence: No est v 56.6 prior
- 8:00 (US) Fed's Pianalto
- 8:00 (BR) Brazil Feb PMI Manufacturing: No est v 50.6 prior
- 8:00 (US) Mar RBC Consumer Outlook Index: No est v 45.1 prior
- 8:00 (RO) Romania to sell Bonds
- 8:30 (EU) Poland Fin Min Rostowski speaks at Brussels Think
- 8:30 (CA) Canada Q4 Current Account (BOP): -$9.6Be v -$12.1B prior
- 8:30 (CA) Canada Jan Industrial Product Price M/M: +0.3%e v -0.7% prior; Raw Materials Price Index M/M: +0.5%e v -2.4% prior
- 8:30 (US) Jan Personal Income: 0.4%e v 0.5% prior; Personal Spending: 0.4%e v 0.0% prior - 8:30 (US) Jan PCE Core M/M: 0.2%e v 0.2% prior; Y/Y: 1.9%e v 1.8% prior; PCE Deflator Y/Y: 2.3%e v 2.4% prior
- 8:30 (US) Initial Jobless Claims: 355Ke v 351K prior; Continuing Claims: 3.415Me v 3.392M prior
- 10:00 (US) Fed Chairman Bernanke delivers semi-annual monetary policy report
- 10:00 (US) Jan Construction Spending M/M: 1.0%e v 1.5% prior
- 10:00 (US) Feb ISM Manufacturing: 54.5e v 54.1 prior; Prices Paid: 58.0e v 55.5 prior
- 10:00 (MX) Mexico Central Bank Economist Survey
- 10:00 (MX) Mexico Jan Remittances: $1.5Be v $1.8B prior
- 10:30 (US) Fed's Raskin
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 11:00 (IC) Iceland Q4 Current Account (ISK): No est v 12B prior
- 12:00 (FR) France Socialist Candidate Hollande to hold Meeting in Lyon
- 12:00 (IT) Italy Feb New Car Registrations Y/Y: No est v -16.9% prior
- 12:30 (US) Fed's Lockhart speaks on Economy and Banking in Atlanta
- 13:00 (MX) Mexico Feb IMEF Manufacturing Index: 53.0e v 51.8 prior; Non-Manufacturing Index: 52.9e v 51.7 prior
- 13:00 (BR) Brazil Feb Trade Balance: $2.3Be v -$12.9B prior
- 13:00 (IT) Italy Feb Budget Balance: No est v -€3.3Be; Budget Balance YTD: no est v -€3.3B prior
- 15:30 (MX) Mexico Jan YTD Budget Balance (MXN): No est v -355.5B prior
- 17:00 (US) Feb Total Vehicle Sales: 14.00Me v 14.13M prior; Domestic Vehicle Sales: 11.00Me v 11.05M prior
- 18:30 (JN) Japan Jan Unemployment Rate: 4.5%e v 4.6% prior
- 18:30 (JN) Japan Jan National CPI: -0.1%e v -0.1% prior
- 23:30 (US) Fed's Williams speaks in Honolulu, HI
- (US) Republican Georgia Primary Event

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TradeTheNews.com Asian Market Update: Australia unemployment better than expected, markets resume their worry over Greece

