?? European Investor Confidence Falls to 3-Year Low

04 June 2012 09: 02 GMT THE TAKEAWAY: Sentix investor confidence hits 3-year low, still better than expected-> European leaders continue to disagree over crisis fighting measures-> Euro sees slight bounce before today's trading
European investors' optimism for the Eurozone has reached a 3-year low according to a Sentix survey. The Sentix investor confidence for June came in at - 28.9, the lowest score since May 2009, but still better than analysts' expectations for a - 30.0 survey result. Back in March of this year, the survey reached a six month high at - 8.2, before the survey results declined for the next four straight months.
The Sentix survey reported a 3.5 point dip in investor confidence for the current situation to - 35.0, and expectations for the future also dropped over 5 points to - 22.5.
Eurozone worries weighed on economic sense as European leaders continued to disagree before the weekend on how to solve the debt crisis. German Chancellor Angela Merkel said that she would not agree to joint debt issuance under any circumstances. US President Barak Obama joined the ECB, Italy, and France in pressuring Merkel to take further steps to control the crisis contagion.
EUR/USD didn't move much following the better than expected investor optimism survey. After the close of a bearish month that saw a 7% decline for the euro against the dollar, the pair started June with a bounce back above 1.2400 from a fresh 2-year low below 1.2300 during Friday's trading.

TradeTheNews.com European Market Update: ECB deposits hit fresh record levels following 3-year LTRO operation

 Friday, March 02, 2012 5:49:18 AM TradeTheNews.com European Market Update: ECB deposits hit fresh record levels following 3-year LTRO operation***Economic Data***

