This page has been archived and commenting is disabled.

Daily US Opening News And Market Re-Cap: May 9

Tyler Durden's picture




 

From RanSquawk

  • The Troika have cancelled their May mission to Greece on the grounds of political instability endangering the rescue effort.
  • The Spanish government are to order Spanish banks to set aside a further EUR 20-40bln in funds for provisions, according to sources.
  • German coalition lawmakers are open to a Greek exit according to German Press.
  • Germany and the UK sell strongly in their respective auctions as participants exhibit a flight to quality.

Market Re-Cap

European equities continue the trend of the week as they move lower throughout the morning session, as no news is bad news from Greece. In the early hours of the session, reports from German press revealed that the Troika have cancelled their May mission to the country, on the grounds that the current political instability could derail the rescue effort.

The continued risk-aversion in Europe is evident in the strong demand for both German and British securities, as both countries sell strongly in their respective auctions. As such, the German Bund contract has hit on all time highs several times in the session today and the Spanish yield on their 10-yr government bond remains elevated above the 6.00% mark.

Overnight source comments speculated that the Spanish government are pressing their national banks to set aside between EUR 20-40bln in funds for bad loan provisions and capital buffers. The reports have weighed down on the IBEX 35 throughout the morning, which is currently severely underperforming its European counterparts.

Looking ahead in the session, participants anxiously await any updates from Greece, as Tsipras, the Syriza leader, is set to meet the leaders of the New Democracy and PASOK parties after the European market close.

Asian Headlines

Japanese Official Reserve Assets (USD) (Apr) M/M 1289.5bln (Prev. 1288.7bln)

Japanese Leading Index CI (Mar P) M/M 96.6 vs. Exp. 96.9 (Prev. 96.3, Rev. 96.0) (Sources)

China is considering a delay in its upcoming 5-yearly key party congress by a few months amid an internal debate over the size and make-up over its top decision making body according to sources. (Sources)

Japan's Maehara has said the BoJ should now focus on meeting new bond buying targets, adding that extending the duration of JGBs that the central bank buys could be an option if more easing is needed. (Sources)

US Headlines

US MBA Mortgage Applications (May 4) W/W 1.7% vs. Prev. 0.1% (Sources)

EU and UK Headlines

The Spanish government is to order domestic banks to set aside between EUR 20-40bln of extra bad loan provisions and capital buffers. This would be additional to the already approved rules obliging banks to boost provisions by EUR 50bln, according to sources. (EFE)

The Greek Syriza leader Tspiras has still been unsuccessful in forming a coalition government, but the Greek conservative leader Samaras said he would tolerate a minority government, and does not want the country to have new elections. (Sources)
Economists from the German Ifo Institute have warned that Europe must prepare for a potential Greek exit for the Eurozone. The Ifo have said it

would be absolutely appropriate to develop a scenario which allows Greece to exit the Eurozone in the most orderly fashion possible. (Handelsblatt) In related news, Credit Suisse have raised their probability of Greece exiting the Eurozone from 5% to 15%. (Sources)
German coalition lawmakers are open to a Greek exit according to the Handelsblatt.

- Politicians of the CDU-FDP coalition will no longer look on the goings on passively. Given the uncertain political situation in Greece are advocating for a withdrawal of the crisis-Mediterranean Heads of State from the euro zone.

- "We should offer Greece the chance to leave the euro zone controlled, without withdrawing from the European Union," according to the CDU budget expert Klaus-Peter Willsch.

A German coalition source has said the parliamentary vote on ESM/fiscal compact will be delayed until at least mid-June. (Sources)
Both Germany and the UK have sold strongly in their respective Bobl and Gilt auctions, as participants seek to distance themselves from the risk in Greece.

Germany sells EUR 4.032bln 0.5% Apr'17 Bobls, bid/cover 1.4 (yield 0.56%) - Retention 19.5%

UK DMO sells GBP 2bln 4.5% Dec'42 Gilts, bid/cover 2.22, Prev. 1.71 (Yield 3.224%, Prev. 3.431%, Yield tail 0.4BPS, Prev. 0.2BPS) (Sources)

The Greek left-wing politician tasked with forming a new government after the country's parliamentary elections has called the Greek bailout agreement invalid. Several German leaders responded Wednesday by demanding that Greece stick to the negotiated austerity measures if it wants to receive future international financial aid. (Der Spiegel)

UK BRC Sales Like-For-Like (Apr) Y/Y -3.3% vs. Exp. 0.6% (Prev. 1.3%) (Sources)

April saw the wettest weather on record for that month and consumers were reluctant to spend in April, dampening retail sales. The drop is the biggest fall since March of last year.

Figures have pointed to a slowdown in the rise of food prices. The BRC have reported recorded food inflation slowing sharply from the 5.4% recorded in March to 4.3% in April. (Guardian)

EQUITIES

European equities are trading lower across the board, with the political concerns carrying through the week and weighing on sentiment. The risk-aversion is evident in the underperformance of the financials sector, particularly from Spain, as reports that the Spanish government are to order its banks to set aside up to EUR 40bln in funds for bad loan provisions and capital buffers renew concerns over the state of the Spanish banks’ finances. As such, the top losers across Europe today feature Bankia, Banco Santander, BBVA and Caixabank.

In individual stocks news, Glencore are outperforming the basic materials sector as well as the FTSE-100 following an output update released premarket. The company have reported that they see commodity demand remaining strong, and highlighting that they see broad scope for portfolio optimization in their merger with Xstrata. As such, Glencore shares currently trade higher by over 1.5%.