- (AU) AUSTRALIA JAN UNEMPLOYMENT RATE: 5.1% V 5.3%E (6-month low); EMPLOYMENT CHANGE: 46.3K V 10.0KE (14-month high); PARTICIPATION RATE: 65.3% V 65.3%E >- (CH) CHINA JAN ACTUAL FOREIGN DIRECT INVESTMENT (FDI) Y/Y: -0.3% TO $10B V -12.70% PRIOR (3rd consecutive month of decline)
- (SG) SINGAPORE Q4 FINAL GDP Q/Q: -2.5% V -2.3%E; Y/Y: 3.6% V 4.3%E
- (AU) AUSTRALIA FEB CONSUMER INFLATION EXPECTATION: 2.5% V 2.8% PRIOR
- (NZ) NEW ZEALAND JAN ANZ NZ JOB ADS M/M: -2.7% V -2.6% PRIOR
- (KR) SOUTH KOREA JAN DEPARTMENT STORE SALES Y/Y: -4.1% V 11.0% PRIOR; DISCOUNT STORE SALES Y/Y: 2.7% V 3.7% PRIOR
- (NZ) NEW ZEALAND FEB ANZ CONSUMER CONFIDENCE INDEX: 113.3 V 116.1 PRIOR
- (NZ) NEW ZEALAND JAN BUSINESS PMI: 50.5 V 51.6 PRIOR
- (UK) UK JAN NATIONWIDE CONSUMER CONFIDENCE: 47 V 40E (5-month high)
- (AU) AUSTRALIA JAN RBA FOREIGN EXCHANGE TRANSACTIONS (A$): 383M V 737M PRIOR
- (JP) JAPAN JAN TOKYO CONDOMINIUM SALES Y/Y: 32.6% V 8.5% PRIOR
- (US) US JAN FORECLOUSRE ACTIVITY M/M: +3% v -9% PRIOR; Y/Y: -19% v -20% PRIOR - REALTYTRAC
- (JP) Japan investors bought ¥1.0T in foreign bonds last week v ¥285B bought in prior week
***Markets Snapshot (as of 05:30GMT)***
- Nikkei225 -0.2%
- S&P/ASX -1.7%
- Kospi -1.4%
- Taiwan Taiex -1.7%
- Singapore Straits Times -0.7%
- Shanghai Composite -0.7%
- Hang Seng -0.9%
- S&P Futures -0.5% at 1,335
- April gold -0.3% at $1,722/oz
- March Crude -0.4% at $101.44
***Overview/Top Headlines***
- Markets declined today follow Wall Street's weaker lead and renewed uncertainty from the EU as fresh divide came out overnight about the next round of bailout funds with the decision being delayed to Feb. 20th, Finland and the Netherlands are calling for the decision to be put off to April when Greece names full time govt. This however presents several problems for Greece, of which the largest is the debt coming due March 20th for the embattled country. The EUR/USD fell near the $1.29 handle, EUR/JPY tested down to ¥102. The Greenback gained against the Swissie testing to CHF0.9280. AUD/USD spiked 50 pips after Australia Jan unemployment came in at a 6 month low at 5.1%, employment change was at a 6 month high. Shanghai Composite came of its 2-month high after FDI fell for the third straight month to $10B. Moody's placed 114 global financial institutions on review for downgrade due to rising funding costs stemming from the EU debt crisis. Banks from New York to Tokyo were included in the review. Iron ore for immediate delivery fell for a 7th consecutive day to $137.40/ton, Vale's weaker earnings took Rio Tinto and BHP shares downward in Sydney. Australia's second largest bank, Westpac reported Q1 weaker than expectations and slightly lower than last year as Australia's banks continued to be hammered under rising funding costs (many rely on UK banks). Japan's JGB yields continued to decline for the second day on BoJ easing measures.
***Speakers/Geopolitical/In the press***
- (AU) RBA's Deputy Gov Lowe: 2012 has started better than expected and domestic economy is in relatively good shape; Sees underlying inflation at 2-3% for the next few years
- (CN) China banks must give CBRC a fresh assessment of local govt debt exposure by the end of March; Will be allowed to extend maturities once for a maximum of 5-years on any bad debts - Chinese press
- (KR) Bank of Korea (BoK) Survey: Public is slightly more worried about the slowing economy than a year ago but still want the country's economic policy to target containing inflation - Korean press
- (EU) ECB's Liikanen: ECB could cut rates again if required - financial press
- (SG) Singapore Central Bank (MAS) Official Robinson: Near term indicators do not show Singapore falling into a recession, though it may be too early to call a technical recession
- (CN) China's top 4 banks total yuan loans in early Feb totaled CNY30B v CNY50B in first 2-weeks of Jan - Chinese press
***Equities***
- Korea Gas, 036460.KR: Reports Q4 Net KRW94.7B v loss KRW28.7B y/y; Op KRW362B v KRW181B y/y; Rev KRW8.75T v KRW6.4T y/y
- LDW.AU: FLSmidth makes a A$10/share bid vs initial bid of A$7.20/share; enterprise value estimated at approx A$358M
- Alibaba, 1688.HK: Expected to sign for a $3.0B loan as soon as this week - financial press
- WES.AU: Reports H1 Net Profit A$1.18B v A$1.4Be, +0.3% y/y; Rev A$29.7B v A$28.07B y/y >- QAN.AU: Reports H1 Net A$42M v A$111Me, -83% y/y; Will not guide due to high uncertainty and volatility, cutting 500 positions
- AWC.AU: Reports FY11 Net A$127M v A$135Me
***US Equities***
- CAR: Reports Q4 -$0.14 v $0.06e, R$1.63B v $1.7Be; -10.4% afterhours
- NVDA: Reports Q4 $0.26 (adj) v $0.19e, R$953M v $950Me; Guides Q1 Rev $900-930M v $945Me; -5.4% afterhours
- HBI: Reports Q4 $0.41 (unclear if comparable) v $0.51e, R$1.15B v $1.2Be; -9.0% afterhours
- VALE: Reports Q4 $0.90 v $0.99e, Rev $14.76B v $14.2Be; -0.4% afterhours
- MAR: Reports Q4 $0.46 v $0.47e, R$3.40B (adj) v $3.8Be; -1.4% afterhours
- TSLA: Reports Q4 -$0.69 v -$0.63e, R$39.4M v $38Me; +2.2% afterhours
- NTAP: Reports Q3 $0.58 v $0.58e, R$1.57B v $1.6Be; +8.6% afterhours
***FX/Fixed Income/Commodities***
- JGB: Japan's MoF sells ¥2.3T in 0.3% (0.3% prior) 5-yr JGBs; Bid to cover: 3.89x v 4.37x prior
- (NZ) S&P Analyst: Gloomier short-term economic picture the govt painted today will not hurt New Zealand's AA sovereign rating
- (CN) PBoC to offer CNY10.0B in 91-day repos
- JJG: (CN) China delegation signs deal to acquire $4.3B worth of soybeans from the US - Iowa Soybean Association
- SLV: iShares Silver Trust ETF daily holdings fall to 9,624 tons from 9,658 tons (lowest since 9,622 on Feb 3rd)

