TradeTheNews.com European Market Update

Share This Story: Friday, February 10, 2012 5:55:30 AM TradeTheNews.com European Market Update:***Economic Data***
- (RU) Russia Narrow Money Supply w/e Feb 6th (RUB): 6.70T v 6.75T prior
- (FI) Finland Dec Industrial Production M/M: +2.8% v -0.1%e; Y/Y: +2.0% v -4.0%e
- (DE) Germany Jan Final Consumer Price Index M/M: 0.4%e v 0.4%e; Y/Y: 2.1% v 2.0%e
- (DE) Germany Jan Final CPI EU Harmonized M/M: 0.0% v 0.0%e; Y/Y: 2.3% v 2.3%e
- (FR) France Dec Current Account: -€3.0B v -€2.1B prior
- (FR) France Dec Industrial Production M/M: -1.4% v -0.7%e; Y/Y: -1.3% v -0.6%e - (FR) France Dec Manufacturing Production M/M: -1.4% v -1.0%e; Y/Y: 0.8% v 0.9%e
- (DK) Denmark Jan CPI M/M: 0.3% v 0.2%e; Y/Y: 2.8% v 2.6%e
- (DK) Denmark Jan CPI EU Harmonized M/M: 0.4% v 0.2%e; Y/Y: 2.8% v 2.5%e
- (ES) Spain Dec House transactions Y/Y: -25.3% v -14.4% prior
- (CH) Swiss Jan CPI M/M: -0.4% v -0.3%e; Y/Y:-0.8% v -0.8%e
- (SE) Sweden Dec Industrial Production M/M: 0.0% v -1.0%e; Y/Y: 2.0% v 0.4%e
- (SE) Sweden Dec Industrial Orders M/M: +8.6% v -4.4% prior; Y/Y: -0.6% v -7.9% prior
- (NO) Norway Jan CPI M/M: -0.2% v -0.4%e; Y/Y: 0.5% v 0.3%e
- (NO) Norway Jan CPI Underlying M/M: -0.6% v -0.6%e; Y/Y: 1.3% v 1.2%e
- (NO) Norway Jan Producer Prices (Includes oil) M/M: 2.2% v % v 0.3%e; Y/Y: 7.9% v 8.2% prior
- (IT) Italy Dec Industrial Production M/M: +1.4% v -0.5%e; Y/Y: -7.7% v -7.2%e; Industrial Production wda Y/Y: -1.7% v -4.6%e
- (CN) China Jan New Yuan Loans (CNY): 738.0B v 1.0Te - (CN) China Jan M2 Money Supply Y/Y: 12.4% v 13.6%e; M1 Money Supply Y/Y: 3.1% v 8.0%e; M0 Money Supply Y/Y: 3.0% v 13.8% prior
- (UK) Jan PPI Input M/M: 0.5% v 0.2%e; Y/Y: 7.0% v 6.8%e - (UK) Jan PPI Output M/M: 0.5% v 0.1%e; Y/Y: 4.1% v 3.7%e
- (UK) Jan PPI Output Core M/M: 0.3% v 0.0%e; Y/Y: 2.4% v 2.3%e
- (PT) Portugal Jan Consumer Price Index M/M: 0.5% v 0.8%e; Y/Y: 3.5% v 3.9%e
- (PT) Portugal Jan CPI EU Harmonized Index M/M: 0.3% v 0.8%e; Y/Y: 3.5% v 3.8%e
- (R) Russia Dec Trade Balance: $20.4B v $19.0Be
- (BR) Brazil Jan IBGE Inflation IPCA M/M: 0.6% v 0.6%e; Y/Y: 6.2% v 6.2%e
- (PT) Portugal Dec Construction Works Index: 59.9 v 66.1 prior
- (IE) Ireland Dec Industrial Production M/M: +2.5% v -12.7% prior; Y/Y: -4.7% v -6.7%e
Fixed Income:
- (ZA) South Africa sold total ZAR800M in I/L 2017, 2022 and 2028 Bonds
- (IN) India sold total INR120B vs. INR120B indicated in 2020, 2024 and 2030 bonds
- (BE) Belgium Debt Agency sold total €420M in 2022 and 2035 bonds
- Sold €175M in 4.0% 2022 Bond; Avg Yield 3.562% v 4.198% prior; Bid-to-cover: 2.29x v 1.5xprior
- Sold €245M in 5.0% March 2035 OLO; Avg Yield 4.127% v 4.330% prior; Bid-to-cover: 2.63x v 1.7x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Euro Zone dismisses Greek budget deal under austerity passed
- Greece is faced with the decision to stay in the eurozone or not; Decision must be made by Feb 15th
- Germany to hold special lower house (Bundestag) meeting regarding Greece on Feb 27th
- China Trade surplus surges 3x over expectations due to 'seasonal distortions'
