TradeTheNews.com USA market update: QE addicts send shares higher ahead of FOMC patch

The U.S. Market Update: QE addicts send shares higher rate before FOMC

By sending more dependent correction EQ before FOMC
Dow Jones S & P 500, NASDAQ 109 31 9.3

Economic data ******
- (USA) of the FCT / GS weekly sales of chain stores w / e 16th June: 0.0% w / w, 3.6% y / y
- (PL) Poland May Jobs M / M: 0.0% v 0.0% e, A / C: 0.3% and 0.3% v
- (PL) Poland Wages May means of M / M: -2.7% -2.5% ev A / C: 3.8% 4.0% ve
- (United States) May Starts: v 722Ke 708k, Building Permits: 780K 730K V
- (CA) Canada in April large M / M: 1.5% 0.2% ve
- (IS) Israel in May, the first "S" indicator M / M: 0.2% v 0.2% prior
- (USA) Redbook retail w / e 16th June: 2.5% y / y in May BAT: 0.5%
- (EU) foreign exchange reserves of the ECB this week before 226.9B 225.0B v
- (U.S.) jobs in April shocks: M v 3.685Me
- (EU) EFSF sold 1.466B vs. calculations 1.5b indicates 0.1421% 6 months 0.2033% average annual return before v; offers start to finish: 2.1xv 2.5 times before
- (EU) ECB drains 210.5B 210.5B vs. white deposit

The European and American markets are strong gains this morning, as traders expect the FOMC decision tomorrow and the convenience of the probable formation of a government in Greece. New Democratic Party of Greece seems to have a coalition government brought together with another party PASOK and the Left, as with PM Samaras. Overall, the analysts expect the Fed to some form of quantitative easing (QE3) to implement in the session, either by expanding its balance sheet and / or extension of its operating budget. In Europe, opened in the German ZEW survey, the lowest door to rate cuts by the ECB and the softer UK CPI data increases the chances of a rate cut by the Bank of England and QE. In addition to these positive catalysts, housing and construction starts report could help was very good. Residential construction has fallen slightly from tip of 3-1/2 years in April, while approvals have risen sharply, reflecting a nascent recovery in residential construction in progress.

- FedEx, more or less the profit and revenue expectations in its Q4 report, however, expectations for Q1 FY13 and were decidedly disappointing. In addition, the company's operating margin suffered a very strong y / y comp, after several quarters of comp easy comparison. U.S. and international packages daily volume fell last year. Management increased its cost reduction plans. In the press conference said the leader of the European company is very well despite the crisis. FDX is 3%, after losing about 2% in premarket trading.

- Oracle announced its results for the fourth quarter, 3 days earlier than planned after the revelation yesterday's stronger-than-expected quarterly results. The early release came after the news of the imminent departure raises the senior sales concern that the company was stagnating. Note that the firm Q1 earnings guidance was a little soft, while no recovery of the recipe for company material in the first quarter. ORCL part is 3%.

- Walgreen shares are 6% after the company acquired a 45% stake in Alliance Boots, based in Switzerland in a $ 6.7 billion in cash and stock. The purchase represents the first foray of international society, and Walgreen have the opportunity to the rest of Alliance Boots to buy in three years. The company said its Q3 profit first news of the offer, including a 6.6% decline in sales thanks to a terrific compositions by March / April sales development. The company increased its dividend by 22%.

- Discover are financial products and Q2 revenues above expectations, but the benefits of Ay / y basis has been reduced. The results included an ominous sign: see increased its reserves for credit losses by a significant amount. Sales of both cards and transaction volumes have been by healthy margins. DFS shares are 1% in the markets.

- Shares of Microsoft rose by almost 4% this morning after the company tender opening tablet computer. The reactions to the Microsoft Surface device were different: Analysts agree that the specifications of the device are impressive, but few expect the tablet to much dent in the huge advantages of making iPad. In addition, the unit's success could relate to individual users and companies to embrace Windows 8 and radical rethinking of the Windows interface.

Looking ahead ******
- (FI) Finland Parliament votes on the European Stability Mechanism (ESM)
- (U.S.) Diamond convinced JP Morgan
- (MX) G-20 Leaders' Summit in Los Cabos, Mexico
- 11.30 (U.S.) Treasury to sell $ 30 billion in Letters of 4 weeks
- 16.30 (U.S.) API weekly crude inventories
- 17:00 (CO) in Colombia in April trade balance: It is not $ 10, before the basis, imports cif F: No's. V $ 4900000000 before
- 18.50 clock (JP) Balance of trade in goods from Japan in May:-v-522.0B prior 544.4Be WO-v-347.7Be 480.2Be
- 18.50 clock (JP) BoJ minutes

? EU market update: Spanish 10-year yields remain above the level of 6% as many questions about Spain.

Monday, June 11, 2012 5:38:18 AM TradeTheNews.com EU Market Update: Spanish 10-year yields remain above the 6% level as plenty of questions remain regarding Spain.***Economic Data***
- (EU) ECB: ?1.9B borrowed in overnight loan facility vs. ?1.5B prior; ?788.2B parked in deposit facility vs. ?756.6B prior
- (JP) Japan May Consumer Confidence: 40.7 v 39.8e
- (JP) Japan May Preliminary Machine Tool Orders Y/Y: -2.9% v v 0.4% prior
- (FR) France Apr Industrial Production M/M: +1.5% v -0.1%e; Y/Y: +0.9% v -0.3%e >- (FR) France Apr Manufacturing Production M/M: -0.7% v -0.7%e; Y/Y: -1.4% v -0.9%e
- (CZ) Czech May CPI M/M: 0.2% v 0.1%e; Y/Y: 3.2% v 3.1%e
- (DK) Denmark Apr Current Account (DKK): 9.4B v 5.5Be; Trade Balance (ex-shipping): 6.1B v 6.3Be prior
- (DK) Denmark May CPI M/M: 0.0% v 0.0%e; Y/Y: 2.1% v 2.1%e
- (DK) Denmark May CPI EU Harmonized M/M: 0.0% v 0.0%e; Y/Y: 2.0% v 2.0%e
- (ES) Spain Apr House transactions Y/Y: -9.9% v -22.7% prior
- (TR) Turkey Apr Current Account: -$5.0B v -$5.0Be
- (IT) Italy Q1 Final GDP Q/Q: -0.8% v -0.8%e; Y/Y: -1.4% v -1.3%e
- (CN) China May M2 Money Supply M/M: 13.2% v 12.8%e; M1 Money Supply M/M: 3.5% v 3.2%e; M0 Money Supply M/M: 10.0% v 10.6%e >- (CN) China May New Yuan Loan (CNY): 793.2B v 700.0Be
- (NO) Norway May CPI M/M: 0.0% v 0.1% prior; Y/Y: 0.5% v 0.3% prior
- (NO) Norway May CPI Underlying M/M: 0.4% v 0.1% prior; Y/Y: 1.4% v 0.7% prior
- (NO) Norway May Producer Prices incl.Oil M/M: -2.1%v -1.6% prior; Y/Y: 2.5% v 2.5% prior
Fixed Income:
- (PH) Philippines rejected all bids in 3-month, 6-month and 12-month Bills
- (SK) Slovakia Debt Agency (ARDAL) sold ?138.0M in 4.35% 2025 Bonds; Avg Yeild 4.2583%; Bid-to-cover: 1.39x
- (NO) Norway sold NOK3.0B vs. NOK3.0B indicated in 2% 2023 Bonds; Yield 2.16%
- (DE) Germany sold ?3.53B in 6-Month BuBills; Avg Yield 0.0070% v 0.0371% prior; Bid-to-cover: 1.2x v 1.5x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Risk on sentiment prevails following ?100B Spanish banking sector aid agreement; initial impact was waning ahead of the NY morning.
- Components of China Trade Balance (exports/imports) show improvement
- China new Yuan loans shows RRR cuts are working
- Spain 10-year Govt bond unable to sustain sub-6.0% yield in session
- S&P: India may be first of BRICS nation to lose investment grade rating
***Equities*** >Indices: IBEX-35 +3.8% at 6799, FTSE 100 +1.3% at 5505, DAX +2.2% at 6265, CAC-40 +1.9% at 3116, FTSE MIB +1.9% at 13,688, SMI +1.3% at 5943, S&P 500 Futures +0.90% at 1340
- Equity indices opened the session sharply higher amid Spain's decision to seek aid for its banks and better than expected May exports data out of China. The gains for the session have been largely driven by banks in Spain, as some of the country's large financial institutions opened the session higher by over 9%. Spain IBEX-35 is continuing to outperform, as the index opened higher by over 5%. Resource related companies are broadly higher (Xstrata, Rio Tinto and BP are trading higher by approx. 2%) on higher commodity prices. Amid the rebound in the European equity markets and announcement related to Spain, corporate bond market activity has picked-up on the session. Companies speculated to issue bonds in the near-term include Accor [AC.FR], France Telecom [FTE.FR], GE Capital, Swedbank [SWEDA.SE] and Volkswagen [VOW3.DE].
- Shares of Tesco [TSCO.UK] are trading off of the best levels for the session, following the release of the firm's Q1 sales figures. Tesco also reaffirmed its FY targets, as it noted that consumer confidence levels in the UK have been largely stable. Engineering and construction services firm Severfield-Rowen [SFR.UK] has lost over 10% after issuing a profit warning, while Mouchel [MCHL.UK] is lower by over 25%, as the firm disclosed that strategic options being considered might result in only limited value for existing shareholders. In France, Technicolor [TCH.FR] has gained over 4%, after rejecting a ?1.90/share offer from JP Morgan. Porsche [PAH3.DE] is trading higher by ~4%, as a German press report said the company might be able to avoid paying ?1.5B in taxes, as part of its merger with Volkswagen. Amid the story related to Porsche, shares of Volkswagen have risen by ~3.5%. Additionally, a separate press report said that Volkswagen is said to be planning to raise its Chinese production by approx. 100% in the next few years.
Speakers: >- Spain Treasury commented that details of bank sector aid yet to be established but the plan did include buffers on top of worst case scenarios. The dept reiterated its view that its funding program would not be changed
- EU's Almunia: Believes ?100B aid would be enough for Spain; Bailout to include conditions; interest rate and timing not yet determined
- EU Commission Official Altafaj commented that the loan to Spain might have avg interest rates of 3-4%. The agreement should not impact Spain's deficit, but would impact its indebtedness. Loan to have strict conditions related to the overhaul of Spain's banking sector but the amount of the loans might not reach ?100B level
- Moody's commented that developments in Spain and Greece might prompt Euro Area sovereign rating downgrades
- Portugal PM Coelho: No reason to ask for new conditions for Portugal's financial aid program following the rescue request for Spanish banks
- Finland Fin Min Urpilainen stated that Finland would demand collateral or its share of emergency loans to shore up the Spanish banking system if aid comes from EFSF facility
- ECB Constancio urged accountants to adopt a long-term view to risks as focusing on shareholder volume provideed only short-term perspective. Fair value accounting could be "Outright wrong" and that current provisioning methodology was a risk to financial stability
- JP Morgan commented on Spain: Country's debt to GDP ratio would jump to around 90% from 81% if the entire ?100B package is used
- Germany Public Banking Assoc official Voeb commented that the sovereign debt crisis was heightening and putting earnings under pressure. The Spain banking sector bailout would help stabilize markets
- S&P commented on China's revised capital rules and noted there were in line with expectations and could push the banking sector to shore up capital
- S&P stated that India might be first of BRICS nation to lose its investment grade rating (**Note: currently at BBB-, outlook negative)
- Japan Govt nominated Takahide Kiuchi and Takehiro Sato as BoJ board members with a parliamentary vote expected mid-week
- Thailand Central Bank reiterated its view that it no need to take any action in FX markets at this time as recent THB currency (Baht) volatility was caused by external factors and that most capital inflows detected were short term
- OPEC President commented that there was a tremendous surplus in oil market but rejected idea of quota system at this stage. Iraq planned 2.9M bpd exports in 2013 vs. 2.4M bpd currently and saw $100-120/barrel as a reasonable price. Iraq was not substituting Iranian production at this time
Currencies:
- Relief and reversing of safe-haven flows characterized the early part of today's session but dealers still had plenty of questions regarding Spain. Thus the markets still needed to be convinced that the weekend agreement was not just a bunch of headlines masking the core problem before Greek election. Key points including where money would come from and in what form it would take (Cash or bonds). Also which banks still to be determined? Overall dealers noted that contingent liabilities were now way higher nonetheless.
The Spanish 10-year Govt bond yield briefly dipped below the 6.0% for the first time in almost a month but could not sustain the momentum to hold that level.
- Swiss names were said to be once again behind the soft tone in Euro after the open with renewed chatter circulating that the SNB might be legging out of the Euros accumulated from its defense of the EUR/CHF floor at 1.2000. The EUR/USD hovered below the pivotal 1.2630 level throughout the European morning after a test above during Asia.
Political/ In the Papers:
- Certain Greek energy companies were reported to have been seeking to obtain emergency bank loans in order to pay suppliers and prevent power cuts.
- The Telegraph's Ambrose Evans-Pritchard anticipated the ?100B bailout for Spanish banks as a loan package to the sovereign state of Spain will raise the country's public debt by up to 10% of GDP. In addition, the rescue package is less than some market estimates; JP Morgan said Spain requires ?350B; RBS placed the estimate at ?450B.
- Comments made by JP Morgan analyst expects the Spanish debt to GDP ratio would jump to around 90% from 81% if the entire ?100B package were to be used. This compares to forecasts made by Spain in April where it forecasted the 2012 debt/GDP ratio at 79.8% vs. 68.5% y/y
- The French President Hollande and his party moved closer to securing the majority needed to govern France with first round results predicting the Socialists and other leftists will take a majority of the 577 seats in the National Assembly in the second round on the 17th June. Four polling agency projections and early official results show diminished support for former President Nicolas Sarkozy's conservative UMP party across the country. They show growing support for the left, amid anger at cost-cutting austerity measures and reforms under Sarkozy seen by some as too friendly to the rich.
- According to the Populus poll 80% of the British population support a European referendum. A third support a referendum in the next few years compared to the 18% seeing no need for one in the foreseeable future.
- In a report released by Deutsche Bank the Irish housing market is expected to continue to be significantly oversupplied. The vacancy rate is at 15% with over 289K empty houses (including approx 60k vacant holiday homes). According to the bank, if current population trends are sustained, housing oversupply will take 43 years to clear.
***Looking Ahead***
***All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- (ES) IMF report on Spain's banking sector
- (DE) German Chancellor Merkel attends event honoring Frankfurt Mayor Roth
- (PT) Bank of Portugal Releases Data on Banks
- 6:00 (PT) Portugal Apr Trade Balance: No est v -?842M prior
- 6:00 (EU) Apr Leading Indicators: No ets v 100.4 prior
- 7:00 (IE) Ireland May Consumer Confidence: No est v 62.5 prior
- 7:30 (FI) IMF review of the Finland
- 7:30 (BR) Brazil Central Bank Weekly Economists Survey
- 8:00 (RO) Romania to sell 12-Month Bills
- 9:00 (MX) Mexico Apr Industrial Production M/M: 0.6%e v 1.5% prior; Y/Y: 4.8%e v 3.1% prior
- 9:00 (MX) Mexico Apr Final Trade Balance: $560Me v $560.2M prelim
- 9:00 (FR) France Debt Agency (AFT) to sell between ?7.8B in 3-month, 6-month and 12-month bills
- 9:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 9:30 (EU) ECB calls for bids in in 1-Month Tender
- 9:30 (EU) ECB announces weekly settlements in its Govt Bond Purchase program
- 11:00 (MX) Mexico May Vehicle Production: No est v 206.4K prior; Vehicle Domestic Sales: No est v 69.9K prior; Vehicle Exports: No est v 168.9K prior
- 11:00 (US) Fed to sell $1.00-1.50B in Notes
- 11:30 (US) Treasury to sell $30B in 3-Month and $27B in 6-Month Bills
- 12:00 (EU) EU's Rehn speaks at European Parliament in Strasbourg, France
- 12:00 (US) Fed's Lockhart speaks on U.S. Economy in Chicago
- 12:00 (US) Fed's Williams delivers opening remarks in San Francisco
- 13:45 (CA) Bank of Canada's Carney gives intro at Montreal Conference
- 18:00 (US) Fed's Pianalto speaks on Improving Educational Attainment
- 20:00 (JP) BOJ Governor Shirakawa speech to San Francisco Fed. 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. Daily Forex 