Data of the work to the bat forecasts, unemployment still falls United States

February 3, 5: 02 pm

The U.S. Bureau of Labor Statistics reported earlier than January pay data non-firm show 243 000 new jobs. Release before surveyed analysts were predicting an increase of only 150,000 new jobs. Data for December revised 203 000 new jobs. Including, the unemployment rate fell yet again, this time to 8.3%, same as the expectations of analysts for the rate remains unchanged.
On Wednesday, ADP reported that only 170,000 new agricultural non-exploitations jobs in December, well off the coast of 185,000 consensus forecast. Who, with the decision of the Federal Reserve to extend the duration of the ultra low rate of interest through 2014, has considerably weakened the Dollar for several days.
Some traders OpenBook were convinced that data from work today to continue its upward trend and meet or even beat expectations, and traders were short the EUR/USD pair in anticipation.
Just forward the announcement, sentiment on the OpenBook is bullish and the EUR/USD pair more rated 1.3172, took a quick dive a few minutes later to opening prices the day that their bounces back quickly. It took a full 20 minutes before the couple lost steam and directed in negative territory. This wording of the pair is trading less than 1.3103 and feeling turned down.
OpenBook guru pyruss, which had closed with profit of long positions of the data dissemination, closed with profit both long and short position once his targets had been met. Guru robepu was able to liquidate a long position at 1.3189 with a gain of 23.26% of the moments just after the announcement.

TradeTheNews.com European Market Update: Spanish unemployment surges in January; China stresses that Europe must first address its structural issues before seeking outside assistance

Thursday, February 02, 2012 5:50:37 AM
 TradeTheNews.com European Market Update: Spanish unemployment surges in January; China stresses that Europe must first address its structural issues before seeking outside assistance
***Economic Data***
- (EU) ECB: €2.0B borrowed in overnight loan facility v €1.6B prior; €486.4B parked in deposit facility vs. €472.5B prior
- (BR) Brazil Jan FIPE CPI: 0.7% v 0.7%e
- (CH) Swiss Dec Trade Balance (CHF): 2.1B v 2.5Be; Real Exports real M/M: +6.1% v -4.8% prior; Real Imports M/M: +7.6% v -8.2% prior
- (ES) Spain Jan Net Unemployment M/M: 177.5K v 127.0Ke
- (HK) Hong Kong Dec Retail Sales Value Y/Y: 23.4% v 20.5%e; Retail Sales Volume Y/Y: 17.1% v 15.1%e
- (ZA) South Africa Jan Naamsa Vehicle Sales Y/Y: 7.0% v 9.8%e
- (NO) Norway Jan Unemployment Rate: 2.8% v 2.8%e
- (UK) Jan PMI Construction: 51.4 v 52.5e
- (RU) Russia Gold & Forex Reserves w/e Jan 27th: $504.0B v $499.7B prior
- EU) Euro Zone Dec PPI M/M: -0.2% v -0.1%e; Y/Y: 4.3% v 4.3%e

