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Daily US Opening News And Market Re-Cap: December 14

Tyler Durden's picture





 

From RanSquawk

  • A well-received Schatz auction from Germany rendered support to Bund futures
  • ECB allotted USD 5.122bln in its 7-day USD operation - a much higher allotment than usual
  • ECB's Weidmann said Bundesbank is only willing to provide fresh funds to the IMF if conditions on other countries' involvement are met, adding that losing AAA rating is not the end of the world
  • Market talk that S&P may downgrade France, however the talk remains unconfirmed

Market Re-Cap
 
Last night the FOMC refrained from additional monetary easing, while a potential sovereign downgrade of various Eurozone countries after S&P placed them on credit watch negative recently weighed on European equities. Weakness in equities rendered support to Bund futures, which gained further following a well-received Schatz auction from Germany. The Eurozone 10-year government bond yield spreads lacked any real direction, whereas the ECB allotted USD 5.122bln in its 7-day USD operation - a much higher allotment than usual.
 
In the forex market, EUR/USD received support in early trade on the back of market talk of Japanese names bidding in the pair. Also, GBP/USD gained strength on market talk of a UK clearer buying in the pair, together with an unexpected decline in jobless claims change data from the UK. However, as the session progressed, EUR/USD and GBP/USD weakened as the USD-Index came off its earlier lows. Elsewhere, AUD came under some pressure overnight on the back of a lacklustre consumer confidence report from Australia.
 
Moving into the North American open, markets look ahead to economic data from the US in the form of import price index as well as the DOE oil inventories report. In fixed income, USD 13bln 30-year Note auction, together with Fed's Outright Treasury Coupon sales operation in the maturity range of Oct'12-May'13, with a sale target of USD 8-8.75bln, and BoE's Gilt purchase operation in the maturity range of 2025-2036 are also scheduled for later.
 
Asian Headlines:
 
China’s policy-setting economic work conference pledged to continue fine-tuning monetary policy to keep reasonable growth in money and credit supply. China’s growth faces downward pressure and China will maintain prudent monetary and proactive fiscal policies in 2012. (Xinhua)
 
•       Japanese Industrial Production (Oct F) M/M 2.2% vs. Prev. 2.4%
•       Japanese Industrial Production (Oct F) Y/Y 0.1% vs. Prev. 0.4%
•       Japanese Capacity Utilization (Oct F) M/M 4.1% vs. Prev. -3.6% (RTRS)
 
US Headlines
 
The US House passed a Republican bill to extend the payroll-tax break next year, approved by 234 votes to 193. (Sources)
 
•       US MBA Mortgage Applications (Dec 9) M/M 4.1% vs. Prev. 12.8% (RTRS)
 
EU and UK Headlines
 
According to a German draft law, resurrected bank rescue fund Soffin II will have same instruments as Soffin I and will be limited until the end of 2012, adding that Soffin II will have guarantee framework of EUR 400bln, and power of attorney to grant loans of EUR 80bln. It further said that liquidity guarantees will generally be possible for 5 years, and 7 years in case of covered bonds. It also said that BAFIN will be able to intervene with existing measures in a bank already when financial stability is in danger. (RTRS)
 
•       Eurozone Industrial Production SA (Oct) M/M -0.1% vs. Exp. 0.0% (Prev. -2.0%)
•       Eurozone Industrial Production WDA (Oct) Y/Y 1.3% vs. Exp. 2.1% (Prev. 2.2%)
•       UK Jobless Claims Change (Nov) M/M 3K vs. Exp. 13.7K (Prev. 5.3K, Rev. to 2.5K)
•       UK Claimant Count Rate (Nov) M/M 5.0% vs. Exp. 5.1% (Prev. 5.0%)
•       UK ILO Unemployment Rate (Oct) 3M/Y 8.3% vs. Exp. 8.3% (Prev. 8.3%) (RTRS)
 
•       German Schatz auction for EUR 4.18bln, 0.25% Dec'13, bid/cover 1.4 vs. Prev. 1.1 (yield 0.290% vs. Prev. 0.390%, retention 16.4% vs. Prev. 19.75%)
•       Italian BTP auction for EUR 3bln, 4.75% Sep'16, bid/cover 1.417 vs. Prev. 1.470 (yield 6.470% vs. Prev. 6.290%) (RTRS)
 
EQUITIES
 
Last night the FOMC refrained from additional monetary easing, while a potential sovereign downgrade of various Eurozone countries after S&P placed them on credit watch negative recently weighed on European equities. Elsewhere, basic materials and oil & gas sectors came under pressure as the USD-Index regained strength during the European session. Moving into the North American open, equities continue to trade lower, with industrials and financials as the worst performing sectors.

