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Daily US Opening News And Market Re-Cap: October 26
From RanSquawk:
- German Chancellor Merkel said that all models that involve the ECB are not on the agenda tonight, however both leverage models are going to be discussed
- According to a senior EU source, IMF thinks 60% Greek debt write-down is not enough, and it should be 65% or more
- Widening was observed in the Greek/German 10-year government bond yield spread ahead of the EU leaders' summit today
- According to a draft statement from the EU heads of state, banks would need guarantees on liabilities for more direct support for access to funding. It further said that there is broad agreement on requiring banks to have capital ratio of 9%, to be attained by June 30th 2010
- There were reports that the Italian PM Berlusconi may resign
Market Re-Cap
European equities traded mixed during the session as uncertainty persisted surrounding the outcome of the EU leaders' summit in Brussels today and market participants remained nervous that a deal on the issue of PSI and haircut on the Greek debt holding may not be reached today. Political uncertainty in Italy with the possibility of a resignation by PM Berlusconi also weighed on sentiment, whereas strong European corporate earnings from the likes of Merck KGaA and SAP had limited reaction on the market. Elsewhere, Bund futures traded in minor negative territory, whereas most Eurozone 10-year government bond yield spreads with respect to Bunds narrowed. However, widening was observed in the Greek/German spread ahead of the EU leaders' summit. In the forex market, the USD-Index traded in negative territory, which provided some support to EUR/USD. Also, strength was observed in CHF and JPY backed by Eurozone debt concerns, which led EUR/CHF to breach the 1.2200 level and stops were triggered to the downside below that level. In other news, USD/JPY printed a fresh record low at 75.71, whereas weakness was observed in AUD across the board following weaker than expected CPI data from Australia overnight.
Moving into the North American open, the EU leaders' summit will remain the main focus in the market, however participants will also look for economic releases from the US in the form of durable goods, new home sales, and DOE oil inventories report. In fixed income, BoE's Gilt purchase operation in the maturity range of 2022-2036, Fed's Outright Treasury Coupon sales in the maturity range of Mar'14-Oct'14, with a sales target of USD 8-9bln, and USD 35bln 5-year Note auction are also scheduled for later.
Asian Headlines:
BoJ Governor Shirakawa said the BoJ is already buying huge amounts of JGB’s now adding that BoJ cannot beat deflation with monetary policy alone but hopes to do what it can on monetary front. (RTRS)
In other news, the BoJ will discuss additional monetary easing measures to help blunt the impact of a strong JPY on the Japanese economy at its policy board meeting on Thursday. The central bank will consider expanding its asset-buying program by around JPY 5trl and also consider purchasing longer-term government bonds. (Nikkei)
US, EU and UK Headlines:
According to a draft statement from the EU heads of state, banks would need guarantees on liabilities for more direct support for access to funding. It further said that there is broad agreement on requiring banks to have capital ratio of 9%, to be attained by June 30th 2010, however there is no overall target sum given. The draft said that to raise capital, banks should first use private sources, including restructuring and conversion of debt to equity instruments. (RTRS)
In other news, a Chinese diplomat in Brussels said China supports EU efforts to deal with the debt crisis, but there is nothing concrete on investing in the EFSF’s SPV. Also, an EFSF spokesman said that he cannot confirm if China has said it will participate in the EFSF's SPV. In related news, Brazil rejected the idea of buying European bonds to help ease the Eurozone’s debt crisis. (RTRS/Sources)
• US MBA Mortgage Applications (Oct 21) W/W 4.9% vs. Prev. -14.9% (RTRS)
• ECB allotted EUR 44.564bln in its 3-month refinancing operation vs. Exp. EUR 65bln
• ECB allotted EUR 56.934bln in its 12-month refinancing operation vs. Exp. EUR 50bln
• Italian 6-month BOT auction for EUR 8.5bln, bid/cover 1.57 vs. Prev. 1.74 (yield 3.535% vs. Prev. 3.071%), yield highest since Sep’08 (RTRS)
BarCap US Treasury month-end extension seen at +0.09yrs
EQUITIES
European equities traded mixed during the session as uncertainty persisted surrounding the outcome of the EU leaders' summit in Brussels today and market participants remained nervous that a deal on the issue of PSI and haircut on the Greek debt holding may not be reached today. Political uncertainty in Italy with the possibility of a resignation by PM Berlusconi also weighed on sentiment, whereas strong European corporate earnings from the likes of Merck KGaA and SAP had limited reaction on the market. Moving into the North American open, equities continue to trade mixed, with telecommunications and technology as the best performing sectors.
GlaxoSmithKline – Co.’s Q3 EPS ex items GBP 0.285 vs. Exp. GBP 0.285, and Q3 total group revenue GBP 7.10bln vs. Exp. USD 6.98bln. Co. expects a full year impact of around GBP 325mln from US reform and European cuts. (RTRS)
**Note: For US equities news in detail, kindly refer to the RANsquawk Daily US Equity Opening News report.
FX
The USD-Index traded in negative territory, which provided some support to EUR/USD. Also, strength was observed in CHF and JPY backed by Eurozone debt concerns, which led EUR/CHF to breach the 1.2200 level and stops were triggered to the downside below that level. In other news, USD/JPY printed a fresh record low at 75.71, whereas weakness was observed in AUD across the board following weaker than expected CPI data from Australia overnight.
