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Daily US Opening News And Market Re-Cap: December 13
From RanSquawk
- Moody's placed the ratings of eight Spanish banks on review for a possible downgrade
- A solid 3-month T-Bill auction by the EFSF supported appetite for risk
- OPEC and IEA trimmed their oil demand growth forecasts
- Talks between Greece and private bondholders have ended without a deal, although consultations will continue, according to a banker involved
- According to BoE’s Dale, there is certainly scope for the central bank to increase QE if needed
Market Re-Cap
European equities traded mixed during the European session, weighed upon by weakness in financials after Moody's placed the ratings of eight Spanish banks on review for a possible downgrade. Also, market participants remained worried about potential rating action by S&P on Eurozone sovereigns after the rating agency put them on rating watch negative recently. However, weakness in the USD-Index rendered strength to basic materials and oil & gas sectors, whereas a successful EFSF T-Bill auction provided additional support to equities. In fixed income, the Eurozone 10-year government bond yield spreads remained marginally wider, despite decent T-Bill auction results from Spain as well as market talk of the ECB buying Italian government debt. Also, Gilts outperformed Bunds as the former was perceived as a safer investment ahead of the 3-month EFSF T-Bill auction, however both Gilts and Bunds came under pressure following a solid EFSF auction.
In the forex market, after trading lower in early European trade, EUR/USD and GBP/USD came off their lows as the USD-Index weakened and following a successful EFSF T-Bill auction. Weakness in the USD-Index also rendered support to commodity-linked currencies, whereas strong business conditions data from Australia overnight helped AUD further. However, CHF came under selling pressure in early trade after the Swiss government lowered its 2011 and 2012 growth forecasts for Switzerland.
Moving into the North American open, markets look ahead to economic data from the US in the form of retail sales, business inventories, API oil inventories report, together with the FOMC rate decision. In fixed income, USD 21bln 10-year Note auction from the US, allied with BoE's Gilt purchase operation in the maturity range of 2038-2060 are also scheduled for later.
Asian Headlines:
The BoJ supplied USD 4.7bln in 3-month operation, the biggest since the BoJ reinstated the dollar facility in May 2010 in the wake of the Greek debt crisis. (RTRS)
In other news, market talk that the PBOC may slash reserve requirement ratios for banks by 100 basis points, however no action has been seen yet. (Sources)
Elsewhere, Ba Shusong, a researcher at the State Council’s Development Research Centre said that China’s economic growth may hit its bottom in Q1 and Q2 next year. A PBOC adviser sees China CPI grow 2.9% next year. (China Securities Journal)
Global Headlines
Europe’s debt crisis is leading to weaker job prospects, which has weakened in most major economies, including China, but the US labour picture has brightened, according to a survey by ManpowerGroup. (RTRS)
US Headlines
US lawmakers moved closer to a deal yesterday to fund the government through next year, potentially avoiding a shutdown that would have further damaged Congress’ tattered reputation ahead of the 2012 election. (RTRS)
• US NFIB Small Business Optimism (Nov) M/M 92.0 vs. Exp. 91.5 (Prev. 90.2) (RTRS)
EU and UK Headlines
Moody's has put the ratings of eight Spanish banks and two holding companies on review for possible downgrade.
The banks placed under review were Banco Cooperativo, Banco Sabadell, Bankia and its holding company Banco Financiero y de Ahorro (BFA), Bankinter, CaixaBank and its holding company, La Caixa, savings bank association CECA, Caja Rural de Granada, Ibercaja Banco, and Lico Leasing. (RTRS)
• German ZEW Survey (Economic Sentiment) (Dec) M/M -53.8 vs. Exp. -55.8 (Prev. -55.2)
• German ZEW Survey (Current Situation) (Dec) M/M 26.8 vs. Exp. 31.0 (Prev. 34.2)
• UK CPI (Nov) Y/Y 4.8% vs. Exp. 4.8% (Prev. 5.0%)
• UK RPI (Nov) Y/Y 5.2% vs. Exp. 5.1% (Prev. 5.4%) (RTRS)
• EFSF sells EUR 1.971bln worth of 3-month T-Bills, bid/cover 3.2 (average yield 0.2222%)
• Spanish 12-month T-Bill auction for EUR 3.44bln, bid/cover 3.10 vs. Prev. 2.13 (yield 4.050% vs. Prev. 5.022%)
• Spanish 18-month T-Bill auction for EUR 1.5bln, bid/cover 5.0 vs. Prev. 5.96 (yield 4.226% vs. Prev. 5.159%) (RTRS)
EQUITIES
European equities traded mixed during the European session, weighed upon by weakness in financials after Moody's placed the ratings of eight Spanish banks on review for a possible downgrade. Also, market participants remained worried about potential rating action by S&P on Eurozone sovereigns after the rating agency put them on rating watch negative recently. However, weakness in the USD-Index rendered strength to basic materials and oil & gas sectors, whereas a successful EFSF T-Bill auction provided additional support to equities. Moving into the North American open, most European indices are trading in positive territory, with telecommunications and oil & gas as the best performing sectors.
