- The ECB hold their interest rate at 1.00%, as expected.
- The BoE hold their interest rate at 0.50%, as expected and leave their APF unchanged at GBP 325bln.
- The Greek Cabinet have said an official announcement concerning the Greek PSI deal will be made on Friday morning at 0600GMT.
European stock futures have trended higher today in relatively light volumes as the market awaits key interest rate decisions (BoE & ECB) and with the deadline for the Greek debt swap deal looming. The latest talk this morning has been that the participation in the PSI deal has been well received and coupled with speculation of a Chinese RRR cut overnight and stops tripped in the E-mini S&P and Eurostoxx futures earlier this morning, contributed to a large portion of the move higher. As a consequence, the USD index has weakened (-0.5%) which has lifted the EUR/USD pair back firmly though the 1.3200 level to the upside and Brent/WTI crude futures are seen higher ahead of the NYMEX pit open.
Looking ahead we await the ECB press conference as well as the latest jobs data from the US due at 1330GMT.
US Challenger Job Cuts (Feb) Y/Y 51.7K vs. Prev. 53.5K
US planned job cuts in 2012 are concentrated in the consumer production and transportation sectors. (Sources)
Japanese Nominal GDP (Q4 F) Q/Q -0.5% vs. Exp. -0.3% (Prev. -0.8%)
Japanese GDP (Q4 F) Q/Q -0.7% vs. Exp. -0.6% (Prev. -2.3%)
Japanese GDP Annualized (Q4 F) Y/Y -0.2% vs. Exp. -0.2% (Prev. -0.6%)
Japanese Adjusted Current Account Total (JPY) (Jan) M/M 115.6bln vs. Exp. 322.3bln (Prev. 752.3bln, Rev. 776.2bln) (Sources)
There was some overnight market talk that the PBOC may cut their RRR, however nothing has materialised from China so far in the session it is becoming more and more unlikely that we will see an announcement from Beijing. (Sources)
EU and UK Headlines
Six Greek pension funds with holdings of EUR 3.4bln are said to be still opposing the Greek bond swap deal, according to a government official. (RTRS)
Greece moves closer to completion of the debt swap deal as more Greek debt holders commit to the pact. (WSJ) Around 52% of bonds are now pledged for restructuring.
The Greek Cabinet have released a statement saying that the official announcement concerning the Greek PSI deal will be made on Friday morning at 0600GMT. (Sources)
The Bank of England have kept their base rate unchanged at 0.50%, as well as holding their Asset Purchase Facility at GBP 325bln. Both these decisions were as expected, and there was a very limited market reaction.
The ECB have held their interest rate at 1.00%, as expected they are holding off action to observe the results of their recent non-standard market actions, namely last weeks’ 3-yr LTRO. (Sources)
German Industrial Production (Jan) M/M 1.6% vs Exp. 1.1% (Prev. -2.9%, Rev -2.6%)
German Industrial Production (Jan) Y/Y 1.8% vs Exp. 1.1% (Prev. 0.9% Rev. 1.3%) (Sources)
European equity markets have made positive movements, with some risk appetite observed in the markets ahead of tonight’s 2000GMT deadline for the Greek PSI deal. The most recent market talk suggests that the deal will be passed through. A brief period of high volatility was observed earlier in the session, in which 20,000 futures contracts were said to have gone through when stops were tripped in the Emini S&P and Eurostoxx futures, which further compounded the spike in equities.
The Basic Materials sector is performing particularly strongly following some overnight market talk that PBOC may cut their RRR, however this remains unconfirmed.
In individual equities news, EADS are outperforming all other stocks following the publication of their corporate earnings, in which they recorded a particularly significant beat on their 2011 net income, as well as an above expected dividend of EUR 0.45 per share. Company shares currently trade up 8.96%. Roche, on the other hand, are performing poorly today as they are going ex-dividend. Company shares currently trade down 2.5%. (Sources)
Top performing sectors in the BE500: Industrials (+2.48%), Basic Materials (+2.44%), Financials (+1.81%)
Worst performing sectors in the BE500: Utilities (+0.02%), Health Care (+0.06%), Telecommunications (+0.58%)
Ahead of the US open, Europe has witnessed some renewed risk appetite following strong performance in the European bourses; as a consequence, the USD index is seen markedly weaker.
China intends to extend CNY loans to other Brics nations, in another step towards the internationalisation of its currency. The China Development Bank will sign a memorandum of understanding in New Delhi with its Brazilian, Russian, Indian and South African counterparts on March 29, say people familiar with their talks. (FT-More)
The SNB has said it spent CHF 17.8bln last year in FX intervention. (Sources)
WTI crude futures are trading higher into the North American open as optimism in regards to a high participation rate in the Greek debt swap deal has lifted sentiment this morning. As a consequence the USD Index is seen down 0.45% with rumours* also circulating during the Asian session of a PBOC RRR cut.
Oil & Gas News:
• Barclays have said the US is more likely than not to release oil from the Strategic Petroleum Reserve (SPR) as tension in the Middle East drives prices higher.
• Bank of America has said they see an upside to the UK’s winter natural gas prices.
• Royal Dutch Shell and US natural gas producers have said that low prices may slow an expansion in North American onshore shale production.
• The US Senate could vote as early as today on competing plans for the future of the Keystone XL crude oil pipeline as part of a highway funding bill, according to Majority Leader Reid.
• US President Obama has offered Israel bunker-busting bombs and planes with mid-flight refuelling capabilities if the Israeli Leader Netanyahu will agree to delay a strike on Iran until after the US elections, citing unidentified diplomats.
• The US House panel has voted to impose new sanctions on Syria’s energy sector.
• A senior Iranian commander has said despite US President Barack Obama’s efforts to distance himself from the excessive warmongering rhetoric against Iran, Tehran remains fully alert over any US aggression.
• Iran's Supreme Leader welcomes US President Obama's words on a diplomatic "window of opportunity", according to the Iranian State News Agency.