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Daily US Opening News And Market Re-Cap: November 3

Tyler Durden's picture




 

From RanSquawk:

  • There were conflicting reports that Greek PM Papandreou has resigned. It was also reported that the EU referendum is off the table
  • Also, according to party sources, Greek socialist MPs are forging proposal for coalition government headed by former ECB vice-president Papademos
  • EU Commission said that the only option is for Greece to stay in the Euro as treaties don’t foresee an exit from the Eurozone. It also said that the Greek tranche payment is conditional on austerity implementation
  • Market talk that Qatar is willing to invest into the EFSF, however earlier the Chinese President said that the Eurozone problem should mainly be solved by Europe
  • According to a senior G20 official, the G20 is assessing the cost of a Greek default

Market Re-Cap
 
Risk-averse trade dominated the early part of the European session on indications that the Greek government may lose the confidence vote on Friday, which may jeopardise the sixth tranche of the EU/IMF bailout to Greece, together with lacklustre Chinese non-manufacturing PMI data overnight. However, in a stark reversal of fortunes, the appetite for risk gathered pace as the European session progressed on growing prospects of formation of a national unity government in Greece, which may avert the need for a referendum. Market talk that Qatar is willing to invest into the EFSF further boosted risk-appetite, and European equities reversed their earlier losses to trade in positive territory, with outperformance seen in the Italian FTSE MIB and Spanish IBEX 35 indices. Strength in equities allied with a large amount of supply from Spain and France weighed on Bunds, whereas the Eurozone 10-year government bond yield spreads came off their widest levels. In the forex market, a weakening USD-Index rendered support to EUR/USD, GBP/USD and commodity-linked currencies. However, AUD and NZD witnessed weakness overnight following the release of lacklustre economic data from Australia and New Zealand.
 
Moving into the North American open, market participants will closely watch developments in the Eurozone, with particular emphasis on Greece. Markets also look ahead to key economic data from the US in the form of jobless claims, ISM non-manufacturing composite, factory orders and durable goods revisions. ECB's November rate-decision is another key event for later in the session, followed by ECB's Draghi press-conference. In fixed income, Fed's Outright TIPS purchase operation in the maturity range of Jan'18-Feb'41, with a purchase target of USD 1-1.5bln is also scheduled.
 
Asian Headlines:
 
Japanese market holiday.
 
•       China Non-Manufacturing PMI (Oct) M/M 57.7 vs. Prev. 59.3
•       China HSBC Services PMI (Oct) M/M 54.1 vs. Prev. 53.0 (RTRS)
 
Global Headlines:
 
According to Chinese President Hu Jintao, China hopes the EU bailout plan agreed in late October can be implemented, adding that the problem should mainly be solved by Europe. He reiterated China’s confidence in Europe. In other news, China’s deputy finance minister, Zhu Guangyao, said that China could not consider raising its investment in the EFSF bailout fund given the lack of detail on proposals to leverage it. (RTRS)
 
US, EU and UK Headlines
 
•       Spanish bond auction for EUR 1.562bln, 4.25% Jan'14, bid/cover 1.70 vs. Prev. 1.70 (yield 4.270% vs. Prev. 3.041%)
•       Spanish bond auction for EUR 2.928bln, 4.25% Oct'16, bid/cover 1.6 vs. Prev. 1.76 (yield 4.848% vs. Prev. 4.489%)
•       French OAT auction for EUR 3.110bln, 3.75% Apr'17, bid/cover 1.719 vs. Prev. 2.61 (yield 2.34% vs. Prev. 2.000%)
•       French OAT auction for EUR 2.865bln, 3.25% Oct'21, bid/cover 2.239 vs. Prev. 2.02 (yield 3.22% vs. Prev. 2.720%)
•       French OAT auction for EUR 0.985bln, 3.50% Apr'26, bid/cover 2.604 vs. Prev. 2.67 (yield 3.77% vs. Prev. 4.030%) (RTRS)
 