• Australian Consumer Prices (Q3) Q/Q 0.6% vs. Exp. 0.6% (Prev. 0.9%)
• Australian Consumer Prices (Q3) Y/Y 3.5% vs. Exp. 3.5% (Prev. 3.6%) (RTRS)
COMMMODITIES
WTI and Brent crude futures lacked any firm direction as participants remained cautious ahead of the DOE inventories release later today and the EU leaders’ summit.
Oil & Gas News:
• Iraq will ask OPEC to be under a quota system in 2014 and Iraq will not oversupply the oil market, according to Iraq's SOMO director. Iraq’s oil output has averaged 2.9MBPD since the start of 2011, with output forecasted to average 3.4MBPD in 2012 and 4.5MBPD in 2013.
• More barrels of Libyan crude are set to hit international oil markets next month, according to traders.
• CME lowered initial margins for Tier 1 speculators on NYMEX heating oil futures to USD 7,830 per contract from USD 8,775; down 11%.
• According to a Goldman Sach’s commodities analyst, Currie, the oil market is getting tighter by the minute.
**Note: For commodities news in detail, kindly refer to the RANsquawk Daily Energy Commentary report.
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JPM's Lee on CNBS, "We think the S&P can go up 20% from here into year end."
What an ass...
All they need is QEx and there you go. Will price small investors out of the pool though.
Sure, the S&P could go up 20%, but hows the dollar doin there JPM guy?
These guys seriously need a haircut right around the neckline with a Kaiser blade, some call it a slingblade, I call it a Kaiser blade.
All CNBC does is pander to money managers (in whatever form they take) who will say anything to avoid redemptions and encourage inflows and politicians who take donations from money managers. The circle of Bullshit is complete.
The concert is over. The crowds are filing out of the stadium and the lights have come up, but Keith Richards (Bernanke) is so high he's still noodling on the guitar and a couple of roadies (CNBC, BlOOMBERG) are trying to fill in for Mick, Charlie, and Ronnie...
60% not enough by far. I'd hazard a guess at 100%+ before I dipped my toe in that cesspool. Not until their entire debt is revoked will I trust a Greek's bond on anything.
June 30 2010 what do they have now, a time machine?
WELL it all certainly seems to be highly bullish to me, countries admit even full blown money printing with their full leverage will do nothing but buy a moment or 2 in time...just fukin great what a world.
I checked the date of the post to make sure *I* was not in a time warp. Nope. They must have invented a time machine.
ANONYMOUS is on a roll.
On Monday they took down the world's largest child porn network in Operation DarkNet.
November 5 they will take down Fox News in Operation Fox Hunt.
lhttp://www.geek.com/articles/tagged/anonymous
Tell em to take down the S&P for a few days.
lulz
Market continues to shuck off bad news.
Momentum remains on the upside.
Even FSLR is up $3.50 pre-market.
Anarchists should be cheering this rally, because ES is leading the way for gold also, despite persistent capping and selling of the metals.
Whats any of it matter to you RearviewTrader?
seriously--there's no way he's got any skin left in the game.
So this summit which was to provide DETAILS of the SOLUTION is now just a discussion...where is the disappointment? Where is the market sending a message that this is unacceptable? When will the rating agencies get tired of this ploy to delay and finally put a fork in them? My god this is unbelievable.
Yea just wrote basically the same thing...this is unbearable BS.
Yea yea theyre having their meeting today, where they promised all details would be given, and no doubt will decide carrot and stick remains the best plan for Europe insolvency.
Next scheduled meeting on the collapse of Europe will be in 3 weeks, wet, lather, rinse, repeat.
Unicorns sharting piles of free Euros and US LOLlars.
A little too much cheering on/schadenfreude for the suicide via Twitter by Zerohedge.. tone it down a bit, please.
Huh?
Zerohedge's posts on twitter, a little too much relishing in EU bungling. We get it already.... the piling on a little bit past jumping the shark.
Seeing as ZH is about the only place laying out the clown and pony show going on over in Europe I dont know why they have to 'tone it down' and I dont think hardly anyone 'gets it' at all.
What was that about Bunga Bunga Berlusconi resigning?
Wouldn't he then lose immunity from prosecution if he resigns? Or have all the payoffs already been made to take care of those pesky charges?
The point is, they are fucking clueless!. They have no idea of how to solve the problem because its unsolvable.
So are they waiting for greece to default? Maybe
Today was supposed to be the presented 'plan' with all details we've been waiting on for months...now they say its just another little routine discussion about further future discussions. FUBAR.
According to a draft statement from the EU heads of state, banks would need guarantees on liabilities for more direct support for access to funding. It further said that there is broad agreement on requiring banks to have capital ratio of 9%, to be attained by June 30th 2010
IF TIME IN EUROPE GOES FORWARD, NOT BACKWORD, as the rest of the world then the date is wrong
JOURNALISM GUYS IF YOU WANT TO BE THE TOP SOURCE OF INFO!!
They got a time machine...problem solved.
Surprising that 21% has now grown to 50% and there are calls for 65% now. In what world does this NOT trigger a credit event, even at the 21% level? 21% may have been "voluntary", but there is no way in hell that 50% is voluntary. They are throwing everything they can at the Ecoponzi Wall and nothing is sticking! So they throw bigger and bigger things at it in the mistaken belief that they haven't used a big enough bazooka. Sometime in the near future, someone is going to realize that a bazooka doesn't cut it and the nuclear option will be floated as the end all and cure all for the EU. That should mark the end of the Euro.