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Daily US Opening News And Market Re-Cap: January 30

Tyler Durden's picture




 

From RanSquawk

  • Market awaits commentary from EU Finance Ministers meeting in Brussels.
  • The Troika believe Greece will need an additional EUR 15bln in its planned bailout fund.
  • Italy raised EUR 7.5bln across four different BTP lines in an auction held earlier today.

Market Re-Cap
 
The week has started with a general risk averse tone as market participants remain somewhat disappointed in the progression of the Greek bond swap talks in spite of Venizelos, the Greek finance minister, suggesting that a compromise can be struck this week. The latest article writes that Troika believes Greece will need EUR 145bln of public money from the Eurozone bailout rather than the EUR 130bln originally planned. This however, has been swiftly dismissed by German lawmakers.
 
In terms of the European equity market it is the banking stocks which have taken the brunt of the selling pressure which in turn has remained a supporting factor for higher prices in European fixed income futures. Meanwhile in the short end, Euribor, is trading higher following the release of the daily fixes which resumed a trend of sizeable declines in the 3-month fix. In other news, Italy came to market and raised EUR 7.5bln across four different BTP lines with decent demand and a fall in average yields paid. As such the Italian10yr spread over bunds has tightened from the morning’s highs with unconfirmed market talk suggesting that the ECB were also checking rates being noted by several desks.
 
Looking ahead the main focus will likely remain on any updates regarding Greece as various European officials meet once again in Brussels. Aside from that, highlights come in the form of US personal income and spending for December with PCE data released at the same time.
 
US Headlines
 
USD index has appreciated ahead of the North American open due to movements from EUR indices before any possible commentary emerges from the European leaders meeting in Brussels today.
 
US Economic releases later in the session today includes Personal Income, Spending and PCE data. All are expected at 1330GMT.
 
BarCap US Treasury month end extension seen at +0.01yrs.
 
Asian Headlines
 
Moody’s have commented on the Japanese economy, saying that the country’s divergence from the deficit reduction goal is credit negative, and could increase over time. Moody’s also added that it does not see a Japanese debt crisis in the next two to three years however the risk of this occurring will rise without credible fiscal action and economic improvement. (Sources)
 
According to the PBOC, China’s GDP growth is to be 8.5% in 2012. (Sources)
 
EU and UK Headlines
 
Market focus for the rest of the European session will remain on Brussels as participants await any commentary regarding debt deals, policy measures or economic commentary from the meeting.
 
Greece's international lenders (Troika) think that the country will need EUR 145bln of public money from the Eurozone bailout fund rather than the planned EUR 130bln. However, lawmakers from German chancellor Merkel’s coalition rejected increasing aid for Greece. (Der Spiegel)
 
German regional CPI levels released today have indicated negative rates of inflation for the month of January suggesting the national CPI for January could come in at a negative nominal rate also.
           
Eurozone Confidence data released earlier in the session has shown below expected figures for Consumer, Economic and Industrial confidence, however the Services component has bucked the trend with an above expected number (albeit still negative).
Eurozone Consumer Confidence M/M (Jan F) -20.7 vs. Exp. -20.6 (Prev. -20.6)
Eurozone Economic Confidence M/M (Jan) 93.4 vs. Exp. 93.8 (Prev. 93.3, Rev. 92.8)
Eurozone Industrial Confidence M/M (Jan) -7.2 vs. Exp. -6.8 (Prev. -7.1, Rev. -7.2)
Eurozone Services Confidence M/M (Jan) -0.6 vs. Exp. -1.6 (Prev. -2.1, Rev. -2.6) (Sources)
 
Portuguese bonds yields have increased to record Euro area highs following market fears that the country may follow in the footsteps of Greece following recent downgrades.
 
Fixed income securities are trading near session highs following risk averse movements from stocks and into government bonds with the German 10-year Bund currently trading around 13960.
 
BarCap Pan Euro Agg month end extension seen at +0.12yrs.
 
EQUITIES
 
The only notable earnings reports released from Europe today are from Philips, reporting Q4 Net loss EUR 162mln vs. Exp. loss EUR 25.8mln. Q4 sales EUR 6.71bln vs. Exp. EUR 6.65bln. Company shares are currently trading down         -2.66%. (RTRS)
 
Financials are the worst performing sector ahead of the North American open due to risk averse behaviour and further speculation regarding any EU commentary from Brussels concerning possible debt deals or further measures.
 
Top performing sectors in BE500: Health Care (+0.47%), Telecommunications (-0.09%), Consumer Goods (-0.23%)
Worst performing sectors in BE500: Financials (-2.18%), Industrials (-1.28%), Basic Materials (-1.25%)

FX
 
Ahead of the European Finance Ministers meeting in Brussels later today, USD index is trading strongly, with further fluctuations possible later in the session, showing an appreciation of 0.43% due to the market expressing caution before any comments are released from Europe.
 
The IMF have said they are reviewing whether the CNY is still substantially undervalued, and review comes as the currency appreciated over 8% in 2011, the IMF added they are developing a new exchange-rate assessment method in regards to the CNY. (Sources)
 
The NZD held near a fresh 3-month high in local trading against the USD after New Zealand posted an unexpected trade surplus for the first time in 5 months. (NZ Scoop)
 
According to the CFTC’s COT report the net Euro short position increased 10% to USD 28.1bln. (CFTC)

COMMODITIES
 
Caution ahead of the European Finance Minister meetings in Brussels has caused the USD index to appreciate 0.43% ahead of the North American open. As such, WTI Crude futures are trading in negative territory with no firm direction with possible further fluctuations later in the session following any developments on the Greek debt situation.
 
Oil & Gas News:
•   US Speaker John Boehner Sunday said that the House will try again to tie approval for the controversial Keystone pipeline project to a new jobs bill being introduced next week, ABC News reported in a blog.
•  Saudi Oil Minister Naimi says domestic growth will not impact Saudi oil exports.
•  OPEC Secretary-General Badri has said the oil market is very well supplied.
 
 
Geopolitical News:
•  Iranian lawmakers delayed taking action on a proposed bill to immediately cut oil exports to Europe in retaliation for an EU oil embargo. The country’s Oil Minister said Iran is soon to cut crude exports to some countries.
•  Syria have said a “terrorist group” has blown up a gas pipeline running near the Lebanese border.
•  South Sudan have refused to pump anymore oil until it can settle all unresolved political and economic issues with Sudan, as UN Secretary-General Ban Ki-Moon warned their dispute threatens regional peace.
•  A spokesman for the Boko Haram Islamist group on Saturday rejected a call by Nigeria's President Jonathan for talks and threatened fresh attacks if captured members of its group are not freed.

 

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