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Daily US Opening News And Market Re-Cap: August 11

Tyler Durden's picture





 

From RanSquawk

  • European equities came under pressure on the back of market talk that BNP Paribas may incur a loss of further USD 713mln on Greece. However, ECB’s Noyer said French banks’ first quarter results showed solidity and capital levels are adequate
  • Societe Generale CEO said rumours are complete fantasy and co. has had no particular trading loss in recent days
  • According to a PBOC advisor, China is willing to keep buying European and US government debt, and it is possible for Chinese organisations to invest in European banks
  • CHF weakened across the board in early trade on the back of market talk of the SNB conducting currency swaps in the market

Market Re-Cap
 
The European equity market remained volatile during the session, with some stability seen in French banks in early trade after Societe Generale's CEO rejected yesterday's market talk that the co. is in trouble, and as the French/German 10-year government bond yield spread retraced all of its widening yesterday. However, as the session progressed, apprehension revisited on the back of market talk that BNP Paribas may incur a loss of further USD 713mln on Greece, together with a three-month hike seen in the ECB's overnight deposit facility yesterday, which highlighted banks reluctance to lend. This resulted in a renewed sell-off in French and Italian bank shares, and financials became the worst performing sector in Europe. In other news, the Eurozone 10-year government bond yield spreads narrowed helped by a PBOC adviser saying that China is willing to keep buying European debt, together with market talk of the ECB buying in the Italian and Spanish government bonds. Elsewhere, CHF weakened across the board in early trade on the back of market talk of the SNB conducting currency swaps in the market. Also, USD/JPY recovered somewhat, after an earlier approach towards its all time low of 76.24, however there was no official confirmation of a BoJ intervention.
 
Moving into the North American open, markets look ahead to key economic data from the US in the form of jobless claims and trade balance, together with housing and trade balance figures from Canada. In fixed income, 5-year TIPS refunding announcement, allied with USD 16bln 30-year Note auction are also scheduled for later in the session.
 
Asia Headlines:
 
Japan may cut its growth forecast for the year ending March as the government will reduce the forecast to 0.5% from a previous 1.5% estimate. In other news, BoJ is mulling additional easing measures to support the market according to Asahi newspaper. (Kyodo/Nikkei/Asahi)
 
US Headlines
 
Republicans named mostly anti-tax hardliners to the US Congressional deficit cutting supper committee, setting the stage for continued deadlock in a battle that has roiled global markets. The six Republicans appointed included Senator Patrick Toomey, a favourite of the conservative Tea Party, Senator Rob Portman, Senator Jon Kyl, Dave Camp, Fred Upton and Jeb Hensarling. (RTRS)
 
Elsewhere, Fed officials are drawing up rules for the largest US banks that won’t be more stringent than global capital standards agreed in Basel, Switzerland, according to a person familiar with the discussions. (Sources) Also, Fed’s Kocherlakota said he is not necessarily always set on dissenting on policy. (WSJ)
 
In other news, foreclosure filings fell to a 44-month low in July, according to RealtyTrac, but the co.’s chief executive said processing delays continue to be the driving force behind the drop in foreclosure activity. (MarketWatch)
 
EU and UK Headlines:
 
Italian economy minister Tremonti said the current budget plan needs restructuring, and he is open to proposals on reforming tax on financial income, adding that the government may levy a solidarity tax. Meanwhile, according to government sources, the Italian government could call a cabinet meeting on new austerity measures as early as Friday. (RTRS/Sources)
 
•    UK Index-Linked Gilt auction for GBP 825mln, 0.625% Nov'42, bid/cover 1.85 vs. Prev. 2.80, yield 0.527% (RTRS)
 
EQUITIES
 
The European equity market remained volatile during the session, with some stability seen in French banks in early trade after Societe Generale's CEO rejected yesterday's market talk that the co. is in trouble. However, as the session progressed, apprehension revisited on the back of market talk that BNP Paribas may incur a loss of further USD 713mln on Greece, together with a three-month hike seen in the ECB's overnight deposit facility yesterday, which highlighted banks reluctance to lend. Allied to this there were concerns surrounding the funding structure for the French and Italian banks, which make them more vulnerable to losses as compared to banks in the UK. All this resulted in a renewed sell-off in French and Italian bank shares, and financials became the worst performing sector in Europe. Moving into the North American open, equities continue to trade in negative territory, with financials and consumer services as the worst performing sectors.

FX
 
CHF weakened across the board in early trade on the back of market talk of the SNB conducting currency swaps in the market. It is worth noting that SNB’s Jordan said the SNB could ease monetary policy further without having to resort to currency interventions, adding that deflation risks are possible.
 
Also, USD/JPY recovered somewhat, after an earlier approach towards its all time low of 76.24, however there was no official confirmation of a BoJ intervention. In related news, Japanese finance minister Noda said he was keeping extremely close watch on currency moves, adding that he will work closely with the global community to maintain market stability.

COMMODITIES
 
WTI and Brent crude futures traded higher in early European trade as risk appetite gathered pace with weakness observed in the USD-Index. However, heading into the North American open, prices came off their session highs as the Eurozone debt spill over concerns returned to markets.
 
Oil & Gas News:

•    According to Noe van Hulst, secretary general of IEF, it is too early for OPEC countries to consider cutting oil output, even as prices fall below the USD 100 per barrel mark.
 
Geopolitical News:

•    North Korea denied shelling near South Korean border.
•    Libya’s Rebels said they were on the verge of capturing the coastal oil town of Brega, in what could be a decisive step toward unlocking the country’s oil wealth and forcing out Gaddafi.
•    The US imposed financial sanctions on Syria and edged closer to issuing an explicit call for Syrian President Bashar al-Assad to step down.
 
In other news, Gold eased from record highs after the CME Group raised margins on COMEX gold futures by 22.2%. (RTRS)

Full note:

 

 


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Thu, 08/11/2011 - 09:00 | Link to Comment slewie the pi-rat
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USD up over 3.3% v. CHF

Thu, 08/11/2011 - 09:10 | Link to Comment disabledvet
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"Killing is my bizness children and bizness is GOOOOD"

Wed, 09/14/2011 - 05:51 | Link to Comment chinawholesaler
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