EQUITIES
 
Risk-averse trade dominated the early part of the European session on indications that the Greek government may lose the confidence vote on Friday, which may jeopardise the sixth tranche of the EU/IMF bailout to Greece, together with lacklustre Chinese non-manufacturing PMI data overnight. However, in a stark reversal of fortunes, the appetite for risk gathered pace as the European session progressed on growing prospects of formation of a national unity government in Greece, which may avert the need for a referendum. Market talk that Qatar is willing to invest into the EFSF further boosted risk-appetite, and European equities reversed their earlier losses to trade in positive territory, with outperformance seen in the Italian FTSE MIB and Spanish IBEX 35 indices. Moving into the North American open, equities continue to trade in positive territory, with industrials and technology as the best performing sectors.

FX
 
A weakening USD-Index rendered support to EUR/USD, GBP/USD and commodity-linked currencies. However, AUD and NZD witnessed weakness overnight following the release of lacklustre economic data from Australia and New Zealand.
 
In other news, according to G20 sources, the G20 draft statement includes new language on moving more rapidly towards market-determined FX rates, and reducing excessive reserve accumulation. (RTRS)
 
•       Australian Retail Sales SA (Sep) M/M 0.4% vs. Exp. 0.4% (Prev. 0.6%)
•       New Zealand Unemployment Rate (Q3) Q/Q 6.6% vs. Exp. 6.4% (Prev. 6.5%)
•       New Zealand Employment Change (Q3) Q/Q 0.2% vs. Exp. 0.6% (Prev. 0.0%, Rev. to 0.1%)
•       New Zealand Employment Change (Q3) Y/Y 1.1% vs. Exp. 1.6% (Prev. 2.0%) (RTRS)

COMMMODITIES
 
Moving into the NYMEX pit open, WTI and Brent crude futures came off their earlier lows as risk-appetite gathered pace on the back of prospects that a referendum in Greece could be averted, together with weakness in the USD-Index.
 
Oil & Gas News:
 
•       IEA says sees high and volatile oil prices in years to come.
 
Geopolitical News:
 
•       According to a report to be released next week, Iran is attempting to engineer and test nuclear weapons at a series of banned production sites in defiance of United Nations sanctions. In other news, the Guardian newspaper reported that Britain's armed forces are stepping up their contingency planning for potential military action against Iran amid mounting concern about Tehran's nuclear enrichment programme.

 

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Thu, 11/03/2011 - 08:08 | 1840241 Irish66
Irish66's picture

He will resign

Thu, 11/03/2011 - 08:12 | 1840253 paarsons
paarsons's picture

I know the news.

The world is a giant shit sandwich.

So the markets will go up by 600 points.

I'm looking for a down at 30,000 points.  And 17 percent unemployment.

Fuck it all in the ass.  At least we still have porno.

http://fucklloydblankfein.blogspot.com

Thu, 11/03/2011 - 08:09 | 1840244 AngryGerman
AngryGerman's picture

"assessing the cost of a Greek default"?

costs = end of BS financial engineering = good

ergo, G20 should assess the benefits of a Greek default

Thu, 11/03/2011 - 08:10 | 1840246 msmith
msmith's picture

The DX, EURUSD, AUDUSD, and the SPX are all setting up for big moves.  Significant USD strength and equity weakness ahead.  http://bit.ly/uCdxU7

Thu, 11/03/2011 - 08:11 | 1840251 Little Red Rooter
Little Red Rooter's picture

That shirt ad on the left is pissing me off, advertise lingerie on ZH and I'd feel more bullish ...

Thu, 11/03/2011 - 08:21 | 1840314 GoldBricker
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I never see any ads here (unless you count Simon Black's pseudo-articles).

Try the firefox browser. Install add-ons 'noscript' and 'adblock'.  On 'noscript', allow only zerohedge.com (you might need one or two others to watch videos and to enter comments).

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