FX
 
EUR/USD received support in early trade on the back of market talk of Japanese names bidding in the pair. Also, GBP/USD gained strength on market talk of a UK clearer buying in the pair, together with an unexpected decline in jobless claims change data from the UK. However, as the session progressed, EUR/USD and GBP/USD weakened as the USD-Index came off its earlier lows. Elsewhere, AUD came under some pressure overnight on the back of a lacklustre consumer confidence report from Australia.
 
•       Australian Westpac Consumer Confidence SA (Dec) M/M -8.3% vs. Prev. 6.3%
•       Australian Westpac Consumer Confidence Index (Dec) M/M 94.7 vs. Prev. 103.4 (RTRS)

COMMMODITIES
 
WTI & Brent crude futures trade lower during the European session ahead of the DOE inventory numbers later on and as OPEC meet in Vienna today.
 
Comments from today’s OPEC meeting:

•       Members of OPEC agreed the group should set a production ceiling of 30 MBPD.
•       OPEC president said group is concerned about low economic growth.
•       Libya oil minister said Libya expects to reach 1.7 MBPD in H2 2012.
•       Iraqi oil minister said aims for 2012 oil exports at 2.6 MBPD and Iraq is exporting oil normally after pipeline bombing.
•       Iranian oil minister said the Saudi oil minister told him that Saudi Arabia would not replace Iranian crude if it were embargoed; Saudi oil minister declined to comment.
 
Geopolitical News:

•       Closing the Strait of Hormuz to shipping is not on Iran’s agenda according to the Iranian foreign minister. Iran may also move nuclear enrichment operations to safer sites if necessary according to a Revolutionary Guards commander.

 


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Wed, 12/14/2011 - 08:58 | Link to Comment Irish66
Irish66's picture

downgrades coming shortly

Wed, 12/14/2011 - 09:07 | Link to Comment lolmao500
lolmao500's picture

It's about to hit the fan badly... and Russia's aircraft carrier is off Scotland...

http://www.worldnewstribune.com/2011/12/13/obama-arab-allies-eye-no-fly-...

The United States has drafted a plan with its Arab allies to establish a no-fly zone over Syria.

Western diplomatic sources said the administration of President Barack Obama has reached agreement with Saudi Arabia and other Arab allies to impose measures meant to topple the regime of Syrian President Bashar Assad.

“The no-fly zone does not have to be enforced throughout Syria, only in areas used by Assad’s military,” a diplomat said.

Under the plan, the United States would supply fuel, weapons and intelligence to maintain the no-fly zone. The sources said Turkish and Arab fighter-jets would challenge the Syrian Air Force as well as monitor Assad’s ground forces.

Wed, 12/14/2011 - 09:08 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

"Market talk that S&P may downgrade France, however the talk remains unconfirmed"

S&P might do something and that might is unconfirmed, that's some tight journalism.  


Wed, 12/14/2011 - 09:13 | Link to Comment LeBalance
LeBalance's picture

"ECB's Weidmann said Bundesbank is only willing to provide fresh funds to the IMF if conditions on other countries' involvement are met, adding that losing AAA rating is not the end of the world"

/cringe!/

/tries to avoid thinking about it./

Weidmann bites lip: "Its going to be ok when they rip out my spine.  Yes, I will make a brave face!"

(talk about trying to damage control and giving your hand away.)

Wed, 12/14/2011 - 09:54 | Link to Comment Eanach1
Eanach1's picture

I have a really basic question. Does anyone know how often the ECB gets injection of funds from US/IMF/other sources?

Wed, 12/14/2011 - 12:26 | Link to Comment Cookie
Cookie's picture

Zh, I think you are missing something important;

India’s currency, the rupee, has hit an all-time low against the US dollar, prompting fears that the country could soon face a financial crisis.

http://www.aljazeera.com/news/asia/2011/12/2011121313562236434.html

 

 

Wed, 12/14/2011 - 12:37 | Link to Comment warezdog
warezdog's picture

I would expect the no sense market to gain about 600 before friday when they take back about twice that after the downgrades get handed out.

Wed, 12/14/2011 - 13:52 | Link to Comment Grand Supercycle
Grand Supercycle's picture

SP500 daily chart resumes choppy downtrend. Opposite for USDX.

My long term indicators have continued to warn of USD strength and EURO weakness and these signals have increased since 2009. The overdue dollar rally should be substantial.

http://stockmarket618.wordpress.com

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