Fixed Income: - (ES) Spain Debt Agency (Tesoro) sold €4.55B vs. €3.5-4.5B indicated range in 2015, 2016, 2017 Bonds
- Sold €2.25B in 4.0% July 2015 Bono ; Avg Yield 2.861% v 3.384% prior; Bid-to-cover: 1.63x v 1.80x prior; Maximum Yield 2.989% v 3.576% prior
- Sells €984M in 4.25% Oct 2016 Bono; Avg Yield 3.455% v 4.029% prior; Bid-to-cover: 3.57x v 3.2x; Max Yield 3.557% v 4.050% prior
- Sold €1.05 in 3.80% Jan 2017 Bono; Avg Yield 3.565% v 5.544% prior; Bid-to-cover: 2.70x v 2.69x prior; Max Yield 3.704% v 5.560% prior
- (FR) France Debt Agency (AFT) sold approx €7.96B vs. €6.5-8.0B indicated range in 2018, 2020 and 2022 Bonds (OAT)
- Sold €1.01Bin 4.25% Oct 2018 Oat; Avg Yield 2.44% v 3.27% prior; Bid-to-cover: 4.34x v 2.92x prior
- Sold €1.25B in 2.5% 2020 Bonds; Avg Yield 2.91% v 3.64% prior; Bid-to-cover: 3.99x v 3.34x prior
- Sold €5.7B in new 3.0% April 2022 OAT; Avg Yield 3.13%; Bid-to-cover: 1.71x
- (HU) Hungary Debt Agency (AKK) sold HUF50B in 12-Month Bills; Avg Yield 7.85% v 8.19% prior; Bid-to-cover:1.97x v 1.58x prior
- (UK) DMO sold £1.25B in 0.125% I/L 2029 Gilts; Avg Yield -0.188%; Bid-to-cover:2.27 x
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Brazil posted its first trade deficit in 2 years in January
- Day 6 of the imminent Greek PSI deal
- Japanese officials continue verbal FX intervention
- Xstrata confirmed talks with Glencore; Rec'd approach regarding a merger of equals
- Spain Jan unemployment surges by 177K
- Spanish borrowing costs decline at 3-tranch bond auction
- China stresses that Europe must help itself first
Equities: FTSE 100 -0.20% at 5781, DAX +0.20% at 6626, CAC-40 flat at 3366, IBEX 35 at 8717, FTSE MIB -0.20% at 16,228, SMI -0.40% at 6045
- European shares erased gains during the session after drop in oil -related names offset the rally following merger talks between Xstrata and Glencore. Xstrata [XTA.UK] rallied over 12% after confirming that Glencore made an approach for a merger of equals. Glencore already owns 34% of Xstrata shares. However, overall earnings for European companies were disappointing.
- Among notable names, Shell [RSDA.NL] declined after missing its net adjusted profit. Company noted that earnings had been affected by a downturn in industry refining margins and natural gas prices. The downside move affected its peer BP. Deutsche Bank [DBK.DE] also declined after reporting a decline in the Q4 profit as trading was adversely affected by the Eurozone debt crisis. Unilever [UNA.NL] also declined after noting that expect the external macro-economic environment to remain difficult in 2012 and input cost headwinds will persist
Speakers: - China Premier Wen commented that China was considering involvement in EFSF and ESM facilities and reiterated its view that it was important to resolve the European debt crisis. Europe must rely on itself and reduce its debt load and introduce structural reforms
- German Chancellor Merkel commented from Beijing that China believed that Europe must do their 'homework' first regarding the crisis, then prepared to work for a stable euro
- Greece govt official commented that the bulk of discussions with EU/IMF/ECB Troika were basically completed but a few sticking points remain
- Germany BDB Banking Assoc President Schmitz stated that it must separate European monetary and fiscal policies to avoid a renewed crisis of confidence in the euro zone
- OECD chief Gurria commented that the ECB should purchase more bonds and contribute to cutting the Greek debt stock and cautioned that long term remedies would be doomed if the short-term issues are not addressed. He did note that Ireland's EU/IMF program was making good progress
- BoJ official Yamaguchi commented that the JPY currency has been appreciating recently although needed more time to assess market trend
- India Central Bank (RBI) Gov Subbarao commented that it needed to be unpredictable about forex interventions; Unreasonable for RBI to target inflation. He did concede that the RBI was biased toward containing inflation rather than managing growth.
- BoE's Posen commented in a radio interview that banks were not doing enough to support the economy
- Norway Fin Fin Johnsen commented that its economy was brighter compared to others but traditional exports did face challenge. He cautioned that banks must prepare for turmoil. Development in housing market were a concern as rising debt made sector 'extremely vulnerable' when interest rates go higher
- Italy minister said to have informed unions the gov't is to go ahead with labor refomrs regardless of agreement
- Moodys analyst Byrne commented that there was not much risk to Asian sovereign ratings in 2012