- (RU) Russia Narrow Money Supply w/e Feb 27th (RUB): 6.85T v 6.84T prior
- (EU) ECB: €572M borrowed in overnight loan facility v €3.0B prior; €776.9B parked in deposit facility (fresh record high) vs. €475.2B prior - (DE) Germany Jan Retail Sales M/M: -1.6% v +0.5%e; Y/Y: 1.6% v 0.2%e
- (FI) Finland Q4 GDP Q/Q: 0.1%e v 0.9% prior; Y/Y: 1.3%e v 2.7% prior
- (HU) Hungary Dec Final Trade Balance: €325.0M v €352.1M prelim
- (ES) Spain Feb Net Unemployment M/M: +112.3K v +80.0Ke
- (ZA) South Africa Feb Naamsa Vehicle Sales Y/Y: 6.4% v 6.5%e
- (NO) Norway Jan Retail Sales Volume Y/Y: 6.7% v 2.6%e
- (UK) Feb PMI Construction: 54.3 v 51.3e
- (EU) Euro Zone Jan PPI M/M: 0.7% v 0.5%e; Y/Y: 3.7% v 3.5%e
- (IT) Italy 2011 Annual GDP: 0.4% v 0.3%e; Deficit to GDP:% v 4.0%e
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- EU's Juncker: There is a plan B if the Greece debt swap fails
- Fed's Williams: More stimulus needed if recovery falters
- Euro Zone Leaders pave way for EU decision on Greek bailout agreement
- China diversifies away from USD
- Germany MoM Retail Sales disappoints
- Spanish Feb Net Unemployment climbs more than expected
Equities: FTSE 100 -0.10% at 5925, DAX flat at 6942, CAC-40 +0.20% at 3508, IBEX-35 +0.50% at 8592, FTSE MIB +0.60% at 16,926, SMI +0.10% at 6135
- European shares rallied lifted by a stronger banking sector which is up following ECB's LTRO allotment this week and press reports that EU leaders may agree to provide capital faster to the €500B permanent bailout fund. EU leaders may pay the first two installment this year and complete the capitalization in 2015, which is one year ahead of the schedule. Goldman Sachs also boosted the financial sector by upgrading European banks to Overweight
- Areva [CEI.FR] , as expected from yesterday's EU session, reported a €2.0B net loss due to provisions, the first loss in its history. However the company reiterated its outlook and noted that it aimed to raise at least €1.2B from asset sales in 2012-13 period. Meanwhile, the company agreed to sell both its stake in Eramet and in Canadian Millenium. Rentokil [RTO.UK] traded down after reporting its earnings and noted that its H1 performance in one of its units would continue to be disappointing.
Speakers: - The European fiscal compact was signed by 25 EU leaders. EU's President Van Rompuy stated that the measure would restore trust among EU states
- Germany Econ Min: Roesler commented in the German press that the supported the idea of placing a European Commissioner in charge of economic development in Greece but could not understand Greek objections to the proposal. He observed that the Greek people were aware of the needed sacrifices, but the Greek elite did not want to give up their privileges.
- BOJ Yamaguchi commented that the central bank might need new tools for its 1% CPI target and was flexible and ready to move if necessary. He noted the BOJ was not thinking about unwinding measures nor saw the need at this time to extend JGB period under program
- Japan Public Pension Fund (GPIF) (world's largest) reported its Oct-Dec qtr returns which rose by 0.58% compared to a prior loss of-3.32% q/q. It noted that it's posted a profit of ¥618.7B due to returns on foreign stocks. Assets at Jan end to head down to ¥108.1T.
- S&P EMEA managing director Fernandez de Heredia commented that Italy could return to an 'A' rating if country moved in the right direction regarding its debt, its growth and reforms. The first step by the rating agency would entail a change of Italy's outlook from negative to stable which depended on the debt, growth and the economic impact of the reforms of PM Monti's government. If Italy goes in the right direction, S&P wouldl take this first step. The recent decrease seen in govt' yields were not enough for the outlook to change, only sustainable impact of the reforms on growth can change the outlook
- Japanese purchasers seek force majeure clause in the event it was unable to pay Iran, or lift Iranian crude for lack of ship insurance coverage
Currencies:
- Concerns that the EU Leaders were waiting for the final outcome of the Greek PSI swap on March 9th and weaker German retail sales data pressured the EUR/USD from the getgo of the session. The record amount of deposits in the ECB's facility seemed to mirror the net new borrowing from the recent 3-year lending LTRO and prompted concerns whether bank would actually lend to assist the real economy.
- The EUR/USD tested 1.3240 before stabilizing in the session but was off some 505 pips from its Asian opening levels.
- The JPY weakness stalled during the mid-morning after testing 81.71. The higher oil prices said to be another factor weighing against the JPY currency sentiment as Japanese demand for oil surged after last year nuclear disaster.
Political/ In the Papers:
- The FT commented on concerns in Germany about the growth of the Bundesbank's balance sheet. The state bank's Target2 balance is about €500B, which reflects the amount that the German central bank has lent to the ECB. According to Commerzbank, Target2 claims are the largest part of the Bundesbank's balance sheet. As a reminder, Target2 is the joint gross clearing system of the ESCB that unifies the technical infrastructure of the 26 central (note-issuing) banks of the EU.
- Prosecutors in Germany raided various properties across Europe as part of an insider trading probe related to allegations that certain investors tried to inflate prices for penny stocks. German officials raided 53 properties in Germany and inquired about 29 other sites outside of Germany.
- The Telegraph's Ambrose Evans-Pritchard suggested that the recent European unemployment data shows a widening prosperity gap between the Northern and Southern EU economies. SocGen analyst Klaus Baader believed the EU's austerity measures are having a more negative than expected impact on the EU's labor markets, particularly in the peripheral countries.
- In an IMF report to the G20 ministers last weekend in Mexico, it was recommended that the ECB lower the target rate to less than 1% in addition to emergency loans to commercial lenders. Monetary policy needed to be kept highly accommodative, which the IMF said could be done by lowering the target policy rate (where there is still room), and by more unconventional measures if necessary.
- In its Credit Review Office (CRO) quarterly report on SMEs, the Ireland Finance Ministry targeted new lending requirements for both Allied Irish and Bank of Ireland. The new plan will require each bank to lend €3.5B in 2012, followed by an additional €4B each in 2013. Lending can take the form of new loans or restructuring old debt.
***Looking Ahead*** - (EU) EU Leaders Summit in Brussels
- (ES) Spain to present new budget targets
- 8:30 (CA) Canada Dec Gross Domestic Product M/M: +0.3%e v -0.1% prior; Y/Y: 1.9%e v 2.0% prior; Quarterly GDP Annualized GDP Y/Y: 1.8%e v 3.5% prior
- 9:45 (US) Feb ISM New York: No est v prior
- 10:00 (DK) Denmark Feb Foreign Currency Reserves (DKK): No est v 492.6B prior
- 16:00 (CO) Colombia Feb Producer Price Index M/M: No est v -0.5% prior; Y/Y: No est v 3.7% prior
- 20:00 (CN) China Feb Non-Manufacturing PMI: No est v 52.9 prior
- 20:00 (US) Fed's Bullard speaks on U.S. Economy in Vancouver
Weekend
Sat: (US) Republican Washington Caucus
Sun 18:00 (EU) Bank of International Settlements (BIS) holds Global Central Bank Meeting
Sun (RU) Russia Presidential Election 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: ECB 3-year LTRO allotment in line with expectations while number of bidders surged to 800

