Daily US Opening News And Market Re-Cap: December 15

From RanSquawk

• A downbeat BoJ's Tankan report, together with a below 50 reading for HSBC Chinese manufacturing dampened sentiment during the Asian session
• ECB's Draghi said intensified financial market tensions continue to dampen economic activity in the Euroarea and the outlook remains subject to high uncertainty
• According to reports, the ECB is planning to introduce new capital rules for banks to prevent aggressive deleveraging and a credit crunch
• The SNB kept its 3-month LIBOR target rate unchanged at 0.00% as expected, and said it will stick to its 1.2000 EUR/CHF floor

Market Re-Cap
 
Overnight, Asian equities came under pressure following a downbeat BoJ's Tankan report, together with a below 50 reading for HSBC Chinese manufacturing, which also weighed on sentiment at the European open. Shares in Credit Agricole have underperformed compared to other banking stocks following a profit warning by the company after market yesterday. However, as the session progressed, equities re-gained strength following reports that the ECB is planning to introduce new capital rules for banks to prevent aggressive deleveraging and a credit crunch. Renewed strength in equities capped any advance in Bunds, while the Spanish/German 10-year government bond yield spread narrowed significantly moving into and after successful bond auctions from Spain. Meanwhile, Gilts came under pressure following a poorly performed conventional Gilt auction from the UK.
 
In the forex market, EUR/USD and GBP/USD lacked direction, however as the session progressed both pairs recovered on the back of a weakening USD-Index. Also, strength was observed in CHF across the board after the SNB said that it will stick to its 1.2000 EUR/CHF floor.
 
Moving into the North American open, markets look ahead to key economic data from the US in the form of jobless claims, Empire manufacturing, PPI, TIC flows, Philadelphia Fed as well as industrial production reports. In fixed income, Fed's Outright Treasury Coupon Purchase operation in the maturity range of Dec'17-Nov'19, with a purchase target of USD 4.25-5bln, together with USD 12bln 5-year TIPS auction are scheduled for later. Also, 2-, 5-, and 7-year Note refunding announcement from the US will be keenly watched.
 
Asian Headlines:
 
China may cut bank’s reserve requirement ratio 2-4 times from the end of this year through next year according to the Bank of Communications company research. (Shanghai Securities News)
 
•  Japanese Tankan Large Manufacturers Index (Q4) Q/Q -4 vs. Exp. -2 (Prev. 2)
•  Chinese HSBC Flash Manufacturing PMI (Dec) M/M 49.0 vs. Prev. 47.7 (RTRS)
 
GLOBAL
 
Fed’s Bernanke told Republican senators that the Fed can’t and won’t provide bailout funds to support European banks or nations, according to lawmakers. US Senator Graham said that Fed’s Bernanke told Republican lawmakers Fed does not have the intention or authority to bail out European banks or nations. (RTRS)
 
US Headlines
 
US President Obama and fellow Democrats signalled a willingness to drop a proposed surtax on millionaires, but remained at odds with Republicans in efforts to extend an expiring payroll tax cut for 160mln Americans. Also, US Republicans introduced USD 915bln spending bill to keep the US government operating through 2012. (RTRS)
 
In other news, bank seizures of US homes fell to their lowest level in nearly three years in November and fewer first-time default notices sent to homeowners according to a report by RealtyTrac. (RTRS)
 
EU and UK Headlines
 
ECB's Draghi said intensified financial market tensions continue to dampen economic activity in the Euroarea and the outlook remains subject to high uncertainty. He further said that present conditions weaken the impact of recent rate cut, adding that systemic risk is seriously hampering the economy. Draghi also said that the Euroarea will have a short term contraction. (RTRS)
 
Also, ECB Noyer said a downgrade of France’s AAA credit rating would not be justified and ratings agencies are making decisions based on politics than economics. (RTRS)
 
•  Eurozone CPI (Nov) Y/Y 3.0% vs. Exp. 3.0% (Prev. 3.0%)
•  Eurozone Manufacturing PMI (Dec A) M/M 46.9 vs. Exp. 46.0 (Prev. 46.4)
•  German Manufacturing PMI (Dec A) M/M 48.1 vs. Exp. 47.5 (Prev. 47.9)
•  French Manufacturing PMI (Dec P) M/M 48.7 vs. Exp. 47.0 (Prev. 47.3)
•  UK Retail Sales (Nov) M/M -0.4% vs. Exp. -0.3% (Prev. 0.6%, Rev. 1.0%) (RTRS)
 