- S&P report noted that a Euro zone recession could end in late 2012 but the severity of recession was a 'close call'. The euro zone should gradually climb out of its mild recession in the second half of this year and into 2013. The core countries would likely lead the way back to growth, with other member countries delivering diverging performances. The S&P baseline forecast for 2012-2013 projected flat GDP growth for the euro zone as a whole in 2012 and 1% growth in 2013. S&P currently assigned a 60% probability to our baseline forecast, versus 40% for our alternative forecast of a true double dip. This would have a particularly adverse impact in countries like Spain, Portugal, and Italy.
Currencies:
- The FX markets maintained its recent ranges as the risk appetite tried to continue maintaining its recent momentum.
- The EUR/USD still had difficulty to break above the 1.32 handle and tested lower following the Spanish unemployment data. The pair probed below the 1.3130 area but did steady a bit after the Spanish and French bond auction results. Dealers did note that 2-way flows were prevalent with a plethora of option-related orders. Comments by China Premier Wen that it was considering involvement in EFSF and ESM facilities while German Chancellor Merkel visited the country on a three-day State visit. Wen did clarify that Europe must rely on itself and reduce its debt load and introduce structural reforms.
- The USD/JPY continued to hold above the 76.00 level with continued rhetoric from Japanese officials.
- The SNB still has yet to defend its 1.2000 floor in the EUR/CHF cross as speculators were performing the task for them. The cross was in the mid-1.20 area.
Political/ In the Papers:
- In an interview with the BBC, Bank of England's Posen said British banks are not doing enough to support the economy. He suggested that the banking sector needs more competition. In terms of policy, he supported the position that the UK would have been far worse without Quantitative Easing (QE).
- The Telegraph's Evans-Pritchard made note on the differences between the IMF and EU with regards to Greece. There are risks that policy makers in Greece could resist the new demands being made by the Troika officials. Both Germany and the Netherlands are opposed to giving Greece any more money, amid recent reports that Greece's second rescue package might have to be raised by €15B.
On the topic of the Bundesbank's liability related to the EU debt crisis, he added that the central bank has about €250B in liabilities related to the euro zone system. The Bundesbank has already provided €496B to countries including Greece, Ireland, Italy and Spain. A large portion of Bundesbank's liabilities are related to the ECB's 'TARGET2' automatic payments network, which deals with transactions between national central banks. According to Professor Frank Westermann of Osnabruck University, the liabilities of the Bundesbank are approaching the 'danger point'. A break-up of the EU would present large risks to the German central bank.
- In Ireland, NAMA reported only one in five loans were performing, with approximately €18.8B in arrears. Its recent quarterly report indicates 83% of the non-performing loans are four months in arrears; the agency must now either restructure these loans or move against developers through the courts. Prior to being transferred to NAMA, the value of performing loans were valued at €56.1B against the current value of €18.8B. NAMA chairman Frank Daly and chief executive Brendan McDonagh stated the number of non-performing loans was likely to continue rising.
***Looking Ahead***
- (EU) NATO Defense Min meet in Brussels
- (EU) EU Commission Rehn meets Netherland PM Rutte and Fin Min De Jager
- (CN) German Chancellor Merkel continues official China visit
- (US) US Senate banking committee vote on additional Iranian sanctions
- (US) Jan ICSC Chain Store Sales Y/Y: No est v 3.5% prior
- 6:00 (EU) EU Parliament votes on Iran nuclear ban
- 6:00 (EU) EU Parliament votes on Euro Bond resolution
- 6:00 (ZA) South Africa Dec Electricity Consumption Y/Y: No est v 0.2% prior; Electricity Production Y/Y: No est v 0.2% prior
- 7:00 (CZ) Czech Central Bank Interest Rate Decision: Expected to XXX the Repo Rate from the current 0.75% level
- 7:30 (US) Jan Challenger Job Cuts Y/Y: No est v 30.6% prior
- 8:00 (IT) Unicredit presents 2012 Economic Outlook
- 8:00 (US) Feb RBC Consumer Outlook Index: No est v 45.8 prior
- 8:00 (RO) Romania to sell Bonds
- 8:30 (US) Q4 Preliminary Nonfarm Productivity: 0.8e%e v 2.3% prior; Unit Labor Costs: +0.8%e v -2.5% prior - 8:30 (US) Initial Jobless Claims: 371Ke v 377K prior; Continuing Claims: No est v 3.554M prior
- 8:45 (US) ISM NY: No est v 51.1 prior
- 9:00 (US) Fed's Evans speaks to reporters in Chicago
- 9:00 (UK) BOE member Posen
- 9:15 (EU) EU Commissioner Rehn
- 10:00 (US) Fed Chairman Bernanke testifies before House Budget Committee
- 10:00 (DK) Denmark Jan Foreign Currency Reserves (DKK): 3.535Me v 481.7B prior
- 10:30 (US) Weekly Natural Gas Inventories
- 19:15 (US) Fed's Fisher speaks in Austin, Texas
- 20:00 (CN) China Jan Non-manufacturing PMI: no est v 56.0 prior - 21:30 (CN) China Jan HSBC Services PMI: No est v 52.5 prior
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