Bankia are performing particularly poorly in the Spanish banking sector. Aside from the overnight reports, earlier market talk that EU lawmakers had pressed on the Spanish government to nationalise the bank after auditors had refused to sign off on its audit have further depressed the shares. This does, however, remain unconfirmed. Following the news for Bankia, their shares trade lower by over 6%.

FX

  • EUR/USD is again exhibiting risk aversion and trades lower due to the political concerns. The pair currently trades towards the lower end of a relatively tight range between session lows of 1.2963 and session highs of just above 1.3000. If the pair sees any upwards pressure it may come into the range of a large option expiry at the 1.3000 level due for the 10am NY cut (1500BST).
  • JPY strength is observed across the board as the US comes to market, with USD/JPY hitting session lows in recent trade. The moves come amid risk-averse flows to the Japanese currency as well as unconfirmed market talk of Japanese names selling the pair earlier in the session; pushing USD/JPY below the 100-DMA of 79.70 and hitting two-and-a-half month lows.
  • GBP/USD is also exhibiting weakness ahead of the BoE’s rate decision tomorrow, and now trades in close proximity to a touted option expiry at the 1.6125 level for the 10am NY cut (1500BST).

COMMODITIES

WTI and Brent crude futures are trading in negative territory ahead of the NYMEX pit open following a large build in API inventories released last night. Participants now await the DOE inventory figures, due for release at 1500BST/0900CDT.

Oil & Gas News:

  • SocGen have recommended buying Brent crude at USD 110/BBL and New York oil at USD 95/BBL, as oil is to rise on increasing global refinery runs. SocGen estimate that oil will begin rising by the end of May.
  • Tankers carrying Alaska North Slope Oil to the West coast of the US are returning with crude still onboard due to an unexpected series of refinery shutdowns, according to industry sources. One of the refineries said to be affecting the ability to offload is BP’s Cherry Point refinery.
  • China's NDRC have confirmed that gasoline prices are to be cut by CNY 330/tonne and diesel prices by CNY 310/tonne from Thursday. The cut is equivalent to 3%, but prices still remain near historic highs.
  • A sophisticated cyber attack on US natural gas pipelines has been underway for several months, according to the Dept. of Homeland Security, raising fresh fears about the vulnerability of the system to hackers.
  • Brazil’s oil and natural gas output fell 5% in March from February, the second straight month-on-month decline and the lowest monthly average in seven months, according to the Brazilian oil regulator ANP.
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 05/09/2012 - 08:15 | 2409485 goldfish1
goldfish1's picture
Eurozone crisis: EU moves to loosen grip of austerity

European executive calls for shift towards growth as leftist leader Alexis Tsipras steps up Greece's eurozone rebellion

 

http://www.guardian.co.uk/world/2012/may/08/eurozone-crisis-austerity-gr...

Wed, 05/09/2012 - 08:16 | 2409488 goldfish1
goldfish1's picture

...In the same article:

Investors were also unnerved by talk of Spain having to rescue its third biggest bank, Bankia, because of toxic property loans.

Sun, 05/13/2012 - 23:23 | 2422644 qiongqiong
qiongqiong's picture

Coach Factory Outlet
Coach Outlet USA
Coach Wallets
Cheap Coach Purses
Coach Outlet
Coach Purses Outlet
Coach Factory Outlet Online
Coach Outlet
Coach Store Outlet
Coach Outlet Online
Coach Outlet
Coach Factory Online
Coach Factory Store
Coach Bags
Nike Air Max

Our Coach Factory Outlet goal is to let everyone be able to buy the Coach Outlet USA for her own. Coach Wallets or Cheap Coach Purses in the cheap Coach Purses Outlet are available now with the best condition and Coach Outlet in the lowest price. Coach products from Coach Factory Outlet Online have classic design yet in top fashion sense. The artwork of Coach in the Coach Outlet is so delicate and distinctive, perfect in details. Coach Store Outlet is a great Coach Outlet Online store not only selling top Coach Bags but also other Coach accessories. Coach Outlet does not let you down on Coach quality, design and workmanship. Coach Factory Online also is a good place for you to enjoy Coach items. In this Coach Factory Store, you could get the best Coach Bags at the best price. So are other Coach accessories, like Coach shoes, Coach wallets or Coach jewelries. Of course, if you love other brand shoes, Nike Air Max is a top one for you! Welcome!

Mon, 09/03/2012 - 04:05 | 2757218 bestlucklyzgt
bestlucklyzgt's picture

All of these Burberry Outlet are 100% mirrored the genuine ones.Now, baggage out of Burberry Outlet go along with lizard, ostrich plus crocodile dermis sometimes during a reasonably Burberry Outlet priced amount. Dolce plus Gabbana fake purses and Burberry Outlet will be excellent to observe and get fine casino wars that is going to enable the particular owner without difficulty tackle all these purses and Burberry Sale in no time. A duplicated baggage out of Burberry Sale will be just what exactly would probably provide the timeless style and design if you wish so that you can clutch plus fantastic superb Burberry Sale . Many who seem to like great fretting Burberry Sale would love any fake travelling bag out of Burberry Outlet Online .Every details including material, hardware, lining, leather trimming, structure and chrominance are cautiously imitated based on the Burberry Outlet Online .There are various kinds of replica Burberry Outlet Online with diverse styles and colors Burberry Outlet Online in the market. Whatever kind Louis Vuitton Outlet you are looking for, you can certainly find Michael Kors Outlet that can perfectly fit you. Louis Vuitton Outlet are fast becoming popular because despite being stylish and made of quality materials, Michael Kors Outlet are affordable to a high percentage of middle income earners.

Do NOT follow this link or you will be banned from the site!