Asian Market Update: EU leaders call on Greece to work harder,

- (CN) CHINA MAY HSBC FLASH MANUFACTURING PMI: 48.7 V 49.3 PRIOR FINAL (7th consecutive contraction) >- (NZ) NEW ZEALAND APR TRADE BALANCE (NZ$): 355M V 400ME (11-month high); TRADE BALANCE YTD: -541M V -651ME 
- (NZ) NEW ZEALAND ANNUAL BUDGET RELEASE: AFFIRMS TARGET OF RETURNING BUDGET TO SURPLUS IN 2015
- (AU) AUSTRALIA Q1 CBAHIA HOUSE AFFORDABILITY: 61.8 V 58.5 PRIOR
- (JP) JAPAN BOJ MONTHLY ECONOMIC REPORT: Increasingly Evident Japan Economy Is Shifting To Pickup
- (KR) SOUTH KOREA Q1 HOUSEHOLD CREDIT Y/Y: +7.0% V 7.8% PRIOR (lowest level since Sept 2009)
- (VN) Vietnam May CPI m/m: 0.2% v 0.1% prior; y/y: 8.3% v 8.9%e
- (JP) Japan investors bought ?244B in foreign bonds last week v ?1.26T bought in prior week
- (AR) Argentina Apr Primary surplus ARS1.06B v ARS1.97B y/y
***Markets Snapshot (as of 05:00GMT)***
- Nikkei225 0.5%
- S&P/ASX -0.3%
- Kospi -0.3%
- Singapore Straits Times Index +0.1%
- Shanghai Composite -0.3%
- Hang Seng -0.6%
- June S&P Futures -0.3% at 1,311
- June gold +0.7% $1,559/oz
- July Crude +0.5% at $90.38
***Overview/Top Headlines***
- Late US session strength came amid rumors that Germany would announce support for a bank deposit guarantee scheme to be announced after the EU summit. However, as the various leaders trickled out of the meeting, little new was said with continued conflicting opinions on euro zone bonds. France President Hollande said there are insufficient investment incentives in the EU, proposed Euro zone bonds. He did admit that not all countries shared his view on growth instruments, but there were several that had similar views. He also reiterated support for a transaction tax. Leaders affirmed their support for Greece staying in the EU, but urged the troubled country to stick with its mandates. EU's Juncker does not expect euro zone bonds any time soon; Preparations must be made for all scenarios. Van Rompuy said leaders agreed to strengthen economic union to match monetary union, more details to come in June. Also that no decision on where new capital would come from for EIB. EUR/USD fell below $1.2560 on the news with only a slight recovery heading into the start of the European session. EUR/JPY fell to ?99.70.
- China May HSBC flash PMI showed a 7th consecutive contraction to 48.7, new export orders also declined below 50 to 47.8. This will only strengthen calls for easing measures from China's leaders to sustain growth and reach 7.5% 2012 GDP target. Equities in China, Australia and Hong Kong slid a bit weaker on the news but softness was limited. A China NDRC researcher called on the PBoC to cut rates if CPI falls below 3% (April CPI was 3.4%). US credit rating agencies came out with cautious comments on China property markets, with a general consensus that any further tightening measures on the sector will be limited this year.
- New Zealand released its budget affirming a return to surplus in 2015 (press had speculated that it may return to surplus sooner). New Zealand warned that a Greek exit from the EU could hamper its ability to reach the goal.
- Commodities were stronger in the session with silver +0.9% to $27.75, copper +0.7% to $3.42, corn and wheat contracts were both stronger in the session. The US dollar was weaker against the Won, Philippine Peso and S$.
***Speakers/Geopolitical/In the press***
- (CN) Shadow banks in Wenzhou, China charging as much as 21.6% on loans in April (down from 25.4% in Mar) vs 7.6% official commercial bank loan target - SCMP
- (EU) EU's Van Rompuy: Ongoing work on growth is being over shadowed by efforts to ensure stability; Euro zone bonds were discussed in longer term context
- Asia Development Bank (ADB) Chief Economist Zhuang: Optimistic about Asia growth prospects - Speaking in Japan
- (CN) NDRC researcher: PBoC should cut rates if CPI falls below 3% - Chinese press
- (EU) Dutch PM Rutte: No talks on Greece exit plans; Saw support for some growth measures but no euro zone bond consensus
- (EU) ECB Pres Draghi: Sees commitment to take EMU to new stage; ESM should be a functioning firewall
***Equities***
- Baoshan Iron & Steel, 600019.CN: Sees China steel demand may increase 3-5% to 10M tons, slowest rate since 2001
- Hyundai Motor, 005380.KR: CEO Kim: On track to reach 2012 sales target of 4.29M vehicles
- VAH.AU: CEO Borghetti: Qantas' reduction in flights will not change our plans to expand - Australian Financial Review
**US Equities**
- HPQ: Reports Q2 $0.98 v $0.91e, R$30.7B v $29.9Be; details previously reported restructuring announcements from 5/17; +9.1% after hours
- NTAP: Reports Q4 $0.66 v $0.63e, R$1.70B v $1.7Be; -16.6% after hours
- CLDX: CDX-011 Demonstrates High Response Rates in Patients with Metastatic Breast Cancer Expressing Elevated Levels of GPNMB and in Triple Negative Disease; -6.3% after hours
- P: Reports Q1 -$0.09 v -$0.18e, R$80.8M v $74Me; +15.7% after hours
- KCG: Estimates loss from Facebook around $30-35M, expected to impact Q2 results - filing; -1.3% after hours
***Fixed Income/Commodities/Forex***
- JGB: Japan's MoF sells ?1.1T 20-yr 1.6% JGBs; Avg yield: 1.6410% v 1.711% prior; bid-to-cover: 3.73x v 3.34x prior
- (CN) PBoC Offers CNY20B in 91-day repos at 3.14% v 3.14% prior
- IMF releases Apr gold buys: Russia +3K oz; Mexico +94.0K oz to 4.04M oz
- GLD: SPDR Gold Trust ETF daily holdings rise by 2.7 tons to 1,268.1 tons

