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Daily US Opening News And Market Re-Cap: January 6
From RanSquawk
- Markets await US Non-Farm Payrolls data, released 1330GMT
- UniCredit experiences another disrupted trading session, trades down 11%, then returns to almost unchanged
- Iran causes further unease with plans to engage in wargame exercises in the Strait of Hormuz
Market Re-Cap
Ahead of the North American open and the eagerly awaited US Non-Farm Payrolls data at 1330GMT, European markets are generally up today, led by the telecommunications sector, Vodafone rose by just under 2% after Goldman Sachs raised shares to buy. However, the DAX has underperformed today following very negative German factory orders data, coming in at 3% lower than expectations.
In spite of positive sentiment towards equities, the yield spread between Italian and German bonds continues to be wide today, this prompted unconfirmed market talk that the ECB have had to come into the market under SMP to buy Italian and Spanish debt. Other market news of note, Eurodollar futures have risen this morning due to a drop in the USD LIBOR for the first time since early December last year, prior to that, the last drop was June.
Asia Headlines:
China’s CPI growth may increase more than 6% in Q4 according to Wang Jian, a China Society of Macroeconomics official.
EU and UK Headlines:
ECB’s Orphanides said Eurozone leaders should act to restore confidence in Europe’s monetary union by abandoning plans to involve private investors in slashing Greece’s massive debts. This is in preparation for Greek talks with the Troika concerning a new aid deal on Jan 16 according to an official.
Macroeconomic outlook concerning confidence within the Eurozone remains depressed following data released today being below expectations.
• German Factory Orders (Nov) M/M -4.8% vs. Exp. -1.8% (Prev. 5.2% Rev. 5.0%)
• German Factory Orders (Nov) Y/Y -4.3 vs. Exp. -1.2% (Prev. 5.4% Rev. 5.2%)
• Eurozone Consumer Confidence (Dec F) M/M -21.9 vs. Exp. -21.2 (Prev. -21.2)
• Eurozone Economic Confidence (Dec) M/M 92.0 vs. Exp. 93.3 (Prev. 93.7, Rev. 93.8)
• Eurozone Industrial Confidence (Dec) M/M -7.7 vs. Exp. -7.5 (Prev. -7.3, Rev. -7.1)
• Eurozone Services Confidence (Dec) M/M -6.0 vs. Exp. -2.1 (Prev. -1.7, Rev. -1.6)
• Eurozone Retail Sales (Nov) M/M -0.8% vs. Exp. -0.4% (Prev. 0.4%, Rev. 0.1%)
EQUITIES
European markets have performed generally well this session, with telecommunications performing particularly well after Goldman Sachs reviews Vodafone’s shares to buy. Against this trend, the DAX underperformed following worse than expected data on German Factory Orders. In banking news, the financials sector has underperformed again, with UniCredit under pressure for much of the session, however shares have bounced following unconfirmed market talk that the share issue has been fully subscribed. Other equity movements today include Volkswagen releasing very positive sales data, finding that sales of VW branded vehicles rose in China, US, India and Russia, with a 13.1% increase in overall sales in 2011.
FX
EURUSD and GBPUSD is trading generally flat this morning, however market shifts are expected following the release of US Non-Farm Payroll data being released at 1330GMT. CAD weakens across the board following a worsening in the Canadian Unemployment rate, with USDCAD spiking 25pips higher after the release.
• Canadian Unemployment Rate (Dec) M/M 7.5% vs. Exp. 7.4% (Prev. 7.4%)
COMMODITIES
WTI is up this morning on Iranian announcements to conduct wargame exercises in the Strait of Hormuz, resulting in EU governments further considering a grace period on Iranian oil import bans. The USD index also trades in negative territory, down 0.1%.
Oil & Gas News:
• Deutsche Bank states it is maintaining its USD 115/BBL Brent forecast for oil prices in 2012, with WTI prices set to average circa USD 105/BBL.
Geopolitical News:
• Iran threatens to disrupt oil supply again as it plans to hold wargame exercises in the Strait of Hormuz in the Iranian calendar month that runs from 21/01/12 to 19/02/12.
• In response to Iranian announcements, EU governments are discussing further a grace period of 1 to 12 months on prospective Iranian oil import bans.
• Japan plans to express its concerns about a possible embargo on Iranian crude oil to the US.
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