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Daily US Opening News And Market Re-Cap: March 6
From RanSquawk
Market Re-Cap
Markets are exhibiting very risk-averse behaviour ahead of the US open, with European equity markets making heavy losses across the board with flows into the safer assets. This follows Greece dominating the headlines once again, with a report from the IIF warning of dangerous ramifications for Europe should Greece default. These reports got the European session off to a bad start, with losses made throughout the morning. Market talk of a delay in the Greek debt swap deal deadline has also been circulating, however this was swiftly denied by the Greek Debt Agency chief as well as the Greek Finance Ministry, although this failed to reassure markets and they continue on a downward trend into the US open.
Eurozone GDP data released earlier in the session showed a contraction in the last quarter of 2011, although expected, this has reignited concerns of a recession in Europe.
The ECB have recorded yet another record level of deposits from European banks in its overnight lending facility, with institutions depositing EUR 827.5bln on Monday night.
GLOBAL
UK regulators and global banks are discussing a potentially far-reaching overhaul of the calculation and regulation of interbank lending rates following reports that up to USD 350trl worth of contracts worldwide have been subject to manipulation. (FT-More)
Regulators from Europe, Japan and the US have extended their probes into the Libor and other benchmark lending rates. People familiar with the discussions have said the review could encompass everything from revamping the way Libor rates are set to imposing new regulatory oversight and compliance requirements on participating banks.
US Headlines
Fed's Fisher said that despite the ample availability of money and low interest rates, US businesses are slow to invest as they lack a clear signal that fiscal authorities are addressing the nation’s long term debt problems. (Sources)
Asian Headlines
Standard & Poor’s have said that Japan would likely be downgraded if the country cuts its medium-term view of real GDP per capita growth below its current estimate of 1.2%. S&P added that the BoJ’s introduction of a 1% inflation target fell short sufficient inflation targeting. (Sources)
EU and UK Headlines
European markets are taking heavy losses ahead of the US open. This follows reports from the IIF warning of large ramifications for Europe should Greece default. The IIF predict that Spain, Ireland and Portugal would require further funds due to the spreading contagion in the case of a Greek default event.
The already fragile sentiment in Europe was knocked further following market talk that the Greek PSI deadline (currently set for Thursday evening) could be delayed due to insufficient voluntary participation. Although these claims were swiftly denied by both the Greek Debt Agency and the Greek Finance Ministry in quick succession, markets have been harshly reminded of the sensitivity of the European debt crisis.
European markets have seen stabilization in recent trade following source comments that participation in the Greek bond swap could reach 75-80%, adding that Greece expects to activate CACs in the deal. (Sources)
Euro-zone GDP data released earlier in the session has confirmed that the Euro-zone contracted in the fourth quarter last year.
Euro-Zone (Q4 P) Q/Q -0.3% vs Exp. -0.3% (Prev. -0.3%) (Sources)
UK retail sales fell for a second straight month as hard pressed consumers struggle to take advantage of the slowdown in inflation, according to the BRC. The data shows that despite CPI falling closer to target, economic uncertainty, rising unemployment and poor wage-growth are continuing to weigh down on consumption.
UK BRC Sales Like-For-Like (Feb) Y/Y -0.3% (Prev. -0.3%) (Sources)
EQUITIES
Equity markets are making heavy losses going into the US open, with investor confidence taking heavy knocks following IIF reports that a potential Greek bailout would have large ramifications for the rest of Europe. Following the digestion of this commentary, market talk began circulating that the deadline for Greek PSI could be delayed due to insufficient voluntary take up in the bond swap deal. Although these reports were denied, investor confidence remains fragile as the riskier assets take heaviest losses, led by the utilities and financial sectors.
Against the trend in Europe today there are some individual stocks making gains, with RWE AG shares trading up 0.9% following the release of their corporate earnings. RWE AG recorded a beat on their recurrent net as well as forecasting above expected growth in Ebitda for 2013. (Sources)
Top performing sectors in the BE500: Health Care (-0.25%), Technology (-0.83%), Utilities (-0.90%)
Worst performing sectors in the BE500: Industrials (-2.18%), Financials (-2.16%), Basic Materials (-1.56%)
FX
Alongside the slides in European equities, EUR-led currency pairs are making losses as confidence in Europe takes hits following commentary regarding Greece.
