Daily US Opening News And Market Re-Cap: January 13

From RanSquawk

• JP Morgan announce disappointing revenues this morning, causing JP Morgan shares to trade down at the midpoint of the European session.
• Italian bond auctions failed to reflect the strong success of the yesterday’s Spanish auctions, with unconfirmed market talk that bidding was marred by technical issues.

Market Re-Cap
 
European Indices are trading up at the midpoint of the session following strong performance from financials, however, Italian bond auction results dampened this effect after failing to replicate the success of the Spanish bond auction yesterday with relatively lacklustre demand. There has been market talk that this lull in demand for Italian bonds is due to technical error preventing some participants from bidding in the auction, but this still remains unconfirmed.
 
Heading into the North American open, fixed income futures are still trading higher on the day having seen the Bund touch on a fresh session high and with peripheral 10-year government bond yield spreads widening ahead of the treasury pit open. Markets now anticipate the release of US trade balance figures and The University of Michigan confidence report.
 
US Headlines
 
JP Morgan have posted Q4 corporate earnings for 2011 with below expected revenues, causing JP Morgan shares to fall before the opening of the American markets. (RTRS)
 
Asian Headlines
 
China’s foreign exchange reserves drop for the first time since 1998 as foreign investment moderated, the trade surplus narrowed and European crisis spurred investors to sell off emerging-market assets. (Sources)
 
A Chinese think tank has said the country should be able to control CPI under 4%. (Sources)
China can set 2012 M2 growth target at about 14%, according to Baoliang, Chief Economist of the State Information Centre.
 
Japan’s former Foreign Minister Okada is to become deputy Prime Minister. (Nikkei)
 
 
EU and UK Headlines
 
The Eurozone has posted an unexpected trade surplus this morning, however this was not market moving, as most market activity has revolved around strong performance from financials.
 
A bond auction from Italy disappointed hopeful bidders after a successful auction from the Spanish treasury yesterday, however, there is unconfirmed market talk that there may have been a technical issue preventing prospective parties from bidding.
 
ECB opposes weakening of proposed fiscal pact that would require Eurozone countries to rein in budget deficits, according to ECB’s Asmussen. (FTD)
 
Germany will reduce its 2012 growth forecast to about 0.75% next week according to the government officials. (Handelsblatt) However, Bundesbank’s Dombret sees no danger of credit crunch in Germany.
 
The EBA will this year postpone the annual stress test for banks usually published in July according to a spokeswoman for the EBA. (Handelsblatt)
 
UK's Osborne said will see a fall in inflation in 2012, and can look to future with "a lot of optimism". (RTRS)
 
EQUITIES
 
Equities are performing positively at the midpoint of the European session following strong performance from financials. However, JP Morgan announced their corporate earnings, with disappointing revenues for the fourth quarter of 2011.
 
Top performing sectors in BE500: Financials (+1.69%), Industrials (+0.73%), Basic Materials (+0.69%)
Worst performing sectors in BE500: Telecommunications (-0.52%), Technology (-0.35%), Health Care (-0.22%)
 
FX
 
GBPUSD has fallen off session highs of 1.5411 amid unconfirmed market talk of Middle-Eastern names are selling the pair. It is now trading closer to the opening level. EURUSD has also experienced a fall from session highs, and is now trading in negative territory, close to session lows with the USD Index trading up 0.25%.

COMMODITIES
 
Oil advanced overnight, trimming the biggest weekly decline in a month, as signs Europe’s debt crisis is easing countered indications that a proposed embargo on Iranian crude will be delayed. Nigerian oil workers are still on strike, however Unions have said the negotiations with the government are “fruitful”.
 
Oil & Gas News:

•  Nigeria’s general strike entered its fifth day, threatening oil exports after the Nigerian President and labour leaders held talks but failed to end a dispute over fuel subsidies. However, one of Nigeria’s main trade unions has said the talks were “fruitful” and ongoing, but strikes would continue until an agreement is reached. Concerning this weekend, unions are to suspend protests that were set to take place according to the BBC.
•  Former OPEC president Khelil has said that OPEC could replace Iranian oil supplies to Europe.
•  Goldman Sachs continues to recommend an overweight allocation on commodities, saying it has the most conviction in oil for 2012.
 
Geopolitical News:

•  Iranian leader Ahmadinejad has ended a lacklustre Latin America tour that yielded kind words from ideological allies, however no clear offers of support against Western sanctions on Iran’s nuclear program.
•  The IAEA has agreed to a meeting with representatives of the Iranian government for the end of this month, according to two diplomats with knowledge of the talks.
•  An EU diplomat has said that Iranian oil sanctions may have a 3-6 month grace period. However the discussions are ongoing and there is no convergence on any one Iran sanction date yet.
•  Japanese Ministers have said that they will discuss Iran measures with US officials next week, with added concerns about Iranian nuclear development and adding they will coordinate with the US on these matters.

Comments

[MFL8240]

European markets up? laughable!

[John Law Lives]

I see the trade deficit for November, 2011 for the US was $47.8 Billion.

Gee, perhaps the elites could explain again why exporting our wealth every single month is such a good deal for the US...

100% FUBAR.