Daily US Opening News And Market Re-Cap: December 1

From RanSquawk

• Lower than expected manufacturing PMI data from China prompted concerns surrounding sustainability of the Chinese growth, and raised hopes for further monetary easing measures by the PBOC soon
• Successful bond auctions from Spain and France resulted in significant tightening of the Spanish/German and French/German 10-year government bond yield spreads with heavy buying from domestic accounts
• Market talk of the ECB buying in Italian and Spanish government debt via SMP
• Gilt futures dropped more than 50 ticks following a lackluster Gilt auction from the UK’s DMO

Market Re-Cap
 
Overnight markets witnessed lower than expected manufacturing PMI data from China prompting concerns on sustainability of the Chinese growth, however losses in equities were capped on the back of yesterday's coordinated action by major central banks to enhance liquidity in the global financial system. Appetite for risk received additional support following well bid Spanish bond auctions, however European equities traded mixed for a vast majority of the session. The Eurozone 10-year government bond yield spreads generally tightened helped by successful bond auctions from Spain together with market talk of the ECB buying Italian and Spanish government debt. Also, Gilt futures fell over 50 ticks on the back of a lacklustre conventional Gilt auction from the UK. In the forex market, GBP/USD gained partly on the back of market talk of an Asian sovereign buying in the pair, however AUD remained under pressure following softer Chinese manufacturing PMI data together with concerns surrounding the Australian economic growth.
 
Moving into the North American open, markets look ahead to key economic data from the US in the form of jobless claims, construction spending, ISM manufacturing, and vehicle sales. Markets will also keep a close eye on developments pertaining to the Eurozone debt crisis, whereas in fixed income the BoE is scheduled to release details of its APF operations for next week later in the session.
 
Asian Headlines:
 
Japanese PM Noda asked the finance minister Azumi to compile a fourth supplementary budget for the financial year to next March to provide support for businesses hurt by a strong JPY and flooding in Thailand. Azumi said the budget will not rely on new bond issuance and he wants to compile it by mid-December. Azumi also said there is no change in Japan’s policy to take firm measures against excessive and disorderly currency moves driven by speculators. (Kyodo)
 
•       Chinese PMI Manufacturing (Nov) M/M 49.0 vs. Exp. 49.8 (Prev. 50.4)
•       Chinese HSBC Manufacturing PMI (Nov) M/M 47.7 vs. Prev. 51.0 (RTRS)
 
US Headlines
 
Fed’s Fisher said that a decision to alter the terms of dollar swap lines with foreign central banks was meant to help economic growth, not bailout Europe. (RTRS)
 
In other news, according to reports, the Fed could opt for further measures to ease the sovereign debt crisis in Europe by cutting the US discount lending rate or restarting a programme that auctions loans to banks. (Sources)
 
EU and UK Headlines
 
•  Eurozone Manufacturing PMI (Nov F) M/M 46.4 vs. Exp. 46.4 (Prev. 47.1), lowest since July 2009
•  German Manufacturing PMI (Nov F) M/M 47.9 vs. Exp. 47.9 (Prev. 49.1), activity drops at fastest level since mid-2009
•  French Manufacturing PMI (Nov F) M/M 47.3 vs. Exp. 47.6 (Prev. 47.6)
•  Italian Manufacturing PMI (Nov) M/M 44.0 vs. Exp. 43.0 (Prev. 43.3)
•  UK Manufacturing PMI (Nov) M/M 47.6 vs. Exp. 47.0 (Prev. 47.4, Rev. 47.8) (RTRS)
 
•  Spanish bond auction for EUR 1.2bln, 3.00% Apr'15, bid/cover 2.70 vs. Prev. 2.10 (yield 5.187% vs. Prev. 3.639%)
•  Spanish bond auction for EUR 1.15bln, 3.15% Jan'16, bid/cover 2.80 vs. Prev. 1.79 (yield 5.276% vs. Prev. 4.045%)
•  Spanish bond auction for EUR 1.4bln, 3.80% Jan'17, bid/cover 2.70 vs. Prev. 1.80 (yield 5.544% vs. Prev. 4.782%)
•  French OAT auction for EUR 0.595bln, 4.25% Oct'17, bid/cover 4.403 vs. Prev. 2.16 (yield 2.42% vs. Prev. 3.080%)
•  French OAT auction for EUR 1.571bln, 3.25% Oct'21, bid/cover 3.046 vs. Prev. 2.24 (yield 3.18% vs. Prev. 3.220%)
•  French OAT auction for EUR 1.1bln, 3.50% Apr'26, bid/cover 3.239 vs. Prev. 2.60 (yield 3.65% vs. Prev. 3.770%)
•  French OAT auction for EUR 1.08bln, 4.50% Apr'41, bid/cover 2.257 vs. Prev. 2.22 (yield 3.94% vs. Prev. 3.720%)
•  UK Conventional Gilt auction for GBP 3bln, 3.75% 2021 Gilt, bid/cover 1.61 vs. Prev. 1.76 (RTRS)
 
EQUITIES
 
Overnight markets witnessed lower than expected manufacturing PMI data from China prompting concerns on sustainability of the Chinese growth, however losses in equities were capped on the back of yesterday's coordinated action by major central banks to enhance liquidity in the global financial system. Appetite for risk received additional support following well bid Spanish bond auctions, however moving into the North American open, European equities are trading mixed, with telecommunications and oil & gas as the worst performing sectors.

FX
 
GBP/USD gained partly on the back of market talk of an Asian sovereign buying in the pair, however AUD remained under pressure following softer Chinese manufacturing PMI data together with concerns surrounding the Australian economic growth.

COMMMODITIES
 
Moving into the NYMEX pit open WTI crude futures lacked any firm direction, with support coming from ongoing geopolitical tension related to Iran, however gains were capped following a weaker than expected Chinese manufacturing PMI data
 
Oil & Gas News:

•       Goldman Sachs said they are maintaining their oil price forecast, but risks are intensifying to both the upside and downside.
•       Iraq November oil exports are up 2.2% on the month at 2.135 MBPD according to SOMO.
 
Geopolitical News:

•       US General Martin Dempsey, the chairman of the Joint Chiefs of Staff, said he did not know whether Israel would alert the US ahead of time if it decided to take military action against Iran.
•       Israeli defence minister says an Israeli attack on Iran is not imminent but all options remain open to stop what Israel sees as an Iranian bid to develop nuclear weapons.

Comments

[misterc]

Rumor: BMW plant Leipzig / Germany to layoff 800 temporary workers

[Keystone Speculator]

Draghi and King downplaying expectations. Draghi says 'do not look tot he ECB to bail out Europe' and King says 'Europe is in systemic crisis'.

Yeserday was a bullish trifecta; step one was China easing, step two was the coordinated banker move and step three was the joyous economic data.

[Georgesblog]

Now that the central banks have chosen to ante up everything into the pot, it's go for broke time. After this run is over, it will be a long time before anyone sees any upside, outside of commodities. Declining purchasing power may finish that off, as well. Whatever people are going to do, they had better take care of it, now.

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

[imarion]

My biggest fear is that considering the Fed was said to be into the 2008 thing for some $7 Trillion that no one knew about, that this time they would have no qualms about going in for a $70 trillion secret synthesization to keep the banks and their bad deals afloat.

If that were to happen, the market could stay up for longer that we can stay solvent.

They are opaque, practically unaccountable and no one is willing to reign
them in..

What’s to stop them?

imarion@BTscene