EU Market Update: Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months

Thursday, May 24, 2012 5:41:17 AM TradeTheNews.com EU Market Update: Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months***Economic Data***
- (RU) Russia Gold & Forex Reserve w/e May 18th: $514.3B v $518.8B prior
- (DE) Germany Q1 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 1.7% v 1.7%e; GDP WDA Y/Y: 1.2% v 1.2%e
- (DE) Germany Q1 Private Consumption: 0.4% v 0.2%e; Government Spending: 0.2% v 0.3%e; Domestic Demand: -0.3% v 0.0%e; Capital Investment: -1.1% v -0.3%e; Construction Investment: -1.3% v -0.4%e; Exports: 1.7% v 0.9%e; Imports: 0.0% v 0.3%e
- (CH) Swiss Apr Trade Balance (CHG): 1.3B v 1.9Be; Real Exports M/M: -0.9% v +0.2%e; Real Imports M/M: 2.6% v 5.9% prior
- (FI) Finland Apr PPI M/M: -0.1% v +0.4% prior; Y/Y: 1.4% v 1.4% prior
- (FI) Finland Apr Preliminary Retail Sales Volume Y/Y: -2.0% v +5.3% prior
- (FR) France May Business Confidence: 93 v 94e; Production Outlook: -29 v -14 prior; Own-Company Production Outlook: -4 v -4 prior
- (FR) France May Preliminary PMI Manufacturing: 44.4 v 47.0e; PMI Services: 45.2 v 45.7e
- (CZ) Czech May Business Confidence: 6.0 v 7.5 prior; Consumer Confidence: -31.0 v -29.3 prior; Composite: -1.4 v +0.2 prior
- (HU) Hungary Mar Retail Trade Y/Y: +0.9% v -0.8%e
- (ES) Spain Mar Mortgages-capital loaned Y/Y: -41.5% v -49.6% prior; Mortgages on Houses Y/Y: -42.0 v -47.1% prior
- (DE) Germany May Advanced PMI Manufacturing: 45.0 v 47.0e (fastest rate of contraction since June 2009); PMI Services: 52.2 v 52.0e
- (NL) Netherlands Apr Unemployment Rate: 6.2 v 5.9% prior
- (NL) Netherlands May Producer Confidence: -5.0 v -3.3 prior
- (EU) Euro Zone May Advanced PMI Manufacturing: 45.0 v 46.0e (lowest reading since June 2009); PMI Services: 46.5 v 46.7e; PMI Composite: 45.9 v 46.6e
- (DE) Germany May IFO Business Climate: 106.9 v 109.4e (first MoM decline in 7 months); Current Assessment: 113.3 v 117.1e; Expectations Survey: 100.9 v 102.0e
- (UK) Q1 Preliminary GDP (Second reading) Q/Q: -0.3% v -0.2%e; Y/Y: -0.1% v 0.0%e
- (UK) Q1 Preliminary Private Consumption: 0.1% v 0.3%e; Government Spending: 1.6% v 0.0%e; Gross Fixed Capital Formation: -0.3% v -0.5%e; Exports: +0.1% v -0.3%e; Imports: 0.4% v 0.1%e
- (UK) Q1 Preliminary Total Business Investment Q/Q: +3.6% v -1.0%e; Y/Y: 14.2% v 9.2%e
- (UK) Mar Index of Services M/M: 0.5% v 0.3%e; 3M/3M: 0.1% v 0.2%e
- (UK) Apr BBA Loans for House Purchase: 32.4K v 32.0Ke
- (HK) Hong Kong Apr Trade Balance (HKD): -42.9B v -40.8Be; Exports Y/Y: 5.6% v 6.2%e; Imports Y/Y: 5.0% v 4.1%e
- (IC) Iceland May CPI M/M: 0.0% v 0.8% prior; Y/Y: 5.4% v 6.4% prior
Fixed Income
- (DK) Denmark sold approx DKK6.0B in I/L 2023 Bonds; Yield -0.14%, bid-to-cover: 1.78x
- (HU) Hungary Debt Agency (AKK) sold HUF50B v HUF45B indicated in 12-Month Bills; Avg yield 7.58% v 7.38% prior; Bid-to-cover: 1.81x v 2.12x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- China May HSBC Flash Manufacturing PMI registers its 7th consecutive contraction
- Major European PMI Manufacturing miss market expectations
- German IFO falls for the first time in 7 months
- UK Q1 GDP second reading revised slightly lower
- Speculation rising of a EU wide deposit guarantee plan to be endorsed by German Chancellor Merkel
- EU growth initiatives will be announced in June, but without abandoning fiscal prudence
***Equities*** >Indices: FTSE 100 +0.80% at 5306, DAX +0.30% at 6301, CAC-40 +0.60% at 3021, IBEX-35 +0.60% at 6481, FTSE MIB +0.75% at 13,057, SMI +0.40% at 5841
- In Europe, equities opened the session broadly higher amid gains in banks. However, markets have since pared gains following the release of weaker than expected EU manufacturing PMI and German IFO data. Additionally, the decline in China's May flash manufacturing PMI has weighed on markets. In terms of upcoming event risks, durable goods and weekly jobless claims data are due out of the US later today. Also, commentary is expected later today from the German Finance Minister Schaeuble, ECB's Prsident Draghi, Fed official Dudley and ECB/Bundesbank official Asmussen.
- In the UK shares of Mothercare [MTC.UK] and Cable & Wireless Communications [CWC.UK] have both traded sharply higher after releasing their respective full year earnings reports. Additionally, Thomas Cook [TCG.UK] has gained more than 5%, after naming a new CEO. SABMiller [SAB.UK] has moved between slight gains and losses, following the release of its full year earnings report. In Spain, Bankia is trading lower by approx. 1%, as Spain's government said the firm will require about ?7.1B to comply with the country's provisioning rules. Austrian bank, Raiffeisen [RIBH.AT] has gained over 1% after reporting higher than expected Q1 earnings. In Germany, sharers of SAP [SAP.DE] and Metro [MEO.DE] have been weighed down by ex-dividend factors. Bayer [BAYN.DE] has lost approx. 1.5%, as a US FDA panel voted against recommending XARELTO as a treatment for acute coronary syndrome.
Speakers: >- German IFO Economists commented that uncertainty in Euro Zone was impacting Germany's economy, but outlook remained above its long-term avg
- ECB's Nowotny: ECB has not used its whole arsenal and reiterated that non-standard ECB measures should not endanger mid-term price stability. The situation in Greece was particularly acute and overcoming imbalances was essential but would take time
- Bank of Japan (BOJ) Monthly Economic Report maintained its overall assessment of the economy that it would return to moderate recovery path
- Japan BOJ Gov Shirakawa commented ion Parliament that distrust in fiscal reform could push up long-term interest rates and weigh upon earnings of financial companies. He reiterated view that BOJ would pursue powerful easing. Risk aversion was the biggest factor in recent FX price movements. He added that there was no clear correlation historically between monetary base and JPY currency movement. The BOJ would strive to beat deflation using current asset buying program
- IMF China representative stated that a Greek exit from EMU would be a big shock to Chinese exports but China has fiscal room to sustain growth in the face of crisis
- BoE official Bailey stated that the UK banking sector's contingency plan for potential Greek exit from euro becoming more detailed
- Finland Fin Min Urpilainen commented that Europe's challenge was to find economic growth. Collateral payment from Greece rose to ?560M
- Ireland Dep PM Gilmore stated that categorically treaty would not be changed and reiterated the view that it wanted Greece to stay inside the EMU. Lastly he added that Ireland did not have contingency plan for a Greek exit.
- Sweden FSA's Cerps stated that the agency was monitoring banking sector to USD funding as Euro crisis deepens
- Poland Dep Fin Min Radziwill commented that the PLN currency was relatively stable with its weakness related to the Euro crisis. Poland currency sales would be similar to 2011 levels. He noted that debt markets were difficult at this time but would return to the market after it stabilizes as the country is in a comfortable situation. Domestic sales were seen covering most remaining needs for 2012
- Hong Kong Chief Executive Leung stated that it would seek stronger economic growth by diversification
- India Finance Ministry Official noted that the Gov't committee to meet on Friday to discuss raising diesel prices
- Philippines Central Bank Assistant Gov Amador commented that it would review CPI forecasts at June policy meeting and saw Inflation at a manageable as lower oil costs dampened pressures. To consider global economy and Euro Zone crisis during policy meeting and added the central bank would moderate sharp volatility in FX rates
- Indonesia Finance Ministry unveiled its mineral export tax regulation
- Iran official stated that there was no basis for new round of UN Counsel (P5+1) discussions
Currencies:
- The Euro initially tried to correct oversold levels but risk aversion sentiment again maintained the upper hand throughout the bulk of the European morning. Following China's lead, the European major PMI Manufacturing data came in softer than expectations and provided further headwinds for the Euro. Citigroup analyst added to sentiment when it issued a note forecasting ECB refi rate being cut to 0.50% and the central bank to resume its 3-year lending LTRO following any Greek exit from EMU. The EUR/USD approached the 1.2500 level for 22-month lows which provided some technical and psychological support. One analyst noted that 1.2530 level was 78.6% retracement of its 2010-2011 move.
-The hour ahead of the NY morning the markets encountered a bit of a reversal as European equity markets moved back into positive territory and peripheral spreads narrowed. The record low yields of safe-haven plays seemed to have ignited some asset reallocation back into equities. The EUR/USD was back around the 1.2560 area as the NY morning approached
- The EUR/CHF cross floor at 1.200 continued to note a 'massive' bid in its defense.
Political/ In the Papers:
- The Spanish government was said to be planning to nationalize CatalunyaCaixa and NovaGalicia banks due to the inability to find a buyer. Prior reports from late March suggested that the auction process for the banks would be slowed by Spain's government, as Spain's Deposit Guarantee Fund (DGF) needed to be strengthened. At that time it was estimated that the DGF had about ?2.0B in funds.
- Plans by the government to delay certain privatizations related to the energy industry have weighed on Russia's equity markets. On Wednesday, Russia's benchmark RTS index declined by 4.4%.
- The Telegraph's Ambrose Evans-Pritchard is critical of former Greek caretaker PM Papademos. He argued If Greece were to leave the Euro, then its fate would not have to be as dire as the situation recently described by Papademos. It could restructure its economy in a similar manner to Iceland.
- According to the FT US manufacturers argued against plans by JP Morgan to launch an exchange traded fund backed by copper as it would grossly and artificially inflate prices, and cause wreak havoc on the global economy.
***Looking Ahead*** >- (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to leave interest rates unchanged at 5.50%
- (AR Argentina May Consumer Confidence:
- 6:00 (IR) Ireland Apr Property Prices M/M: No est v 0.0% prior; Y/Y: No est v -16.2%e
- 6:00 (CZ) Czech Republic to sell 9-month Bills
- 7:15 (UK) BOE member Miles
- 7:30 (DE) German Fin Min Schaeuble
- 7:30 (TR) Turkey May Industrial Confidence: No est v 116 prior; Capacity Utilization: No est v 74.7% prior
- 8:00 (ZA) South Africa Central Bank Gov Marcus Rate Decision press conference
- 8:00 (BR) Brazil Apr Unemployment Rate: 6.2%e v 6.2% prior
- 8:00 (RO) Romania to sell RON500M in Bonds
- 8:30 (US) Apr Durable Goods Orders: +0.2%e v -4.0% prior (revised from -4.20%); Durables Ex Transportation: +0.8%e v -0.8% prior (revised from -1.1%); Capital Goods Orders Non-defense Ex-Aircraft: 0.8%e v -0.8% prior; Capital Goods Shipment Non-defense Ex-Aircraft: -1.0%e v +2.6% prior
- 8:30 (US) Initial Jobless Claims: 370Ke v 370K prior; Continuing Claims: 3.250Me v 3.265M prior
- 8:58 (US) May Preliminary Markit PMI:
- 9:00 (IT) Italy PM Monti
- 9:00 (EU) ECB's Draghi, Bank of Italy's Visco speak at Rome Conference
- 9:00 (DE) German Chancellor Merkel speaks at German Engineering Industry Convention
- 9:00 (BE) Belgium May Business Confidence: -11e v -10.7 prior
- 9:00 (MX) Mexico Q1 GDP Y/Y: No est v 11.0% prior
- 9:30 (DE) Germany Econ Min Roesler
- 9:30 (US) Fed's Dudley to speak on Regional Economy in New York
- 9:30 (EU) EFSF CFO Frankel in Rome
- 9:30 (BR) Brazil Apr Current Account: -$4.0Be v -$3.3B prior; Foreign Direct Investment (FDI): $4.9Be v $5.9B prior
- 9:30 (US) Commercial Paper data
- 10:30 (US) EIA Natural Gas Inventories
- 11:00 (US) May Kansas City Fed Manufacturing Activity: 5 v 3 prior
- 12:20 (DE) ECB member Asmussen in Poland
- 15:00 (AR) Argentina Apr Industrial Production M/M: No est v 1.9% prior; Y/Y: 1.5%e v 2.1% prior
- 19:30 (JP) Japan Apr National CPI Y/Y: No est v 0.5% prior; Ex-Food Y/Y: No est v -0.5% 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 rynek UE aktualizacja: Sektor bankowy Hiszpanii powiedział do wywoływania na rynku regulatora w odnowionej zakaz sprzedaży short

