Daily US Opening News And Market Re-Cap: Red Friday

From Ran Squawk

• Trading volumes remained thin owing to early closes associated with Thanksgiving in the US
• Italy paid a record premium of 6.504% on the 6-month BOT and the bid/cover remained on the softer side, however the country managed to raise the full amount in the auction
• Market talk of the ECB buying Italian and Spanish government debt
• According to an article in the FT, the EFSF may not be able to raise enough funds to increase its capacity to more than EUR 1trl as planned
• ECB's Coene said that if the current trend continues, rate cut is probable

Market Re-Cap
 
European equities traded lower for a vast majority of the session, amid thin trade, and as market participants remained nervous ahead of EUR 8bln BOT auction from Italy. Italy paid a record premium of 6.504% on the BOT and the bid/cover remained on the softer side, however the country managed to raise the full amount in the auction, which provided some relief. An article in the FT saying that the EFSF may not be able to raise enough funds to increase its capacity to more than EUR 1trl as planned also weighed on sentiment. Financials underperformed its European peers, with underperformance seen in the Italian FTSE MIB index. Weakness in equities rendered support to Bunds in early European trade, however Bunds came under pressure as the session progressed, amid thin volume, and as stops were triggered to the downside. Meanwhile, the Eurozone 10-year government bond yield spreads came off their widest levels partly helped by market talk of the ECB buying the Italian and Spanish government debt. In the forex market, the USD-Index continued to strength, which in turn exerted downward pressure on EUR/USD, GBP/USD and commodity-linked currencies. Also, CHF came under some pressure following market talk that the SNB is active in swaps market. Elsewhere, strength in the USD-Index weighed upon WTI and Brent crude futures throughout the European session.
 
Moving into the North American open, the economic calendar remains thin, however markets will keep a close eye on developments pertaining to the Eurozone debt situation.
 
Asian Headlines:
 
BoJ’s Shirakawa said Japan’s financial system remains stable and government bond yields remain low. Japan’s financial firms have small exposure to Europe’s debt problems and Japan’s economy is picking up, but the pace is moderate. (RTRS) In other news, Japan’s 2011 GDP estimate is cut to -0.4% from +0.1%, and 2012 GDP growth estimate cut to 2.4% from 3.3% by Societe Generale. (Sources)
 
·       Japanese National CPI (Oct) Y/Y -0.2% vs. Exp. -0.1% (Prev. 0.0%) (RTRS)
 
US, EU and UK Headlines
 
The EFSF may not be able to raise enough funds to increase its capacity to more than EUR 1trl as planned because of deterioration in market conditions over the past month, according to unnamed senior Euro-area officials. (FT-More)
 
·       Italian 6-month BOT auction for EUR 8bln, bid/cover 1.47 vs. Prev. 1.57 (yield 6.504% vs. Prev. 3.535%) (RTRS)
 
EQUITIES
 
European equities traded lower for a vast majority of the session, amid thin trade, and as market participants remained nervous ahead of EUR 8bln BOT auction from Italy. Italy paid a record premium of 6.504% on the BOT and the bid/cover remained on the softer side, however the country managed to raise the full amount in the auction, which provided some relief. An article in the FT saying that the EFSF may not be able to raise enough funds to increase its capacity to more than EUR 1trl as planned also weighed on sentiment. Financials underperformed its European peers, with underperformance seen in the Italian FTSE MIB index. Moving into the North American open, equities continue to trade lower, with financials and industrials as the worst performing sectors.

FX
 
The USD-Index continued to strength, which in turn exerted downward pressure on EUR/USD, GBP/USD and commodity-linked currencies. Also, CHF came under some pressure following market talk that the SNB is active in swaps market.

COMMMODITIES
 
WTI and Brent crude futures traded lower in the European session amid light volume and weighed upon by strength in the USD-Index.
 
Oil & Gas News:

·       IEA chief economist said the current oil price is major risk for economic growth. He said he would like to see oil in the markets, oil prices are too high and the current oil price risks strangling economic recovery efforts.
 
Geopolitical News:

·       The Arab League has given Syria until 11:00 GMT today to sign a protocol allowing rights monitors into the country before it presses ahead with plans to impose economic sanctions, according to Egypt's envoy to the regional bloc. The Turkish foreign minister said that the Arab league foreign ministers could meet on Sunday, and if Syria does not show goodwill there are steps Turkey can take with the Arab League.

Comments

[Alexmai]

Federal Reserve banks are privately owned In Violation To the US Constitution

http://investmentwatchblog.com/federal-reserve-banks-are-privately-owned-in-violation-to-the-us-constitution/

[paarsons]

Fuck the markets.

Let's hope LSU defeats Arkansas.

http://fucklloydblankfein.blogspot.com

[evolutionx]

Obama: Dollar just an Illusion

In a sensational interview  President Barack Obama provided some deep insight into the monetary system: "The dollar is just an illusion" - the US currency was actually not worth anything.

http://www.mmnews.de/index.php/english-news/7593-obama-dollar-just-an-illusion-

[SilverIsKing]

Nice...but I'll believe it when I see it with my own eyes. Seems way too complicated for Obama to understand such a thing and even if he did, I highly doubt he would say it publicly unless the plan was to bring it all down right now.

[Ronaldo]

Short-term buying opportunities are coming soon.  Maybe even some long-term PM is called for after a precipitous drop in the coming weeks.

[WhiteNight123129]

History as a guide: ~Les Assignats~

By decision of the Directoire, the ~assignats~ (the hyperinflation fiat money introduced in the French revolution) were finally abandoned (after years of hyperinflation) with pomp when the printing presses, punches, dies and plates are burned in public place Vendôme, 30 Pluviose, Year IV of the Republic (February 19, 1796).

Wait a few years and the Fed building will be destroyed by the new authorities in charge (Maybe some of you guys, don t get corrupted please!!!) with live streaming coverage from news outlets and people hugging each other applauding and cheering.

[PulauHantu29]

Trampled to Death this year? Anyone stomped to Death at Black Friday deals as people panic to buy a $18 toaster for $4.00?

[michaelsmith_9]

A short term retracement seems to be underway for the SPX and DX as they continue to move inversely to each other.  The DX continues to remain in a very bullish formation.  The chart technicals are available here.  http://bit.ly/v5PdJS