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Daily US Opening News And Market Re-Cap: September 12

Tyler Durden's picture




 

From RanSquawk:

  • Sources close to the situation said during the weekend that Moody's may cut credit ratings of major French banks including Societe Generale, BNP Paribas and Credit Agricole. However, SocGen’s CEO downplayed the news, and ECB’s Noyer said that French banks have no liquidity issues
  • German economy minister Roesler didn’t rule out an orderly Greek bankruptcy. However, a German Economy Ministry spokesman said that instruments for an orderly Greek debt insolvency is not currently being readied
  • UK’s ICB, in its report, recommended “ring fencing” UK banks’ retail arm, which will incur a cost of between GBP 4-7bln. However, it gave the banks till 2019 to implement those measures

Market Re-Cap
 
Risk-averse trade dominated markets for a vast majority of the European session, and equities traded lower throughout the session, led by financials. Sources close to the situation said during the weekend that Moody's may cut credit ratings of major French banks including Societe Generale, BNP Paribas and Credit Agricole. Meanwhile, close allies of the German Chancellor Merkel commented on the possibility of a Greek default and even it leaving the Eurozone altogether. Also, markets remained nervous ahead of the release of the UK's ICB report, where it was expected to recommend "ring fencing" of banks' retail arm. This was later confirmed once the report was released, which also showed that UK banks will incur a cost between GBP 4-7bln due to those measures. However, the ICB gave the banks till 2019 to implement the proposals, which in turn waned some concerns and rendered support to the UK banks.
As the session progressed, European banking shares came off their lows after ECB's Noyer said that French banks have no liquidity issues, whereas Societe Generale's CEO downplayed potential for a Moody's downgrade. In forex news, the USD-Index surrendered its earlier strength and ventured in negative territory, as EUR/USD and GBP/USD moved higher. EUR/USD received support on the back of market talk of short covering in the pair. Elsewhere, JPY gained strength across the board on the back of risk-averse flow.
 
Moving into the North American open, the economic calendar remains thin, however Chancellor Merkel and Fed's Fisher are due to speak later in the session. In fixed income, ECB's bond purchase announcement, together with USD 32bln 3-year Note auction are also scheduled for later.
 
Asian Headlines:
 
•    Chinese Trade Balance (USD) (Aug) 17.76bln vs. Exp. 24.60bln (Prev. 31.48bln)
•    Chinese Exports (Aug) Y/Y 24.5% vs. Exp. 21.9% (Prev. 20.4%)
•    Chinese Imports (Aug) Y/Y 30.2% vs. Exp. 21.0% (Prev. 22.9%)
 
US, EU and UK Headlines:
 
IMF’s Lagarde has softened her stance on the amount of capital needed by European banks, as finance ministers and central bankers from the leading advanced economies sought to calm febrile markets at the weekend. IMF managing director, confirmed that the Fund was revising its estimates of the loss of tangible equity in European banks on Saturday, saying the estimated capital losses of EUR 200lbn were “tentative”. (FT- More)
 
EQUITIES
 
Risk-averse trade dominated markets for a vast majority of the European session, and equities traded lower throughout the session, led by financials. Sources close to the situation said during the weekend that Moody's may cut credit ratings of major French banks including Societe Generale, BNP Paribas and Credit Agricole. Meanwhile, close allies of the German Chancellor Merkel commented on the possibility of a Greek default and even it leaving the Eurozone altogether. Also, markets remained nervous ahead of the release of the UK's ICB report, where it was expected to recommend "ring fencing" of banks' retail arm. This was later confirmed once the report was released, which also showed that UK banks will incur a cost between GBP 4-7bln due to those measures. However, the ICB gave the banks till 2019 to implement the proposals, which in turn waned some concerns and rendered support to the UK banks.
As the session progressed, European banking shares came off their lows after ECB's Noyer said that French banks have no liquidity issues, whereas Societe Generale's CEO downplayed potential for a Moody's downgrade. Moving into the North American open, equities continue to trade lower, with financials and oil & gas as the worst performing sectors.

FX
 
The USD-Index surrendered its earlier strength and ventured in negative territory, as EUR/USD and GBP/USD moved higher. EUR/USD received support on the back of market talk of short covering in the pair. Elsewhere, JPY gained strength across the board on the back of risk-averse flow.

COMMODITIES
 
WTI and Brent crude futures traded in firm negative territory earlier in the session as concerns over the European debt crisis remained in focus, boosting strength in the USD-Index.
 
Oil & Gas News:

•    Goldman Sachs has predicted that America will become the world’s largest oil producer once again nearly four decades after it lost the title. Goldmans say that US production will hit 10.9 MBPD by 2017, a one-third increase over its current level of 8.3 MBPD.
•    Libya has started producing oil again, the country's interim prime minister said on Sunday, promising that more of it would come online in the "near future". Libyan oil firm Agoco said it has started oil production in Eastern oilfields of Sarir and output is at around 50,000 BPD, with plans to send oil to Tobruk on Tuesday.
•    Saudi Arabia produced 9.76 MBPD of oil in August, up from 9.60 MBPD in July according to a senior OPEC delegate. In other news Saudi Arabia will supply fully contracted volumes of crude oil in October to at least two Asian term buyers, steady with September.
•    China’s implied oil demand in August slipped to the lowest rate this year as plant maintenances and accidents cut into refinery production, but on a year-on-year basis still expanded by 7.8%.
•    OPEC cuts 2011 global oil demand growth forecast by 150,000 BPD to 1.06 MBPD, citing weakening economy. They also trim 2012 global demand growth forecast by 40,000 BPD to 1.27 MBPD, and weaker US economic performance could cut growth by further 200,000 BPD. OPEC expects Libyan oil production to reach 1 MBPD within next six months and see full capacity restored in less than 18 months. They say perception of market tightness and worries of supply shortages in the fourth quarter appear to be easing.
 
Geopolitical News:

•    The Gulf Co-operation Council (GCC) has called for "an immediate end to the killing machine" in Syria, and reiterated its demand for government reforms.

 

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Mon, 09/12/2011 - 08:53 | 1659116 Quadlet
Mon, 09/12/2011 - 08:55 | 1659123 MFL8240
MFL8240's picture

Moodys = political hacks!!

Mon, 09/12/2011 - 08:59 | 1659136 spiral_eyes
spiral_eyes's picture

Euro collapse this week? This month? This year?

http://azizonomics.com/2011/09/11/big-change-for-europe/ 

Mon, 09/12/2011 - 09:02 | 1659141 ivars
ivars's picture

This February 6th forecast graph of DJIA was not so bad as well:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=34034#p34034

As was the current gold bubble forecast graph made on May 4th:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

It of course includes all manipulations by central banks , governments, banks, Gadaffi etc etc etc

 

Tue, 09/13/2011 - 22:00 | 1665991 moxia19
moxia19's picture

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