Wednesday, February 29, 2012 5:49:24 AM

 TradeTheNews.com European Market Update: ECB 3-year LTRO allotment in line with expectations while number of bidders surged to 800

***Economic Data***
- (EU) ECB: €4.9B borrowed in overnight loan facility v €1.1B prior; €481.1B parked in deposit facility vs. €475.2B prior
- (IN) India Quarterly GDP Y/Y: 6.3%e v 6.9% prior
- (ZA) South Africa Jan Private Sector Credit Y/Y: 7.3% v 7.1%e; M3 Money Supply Y/Y: 6.6 v 8.6%e >- (DE) Germany Jan Import Price Index M/M: 1.3% v 0.7%e; Y/Y: 3.7% v 3.0%e
- (DE) Germany Jan ILO Employment: 41.37M v 41.28M prior; Unemployment Rate: 5.8% v 5.7% prior
- (FI) Finland Dec Final Trade Balance: -€533M v -€475M prelim
- (TH) Thailand Jan Business Sentiment Index: 50.8 v 48.5 prior
- (FR) France Jan Consumer Spending M/M: -0.4% v +0.2%e; Y/Y: -2.2% v -2.0%e
- (DK) Denmark Q4 Preliminary GDP Q/Q: 0.2% v 0.6%e; Y/Y: 0.6% v 0.2%e
- (ES) Spain Feb Preliminary Consumer Price Index Y/Y: 2.0% v 1.9%e; CPI EU Harmonized Y/Y: 1.9% v 1.9%e >- (CH) Swiss Feb KOF Swiss Leading Indicator: -0.12 v -0.10e
- (TR) Turkey Jan Trade Balance: -$7.0B v -$6.4Be
- (TW) Taiwan Jan Leading Index M/M: 1.0% v 1.0% prior; Coincident Index M/M: 0.2 v 0.0% prior
- (HK) Hong Kong Jan M2 Money Supply Y/Y: 5.6% v 4.6% prior; M3 Money Supply Y/Y: 5.5% v 4.6% prior; M1 Money Supply Y/Y: 1.3% v 8.8% prior
- (SE) Sweden Q4 GDP Q/Q: -1.1% v -0.7%e; Y/Y: 1.1% v 2.6%e
- (SE) Sweden Dec Non-Manual Worker Wages: 2.7 v 2.6% prior
- (DE) Germany Feb Unemployment Change: 0K (flat) v -5Ke; Unemployment Rate: 6.8% v 6.7%e
- (AT) Austria Jan Consumer Price Index M/M: -0.3% v +0.2% prior; Y/Y: 3.0% v 3.2% prior
- (CZ) Czech Jan Money Supply Y/Y: 6.0% v 5.3% prior
- (IC) Iceland Jan Final Trade Balance (ISK): 10.1B v 12.0B prior
- (NO) Norway Jan Credit Indicator Growth Y/Y: 6.9% v 6.7%e
- (NO) Norway Q4 Manufacturing Wage Index Q/Q: 1.4% v 2.1% prior
- (UK) Jan Net Consumer Credit: £0.1B v £0.2Be; Net Lending: £1.6B v £0.8Be >- (UK) Jan Mortgage Approvals: 58.7K v 54.0Ke (highest reading since Dec 2009)
- (UK) Jan M4 Money Supply M/M: +1.6% v -1.4% prior (fastest growth since Oct 2009); Y/Y: -1.8% v -2.5% prior; M4 Ex IOFCs 3M Annualized: no est v -0.8% prior
- (EU) Euro Zone Jan CPI M/M: -0.8% v -0.8%e; Y/Y: 2.6% v 2.7%e; CPI Core Y/Y: 1.5% v 1.7%e
- (CH) Swiss Jan CPI EU Harmonized M/M: -0.7% v -0.3%e; Y/Y: -0.9% v -0.7%e
- (GR) Greece Dec Retail Sales Value Y/Y: -11.0% v -6.4% prior; Retail Sales Volume: 12.7% v -8.9% prior
- (ES) Spain Dec Current Account: -€3.6B v -€4.1B prior
- (IE) Ireland Feb Live Register Monthly Change: -1.8K v -3.2K prior; Unemployment Rate: 14.2% v 14.2% prior; Live Registry Level: 438.3 v 440.1 prior