GBP/USD is trading in close proximity to the 1.5800 option expiry level due for the 10am NY cut (1500GMT).
Stronger currencies today are USD and JPY, benefiting from safe haven flows away from the Europe-exposed currencies.
COMMODITIES
WTI and Brent crude futures are trading negatively ahead of the North American open amid general risk-averse sentiment in Europe throughout the morning session, however price levels are likely being supported by upwards pressure from political tensions in the Middle-East following a meeting between US President Obama and Israeli PM Netanyahu yesterday.
Oil & Gas News:
• India’s largest Iranian oil buyer, Mangalore Refinery, is planning to almost halve daily imports from Iran, according to industry sources.
• US lawmakers are to urge the US futures regulator to crack down on excessive speculation in oil markets following the recent rise in retail gasoline prices in the US.
Geopolitical News:
• US President Obama and Israeli PM Netanyahu spent roughly three hours yesterday attempting to narrow their differences on how to thwart Iran’s nuclear ambitions. US officials believe the talks have eased some immediate pressure from Israel for a military strike on Iran. The US officials also estimate that Iran is around one year away from being able to achieve a nuclear weapon.
• Israeli PM Netanyahu has stated Israel’s right to defend itself against Iran, adding “I will never let my people live in the shadow of annihilation”.
• A gas pipeline from Egypt to Jordan and Israel has been blown up near Al-Arish in Northern Sinai, according to witnesses. This is the 13th attack on the pipeline since the Egyptian uprising began last year.
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watch 1685'ish level on the yellow stuff. It's a line in sand buy number for some of the gold bulls.
Who is selling US10Y and buying Euros? Has got to be Mr. Hope.
My oh my.
Absolutely 0 of this is a surprise to any of us here. Pieces just continue to fit. Puzzle taking shape now.
Once again, gold proves to be a horrible asset in times of trouble. Gold is fine when everything is fine and everybody is happy spending freshly printed money. But when reality sets in, gold sucks like everything else (probably more because it gets no support whatsoever from governments.)
Gee B-009, in 2007 i divested myself from govt controled markets. turned it into G. I has really sucked watching my $$ keep pace with inflation and then some. everytime euro sneezes, the cash comes over the pond and gold takes a dip. I guess that every central bank in world loading up on gold would prove your statement of no government support. take a good look at your facts, you are reaching an eronious conclusion.
Gee B-009, in 2007 i divested myself from govt controled markets. turned it into G. It has really sucked watching my $$ keep pace with inflation and then some. everytime euro sneezes, the cash comes over the pond and gold takes a dip. I guess that every central bank in world loading up on gold would prove your statement of no government support. take a good look at your facts, you are reaching an eronious conclusion.
It is vulnerable to short term corrections due to 'flight to safety' dollar strength. But if you just consider the laughable nature of the words 'dollar strength' you can see that it is of little concern unless you are a tick-sweater.
009,
not real gold, just the paper tower version. Read, learn...then write.
350trl worth of contracts worldwide have been subject to manipulation...
...impose new regulatory oversight and compliance requirements on participating banks.
Call the police; the FBI. Arrest them. Throw them into jail. To allude that a bank may become compliant through regulatory oversight is an act of treason.
May the curse and despair of seven billion humans be upon them.
Don't be silly. As long as the Western economies and their people can leverage cheap labor abroad, which they have done for decades, all is well. Those cheap gas grills at Wal-Mart go up in price, there will be hell to pay.
Obama moves G8 summit from Chicago to Camp David in May.
http://www.chicagotribune.com/news/local/breaking/chi-g8-summit-to-be-he...
To be closer to the War Room?
Thats just great. o-man just gave OWS a giant win. the most powerful man on the planet, with whole armies at his command...runs away. FFFantastic!
Oh nooo! A temporary pull-back resultant from continued CB intervention! We've never seen this before! Oh well, just wait till the bottom and load up again on Ag. Thanks for the opportunity Ben!
As warned about previously, overextended SP500 / DOW / NASDAQ trend degradation has increased with risk of waterfall sell off.
Also noted earlier, USDX shows further strength.
S&P500 weekly chart Feb 18:
http://stockmarket618.files.wordpress.com/2012/02/2012-02-18_sp500_wk3.png