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Share This Story: | | Email Friday, May 18, 2012 5:47:18 AM

 TradeTheNews.com EU Market Update: Spain's banking sector said to be calling on market regulator for renewed ban on short-selling

***Economic Data***
- (EU) ECB: €809M borrowed in overnight loan facility €839M prior; €762.4B parked in deposit facility v €785.1B prior
- (JP) Japan Apr Nationwide Dept. Sales Y/Y: 1.3% v 14.1% prior; Tokyo Dept. Store Sales Y/Y: 6.7% v 26.7% prior
- (IN) India Apr CPI Y/Y: 10.4% v 9.4% prior
- (DE) Germany Apr Producer Prices M/M: 0.2% v 0.3%e; Y/Y: 2.4% v 2.5%e
- (HU) Hungary Mar Avg Gross Wages Y/Y: 2.7% v 6.5%e v 6.9% prior
- (RU) Russia Narrow Money Supply w/e May 14th (RUB): 6.93T v 6.88T prior
- (ES) Spain Central Bank (BOS): Mar Bad Loan Ratio at 8.37% v 8.16% prior; - Lending -3.1% y/ym, Deposits -4.2% y/y
- (IT) Italy Mar Industrial Orders M/M: 3.5% v 1.0%e; Y/Y: -14.3% v -13.2% prior
- (IT) Italy Mar Industrial Sales M/M: 0.0% v 2.3% prior; Y/Y: -3.1% v -1.5% prior
- (PL) Central/Eastern European May ZEW Indicator: 14.6 v 5.4 prior
- (PT) Portugal Apr Producer Prices M/M: 0.6% v 0.4% prior; Y/Y: 3.6% v 3.7% prior

Fixed Income: >- (IN) India sold total INR150B vs. INR150B target in 2020, 2024, 2030 and 2041 Bonds
- (ZA) South Africa sold total ZAR800M in I/L 2017, 2022 and 2028 Bonds

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Moody's cuts 16 Spanish banks and Santander UK (as expected)
- Moody's cut 4 Spanish Regions
- Fitch would place all Euro-zone sovereign ratings on Rating Watch Negative (RWN) following the Greek elections should the risk of a Greek exit from the EU seem probable in the near term.
- G8 Summit at Camp David; market seeks guidance
- ECB and EU said to be working on emergency scenarios for Greek euro exit
- Recent Greek Poll shows pro-bailout parties regaining a majority in Parliament
- Spain's banking sector said to be calling on market regulator for renewed ban on short-selling

***Equities*** >FTSE 100 -1.2% at 5273, DAX -0.50% at 6276, CAC-40 -0.70% at 2989, IBEX-35 -0.40% at 6513, FTSE MIB -0.50% at 13,026, SMI -0.90% at 5820

- European equity indices opened lower, but have since moved off of the worst levels for the session. Spanish banks have rebounded from the prior session's losses, as shares of Bankia [BKIA.ES] have traded higher by over 20%, amid speculation that Spain could seek to reinstate its short-selling ban related to financial shares. The government ended the prior short-selling ban in mid Feb. The gains in the Spanish banks have come despite the rise in their debt insurance costs to fresh record highs, as Moody's downgraded more than 15 Spanish banks. Amid the concerns about the Spanish banking sector, data from the Bank of Spain showed that the March bad loan ratio rose to highs not seen since at least the mid 1990s. In terms of upcoming event risks for equity markets, shares of Facebook are due to begin trading publicly later today (approximate opening time is 11:00 AM ET). Also, a G8 summit is due to be held over the weekend.
- Shares of the London Stock Exchange [LSE.UK] have risen by over 3%, following the release of its FY earnings report. Small cap silicon wafer producer PV Crystalox [PVCS.UK] has gained over 100%. The company announced a settlement agreement related to the termination of a long-term wafer supply contract, which will result in a €90M payment for the company. Pub manager, Mitchells & Butlers [MAB.UK] has declined by approx. 1%, after issuing its first half results.

Speakers: >- EU Trade Commissioner de Gucht commented ECB and EU Commission were working on emergency scenarios for Greek euro exit
- UK Company De La Rue [DLAR.UK] which produces banknotes for more than 150 countries was said to be preparing for potential production of drachma currency
- German Fin Min Schaeuble stated that he believed markets might calm down over Euro Zone crisis within 12-24 months . He expected France to respect European agreements and recent elections did not put into question the agreements already signed. Germany would be open to propositions on economic growth. He reiterated that Germany wanted Greece to stay within the EMU; but Greece must do what is necessary for its economy. Lastly he also reiterated that Germany was in favor of a European President
- France PM Ayrault stated that he was confident that economic growth would become a major priority in Europe
- BOE Posen stated that he might have been premature to say BOE had done enough on QE and that he never discussed keeping the powder dry on policy. There was less impact from latest round of QE than expected. Core inflation was stickier than predicted but he saw greater downside inflation risk compared to other MPC members. He saw CPI close to central forecast in recent quarterly inflation report. Lastly he was not confident UK has done enough to avoid a Japanese type economic trap
- Spain's banking sector said to be calling on market regulator for renewed ban on short-selling
- India Central Bank Dep Gov Gokarn: Current approach of FX intervention and administrative steps to continue
- Turkey Central Bank Gov Basci stated that he expected May CPI to significantly decline
- South Africa Fin Min Gordhan stated that its domestic growth was weak and uneven
- China Commerce Ministry (MOFCOM) stated that it was strongly dissatisfied with US solar ruling saying it is both unfair and protectionist (Note: US Commerce Dept said to have imposed 31.22% duties on Imports of China solar panel product)

Currencies:
- Safe-haven plays were again the dominate theme heading into Europe after Far East equity markets slumped between 1-3%. The German 2-year, 5-year, 10-year and 30-year bonds are all at record lows as was the UK 10-year Gilts. The USD Index again hit fresh 4-month highs. The sentiment improved marginally as the session wore on. Recent Greek Poll shows pro-bailout parties regaining a majority in Parliament and Spain's banking sector was said to be calling on market regulator for renewed ban on short-selling.
- The EUR/USD continued to make fresh 4-month lows but held above its Jan low of 1.2622. The pair staged a minor rebound ahead of the NY morning to retest the 1.27 level.
The USD/JPY pair was softer in the session but delers notedg of fibonacci retracement support at 79.12. The level corresponds to Feb low of 76.00 and the March high of 84.17
- Markets will now look towards the weekend G8 summit for guidance

Political/ In the Papers:
- Recent Greek polling data (conducted over three days to 17th May) suggest the pro-bailout parties regaining majority coalition. The New Democracy (ND) party was ahead of Syriza for the first time since the May 6th elections receiving just over 23%, Syriza at 21% and Pasok slightly above 13%. In terms of parliamentary seats, this would correspond to ND receiving 123 seats (Syriza at 66 seats, Pasok at 41). A coalition between ND and Pasok would now have a parliamentary majority compared to the election results which left them short by two seats.
- Some major banks have told clients that there could be a strong rally in risky assets if Greece is forced out of the euro zone according to the Telegraph's Ambrose Evans-Pritchard. Analysts believe that if Greece left the Euro, global authorities would support markets by providing large amounts of liquidity. Bank of America believes that there could be a "powerful short squeeze" in risk assets. The firm also believes that in such a situation, the Euro would rise to $1.40 against the USD after falling to $1.20, believing that initial panic selling could drive the Euro down to $1.20, before rebounding.
- The British Treasury is seeking to invest £20B on infrastructure projects. The plan is seen as an attempt by the government to stimulate the economy. It is believed that the Treasury is examining a plan to use state guarantees to ease credit for housing and infrastructure projects. The proposal is similar to the "project bonds" proposed by France's President Hollande.
- De La Rue was reported to have been preparing for a potential production of the Greek drachma currency. Note that De La Rue produces banknotes for more than 150 countries.

***Looking Ahead***
- (US) G8 Summit in Camp David
- (ES) Spain Mar Trade Balance: No est v -€3.8B prior
- 7:30 (IN) India Forex Reserves w/e May11th: No est v $293.2B prior
- 8:00 (DE) German Chancellor Merkel and Fin Min Schaeuble speeches at Catholic Convention: Mannheim
- 8:00 (PL) Poland Apr Employment M/M: No est v -0.1% prior; Y/Y: No est v 0.5% prior
- 8:00 (PL) Poland Apr Avg Gross Wages M/M: No est 5.7% prior; Y/Y: No est v 3.8% prior
- 8:30 (US) Factory Orders revisions; Durable Goods Benchmark revisions
- 8:30 (CL) Chile Q1 Current Account: No est v -$1.3B prior
- 8:30 (CL) Chile Q1 GDP Q/Q: No est v 2.0% prior; Y/Y: No est v 4.5% prior
- 8:30 (CA) Canada Apr Consumer Price Index M/M: No est v 0.4% prior; Y/Y: No est v 1.9% prior; CPI Index: no est v 121.7 prior
- 8:30 (CA) Canada Apr CPI Core M/M: No est v 0.3% prior; Y/Y: No est v 1.9% prior
- 10:00 (US) API monthly reports
- 11:00 (US) Fed to purchase $4.50-5.25B in Notes
- 15:00 (AR) Argentina Mar Economic Activity Index M/M: No est v 0.3% prior; Y/Y: No est v 5.2% prior
- 17:00 (CO) Colombia Mar Industrial Production Y/Y: No est v 4.50%

Weekend
- Nato Summit in Chicago

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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TradeTheNews.com Asian Market Update: Risk-aversion at a boil after Moody's cut

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(CL) CHILE CENTRAL BANK LEAVES OVERNIGHT RATE TARGET AT 5.00%, AS EXPECTED
- (CN) CHINA APR NEW HOME PRICES M/M: FELL IN 43 OF 70 CITIES V 46 PRIOR; Y/Y: FELL IN 46 OF 70 CITIES V 37 PRIOR >- (JP) JAPAN CABINET MAY MONTHLY ECONOMIC REPORT: UPGRADES ECONOMIC ASSESSMENT (First upgrade in 9 months)
- (KR) South Korea Mar Conference Board Leading Economic Index: -1.5% v +2.9% prior

***Markets Snapshot (as of 04:45GMT)***
- Nikkei225 -2.5%
- S&P/ASX -2.4%
- Kospi -2.6%
- Singapore Straits Times Index -1.6%
- Shanghai Composite -1.1%
- Hang Seng -2.6%
- Jun S&P Futures -0.2% at 1,298
- June gold -0.1% at $1,573/oz
- June Crude -0.6% at $92.01

***Overview/Top Headlines***
- Asian equity markets are sliding ever lower in the final trading session of the week, giving little reverence to the G8 summit taking place this weekend in Camp David. Regional indices are off by over 2% just about across the board, S&P500 futures have reversed initial gains to fall over 7 handles, while EUR, AUD, and NZD are all at fresh multi-month lows against the greenback. Govt bonds of US and Japan meanwhile are firmly bid, broadly benefiting USD and JPY currencies. In commodities space, front-month crude has also pared initial gains to fall over $1.00 below $92/brl, while copper retraced its run-up from $3.49 all the way down to $3.45.