TradeTheNews.com European market update: Spanish unemployment rate surges in January; China stressed that Europe must first address of its structural problems before looking for help

Thursday, February 02, 2012 5:50:37 AM

 TradeTheNews.com European Market Update: Spanish unemployment surges in January; China stresses that Europe must first address its structural issues before seeking outside assistance

***Economic Data***
- (EU) ECB: €2.0B borrowed in overnight loan facility v €1.6B prior; €486.4B parked in deposit facility vs. €472.5B prior
- (BR) Brazil Jan FIPE CPI: 0.7% v 0.7%e
- (CH) Swiss Dec Trade Balance (CHF): 2.1B v 2.5Be; Real Exports real M/M: +6.1% v -4.8% prior; Real Imports M/M: +7.6% v -8.2% prior
- (ES) Spain Jan Net Unemployment M/M: 177.5K v 127.0Ke
- (HK) Hong Kong Dec Retail Sales Value Y/Y: 23.4% v 20.5%e; Retail Sales Volume Y/Y: 17.1% v 15.1%e
- (ZA) South Africa Jan Naamsa Vehicle Sales Y/Y: 7.0% v 9.8%e
- (NO) Norway Jan Unemployment Rate: 2.8% v 2.8%e
- (UK) Jan PMI Construction: 51.4 v 52.5e
- (RU) Russia Gold & Forex Reserves w/e Jan 27th: $504.0B v $499.7B prior
- EU) Euro Zone Dec PPI M/M: -0.2% v -0.1%e; Y/Y: 4.3% v 4.3%e

Fixed Income: >- (ES) Spain Debt Agency (Tesoro) sold €4.55B vs. €3.5-4.5B indicated range in 2015, 2016, 2017 Bonds
- Sold €2.25B in 4.0% July 2015 Bono ; Avg Yield 2.861% v 3.384% prior; Bid-to-cover: 1.63x v 1.80x prior; Maximum Yield 2.989% v 3.576% prior
- Sells €984M in 4.25% Oct 2016 Bono; Avg Yield 3.455% v 4.029% prior; Bid-to-cover: 3.57x v 3.2x; Max Yield 3.557% v 4.050% prior
- Sold €1.05 in 3.80% Jan 2017 Bono; Avg Yield 3.565% v 5.544% prior; Bid-to-cover: 2.70x v 2.69x prior; Max Yield 3.704% v 5.560% prior
- (FR) France Debt Agency (AFT) sold approx €7.96B vs. €6.5-8.0B indicated range in 2018, 2020 and 2022 Bonds (OAT)
- Sold €1.01Bin 4.25% Oct 2018 Oat; Avg Yield 2.44% v 3.27% prior; Bid-to-cover: 4.34x v 2.92x prior
- Sold €1.25B in 2.5% 2020 Bonds; Avg Yield 2.91% v 3.64% prior; Bid-to-cover: 3.99x v 3.34x prior
- Sold €5.7B in new 3.0% April 2022 OAT; Avg Yield 3.13%; Bid-to-cover: 1.71x
- (HU) Hungary Debt Agency (AKK) sold HUF50B in 12-Month Bills; Avg Yield 7.85% v 8.19% prior; Bid-to-cover:1.97x v 1.58x prior
- (UK) DMO sold £1.25B in 0.125% I/L 2029 Gilts; Avg Yield -0.188%; Bid-to-cover:2.27 x