Fixed Income:
- (EU) ECB allots $3.5B in 7-Day USD Liquidity Tender at fixed 0.61% vs. $3.6B prior
- (EU) ECB allots $14.5B in 3-Month USD Liquidity Tender at fixed 0.62% vs. $9.4B prior
- (SE) Sweden sells total SEK10B vs. SEK10B indicated in 3-month and 7-month Bills
- (EU) ECB allots €6.5B in 3-Month Tender (MRO) vs. €19.6B prior >- (EU) ECB allotted €529.5B in 3-Year Lending Tender (LTRO) vs. €500Be; Bidders at 800 vs. 523 prior
- (DE) Germany sold €3.258B in 2.0% Jan 2022 Bund; Avg Yield 1.83% v 1.82% prior; Bid-to-cover: 1.4x v 1.4x prior

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Dow Jones Industrial closes above the 13,000 level for the first time since 2008
- Fed member Pianalto: Will take five years to get back to 6% unemployment
- Japan fund managers raise global equity weighting in Feb
- German Unemployment change slightly weaker than expected but unchanged MoM
- ECB 3-year allotment in line with expectations at €529.5B but had 800 banks participate vs. 523 prior

Equities: >FTSE 100 flat at 5928, DAX +0.40% at 6916, CAC-40 +0.30% at 3460, IBEX-35 +0.24% at 8548, FTSE MIB +0.75% at 16,466, SMI +0.20% at 6135

- Markets traded up ahead of ECB's LTRO which boosted optimism that the second long-term refinancing operation would ease the tension in the banking sector. Data showed that the 3-year tender, which was slightly higher than expected, attracted 800 bidders from 523 prior. Markets are still digesting the news and are moving erratically but remain in positive territory. Banks rallied during the session.
- Standard Chartered [STAN.UK] was up approx. 2% after releasing better than expected earnings and increasing its dividend. Bank also expected to see double digit EPS growth in medium term. ITV [ITV.UK] also rose after exceeding expectations. Swiss cement-maker, Holcim [HOLN.CH] was higher after reporting a narrower than expected loss and higher revenues. Company expects higher demand across its geographic segments. Hochtief [HOT.DE] reported a loss for its full year and expected that its 2012 pretax profit to be lower than 2010 level. Company also announced that it would not pay a dividend in 2011. Shares were lower.