- RBA sees scope for further rate cuts on inflation outlook
Equities: FTSE 100 -0.40% at 5873, DAX -0.90% at 6728, CAC-40 -0.60% at 3403, IBEX-35 -0.70% at 8839, FTSE MIB -0.30% at 16,604, SMI -0.50% at 6139
- European shares declined after EU finance ministers failed to approve the €3.3B austerity package upon which the Greek government had agreed. Aside from demanding further cuts in the amount of €325M, the EU leaders also want political commitment to implement those measures after April election. Yesterday Greek Deputy labor minister resigned over austerity deal and there were rumors that the Greek coalition head may pull his party out of the austerity talk.
- In notable corporate earnings, Barclays [BARC.UK] declined at the open after reporting that its FY11 profit had declined, thus missing the estimates. Corporate and Investment banking pretax profit had also declined, in line with the European banks' trend. However the total income had increased slightly over the year and the bank announced that it would increase its dividend. The shares moved out of negative territory. Total [FP.FR] reported in line with analysts' estimates, while hydrocarbon production had decreased. The company also cut its FY12 investment guidance to $20B from $22B.
Speakers: - ECB's Noyer commented on French radio that the Greek situation must be resolved and the ball was in Greece's court to help itself. He noted that other countries have made great efforts for Greece. France was not in recession but growth was flat. He did see signs of a recovery ahead and the ECB was doing everything to increase bank lending. Lastly he noted that the Bank of France held 2,500 tons of Gold and it would not cut its gold reserves further
- German to hold special lower house (Bundestag) meeting regarding Greece on Monday, 27th Feb with one German lawmaker convinced that Greek aid to find parliamentary majority. Left Party official Ernst commented that Germany to provide €35B in temporary security during Greek write down phase while CDU Party official Fuchs stated that the Lower house to support Greek aid if terms were met. German parliament was said to plan to vote on Greek aid on Wed Feb 22nd in one package
- German Fin Min Schaueble stated that it informed law officials that the EU/IMF/ECB Troika demanded that Greek vows be maintained post-election. The Troika also demanded oversight of Greece's plans and bank capitalizations. The plan for Greece would leave the country's debt to GDP at 136%.
- Japan Fin Min Azumi clarified earlier comments on intervention noting that he not refer to any specific trigger level but MPF could intervene at any time when deemed necessary (Reminder: Earlier in the Asian session Azumi commented that he ordered last year's intervention for USD/JPY at ¥75.63)
- Belgium Planning Bureau forecasts 2012 GDP at 0.1%; faces a budget deficit up to €2.5B in 2012
- China sovereign wealth fund (CIC) said to have received $50B capital injection from PBoC (as speculated) and had total assets equal to more than $300B.