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Brazil posted its first trade deficit in 2 years in January
- Day 6 of the imminent Greek PSI deal
- Japanese officials continue verbal FX intervention
- Xstrata confirmed talks with Glencore; Rec'd approach regarding a merger of equals
- Spain Jan unemployment surges by 177K
- Spanish borrowing costs decline at 3-tranch bond auction
- China stresses that Europe must help itself first

Equities: >FTSE 100 -0.20% at 5781, DAX +0.20% at 6626, CAC-40 flat at 3366, IBEX 35 at 8717, FTSE MIB -0.20% at 16,228, SMI -0.40% at 6045

- European shares erased gains during the session after drop in oil -related names offset the rally following merger talks between Xstrata and Glencore. Xstrata [XTA.UK] rallied over 12% after confirming that Glencore made an approach for a merger of equals. Glencore already owns 34% of Xstrata shares. However, overall earnings for European companies were disappointing.
- Among notable names, Shell [RSDA.NL] declined after missing its net adjusted profit. Company noted that earnings had been affected by a downturn in industry refining margins and natural gas prices. The downside move affected its peer BP. Deutsche Bank [DBK.DE] also declined after reporting a decline in the Q4 profit as trading was adversely affected by the Eurozone debt crisis. Unilever [UNA.NL] also declined after noting that expect the external macro-economic environment to remain difficult in 2012 and input cost headwinds will persist

Speakers: >- China Premier Wen commented that China was considering involvement in EFSF and ESM facilities and reiterated its view that it was important to resolve the European debt crisis. Europe must rely on itself and reduce its debt load and introduce structural reforms
- German Chancellor Merkel commented from Beijing that China believed that Europe must do their 'homework' first regarding the crisis, then prepared to work for a stable euro
- Greece govt official commented that the bulk of discussions with EU/IMF/ECB Troika were basically completed but a few sticking points remain
- Germany BDB Banking Assoc President Schmitz stated that it must separate European monetary and fiscal policies to avoid a renewed crisis of confidence in the euro zone
- OECD chief Gurria commented that the ECB should purchase more bonds and contribute to cutting the Greek debt stock and cautioned that long term remedies would be doomed if the short-term issues are not addressed. He did note that Ireland's EU/IMF program was making good progress
- BoJ official Yamaguchi commented that the JPY currency has been appreciating recently although needed more time to assess market trend
- India Central Bank (RBI) Gov Subbarao commented that it needed to be unpredictable about forex interventions; Unreasonable for RBI to target inflation. He did concede that the RBI was biased toward containing inflation rather than managing growth.
- BoE's Posen commented in a radio interview that banks were not doing enough to support the economy
- Norway Fin Fin Johnsen commented that its economy was brighter compared to others but traditional exports did face challenge. He cautioned that banks must prepare for turmoil. Development in housing market were a concern as rising debt made sector 'extremely vulnerable' when interest rates go higher
- Italy minister said to have informed unions the gov't is to go ahead with labor refomrs regardless of agreement
- Moodys analyst Byrne commented that there was not much risk to Asian sovereign ratings in 2012
- S&P report noted that a Euro zone recession could end in late 2012 but the severity of recession was a 'close call'. The euro zone should gradually climb out of its mild recession in the second half of this year and into 2013. The core countries would likely lead the way back to growth, with other member countries delivering diverging performances. The S&P baseline forecast for 2012-2013 projected flat GDP growth for the euro zone as a whole in 2012 and 1% growth in 2013. S&P currently assigned a 60% probability to our baseline forecast, versus 40% for our alternative forecast of a true double dip. This would have a particularly adverse impact in countries like Spain, Portugal, and Italy.