Speakers: >- EU Leader Summit draft document noted that the region was taking all required measures to facilitate economic growth and pledge June agreement on pilot phase of project bonds. The summit to pledge differentiated fiscal consolidation. The EU saw need to aid banks without excessive deleverage and sought more precise commitments on reforms and targets
- BOE members King, Bean, Tucker and Posen all testified on inflation in Parliament.
- BOE Gov King commented that unwinding QE was relatively straight forward operation with the process is a lot easier compared to stimulating the economy. The BoE would take whatever action it thought was appropriate on QE and no hard and fast expectation that BoE was going to do a lot more QE. Main reason for QE was to bring growth in broad money back to normality
- BOE member Posen stated that second round of QE wouldl be as successful as the first round and that the QE2 now was different than 2009 because market was not in panic mode. Lastly he noted that Japan needed to react quickly on its monetary policy.
- BOE member Bean stated that he saw a gradual strengthening of UK economy and that inflation would fall back to target in the near term. He did caution some uncertainty over further inflation moderation down the road and noted headwinds from fiscal consolidation and de-leveraging
- BoE Tucker noted that the outlook was highly uncertain and needed to keep policy under review
- BoJ Gov Shirakawa commented to parliament that the central bank would pursue strong monetary easing policy. The Gov reiterated his view that the central bank would maintain Zero Rate Policy until the 1.0% price target was in sight.
- Japan Fin Min Azumi also noted in Parliament that the BoJ effectively adopted inflation goals with a clear target of price increases
- Italy Dep Fin Min Grilli commented that the risk of debt crisis contagion had yet to be overcome
- Poland Finance Ministry said to have forecasted its Q4 GDP at 4.3%
- Ireland Central Bank dep gov Gerlach: The central banks must do more to assess risks
- Sweden Central Bank (Riksbank) released its February Minutes which note that sluggish Euro Area growth impacted Swedish exports more than expected and concluded that inflationary pressures were low in the years ahead. Various members echoed the same theme in their commentary. Gov Ingves noted that he saw big differences between Northern and Southern Europe in terms of growth while there were bright spots in US economy. Member Jansson expressed concerned over slow pace of Euro Area improvement but recent agreement on EU Fiscal Compact was encouraging. Member Jochnick noted that economic developments in Europe weakened since December but Europe was on the right path and member Wickman-Parak added that the European economic slowdown had a pronounced effect on Sweden's exports with sSome improvement recently in both domestic and international data. She added that she could not see any reason to stop the current rate cuts
- German gov't spokesperson commented that the German cabinet supported solar-subsidy draft legislation

Currencies:
- The FX markets were steady heading into the ECB 3-year lending operation but overall dealer sentiment was stacked against the greenback due to the LTRO operation in Europe and the semi-annual testimony from Fed Chairman Bernanke. - The price action was initially choppy following the results of the 3-year LTRO but the number of banks participating added some concern. The EUR/USD drifted lower into the NY open around the 1.3440 level. There was some chatter of a large 1.3500 option barrier in the pair circulating (but unconfirmed).

Political/ In the Papers:
- Morgan Stanley had expected banks in Italy and Spain to increase their holdings of government debt by up to €120B in sovereign debt. Recent data from the ECB showed that Spanish and Italian banks increased holdings of their country's sovereign debt by record amounts in Jan.
- Out of Germany, the Frankfurt court banned airport strike action, adding that impact caused by air traffic controllers announced by the GdF union would be 'disproportionate' to the support it would provide for the demands by the ground workers. The GdF union stated that it would appeal against the court decision.
- The Telegraph's Ambrose Evans-Pritchard looked at the possible implications from Ireland's planned referendum on the EU fiscal pact. The move by Irish officials could lead to clashes with German officials. Although Ireland's top political parties support the treaty, some analysts believe there is a high risk that the measure could be rejected by their voters. Note that Ireland voted "No" to both the Nice and Lisbon treaties before being made to vote again. If Ireland rejects the fiscal agreement, it would make it harder for the company to receive a second EU bailout, if needed.