FX
After trading lower in early European trade, EUR/USD and GBP/USD came off their lows as the USD-Index weakened and following a successful EFSF T-Bill auction. Weakness in the USD-Index also rendered support to commodity-linked currencies, whereas strong business conditions data from Australia overnight helped AUD further. However, CHF came under selling pressure in early trade after the Swiss government lowered its 2011 and 2012 growth forecasts for Switzerland.
COMMMODITIES
Moving into the NYMEX pit open WTI & Brent crude futures gained strength as OPEC & IEA trimmed their oil demand growth forecasts, together with weakness in the USD-Index.
OPEC comments:
• OPEC trimmed 2012 global oil demand growth forecast by 100,000 BPD to 1.1 MBPD. OPEC raises 2012 demand forecast for its crude by about 100,000 BPD to 30.1 MBPD.
• Incremental oil demand in 2012 will be met by the increase in non-OPEC supply and OPEC natural gas liquids.
IEA Monthly Oil Report:
• The IEA cut its oil demand outlook for 2011 and 2012 by around 200,000 BPD due to a "more precarious economic backdrop".
• Global oil demand will grow more slowly this year and next due to a worsening economic outlook while supply is increasing, which should produce a more balanced oil market through 2012.
Oil & Gas News:
• Investors and traders are buying large numbers of oil contracts that would profit from a price super-spike, and a collapse. In a rare and deep split of views, investors and traders are pricing in unusually large “fat tail” risks – low-probability events that have an outsize impact on prices – for next year that could boost oil prices to USD 50 a barrel or push them to USD 150 a barrel.
• Iran’s military is set to conduct drills for closing the Strait of Hormuz, a bottleneck for oil exports from the Persian Gulf according to a parliamentarian member Parviz Sorouri. The Iranian oil minister said OPEC will decide oil output by consensus and the market is not abnormally imbalanced now.
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Keynesianism is dead:
http://seekingalpha.com/article/313225-the-death-of-keynesianism
Yeah, well, we'll see about that. Me thinks that will be an awfully tuff habit to break.
Keynesianism, in Europe, will be on its death bed if and only if tens of countries can all amend their constitutions and the politicians from each of those countries tell the truth abou their budgets.
Look at me, not holding my breath.
Not quite clear what "Keynesianism" is. Keynes was a Monetary Economist but Joan Robinson and Larry Klein were not. Since Keynes died in 1947 having negotiated Bretton Woods, I doubt he can be held to account for any of postwar Western economic policy. He certainly never proposed lunatic ideas like cutting taxes on the seriously rich whilst funding foreign wars, but that was George Bush and Dick Cheney aided and abetted by Senile Greenspan.
As for easy credit policies, I doubt you'll find that in Keynes. There was the Hicks-Hansen Theory of pushing interest rates lower by increasing liquidity and encouraging Investment through the Accelerator, but I don't recall Keynes saying that - his problem was Liquidity Trap and boy have we got one.
Keynes was EXPECTATIONS THEORY - so tell us what EXPECTATIONS Workers and Capitalists have at present and for the future ?
This is basic Incompetence and an Indictment of the whole Efficient Markets Bullshit and the rest of the Prayer Book the I-Bankers sold the Political Puppets they had hired. This is the End of Welfare Capitalism and Lemon Socialism
Bank of England Chief Economist Spencer Dale revealed the real policy of the Bank of England as highlighted below.
Bank downgrades?? Always with the downgrades this is getting so old; the only thing that may be worse is losing your soap on a rope in a communal prison shower - but taco night should put potential suitors off so that wouldn't even be as bad as this lot.
Here I am chewing the arse out of a spam can and these fucktards are fiddlin' while the whole thing burns......
Next to Jesus and the Constitution and the US Supreme Court decide on Income tax and pretty near every law ever written Keynes has to be the most mis-quoted SOB in history.....
Fuck, Fuck and double Fuck....
Maybe it's the Christmas season that brings out the festive spirit in me; now where the hell did I put that spam fuckwich...
Black Friday, Cyber Monday, Green Monday............
http://www.marketwatch.com/story/best-buy-profit-falls-13-shares-slide-2...