- Continued selling has been attributed to more bad news from Europe, where Moody's cut the ratings of 16 Spanish banks by 1-3 notches. Top two banks - Santander and BBVA - bore the brunt of the action with a 3-notch downgrade to A-3, as the credit rating agency noted deteriorating asset quality and little expectation of improvement for the sovereign economy. In China, April home prices saw accelerated declines with 1.2% y/y slide in prices vs -0.7% drop in the prior month. Prices also fell m/m and y/y in 43 and 46 cities respectively out of 70 cities.

- Japan cabinet economic monthly report saw the defiant govt upgrade its economic assessment for the first time in 9 months on expectation of continued reconstruction-related demand. Exports and consumer spending were also upgraded, even as Japan remained mindful of Europe-related risks. Finance Min Azumi noted economic data suggests Japan is in good shape and Econ Min Furukawa saw prospects for sustained recovery. Tokyo officials also argued the recent strength in JGBs reflects market perception of the safety of the asset, just as 10-yr yields hit multi-year lows of 0.82%.

***Speakers/Geopolitical/In the press***
- (CN) According to gov't economist Zhu Baoliang, lending rates could be cut as soon as the current quarter (Q2), but rates could be left unchanged amid concerns about inflation - financial press >- (CN) China Q2 GDP estimated around 7.5% y/y; Inflation around 3.3% - Chinese press citing State Information Center
- (EU) Former ECB Pres Trichet: EMU needs more integration measures such as emergency federal powers to guard against significant risks in Europe - financial press
- (JP) Japan lawmakers continue to oppose entry into TPP free trade talks - Nikkei News
- JPM: Purchased European MBS and other debt securities over the past 3 years, building a position of as much as $100B - FT

***Equities***
- (AU) S&P/ASX extends decline below 4,070; Down over 2.2% and at lowest level in 2012
- TM: To expand capacity at 2 of 3 engine plants in N America; Total investment seen at about $110M - Nikkei News
- BIDU: To cooperate with Foxconn in a launch of cloud computing smartphones - Chinese press
- ACH: Received regulatory approval for a $1B IPO in Hong Kong - financial press

**US Equities**
- CRM: Reports Q1 $0.37 v $0.34e, R$695M v $678Me; +6.4% afterhours >- GPS: Reports Q1 $0.47 v $0.46e, R$3.49B v $3.5Be; +4.7% afterhours
- INTU: Reports Q3 $2.51 v $2.48e, R$1.95B v $2.0Be; -0.1% afterhours
- MRVL: Reports Q1 $0.23 v $0.20e, R$796M v $769Me; +3.0% afterhours
- AMAT: Reports Q2 $0.27 v $0.24e, R$2.54B v $2.4Be; -0.7% afterhours

***Fixed Income/Commodities/Forex***
- AUD/USD: Extending decline below $0.9870; 6-month lows
- NZD/USD: Extending decline to $0.76; 6-month lows
- EUR/USD: Extending decline below $1.2666; fresh 4-month low
- Japan 10-yr JGB yield falls to 9-year lows below 0.82%
- iShares Silver Trust ETF daily holdings rise to 9,619 tons from 9,516 tons (highest level since Apr 11th)
- SPDR Gold Trust ETF daily holdings rise by 2.1 tons to 1,278.7 tons (highest since Apr 27th)
- (MX) Mexico central bank gov Carstens: Mexico inflation is low and stable; Volatility in MXN does not change impact inflation or call for adjustment in monetary policy - financial press
- (US) Weekly Fed Balance Sheet Assets Week ending May 16th: $2.83T v $2.85T prior; M1: -$34B v -$4.0B prior; M2: -$1.7B v +$57.1B prior

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

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TradeTheNews.com USA rynku aktualizacja: Nam przeszkadzał Facebook Mania wykonywaniu z Europy

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Share This Story: | | Email Friday, May 18, 2012 11:36:32 AM

 TradeTheNews.com US Market Update: Facebook Mania Distracts from Europe

DJIA -29 S&P500 +3.2 NASDAQ -15

***Economic Data***
- (ES) Spain Mar Trade Balance: -€3.3B v -€3.8B prior
- (BR) Brazil Mar Economic Activity M/M: -0.4% v +0.5%e; Y/Y: 0.9% v 2.4%e
- (IN) India Forex Reserves w/e May11th: $291.8B v $293.2B prior
- (PL) Poland Apr Employment M/M: -0.1% v +0.1%e; Y/Y: 0.3% v 0.5%e
- (PL) Poland Apr Avg Gross Wages M/M: -1.3% v -0.8%e; Y/Y: 3.4% v 3.9%e
- (CL) Chile Q1 Current Account: -$346M v -$700Me
- (CL) Chile Q1 GDP Q/Q: 1.4% v 1.4%e, Y/Y: 5.6% v 5.6%e
- (CA) Canada Apr Consumer Price Index M/M: 0.4% v 0.3%e, Y/Y: 2.0% v 1.9%e; CPI Index: 122.2 v 121.7 prior
- (CA) Canada Apr CPI Core M/M: 0.4% v 0.2%e; Y/Y: 2.1% v 1.9%e

- Trading in US and European markets has been choppy this morning as cross currents from Facebook mania and events in Europe keep traders on their toes. Volume is very elevated in US trade thanks to options expirations. The media frenzy surrounding Facebook has crowded out nearly everything else during the US session this morning; shares of the social media giant opened this morning at $42.05 after some minor snafus. In Europe, Moody's downgraded the Spanish banking sector yesterday evening, although the move was widely telegraphed and came as a surprise to no one. There were reports that Moody's cut is giving the banks ammunition to press Madrid to reinstitute a short-selling ban on financials, which is in turn boosting confidence. In addition, EU Trade Commissioner De Gucht told a Belgian newspaper that contingency plans are being drafted to deal with a potential Greek euro exit, prompting denials from the EU Commission. EUR/USD sank as low as 1.2645 overnight before bouncing back to 1.2740 in the US morning, although peripheral bond spreads remain highly elevated, with the Spanish 10-year was trading as high as 6.33%. President Obama is hosting the G8 in Washington this weekend, and while no major policy developments are expected, there has been plenty of chatter this week that leaders will discuss potential plans to calm markets and cope with potential Greece exit scenarios.

- In retail earnings, Footlocker is up 10% after topping both earnings and revenue expectations and racking up a big 9.7% comp sales gain in Q1. On the conference call, the CFO said that sales trends also improved in March and April. High-end department store name Nordstrom missed earnings targets and only reiterated its disappointing FY12 outlook, although investors are still keeping the name in positive territory. Ann, Inc spiked on the open following a somewhat better-than-expected Q1 report. ANN is up 2.5% mid morning.

- Semi industry manufacturing equipment provider Applied Materials saw declines in both earnings and revenue in its Q2, although the firm narrowly beat expectations. The firm's guidance for Q3 was not much better, and for FY12 the firm said it would meet the high end of its prior guidance range. Mobile phone chip maker Marvell Q1 results were strong and its Q2 guidance was stronger, thanks to excellent demand from the Chinese mobile market. AMAT and MRCL have given up slight gains to trade flat on the session. In other tech news, Salesforce.com more or less met expectations on very strong revenue growth y/y and also raised its full-year earnings outlook into line with expectations. Executives were very optimistic on the call, saying that there biggest challenge was coping with the huge amount of demand coming their way. CRM is up 10%.

***Looking Ahead***
- (US) G8 Summit in Camp David
- 11:00 (US) Fed to purchase $4.50-5.25B in Notes
- 15:00 (AR) Argentina Mar Economic Activity Index M/M: No est v 0.3% prior; Y/Y: 4.8%e v 5.2% prior
- 17:00 (CO) Colombia Mar Industrial Production Y/Y: No est v 4.50%

***Weekend***
- NATO Summit in Chicago  

Legal disclaimer and risk disclosure

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EU Market Update: Risk Aversion remains heightened in session; GBP slumps following BOE quarterly inflation report