•  Spanish bond auction for EUR 2.45bln, 3.15% Jan'16, bid/cover 2.00 vs. Prev. 2.83 (yield 4.023% vs. Prev. 5.276%)
•  Spanish bond auction for EUR 2.18bln, 4.00% Apr'20, bid/cover 1.50 vs. Prev. 2.01 (yield 5.239% vs. Prev. 5.006%)
•  Spanish bond auction for EUR 1.4bln, 5.50% Apr'21, bid/cover 2.20 vs. Prev. 1.76 (yield 5.545% vs. Prev. 5.433%)
•  UK Conventional Gilt auction for GBP 4bln, 1.75% 2017 Gilt, bid/cover 1.27 vs. Prev. 1.66 (RTRS)
 
EQUITIES
 
Overnight, Asian equities came under pressure following a downbeat BoJ's Tankan report, together with a below 50 reading for HSBC Chinese manufacturing, which also weighed on sentiment at the European open. Shares in Credit Agricole have underperformed compared to other banking stocks following a profit warning by the company after market yesterday. However, as the session progressed, equities re-gained strength following reports that the ECB is planning to introduce new capital rules for banks to prevent aggressive deleveraging and a credit crunch. Moving into the North American open, European equities are trading in positive territory, with financials and healthcare as the best performing sectors.

FX
 
EUR/USD and GBP/USD lacked direction, however as the session progressed both pairs recovered on the back of a weakening USD-Index. Also, strength was observed in CHF across the board after the SNB said that it will stick to its 1.2000 EUR/CHF floor.

COMMMODITIES
 
WTI & Brent crude futures followed moves in European stock indices during the mixed European morning session, with the USD-Index trading near flat on the session.
 
Oil & Gas News:

•  Saudi Arabia won’t compensate for any potential decline in Iranian oil supply if the Persian country comes under sanctions affecting its exports of crude according to the Iranian oil minister.
•  Shipping traffic through Turkey’s Bosporus strait was halted at 7:58am local time (GMT+2) after an anchor malfunction on a ship according to GAC Shipping Turkey. Transit is scheduled to resume at 12pm local time.
 
Geopolitical News:

•  The US deputy energy secretary said the US is to work with partners to ensure the global oil market remains well supplied, and said the US is in consultation with all parties including China on new sanctions against Iran.
•  Iran announced that it had completed the transfer of its nuclear facilities underground, including its uranium enrichment centrifuges, and that the Iranian nuclear program was now safe from US and Israeli attack.
 
Corporate News:

•  Chevron and Transocean were asked to suspend all activity in Brazil by prosecutors, and Chevron ordered to pay USD 10.7bln in damages. In other news Chevron has made a gas discovery off Western Australia, marking the company's twelfth offshore discovery in Australia since mid-2009. The discovery was in the Vos-1 permit area which Chevron jointly owns with Royal Dutch Shell.

Comments

[youLilQuantFuker]

"Iranian nuclear program was now safe from US and Israeli attack."

Don't they call that NATO these days?

[firstdivision]

prepare for a short covering rally today, courtesy of the data fudging that just came out.

[adr]

So we are looking at all of yesterday's loss being made up at the US open then? Perhaps oil will skyrocket 7% today. Now that the USA has officially become the USSA who even cares anymore. All Americans whodsagree with the ever expanding Federal Government will be deemed terrorists and promptly killed. We have reached th endgame. By March the world domination by the elite will be complete.

[Nigh Eve]

On Bloomberg this morning, at about 7:27 AM EST, I caught the end of some comments by Stephanie Ruhle.   She mentioned Zero Hedge and said something to the effect of "Come on Zero Hedge, don't bring out the snark."

Does anybody know what she was referring to?

[ucsbcanuck]

The MSM realises that alternative websites like Zero Hedge are entering popular consciousness and eating their lunch, so they try to discredit. But they're only making it worse, because they end up raising public awareness of Zero Hedge and alternative financial news websites. You can't have well-informed sheeple, especially when it comes to financial matters.

Worse still, ZH tells. The. Truth. You can't have that.

Go Tyler!