***Looking Ahead***
- 6:00 (EU) EU to propose competition and capital rules for Trade Settlement
- 6:00 (NL) Netherlands Parliament votes on second Greek bailout package
- 6:30 (CL) Chile Central Bank Meeting Minutes
- 7:00 (FI) Finland Parliament votes on second Greek bailout package
- 7:00 (UK) PM question time in House of Commons
- 7:00 (CL) Chile Jan Industrial Production Y/Y: 2.4%e v 0.5% prior; Industrial Sales Y/Y: No est v 0.4% prior
- 7:00 (CL) Chile Jan Total Copper Production: no est v 509.4K tons prior
- 7:00 (CL) Chile Jan Retail Sales Y/Y: 8.8%e v 10.1% prior
- 7:00 (US) MBA Mortgage Applications w/e Feb 24th: No est v -4.5% prior
- 7:00 (ZA) South Africa Jan Budget (ZAR): No est v 20.9B prior
- 8:00 (EU) EU's Barnier speaks at Event in Brussels
- 8:00 (EU) EU's Barroso
- 8:00 (PL) Poland Central Bank (NBP) Feb Inflation Expectations Survey: No est v 5.2% prior
- 8:30 (US) Q4 Final GDP Q/Q Annualized: 2.8%e v 2.8% prelim; Personal Consumption: 2.0%e v 2.0% prelim >- 8:30 (UD) Q4 Final GDP Price Index: 0.4%e v 0.4% prelim; Core PCE Q/Q: 1.1%e v 1.1% prelim
- 8:30 (BR) Brazil Jan Nominal Budget Balance (BRL): No est v -18.6B prior; Primary Budget Balance: No est v +1.9B prior; Net Debt to GDP ratio: No est v 36.5% prior
- 9:00 (CA) Canada Dec Teranet/National Bank House price Index M/M: No est v -0.2% prior; Y/Y: No est v 7.1% prior; HPI Index: No est v 149.11 prior
- 9:30 (US) Fed's Fisher speaks on economy in Mexico City
- 9:30 (UK) Treasury Minister Hoban testifies on Euro-Area Crisis
- 9:45 (US) Feb Chicago Purchasing Manager: 61.0e v 60.2 prior
- 9:45 (UK) BOE to buy £1.5B in 2019-2025 Gilts in reverse auction
- 10:00 (US) Fed Chairman Fed's Bernanke delivers semi-annual Monetary Policy Report
- 10:00 (US) Feb NAPM-Milwaukee: 58.8e v 58.4 prior
- 10:30 (US) Weekly DOE Energy Inventories
- 10:30 (BR) Brazil Central Bank weekly currency flows
- 11:00 (CO) Colombia Jan Urban Unemployment Rate: 10.8%e v 10.4% prior
- 11:00 (EU) EU Juncker before EU Parliament
- 11:00 (IT) Italy PM Monti with Portugal PM Coelho
- 12:00 (GR) Expected ISDA ruling if Greek sovereign credit event occurred
- 12:00 (DE) German Chancellor Merkel hosts Town Hall on Germany's Future in Erfurt
- 13:00 (US) Fed's Plosser speaks on economy in New York
- 14:00 (US) Fed Releases Beige Book Economic Survey
- 14:00 (EU) Denmark PM Thorning-Schmidt speaks at Brussels Think Tank
- 14:00 (AR) Argentina Jan Construction Activity M/M: No est v 1.2% prior; Y/Y: No est v 2.6% prior
- 20:00 (CN) China Feb Manufacturing PMI: 50.8e v 50.5 prior
- 21:30 (CN) China Feb HSBC Manufacturing PMI: No est v 48.8 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.