Currencies:
- The FX markets maintained its recent ranges as the risk appetite tried to continue maintaining its recent momentum.
- The EUR/USD still had difficulty to break above the 1.32 handle and tested lower following the Spanish unemployment data. The pair probed below the 1.3130 area but did steady a bit after the Spanish and French bond auction results. Dealers did note that 2-way flows were prevalent with a plethora of option-related orders. Comments by China Premier Wen that it was considering involvement in EFSF and ESM facilities while German Chancellor Merkel visited the country on a three-day State visit. Wen did clarify that Europe must rely on itself and reduce its debt load and introduce structural reforms.
- The USD/JPY continued to hold above the 76.00 level with continued rhetoric from Japanese officials.
- The SNB still has yet to defend its 1.2000 floor in the EUR/CHF cross as speculators were performing the task for them. The cross was in the mid-1.20 area.

Political/ In the Papers:
- In an interview with the BBC, Bank of England's Posen said British banks are not doing enough to support the economy. He suggested that the banking sector needs more competition. In terms of policy, he supported the position that the UK would have been far worse without Quantitative Easing (QE).
- The Telegraph's Evans-Pritchard made note on the differences between the IMF and EU with regards to Greece. There are risks that policy makers in Greece could resist the new demands being made by the Troika officials. Both Germany and the Netherlands are opposed to giving Greece any more money, amid recent reports that Greece's second rescue package might have to be raised by €15B.
On the topic of the Bundesbank's liability related to the EU debt crisis, he added that the central bank has about €250B in liabilities related to the euro zone system. The Bundesbank has already provided €496B to countries including Greece, Ireland, Italy and Spain. A large portion of Bundesbank's liabilities are related to the ECB's 'TARGET2' automatic payments network, which deals with transactions between national central banks. According to Professor Frank Westermann of Osnabruck University, the liabilities of the Bundesbank are approaching the 'danger point'. A break-up of the EU would present large risks to the German central bank.
- In Ireland, NAMA reported only one in five loans were performing, with approximately €18.8B in arrears. Its recent quarterly report indicates 83% of the non-performing loans are four months in arrears; the agency must now either restructure these loans or move against developers through the courts. Prior to being transferred to NAMA, the value of performing loans were valued at €56.1B against the current value of €18.8B. NAMA chairman Frank Daly and chief executive Brendan McDonagh stated the number of non-performing loans was likely to continue rising.

***Looking Ahead***
- (EU) NATO Defense Min meet in Brussels
- (EU) EU Commission Rehn meets Netherland PM Rutte and Fin Min De Jager
- (CN) German Chancellor Merkel continues official China visit
- (US) US Senate banking committee vote on additional Iranian sanctions
- (US) Jan ICSC Chain Store Sales Y/Y: No est v 3.5% prior
- 6:00 (EU) EU Parliament votes on Iran nuclear ban
- 6:00 (EU) EU Parliament votes on Euro Bond resolution
- 6:00 (ZA) South Africa Dec Electricity Consumption Y/Y: No est v 0.2% prior; Electricity Production Y/Y: No est v 0.2% prior
- 7:00 (CZ) Czech Central Bank Interest Rate Decision: Expected to XXX the Repo Rate from the current 0.75% level
- 7:30 (US) Jan Challenger Job Cuts Y/Y: No est v 30.6% prior
- 8:00 (IT) Unicredit presents 2012 Economic Outlook
- 8:00 (US) Feb RBC Consumer Outlook Index: No est v 45.8 prior
- 8:00 (RO) Romania to sell Bonds
- 8:30 (US) Q4 Preliminary Nonfarm Productivity: 0.8e%e v 2.3% prior; Unit Labor Costs: +0.8%e v -2.5% prior >- 8:30 (US) Initial Jobless Claims: 371Ke v 377K prior; Continuing Claims: No est v 3.554M prior
- 8:45 (US) ISM NY: No est v 51.1 prior
- 9:00 (US) Fed's Evans speaks to reporters in Chicago
- 9:00 (UK) BOE member Posen
- 9:15 (EU) EU Commissioner Rehn
- 10:00 (US) Fed Chairman Bernanke testifies before House Budget Committee
- 10:00 (DK) Denmark Jan Foreign Currency Reserves (DKK): 3.535Me v 481.7B prior
- 10:30 (US) Weekly Natural Gas Inventories
- 19:15 (US) Fed's Fisher speaks in Austin, Texas
- 20:00 (CN) China Jan Non-manufacturing PMI: no est v 56.0 prior >- 21:30 (CN) China Jan HSBC Services PMI: No est v 52.5 prior

Legal disclaimer and risk disclosure

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

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