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Daily UK and Europe Highlights - 24 July 2009
Folks, its Freaky Friday today. Lots of economic data coming out of
the cupboard in the Eurozone, mostly PMI and Business Climate numbers.
UK's preliminary GDP q/q and services index are out as well today, both
quite weak; no green shoots here folks. Preliminary printing of the UK
GDP figures shows biggest Y/Y fall since the series began in 1955,
annualised to -5.6% !
Gordon Brown was caught today dishing out advise on how the G-20 needs
to address global imbalances when it is quite clear from the horrible
economic numbers that he needs to keep his trap firmly shut!
Here is a thought to take away over the weekend - European and UK
exchanges (LSE et. al) do not release program trading data; I wonder
how much these markets are being gamed on a day-to-day basis. Anyone
with insight into this matter should fire away in the comments section.
- Must read: Perma-bear Blanchflower says BoE risks choking recovery, should expand QE (Bloomberg)
- Must read: UK VAT cut must be extended, business leaders and MPs say (Telegraph)
- Must read: Brown braced for defeat as by-election count begins (Guardian)
- Must read: UK public services 'face decade of pain' - Institute of Fiscal Studies (Guardian)
- Must read: UK Commercial Vehicle output down sharply - 60.4% fall in June according to SMMT (SMMT)
- Cocaine Britain: 25 percent rise in the last year [RS: most read at The Independent] (The Independent)
- EDF fined £2m for poor service (Telegraph)
- Russia will not allow Georgia to re-arm (Guardian)
- De Beers profit dives 99 percent (Reuters)
- Berlusconi's Sex Tape scandal unlikely to be fatal in homeland of Casanova (Bloomberg)
- Hungary gets premium reduction, deadline extension on IMF bailout loan (Bloomberg)
- Must read: More than half of Swedbank's mortgages in Latvia exceed collateral (Bloomberg)
- Hungary seeks to raise 55 bln Forint in domestic bond sale next week (Bloomberg)
- Estonia's trade deficit shrank most in thirteen years in May (Bloomberg)
- Hungarian retail sales fall 28-month in a row on deficit financing (Bloomberg)
- Euro may rise to year-high after breaking "Triangle": Technical Analysis (Bloomberg)
- German business confidence jumps for fourth month, adds more than forecast (Bloomberg)
- European manufacturing, services industry contraction easing, PMI shows (Bloomberg)
- Ericsson Profit Misses Estimates on Losses at Mobile-Phone, Chip Ventures (Bloomberg)
- French July Consumer Confidence Declines on Rising Joblessness (Bloomberg)
- Fonciere Des Regions Reports Loss as Real-Estate Values Fall [RS: european real estate woes!] (Bloomberg)
- Commerzbank is unlikely to need new Government cash injection, FAZ reports (Bloomberg)
- Beijin Auto's China success may have hindered ambition to buy GM's Opel (Bloomberg)
- Must read: Deputy Fin. Min. Campa says Spain needs exports to end 'crisis of my generation' (Bloomberg)
- Must read: UK Economy contracted 0.8% in second quarter, more than double forecast (Bloomberg)
- Lawmakers say Business Loan Guarantee Program overcame its initial delay (Bloomberg)
- Must read: Auditors under attack as the recession exposes failings (The Independent)
- Latvia PM says ministers have to start cutting 2010 budget by 500mln Lats as talks with IMF continue
- UK PM Brown says G-20 needs to address global imbalances
- ECB says Eurosystem covered bond purchase programme totals EUR 2.861bln
Economic Calendar:
- UK GDP (Q2 A) Q/Q -0.8 % vs. Exp. -0.3% (Prev. -2.4%); Y/Y -5.6% vs. Exp. -5.2% (Prev. -4.9%)
- German IFO - Business Climate (Jul) M/M 87.3 vs. Exp. 86.5 (Prev. 85.9)
- EU PMI Maufacturing (Jul A) M/M 46.8 vs. Exp. 43.5 (Prev. 42.6)
- German PMI Manufacturing (Jul A) M/M 45.2 vs. Exp. 42.0 (Prev. 40.9), 10 month high
- UK 3-month to May services output down 1% on previous three months
- Slovenia Q1 unemployed up 10K from Q4
- Slovenia June Tourist arrivals down 11% on Year
- Hungarian retail sales (see above for news article)
Interesting articles from other Blogs this morning:
- The equity market goes 'pre-pay' - interesting read about analyst upgrade circle-jerks from Goldman (FT Alphaville)
- Investors blast BofE on gilts sale - a tale of angry investors blast against the BofE (FT Alphaville)
- RBS and Llyods bow to Brussels - European anti-trust rules could make them break their branches apart (FT Alphaville)
- Sovereign Wealth Funds tipped for greater financing role - Turner & Townsend share their thoughts (FT Alphaville)
- It Isn’t Only Canicular Heat They Are Suffering From In Latvia (Fistful of Euros)
- Escaping Original Sin in Hungary? (Fistful of Euros)
Make sure you to watch the RAN Squawk 'EU Morning Briefing' video and visit the RAN Squawk News page.
