Daily US Opening News And Market Re-Cap: November 28

From RanSquawk

• According to La Stampa, the IMF is preparing a EUR 600bln loan for Italy, in case its debt crisis worsens, although the report was swiftly denied by IMF officials
• Several papers reported that Germany is considering the option of joining the five other AAA-rated Eurozone member states to issue common bonds. However, the German finance ministry dismissed the report later in the session
• Particular narrowing was observed in the Belgian/German 10-year government bond yield spread partly after Belgian negotiators reached an accord on the country's 2012 budget during the weekend, together with well received OLO bond auctions from Belgium

Market Re-Cap
 
News that the IMF is preparing a EUR 600bln loan for Italy, in case its debt crisis worsens, underpinned the strength in risk-appetite today, although the report was swiftly denied by IMF officials. Further positive sentiment entered the market on the back of news that Germany is considering the option of joining the five other AAA-rated Eurozone member states to issue common bonds, although the German finance ministry dismissed the report later in the session. Renewed risk-appetite rendered support to equities, with outperformance seen in the Italian FTSE MIB and Spanish IBEX 35 indices, and financials leading the way among the European sectors. Strength in equities weighed upon Bunds, whereas the Eurozone 10-year government bond yield spreads narrowed across the board. Particular narrowing was observed in the Belgian/German spread partly after Belgian negotiators reached an accord on the country's 2012 budget during the weekend, together with a well bid 10-year OLO auction from Belgium. In the forex market, EUR/USD, GBP/USD and commodity-linked currencies moved higher as the USD-Index weakened during the European session. Also, NZD received support on the back of re-election of New Zealand's Prime Minister Key and his centre-right National Party over the weekend. Elsewhere, weakness in the USD-Index helped WTI and Brent crude futures to trade higher throughout the European session.
 
Moving into the North American open, markets look ahead to new home sales and Dallas Fed manufacturing reports from the US. In fixed income, Fed's Outright Treasury Coupon Purchase operation in the maturity range of Feb'20-Nov'21, with a purchase target of USD 4.25-5bln, together with another BoE's Gilt purchase operation in the maturity range of 2015-2020 are also scheduled for later.
 
Asian Headlines:
 
The BoJ will continue to implement powerful credit easing to ensure sustainable recovery, and powerful credit easing reflects sense of crisis versus economic downside risks. Shirakawa said that Japanese banks are not facing dollar-funding difficulties, but global shocks could have an impact. (Sources)
 
Global Headlines:
 
**OECD’s Economic Outlook** (RTRS)
•       OECD lowered its 2012 world GDP growth forecast to 3.4% vs. its previous forecast of 4.6% in May.
•       OECD said the Fed should keep the Fed fund rate at its current level until the end of 2013.
•       OECD said the Eurozone has entered a mild recession, adding that the ECB alone currently has the capacity to contain the debt crisis.
•       OECD said the ECB should commit to capping government bond yields, adding that the ECB should continue lowering policy rates and ensure ample liquidity.
•       OECD said France has no room for economic stimulus without endangering its AAA credit rating.
•       OECD said the Bank of England should expand QE programme to GBP 400bln.
 
US Headlines
 
Note: According to NYSE LIFFE US, total exchange open interest exceeded 950K on Friday for the first time as open interest in interest rate futures renewed its record.
 
EU and UK Headlines
 
Moody’s said that the rising severity of the Euro area sovereign crisis threatens EU sovereign ratings and central scenario carries very negative rating implications for Euro-zone in the interim. Moody’s said the launch of IMF new credit line is positive for stressed Euro-zone sovereigns but the new IMF credit line can’t solve the escalating Euro-zone crisis alone. (Sources)
 
•       German CPI - Bavaria (Nov) Y/Y 2.5% vs. Prev. 2.7%
•       German CPI - Hesse (Nov) Y/Y 2.3% vs. Prev. 2.4%
•       German CPI - North Rhine West (Nov) Y/Y 2.1% vs. Prev. 2.3%
•       German CPI - Saxony (Nov) Y/Y 2.6% vs. Prev. 2.7%
•       German CPI - Brandenburg (Nov) Y/Y 2.6% vs. Prev. 2.4% (RTRS)
 