Wednesday, May 16, 2012 5:51:17 AM TradeTheNews.com EU Market Update: Risk Aversion remains heightened in session; GBP slumps following BOE quarterly inflation report***Economic Data***
- (EU) ECB: €2.0B borrowed in overnight loan facility €1.6B prior; €788.4B parked in deposit facility v €788.2B prior
- (EU) Euro Zone Apr EU 25 New Car Registrations: -6.9% v -7.0% prior (7th straight monthly decline)
- (TR) Turkey Apr Consumer Confidence: 91.1 v 93.9 prior
- (AT) Austria Apr Consumer Price Index M/M: 0.4% v 1.1% prior; Y/Y: 2.3% v 2.4% prior
- (CZ) Czech Mar Current Account (CZK): 16.8B v 13.9Be >- (IT) Italy Mar Total Trade Balance: +€2.1B v -€1.1B prior; Trade Balance EU: €1.6B v €416M prior
- (UK) Apr Jobless Claims Change: -13.7K v +5.0Ke; Claimant Count Rate: 4.9% v 5.0%e
- (UK) Mar Average Weekly Earnings 3M/Y: 0.6% v 1.0%e; Weekly Earnings ex-Bonus 3M/Y: 1.6% v 1.4%e
- (UK) Mar ILO Unemployment Rate: 8.2% v 8.4%e >- (EU) Euro Zone CPI M/M: 0.5% v 0.5%e; Y/Y: 2.6% v 2.6%e; Core CPI Y/Y: 1.6% v 1.5%e
- (CH) Swiss May Credit Suisse ZEW Expectations Survey: -4.0 v +2.1 prior
- (IC) Iceland Central Bank (Sedlabanki ) raised 7-Day Lending Rate by 50bps to 5.50%
- (EU) Euro Zone Mar Trade Balance Seasonally Adj: €4.3B v €3.8Be; Trade Balance unadj: €8.6B v €4.0Be
Fixed Income: >- (RU) Russia cancelled its 10-Year OFZ Bonds
- (EU) ECB alloted $300M in 7-Day USD Liquidity Tender at fixed 0.66% vs. $326.3M prior
- (FR) France Debt Agency (AFT) sold €8.0B vs.€7-8B indicated range in 2014, 2015, 2016 and 1017 BTANs, OATs
- Sold €2.505B in 0.75% Sept 2014 BTAN; Avg Yield 0.74% v 0.85% prior; Bid-to-cover: 2.97x v 2.29x prior
- Sold €945M in 3.5% Apr 2015 OAT; Avg Yield 0.95% v 1.06% prior; Bid-to-cover: 4.58x v 3.0x prior
- Sold €895M in 3.25% Apr 2016 OAT; Avg Yield 1.37% v 2.80% prior; Bid-to-cover: 4.97x v 4.50x prior
- Sold €3.651B in 1.75% Feb 2017 BTAN; Avg Yield 1.72% v 1.83% prior; Bid-to-cover: 2.04x v 2.69x prior
- (DE) Germany sold €4.107B in 1.75% July 2022 Bund; Avg Yield 1.47% (fresh record low) v 1.77% prior; Bid-to-cover: 1.5x v 1.1x
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- China's "Big Four" state-run banks have issued almost no new yuan loans in the first half of May
- Germany and ECB said to be at odds over EFSF guarantees
- UK Claimant Count registers its largest monthly decline since July 2010
- ECB holding a previously scheduled meeting in Frankfurt
***Equities*** >FTSE 100 -1.1% at 5378, DAX -1% at 6335, CAC-40 -0.10% at 3036, IBEX-35 -1% at 6636, FTSE MIB -0.40% at 13,253, SMI -0.05% at 5860
- European equity indices opened the session broadly lower, as indices have been pressured by banks. Additionally, resource-related companies opened lower following cautious comments out of BHP about the outlook for commodity prices. Concerns about Greece have continued to weigh on the markets, following reports from yesterday that the country is expected to hold elections in mid-June. Also, Greek banks have been in focus, amid reports that deposit outflows have accelerated following the recent Greek parliamentary elections. In terms of upcoming event risks, the US Fed is due to release the minutes from its most recent policy meeting later today. Also on Thursday's session, Spain is due to sell 2015 and 2016 bonds.
- UK-listed construction and engineering services company Lamprell [LAM.UK] has declined by over 60%, after disclosing a profit warning. Additionally ,shares of Bovis Homes [BVS.UK] and Land Securities are trading lower, following the release of their respective earnings reports. German names Rheinmetall [RHM.DE], Lanxess [LXS.DE], Prosieben [PSM.DE] and Symrise [SY1.DE] have all been weighed down by ex-dividend factors. In France, EADS [EAD.FR], EADS has gained over 1% following its Q1 earnings release. Swiss luxury watch maker Richemont [CFR.CH] has gained over 4%, as the company reported better than expected FY11 results. Danish shipping name AP Moller Maersk [MAERSKB.DK] has lost over 5% amid concerns about the company's 2012 outlook. Shares of Italian bank, Banca Monte Paschi have lost more than 2%, after the company reported a y/y decline in its Q1 net profit. Monte Paschi also reported a 4.9% sequential rise in its bad loans in Q1.
Speakers: >- Bank of England Releases Quarterly Inflation Report which raised inflation forecast with CPI seen above 2% for the next year or so compared to its Feb forecast of until Q4 2012. The report noted that Inflation report chart shows CPI at around 1.6% in 2 years and at 1.8% in 3 years assuming market interest rate path and AFT steady at £325B
- BoE Gov King stated during Q&A that contingency plans were being discussed for some time with UK Treasury and FSA regarding the euro area. On QE decision he noted that ultimately have to be driven by inflation outlook, last week decision consistent with that idea.
- Germany Fin Min Schaeuble reiterated the view that all wanted Greece to remain in the Euro but the Greek political parties had the choice and it was their responsibility. He stressed that differences between Chancellor Merkel and new French President Hollande were not large and that Germany economic growth was robust because the country was reducing its deficit. Lastly he noted that was working on Financial Transaction Tax (tobin tax) in a smaller group of EU members
- Spain PM Rajoy commented that Spain faced risk of astronomical borrowing costs in an address to Parliament
- Ireland PM Kenny noted that enormous challenges lie ahead; Ireland will continue to meet all commitments
- Ireland Fin Min Noonan stated that he hope to get back to bond market by end 2013 but might not due to uncertainty in Europe. He added that it was not a guarantee that Greece would leave the Euro Zone and maybe Greece needed a referendum whether to stay in the EMU
- Finland PM Katainen: Risk of contagion from Greece as the situation is threatening Spain, Italy and Portugal
- China PBoC Gov Zhou commented that China to steadfastly prevent systemic financial risk
- Poland Fin Min Rostowski commented that he expected there would be some significant weakening of the PLN currency (Zloty) due to Greece fears
- India Central Bank Dep Gov Kahn stated that the RBI was closely watching INR currency volatility and it would take all steps to curb such volatility
- India Central Bank Chakrabarty commented that the RBI would only intervene in FX markets to curb INR volatility
- Russia Central Bank Gov Ignatyev stated that Apr YTD Capital Outflows was $42B and that such outflows remained a serious problem for the economy. The CBR remained determined to hold inflation between 5.0-6.0%
- India Fin Min Mukherjee: Reiterates India's growth story is intact
Currencies:
- Euro zone crisis remain the leading influence in the session and kept the USD well supported against the majors and commodity-related currency pairs. The session began with a heightened amount of risk aversion prevalent but by mid-morning sentiment calmed down. Perhaps that the ECB was holding a previously scheduled conference today on Monetary Policy Conference in Frankfurt helped ease concerns. However some dealers misconstrued it as an 'emergency meeting'
- The EUR/USD continued to hit fresh 4-month lows as it tested 1.2682 in the session. The European peripheral yield was higher with the 10-year Spanish/German Gov't bond spread at 510bps for fresh EMU record. Dealers were on guard whether Moody's would make any cuts in Spanish banking sector after doing so for Italy earlier in the week. The 10-year Italian bond yield pushed firmly above the 6% area but a move towards 7% would heighten concerns and possible re-activate the ECB SMP program. With Greece heading for fresh elections next month, fears of capital flight mounted and yesterday the Greek central bank confirmed that €700M in deposit had been withdrawn in recent days.
- The implication on global growth was also on the minds of traders. China's "Big Four" state-run banks were said to have issued almost no new yuan loans in the first half of May. The AUD/USD pair was suffering not only from euro zone risks, yet also concerns that activity in China's economy may be faltering
- The GBP slumped lower to approach 1.5900 after the BOE inflation report which did raise its short term CPI view but overall remaining in target in 2-3 year time frame
Political/ In the Papers:
- The CBRE Group expects further defaults in European commercial real estate loans due to declining rents and occupancies. The trend is affecting many areas, now including large city centres such as London and Frankfurt. Values are currently down by almost 20% from their peaks in 2007.
- With the concerns related to a possible Greek collapse, the Irish Independent calculated that such an event would cost each Irish resident €380. It added that the true costs would be greater because Ireland would have to deal with a five-year financial crash if Greece were to exit the currency. According to Citi, the loans to Greece now stand at €160B, owed either to the ECB or euro zone countries as a share of the bailout (with Ireland's portion calculated at slightly above 1%, or a little over €380 per person). The independent clarified that the exact figure is difficult to assess due to Ireland's own euro zone loans.
- The Telegraph's Ambrose Evans-Pritchard looked at the risks related to Italian banks noting that the contracting economy is a challenge for domestic banks, as Italian banks are highly exposed to the economy. He also added the contagion risks that Italian banks face in relation to Greece.
- The ECB was said to have cut liquidity support for Greek banks according to the Dutch press. The cut in support was due to Greece holding off on recapitalizing its banking system, although it received €25B in funds for that purpose. At the end of January, Greek banks received €73B in liquidity support from the ECB, although the amount was down by over 50%.
***Looking Ahead***
- 6:00 (PL) Poland to sell New 5-Year Fixed Rate Bonds
- 6:00 (RU) Russia to sell Up to RUB20.0B in 10-Year OFZ Bonds
- 6:00 (FR) France Debt Agency (AFT) to sell I/L 2022, 2023 and 2027 Bonds
- (IT) IMF mission visit to Italy
- 6:00 (GR) Greece interim govt expected to be announced; election date
- 6:00 (DE) German Govt Advisor Feld
- 6:00 (PT) Portugal Q1Unemployment Rate: No est v 14.0% prior
- 7:00 (UK) Prime Minister's Question Time in House of Commons
- 7:00 (US) MBA Mortgage Applications w/e May 11th: No est v 1.7% prior
- 7:00 (ZA) South Africa Mar Retail Sales Constant M/M: No est v -2.2% prior; Y/Y: No est v 7.2% prior
- 8:00 (PL) Poland Mar Current Account: No est v -€1.6B prior; Trade Balance: No est v -€838M prior
- 8:30 (CA) Canada Mar Manufacturing Sales M/M: No est v -0.3% prior
- 8:30 (US) Apr Housing Starts: 685Ke v 654K prior; Building Permits: 730K v 764K prior (revised from 747K)
- 9:00 (DE) German Fin Min Schaeuble speech on crisis themes: University of Aachen
- 9:00 (EU) ECB's Monetary Policy Conference in Frankfurt
- 9:15 (US) Apr Industrial Production: 0.6%e v 0.0% prior; Capacity Utilization: 79.0%e v 78.6% prior; Manufacturing Production: No est v -0.2% prior
- 10:30 (US) Weekly DOE Energy Inventories
- 11:30 (BR) Brazil Central Bank weekly currency flows
- 12:00 (US) World Bank President Zoellick
- 12:30 (US) Fed's Bullard speaks on US Economy in Louisville, Kentucky
- 12:45 (EU) ECB member Gonzalez-Paramo
- 14:00 (US) Fed Releases Minutes from April 24-25 FOMC Meeting
- 14:00 (US) Minutes of FOMC Meeting
- 17:00 (CO) Colombia Mar Trade Balance: No est v $537.2M prior; Imports CIF: no est v $4.5B prior
- 18:00 (HU) Hungary Central Bank Gov Simor speaks at EBRD Conference
- 18:00 (HU) Hungary Central Bank VP Kiraly speaks
- 18:00 (EU) EU's Juncker speaks at German Fin Min Schaeuble award ceremony in Aachen, Germany
- 18:00 (CL) Chile Central Bank Economists Publish Report
- 19:50 (JP) Japan Q1 Preliminary GDP Annualized: +3.5%e v -0.7% prior; GDP Q/Q: +0.9%e v -0.2% prior; Nominal GDP Q/Q: +1.0%e v -0.5% 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.