- Czech Central Bank released its minutes from its Feb 2nd rate decision. It noted that inflation to hit target of 2.0% in 2013 and that inflationary risks are balanced. Euro Zone risk outlook were substantially lower but good shape of German economy would aid Czech exporters. Euro Zone risk outlook was substantially lower but good shape of German economy would aid Czech exporters
- IEA Monthly Oil Report cut its global demand growth forecast for 2012 by 250K to 800K bpd and lowered 2012 Global oil demand by 200K to 89.9M bpd. It noted supply concerns underpinning markets at this time; believes market has capacity to make up for loss of Iranian supply. Oil demand growth outlook curtailed by reduced global economic growth rate
Currencies:
- The EUR/USD maintained its consolidating mode in the session as markets analyst the next chess move in the Greek saga. Greece PM Papademos was said to be holding a Cabinet Meeting later today which provided a basis for some rumors to circulate with chatter that the Greek coalition chief might withdraw support for austerity. There were also reports that a Greece Socialist lawmaker resigned to protest austerity. The pair remained above the pivot support of 1.3230 area. China sovereign wealth fund (CIC) was said to have received $50B capital injection from PBoC after the Lunar New Year holiday and might have helped to stabilize the Euro as the region continued to find ways to possible lure Chinese investment.
Political/ In the Papers:
- The Telegraph Evans-Pritchard commented on how ECB President Draghi lowered expectations for additional rate cuts, despite the signs of a credit crunch. According to Mr. Draghi, the ECB did not discuss possible rate cuts over the coming months. He argued that the ECB's lending operations have primarily been supportive to banks as corporate and household credit in the EU continues to contract.
Similarly, in a separate article it was said that German Bundesbank president Weidmann indicated concerns over the lowering of credit standards. Mr. Draghi admitted that the decision by the council to allow central banks to expand assets that can be used as collateral for additional liquidity was not unanimous. The concerns are reported to be significant, as Draghi has attempted to mend the damage created by conflicts with skeptical German policymakers over the euro zone crisis measures under the previous ECB president Trichet.
- Fitch's Global Sovereigns Managing Director Stringer discussed various European nations and their possible outcomes. He was concerned with Portugal's ability to make the necessary adjustments as it faces the prospects of a very serious recession this year, although he did add that it would not require another bailout. Similar sentiments were placed on Spain. Even though Spain could see more stabilization of a rating outlook if deficit comes under control, placing deficit under control is 'big if' due to growth prospects. On Greece, he said that it must secure an agreement to cut its debt burden in the next few days to prevent a 'disorderly' default.
- The British Chancellor of the Exchequer decided not to set lending targets as reported in the FT. Mr. Osborn e has decided to drop fixed lending targets agreed with the five main banks last year under the deal known as 'Project Merlin'. Officials are looking for government guarantees of up to £20B in bank funding, if savings are passed on to small businesses, and the median loan cost to small companies come down from their current level of approximately 4.5%.
***Looking Ahead***
- (CO) Colombia Monetary Policy Minutes
- (PE) Peru Dec Trade Balance: $200.0Me v -$13.3M prior
- 6:10 (UK) DMO to sell Bills
- 7:00 (SL) Slovenia to sell 3-month, 6-month and 12-month Bills
- 6:30 (CL) Chile Central Bank Economist Survey
- 6:30 (IN) India Forex Reserves w/e Feb 3rd: No est v $293.9B prior
- 8:30 (CA) Canada Dec Int'l Merchandise Trade: C$800Me v C$1.1B prior - 8:30 (US) Dec Trade Balance: -$48.5Be v -$47.8B prior
- 9:00 (GR) Greece PM Papademos holds Cabinet Meeting
- 9:55 (US) Feb Preliminary University of Michigan Confidence: 74.8e v 75.0 prior
- 14:00 (US) Jan Monthly Budget Statement: -$34.0Be v -$49.8B prior
- 14:00 (AR) Argentina Jan Consumer Price Index M/M: 0.8%e v 0.8% prior; Y/Y: 9.6%e v 9.5% prior
- 14:00 (AR) Argentina Jan Wholesale Price Index M/M: No est v 0.9% prior; Y/Y: No est v 12.7% prior
- 16:00 (CO) Colombia Jan Producer Prices M/M: No est v 0.1% prior; Y/Y: No ets v 5.2% prior
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