•       Belgian OLO auction for EUR 0.165bln, 4.00% Mar'18, bid/cover 5.89 vs. Prev. 1.43 (yield 5.462% vs. Prev. 4.072%)
•       Belgian OLO auction for EUR 0.450bln, 4.25% Sep'21, bid/cover 2.59 vs. Prev. 1.65 (yield 5.659% vs. Prev. 4.372%)
•       Belgian OLO auction for EUR 0.530bln, 5.00% Mar'35, bid/cover 1.58 vs. Prev. 2.07 (yield 5.774% vs. Prev. 4.396%)
•       Belgian OLO auction for EUR 0.860bln, 4.25% Mar'41, bid/cover 1.44 vs. Prev. 1.64 (yield 5.784% vs. Prev. 4.280%) (RTRS)
 
EQUITIES
 
News that the IMF is preparing a EUR 600bln loan for Italy, in case its debt crisis worsens, underpinned the strength in risk-appetite today, although the report was swiftly denied by IMF officials. Further positive sentiment entered the market on the back of news that Germany is considering the option of joining the five other AAA-rated Eurozone member states to issue common bonds, although the German finance ministry dismissed the report later in the session. Renewed risk-appetite rendered support to equities, with outperformance seen in the Italian FTSE MIB and Spanish IBEX 35 indices, and financials leading the way among the European sectors. According to initial estimates, retail sales on Black Friday rose by their biggest margin since 2007 to hit a new record, while online sales grew even faster, which also supported equities. Moving into the North American open, equities continue to trade higher, with financials and basic materials as the best performing sectors.

FX
 
EUR/USD, GBP/USD and commodity-linked currencies moved higher as the USD-Index weakened during the European session. Also, NZD received support on the back of re-election of New Zealand's Prime Minister Key and his centre-right National Party over the weekend. In other news, AUD also gained strength following market talk of M&A related buying in the currency.
 
COMMMODITIES
 
WTI crude futures trades back above USD 100 per barrel supported by weakness in the USD-Index with renewed Euro-zone efforts to end the crisis.
 
Oil & Gas News:
•       Iraq's output has reached 2.95 MBPD and is expected to hit 3.00 MBPD by the end of the year, according to Oil Minister Abdul-Kareem Luaibi.
 
Geopolitical News:
•       The Arab League has approved unprecedented sanctions against Syria to pressure the regime to end its deadly eight-month crackdown on dissent. Damascus slammed the move as a betrayal of Arab solidarity.
•       Saboteurs blew up Egypt's gas pipeline to Jordan and Israel today a few hours before the country holds its first free election since President Hosni Mubarak was toppled in February.
 
Corporate News:
•       Chevron plans to invest USD 3bln in the next three years in Brazil according to a company executive.
•       Royal Dutch Shell Iraq signed a final USD 17bln deal with the company and Mitsubishi on Sunday to capture gas at southern oilfields.

Comments

[Rakshas]

First one???

I'm gonna get drunk now....

[paarsons]

I want to buy Becky Quick.

I find her sexy.

I also want to buy a chili-dog.

How much gold and silver do I need?

Can you quantify it?

Somebody fucking help me.

http://fucklloydblankfein.blogspot.com

[Gold Dog]

I will sell you Becky for 10 oz of gold.

Dog

(She is a total monkey woman!)

[paarsons]

How dare you!

That's actually fucking funny.

You're the first gold-bug to name a price.

Good for you.

http://fucklloydblankfein.blogspot.com

[ltsgt1]

I am truly humble by the insanity of the markets. S&P, DOW and Nasdaq future are up over 2% based on rumors which have been denied.  

[jmcadg]

First rumour, then denied, second rumour, then denied etc etc.

For fucks sake, when are people going to truthfully DO SOMETHING.

Fuckin' die already Euro, we know it's a given.

Mark everything to market, let's see what's left.

And get on with it. I'm bored already.

[ucsbcanuck]

"And get on with it. I'm bored already"

Second that. I'm running out of popcorn here.

[jmc8888]

Of course the funny thing is that if they tier the bonds, the ones that aren't AAA rated are going to sink like a rock.  But then again, they're worthless so it's all monetarist bullshit anyways.

Glass-Steagall