EU Market Update: 3-month Euribor rises for the first time in the post-LTRO environment

Thursday, May 17, 2012 5:41:22 AM

EU Market Update: 3-month Euribor rises for the first time in the post-LTRO environment***Economic Data***
- (EU) ECB: €839M borrowed in overnight loan facility €2.0B prior; €785.1B parked in deposit facility v €788.4B prior
- (RU) Russia Gold & Forex Reserve w/e May 11th: $518.8B v $522.9B prior
- (JP) Japan Apr Final Machine Tool Orders Y/Y: 0.4% v 0.5% prelim
- (CZ) Czech Mar Export Price Index Y/Y: 2.5% v 4.2% prior; Import Price Index Y/Y: 4.2 v 5.8% prior
- (CZ) Czech Apr PPI (Industrial) M/M: 0.0% v 0.2%e; Y/Y: 2.2% v 2.4%e
- (ES) Spain Q1 Final GDP Q/Q: -0.3% v -0.3%e; Y/Y: -0.4% v -0.4%e >- (HK) Hong Kong Apr Unemployment Rate: 3.3% v 3.5%e
Fixed Income: >- (ES) Spain Debt Agency (Tesoro) sold total €2.49B vs. €1.5-2.5B indicated range in 2015 and 2016 Bonds (three tranches)
- Sold €372M in 4.4% Jan 2015 Bono; Avg Yield 4.375% v 2.890% prior; Bid-to-cover: 4.47x v 2.41x prior; Maximum Yield set at 4.421% v 2.960% prior
- Sold €1.02B in 4.00% July 2015 Bono; Avg Yield 4.876% v 4.037% prior; Bid-to-cover: 3.01x v 2.88x prior; Maximum Yield 4.917% v 4.069% prior
- Sold €1.1B in 3.25% April 2016 Bono; Avg Yield 5.106% v 3.374% prior; Bid-to-cover: 2.38x v 4.1x prior; Max Yield 5.13% v 3.428% prior
- (HU) Hungary Debt Agency (AKK) sold total HUF53B in 2015, 2017 and 2022 Bonds
- (UK) DMO sold £1.5B in 5% 2014 Gilt mini tender; avg yield 0.351% v 1.542% prior; Bid-to-cover: 3.67x v 1.69x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- European markets quiet due to Ascension Thursday Holiday
- US foreclosure filings hit 5 year lows
- Spain sells upper end of its range in bond auction with Yields rising (as expected)
- Troika to study contingency plan for Portugal in case of Greek EMU exit
- 3-month Euribor rises for the first time since Dec 19th 2012
***Equities*** >Indices: FTSE 100 -0.70% at 5366, DAX -0.50% at 6349, CAC-40 at 3028, IBEX-35 -0.50% at 6579, FTSE MIB -1% at 13,149, SMI +0.10% at 5872
- European equity markets opened the session slightly higher, but indices have since pared gains as most banks are in negative territory. Banks have traded with a negative tone, amid reports that JP Morgan's previously reported $2B trading loss may have risen by approx. €1B. The FT reported that Spain is expected to appoint Blackrock as one of the firms which will appraise the property assets of Spanish banks. In other banking news the Italian Banking Association suggested that it might become more difficult for Italian banks to issue debt on the international market.
- In individual movers in the UK, copper producer Antofagasta [ANTO.UK] is trading lower after reporting weaker than expected Q1 results. Vedanta Resources [VED.UK ] has traded lower by over 2%, as its FY results missed market expectations. Retailer French Connection [FCCN.UK] is has declined by over 20%, after issuing a profit warning. Energy services firm Invensys has gained over 4%, as the company reported higher than expected FY revenues and announced an increase in its dividend. In Spain, Bankia has lost over 14%, amid concerns about deposit outflows at the bank. In Germany companies including BMW [BMW.DE], Celesio [CLS1.DE] and Leoni [LEO.DE] have been weighed down by ex-dividend factors.
Speakers: >- Spanish Bank Bankia [BKIA.ES] Clients said to have withdrawn over €1B since last Wednesday
- Italy Banking Association stated that €137B of bank debt was coming due in 2012. Italian bank funding from retail clients had been very weak although positive in early 2012. >- EU/IMF/ECB Troika was said to examine possible contingency plans for Portugal in the event of a Greek exit from EMU
- UK PM Cameron commented that the UK to stick to deficit reduction plans in the face of Euro crisis. He noted that the BoE had the flexibility to do more to support the economy. He stressed that the ECB and core Euro Zone countries must do more to support demand and welcomed France's proposal of project bonds
- UK Business Sec Cable noted that there were clearly risks to domestic economy from potential euro zone breakup, but businesses should not panic from that threat
- France Fin Min Moscovici commented that both France and Germany wants Greece to stay in EMU. He stated that it needed to defend euro. France must manage public finances (reduce budget deficit and debt) while facilitating growth. He noted that growth would be a key topic at the upcoming G8 Summit. He sought to add growth to EU deficit rules and that the Budget Pact wouldl not be approved without changes. France to seek transaction tax (tobin tax) and project bonds
- German Bundesbank's Dombret commented that most European banks were now stronger than before the financial crisis. Banks in Germany are prepared for larger Greek problems.
- Former MoF official Sakakibara ('Mr Yen') commented on CNBC that Japan would not have a crisis for the next 4-5 years. Japanese exporters suffering from reduced global demand and effects from a strong JPY currency. Current USD/JPY levels were not an issue for exporters but could be if it moved below 70 handle. He believed the JPY could strengthen towards 78 for a while.
- Japanese Bankers Group head: Further turmoil in Europe could lead to a stronger JPY currency
- Hungary IMF representative Fellegi commented that the IMF talks might start in June and end in autumn. He noted that no agreement on banking sector on tax would mean tense discussions with IMF >- Fitch report noted that Basel III capital rules posed ROE challenges for global banks and estimated that the 29 global systemically important financial institutions (G-SIFI) might need to raise approximately $566B in common equity to satisfy new Basel III capital rules by end-2018.
Currencies:
- A very quiet session with most European participant observing Ascension Thursday Holiday. The highlight of the morning was the Spanish GDP figures and its 3-4 year Bond auctions which provided no surprises. The EUR/USD was little changed from its Far East opening levels of 1.2720. Concerns over Greece remain with EU/IMF/ECB Troika to examine possible contingency plans for Portugal in the event of a Greek exit from EMU. The 3-month Euribor rose for the first time since the ECB launched its 3-year lending LTRO back on Dec 21st 2011in the post-LTRO environment. Some chatter that the European holiday might have excluded on bank in its survey and skewed results
Political/ In the Papers:
- The Chief Executive of Centre for Economic and Business Research (CEBR) Douglas McWilliams stated a planned breakup of the single currency would cost 2% of euro zone GDP ($300B), while a disorderly collapse would be at 5% decline in output or a loss of $1T. He added that the end of the euro in its current form is a certainty.
- Some analysts are concerned about the collateral levels of Greek banks according to the Telegraph's Ambrose Evans-Pritchard. The low collateral levels of Greek banks could make it more difficult to obtain funding from the ECB's €100B Emergency Liquidity Assistance [ELA] facility. Some analysts believe that the ECB could improve the situation by relaxing collateral requirements for Greek banks.
- The economics editor for the BBC Stephanie Flanders noted that the estimated range of Greek deposit withdrawal is €700M-1.2B (out of €160B total deposits) following the election; the total deposits are about a third lower against end-2009. The most important aspect of the euro and Greek banks is that the ECB is again at the centre of events; the ECB has the power to make or break the euro. What it does not have is any desire to do this, or formal legal responsibility.
- The Times reported British mortgages are to be hit by the euro crisis, as homeowners are expected to face new increases in mortgage rates.
***Looking Ahead***
- 7:00 (BR) Brazil May FGV Inflation IGP-10 M/M: 1.0%e v 0.7% prior
- 8:00 (BR) Brazil Mar Retail Sales M/M: +0.3%e v -0.5% prior; Y/Y: 11.7%e v 9.6% prior; Broad Retail Sales Y/Y: 7.9%e v 2.5% prior
- 8:30 (CA) Canada Mar Int'l Securities Transactions (CAD): 8.0Be v 12.5B prior
- 8:30 (CA) Canada Mar Wholesale Sales M/M: 0.3%e v 1.6% prior
- 8:30 (US) Initial Jobless Claims: 365Ke v 367K prior; Continuing Claims: 3.225Me v 3.229M prior
- 9:00 (US) IMF Lagarde, Zhu Min and World Bank Zoellick
- 9:30 (US) IMF briefing
- 9:00 (MX) Mexico Q1 GDP Q/Q: 1.0%e v 0.4% prior; Y/Y: 4.5%e v 3.7% prior
- 9:30 (US) Weekly Commercial Paper Outstanding
- 10:00 (US) May Philadelphia Fed: 10.0e v 8.5 prior
- 10:00 (US) Apr Leading Indicators: 0.1%e v 0.3% prior
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 10:30 (CA) Bank of Canada quarterly review of economy
- 11:00 (US) Fed to purchase $1.5-2.0B in Notes
- 11:00 (BR) Brazil to sell 2013, 2014, 2016 Bills
- 11:00 (BR) Brazil to sell Sell Fixed-rate 2018 and 2023 bonds
- 13:00 (US) Treasury to sell $13B in 10-Year TIPS Reopening
- 11:30 (EU) European Leaders to hold pre-G8 video conference call
- 12:00 (US) IMF chief economist Blanchard
- 12:35 (US) Fed's Bullard Speaks to Rotary Club of Louisville
- 17:00 (CO) Colombia Mar Retail Sales Y/Y: No est v 9.4% prior
- 18:00 (CL) Chile Central Bank Interest Rate Decision: Expected to leave the Nominal Overnight Rate Target unchanged at 5.00% 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. 

European market update: Greece said the European GDP data and the German ERF survey varied session

 Tuesday, May 15, 2012 5:53:18 AM European Market Update: Greece said to make €430M bond payment today; European GDP data and German ZEW Survey were mixed in session***Economic Data***