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Re the British way worse than expected GDP figures, the UK stock market loved it and is higher on day.
I am concluding that Bloomberg TV is worse than CNBC - in terms of on air personalities. Betty Looooo and Carol Maaassser have the most annoying voices and they drag their vowels and extend there sssss's. Then there's Cris Valero who sounds like she just escaped from the Bronx - where do they get these 'talents' - finally they recycle interviews throughout the day.
That ain't fair to those ladies. Bloomie can't help it if that other station gets the high price call girls.
The only industry where employee salaries are going up. Considering the fact that these very same set of people caused the financial meltdown and the "deep recession", it must be good to reward themselves with taxpayer money
Is there no shame in the banking world ?
http://www.marketwatch.com/story/jp-morgan-raising-some-banker-salaries-...
LMAO I'm surprised you got past captcha!
Good numbers from Europe so bull will continue and kill all bears.
Whatever risk penalty that was priced into the emerging markets is evaporating. Huge run up on Warsaw Stock Exchange.
Emerging currencies have gained tremendously on the dollar and euro. This means that the portfolio risk on mortgages financed in foreign currencies is also diminishing.
This is huge positive for sweden banks, reifessen etc.
I would have thought you were a bit more sophisticated than the very basic market knowledge and awareness that is provided by RAN. You live and you learn I guess.
JPMorgan and GS have been manipulating the Warsaw Exchange and Eastern European curriencies for a few years now. The market is really thin and the regulators can be bought off with a job offer for their graduating kid or some "consulting" contract.
Goldman has hired one of the recent prime ministers to get into privatisation of the energy companies (oil and natural gas).
JPMorgan routinely does runs crazy block orders from their London office, untouchable by the toothless regulators. They too are looking for a lot of business in privatisation of and "consulting" to the state conglomerates. When JPM London desk strikes, everyone on the Warsaw Stock Exchange notices :)
If you check Polish media reports on Goldman Sachs last fall, they are accused of having orchestrated a huge devaluation on the PLN after having sold symmetric options to all those fools who run the state and semi-state enterprises.
The losses associated with this scheme have been approximately $10 billion. A lot of people lost their jobs after the companies shut down when bankrupted by GS pump-and-dump.
In summary a shallow market in such a banana republic really doesnt require high frequency trades to make money. Just play on the weak government and incompetent, easy to bribe regulators.
EDIT: I might add that "401k" type scheme is COMPULSORY for all workers and the "Polish 401k" DOES'T ALLOW for withdrawals, also DOESN'T ALLOW for choosing your allocation. It is essentially a regular monthly injection of 10% of the working population wages, permanently into the stock market.
COMPULSORY and NO WITHDRAWAL
How do you like em apples?
PolishHammer,
Thank you for the insight. I agree with with you regarding manipulation of shallow markets and buying of government ministers.
Unfortunately I cannot read Polish, so if you could put links up of the relevant articles it would be highly appreciated. In fact, I encourage readers who come across noteworthy non-English articles (Spiegel, et. al) to post them in the comments box below (with an English title) when the morning brief comes out.
This below is the PR move Goldman pulled off after making huge bets against economies of countries that pay them to do IB work for them. GS had to do this as it was politically untenable for them to remain the main privatisation agent in Poland. What I would compare it to is the recent "repurchase of swaps" PR move.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aP6gJ42Or17o
The "squid on the face of working people" articles in Poland appeared already in the fall of 2008.