- (JP) Japan Apr Consumer Confidence: 40.0 v 40.8e
- (SG) Singapore Mar Retail Sales M/M: 1.6% v 0.2%e; Y/Y: 9.1% v 7.2%e; Retail Sales Ex Auto Y/Y: 6.5% v 3.5%e
- (FR) France Apr Consumer Price Index M/M: 0.1% v 0.2%e; Y/Y: 2.1% v 2.2%e; CPI Ex Tobacco Index: 124.80 v 124.84e
- (FR) France Apr CPI EU Harmonized M/M: 0.2% v 0.2%e; Y/Y: 2.4% v 2.5%e
- (FR) France Q1 Preliminary Gross Domestic Product Q/Q: 0.0% v 0.0%e; Y/Y: 0.3% v 0.5%e
- (FI) Finland Mar GDP Indicator: 2.4% v 3.5% prior
- (DE) Germany Q1 Preliminary GDP Q/Q: 0.5% v 0.1%e; Y/Y: 1.7% v 0.9%e; GDP wda Y/Y: 1.2% v 0.8%e
- (FR) France Q1 Preliminary Non-Farm Payrolls Q/Q: +0.1 v -0.2%e; Wages Q/Q: 0.9% v 0.7%e
- (AT) Austria Q1 GDP Q/Q: 0.2 v 0.0% prior; Y/Y: 1.9 v 0.8% prior >- (CZ) Czech Q1 Preliminary GDP Q/Q: -1.0% v +0.1%e; Y/Y: -1.0% v +0.2%e
- (HU) Hungary Q1 Preliminary GDP Q/Q: -0.7% v -0.5%e; Y/Y: -1.3% v -0.1%e
- (HU) Hungary Mar Final Industrial Production M/M: 0.6% v 0.6% prelim; Y/Y: 0.6% v 0.6% prelim
- (TR) Turkey Feb Unemployment Rate: 10.4% v 10.2% prior
- (FI) Finland Mar Current Account: -€40M v -€230M prior
- (DK) Denmark Apr Wholesale Prices M/M: 0.2 v 0.8% prior; Y/Y: 2.2% v 2.7% prior
- (NL) Netherlands Q1 Preliminary GDP Q/Q: -0.2% v -0.3%e; Y/Y: -1.1% v -1.1%e
- (NL) Netherlands Mar Trade Balance: €4.1B v €2.9B prior
- (SE) Sweden Q1 Total Number of Employees Y/Y: 2.3% v 2.8%e
- (TR) Turkey Apr Budget Balance (TRY) 1.4B v 1.1B y/y
- (IT) Italy Q1 Preliminary GDP Q/Q: -0.8% v -0.7%e; Y/Y: -1.3% v -1.2%e
- (NO) Norway Apr Trade Balance (SEK): 38.4B v 46.4B prior
- (UK) Mar Visible Trade Balance: -£8.6B v -£8.4Be; Total Trade Balance: -£2.7B v -£2.9Be; Trade Balance Non EU: -£4.1B v -£4.7Be >- (GR) Greece Q1 Advanced GDP Q/Q: %; Y/Y: -6.2% v -7.5% prior
- (EU) Euro Zone Q1 Advanced GDP Q/Q: 0.0% v -0.2%e; Y/Y: 0.0% v -0.2%e
- (DE) Germany May Zew Economic Sentiment: 10.8 v v 19.0e; Current Situation: 44.1 v 39.0e
- (EU) Euro Zone May ZEW Economic Sentiment: -2.4 v +13.1 prior
- (PT) Portugal Q1 Preliminary GDP Q/Q: -0.1%% v -1.0%e; Y/Y: -2.2% v -3.1%e
Fixed Income: >- (GR) Greece Debt Agency (PDMA) sold €1.3B v €1.0B in 13-week Bills; avg yield 4.34% v 4.20% prior; Bid-to-cover: 2.32x v 2.46x prior
- (SE) Sweden sold SEK2.5B vs. SEK2.5B indicated in 3.5% 2022 Bonds; avg yield 1.4696%
- (ZA) South Africa sold total ZAR2.1B vs. ZAR2.1B indicated in 2018, 2026 and 2041 bonds
- (EU) ECB allotted €43.0B vs. €39.0Be in 7-Day Main Refinancing Tender at fixed 1.0%
- (HU) Hungary Debt Agency (AKK) sold HUF45B in 3-Month Bills; Avg Yield 7.16% v 7.16% prior; Bid-to-cover: 2.02x v 2.40x
- (UK) DMO sold £2.75B in 5% 2025 Gilts; Avg Yield 2.251% v 2.356% prior; Bid-to-cover: 2.09x v 1.8x prior; Tail 0.2bps vs. 0.4bps prior
- (BE) Belgium Debt Agency sold total 3.39B vs. €3.0-3.5B in 3-month and 12-month Bills
- Sold €1.465B in 3-month Bills; Avg yield 0.201% v 0.179% prior; Bid-to-cover: 3.97x v 2.62x prior
- Sold €1.925B in 12-month Bills; Avg yield 0.627% v 0.734%prior; Bid-to-cover: 2.36x v 2.32x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- Moodys cuts Italian banking sector (as expected)
- RBA minutes: Need to cut rates tp offset higher bank rates; CPI has slowed
- Greece will make bond payment of €430M today
- German, Eurozone & Portugal GDP beats expectations; Italy, emerging Europe do not
- Greek President Papoulias will attempt to persuade leaders to accept a technocratic government to avert another round of elections
- Hollande inaugurated as France's new President
***Equities*** >FTSE 100 +0.10% at 5469, DAX +0.20% at 6462, CAC-40 +0.40% at 3071, IBEX 35 -0.40% at 6783, FTSE MIB -0.30% at 13,622, SMI +0.10% at 5882
- European equity indices opened the session slightly higher, following the losses seen on Monday's session. Additionally, banks opened higher, but are currently trading in negative territory, as peripheral government bond yields have moved higher. The better than expected Q1 GDP data out of Germany has been offset by disappointing growth figures out of Italy and mixed German ZEW data. Additionally, concerns related to Greece's political situation and Spanish banks have continued to linger. In Greece, the Athens Stock Exchange has risen by more than 0.50%, while Greece's 10 yr bond yield has risen by over 10bps on the session amid reports that Greece will make the €430M debt payment, which is due today.
- UK-listed Smiths Group [SMIN.UK], Babcock International [BAB.UK], Afren [AFR.UK] and G4S [GFS.UK] are all trading higher following the release of their respective financial reports. Shares of Germany's largest steel maker, Thyssenkrupp [TKA.DE] have declined by over 2% on the session, as the company reported weaker than expected quarterly revenues. Merck KGAA [MRK.DE] and Air Berlin are also trading lower after their respective Q1 earnings reports. In other German movers, Phoenix Solar [PS4.DE] has gained over 9% following its quarterly earnings release, while Sky Deutschland [SKYD.DE] is higher by over 5% as the company reported better than expected quarterly revenues.
In France, shares of Iliad [ILD.FR] are higher by over 4%, as the company's Q1 sales beat analyst expectations. Additionally, Vivendi [VIV.FR] has gained more than 3% on better than expected Q1 results. Swiss private bank Julius Baer is lower by more than 2%, as the company said its year to date gross margin was below the level seen in 2011. Italian banks opened the session mostly higher, despite the decision by Moody's to downgrade 26 Italian banks. Italian banking name Intesa [ISP.IT] is due to report its quarterly earnings later today.
Speakers: >- Greece will pay holdouts €430M of a Euro bond maturing today
- France President Hollande commented in his acceptance sppech that he vowed to open a new path for Europe and that France had always overcome challenges
- Head of Greek Independent party Kammenos denied having sent document to president's office with proposals for forming a government
- ZEW Economists commented that political uncertainty in Greece and France contributed to the drop in its May Survey and that economic risks had risen in recent weeks. Growth and consolidation did not contradict each other and that austerity must be pursued in some European countries. There was the expectation of small banking crisis during the next 6 months, as sectorally everything was quite well, except for the banking sector. The ZEW noted that the exchange rate expectations was for Euro to weaken as expectation of the Euro Zone crisis would intensify again
- EU's Juncker commented that the topic of a new Eurogroup chief was not on today's agenda. He reiterated that he was confident Spain to reach 2013 deficit target
- France Fin Min Baroin stated that the French banking sector could absorb Greek losses
- UK Chancellor Osborne commented that the Euro Region must stand behind its currency. Uncertainty was undermining Euro Area economies and that strengthening the banking sector was part of the solution
- Spain Fin Min De Guindos commented that Spain asked for ECB role in auditing banking sector. He noted that EFSF aid for banking sector was not discussed
- German CDU official Altmaier stated that it was certain that Germany and France would agree on a common euro crisis approach by the end of June at the latest. He reiterates that expected the fiscal compact to be approved by the German Parliament before the summer recess
- German SPD (opposition) stated that Chancellor Merkel policies were leading Europe into recession and called for investment and fiscal pact
- German SDP's Steinmeier (opposition) doubted that the ESM and fiscal compact would be ratified before summer recess. Party would need to decide whether it backed the fiscal pact depending on what growth measures are added. He expected Chancellor Merkel to accept an EU growth pact
- Slovakia gov't won a confidence vote on its austerity program, as expected
- India Junior Oil Min commented that India to import 15.5M tons of crude oil from Iran in FY13 compared to 17.4M tons y/y
- Norway Govt revised its 2012 budget with the overall surplus revised higher to NOK381B vs. NOK346B seen in Oct . Structural non-oil deficit was raised to to NOK116B vs. NOK112.2B seen in Oct and the non-oil Defciit to GDP to 3.5% vs. 3.9% prior. Norway cut it 2012 non-oil GDP growth to 2.7% from 3.1% prior Oct view and lowered 2012 Core CPI to 1.4% from 1.8% seen in Oct. It noted that the budget was somewhat more expansive compared to October budget
- IMF commented on Sweden and noted that various financial fragilities were apparent in the country that included household debt and a softening housing market
- Sweden Central Bank's Wickman-Parak: Reasonable to assume that the Euro crisis will be solved
- South Africa Central Bank (SARB) approved provision of liquidity facility to help banks meet Basel III requirements
- Singapore Dep PM commented that the Euro Zone debt crisis escalation might have substantially spilled over into global markets and could not rule out a deeper recession in Europe and more market stress as a result
- (IR) Iran envoy: Discussions with IAEA have been constructive
Currencies: -
- The early part of the session exhibited some consolidation of recent moves in markets, including currencies. A stronger German Q1 GDP helped to contain some of the risk aversion coupled with word that Greece would make the €430M bond payment today. However, as other Euro Area members reported their respective GDP highlighted the two-tier growth and some of the earlier euphoria faded. German ZEW investor confidence was weaker than expected and provided another headwind for any prolong Euro rebound. As the NY morning approached the EUR/USD was steady at 1.2845, about 20 pips higher from it Far East open. The market will now focus on key US economic data and EcoFin meeting.
Political/ In the Papers:
- The Trades Union Congress (TUC) reported that due to the inability to find full-time work the number of part-time workers more than doubled over the past four years. Approximately 600K men were working part-time in December while looking for full-time positions compared to 293K at the end of 2007. In addition, total in involuntary part-time work hit 1.4M (highest reading since records began in 1992).
***Looking Ahead***
- (PT) Bank of Portugal releases 2011 Annual Report
- (IT) EU's Barroso to meet Italy PM Monti
- 6:00 (EU) EFSF to sell €1.0B in 2.0% 2017 Notes
- (PE) Peru Mar Economic Activity Index Y/Y: No est v 7.2% prior
- (PE) Peru Apr Unemployment: No est v 8.7% prior
- 6:00 (EU) EU Officials Hold Meeting With Ukraine's Foreign Minister
- 6:00 (PT) Portugal Q1 Labour Costs: No est v -1.7% prior
- 7:00 (DE) German Chancellor Merkel
- 7:00 (EU) ECB; to drain €214.0B to offset govt bond purchases
- 7:30 (US) Weekly ICSC Chain Store Sales
- 7:45 (EU) EU Finance Ministers (Ecofin) press conference
- 8:00 (IC) Iceland Apr Unemployment Rate: No est v 7.1% prior
- 8:00 (PL) Poland Apr CPI M/M: 0.5%e v 0.5% prior; Y/Y: 3.9%e v 3.9% prior
- 8:30 (US) Apr Consumer Price Index M/M: 0.0%e v 0.3% prior; Y/Y: 2.3%e v 2.7% prior
- 8:30 (US) Apr CPI Ex Food & Energy M/M: 0.2%e v 0.2% prior; Y/Y: 2.3%e v 2.3% prior
- 8:30 (US) Apr Consumer Price Index NSA: 229.9000e v 229.392; CPI Core Index SA: No est v 228.432 prior >- 8:30 (US) May Empire Manufacturing: 9.50e v 6.56 prior
- 8:30 (US) Apr Advance Retail Sales: 0.2%e v 0.8% prior; Sales Less Autos: 0.2%e v 0.8% prior; Retail Sales Ex Auto & Gas: 0.3%e v 0.7% prior
- 8:55 (US) Weekly Redbook Retail Sales
- 9:00 (US) Tsy Sec Geithner
- 9:00 (BE) Belgium Mar Trade Balance: No est v -€152.3M prior
- 9:00 (US) Mar Total Net TIC Flows: $32.5Be v $107.7B prior; Net Long-term TIC Flows: No est v $10.1B prior
- 9:00 (PL) Poland Apr YTD Budget Level (PLN): No est v -23.0B prior; Budget Performance YTD: No est v 65.6% prior
- 9:00 (EU) ECB Forex data
- 9:30 (US) Fed's Duke
- 10:00 (US) Mar Business Inventories: 0.4%e v 0.6% prior
- 10:00 (MX) Mexico weekly International Reserves
- 10:00 (US) May NAHB Housing Market Index: 26e v 25 prior
- 11:00 (US) Fed to sell $8.00-8.75B in Notes
- 11:30 (US) Treasury to sell $30B in 4-Week Bills
- 11:30 (IS) Israel Apr Consumer Prices M/M: 0.8%e v 0.4% prior; Y/Y: 2.1%e v 1.9% prior
- 12:30 (FR) German Chancellor Merkel to meet France President Hollande
- 14:30 (EU) EU's Rehn Speaks at Dinner Event in Brussels
- 16:30 (US) Weekly API Energy Inventories
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