Daily US Opening News And Market Re-Cap: September 14

From RanSquawk:

• Moody's downgraded long-term debt and deposit ratings for Societe Generale and Credit Agricole by one notch each, whereas extended its review for a downgrade on BNP Paribas ratings. However a French government spokeswoman said that French banks' ratings are still very good despite Moody’s downgrade
• EU's Barroso said that the European Commission will soon present options for the introduction of Eurobonds
• An unexpected decline in the jobless claims data from the UK provided support to GBP

Market Re-Cap
 
Moody's downgraded long-term debt and deposit ratings for Societe Generale and Credit Agricole by one notch each, whereas extended its review for a downgrade on BNP Paribas ratings, which weighed on equities, led by financials, in early trade. However, as the session progressed, equities pared earlier losses following comments from EU's Barroso who said that the European Commission will soon present options for the introduction of Eurobonds. Meanwhile, according to a Brazilian government source overnight, BRICS countries are in preliminary discussion to co-ordinate purchases of Eurozone debt. Equities received further support ahead of a teleconference between the Greek PM Papandreou, German Chancellor Merkel, and French President Sarkozy in anticipation of enhanced clarity on measures to tackle the Greek debt issue. In other news, the ECB allotted USD 575mln in its 7-day USD operation, which resulted in a sharp decline in Eurodollar futures, and highlighted difficulty faced by many banks to borrow USD in the money-market. Elsewhere, EUR moved higher amid relative risk-appetite as the session progressed, whereas GBP/USD moved up over 40 pips following an unexpected decline in jobless claims data from the UK. Also, commodity-linked currencies came off their earlier lows as the USD-Index weakened later in the European session.
 
Moving into the North American open, markets look ahead to key economic data from the US in the form of retail sales, PPI, business inventories as well as DOE oil inventories report. Markets will also keep a close eye on comments pertaining to the Eurozone debt crisis, and Greece in particular. In fixed income, USD 13bln 30-year Note auction is also scheduled for later in the session.
 
Asian Headlines:
 
Premier Wen Jiabo says China will keep monetary policy tight to contain inflation while forging ahead with structural reforms and boosting consumption to sustain long-term economic growth. He also signalled that developed nations should cut deficits and create jobs rather than relying on China to bail out the world economy. Wen called on the European Union and the US to open their markets in return. (RTRS)
 
•    Japanese Industrial Production (Jul F) M/M 0.4% vs. Prev. 0.6%
•    Japanese Industrial Production (Jul F) Y/Y -3.0% vs. Prev. -2.8%
•    Japanese Capacity Utilization (Jul) M/M 0.6% vs. Prev. 5.2% (RTRS)
 
Global News:
 
China should refrain from buying large amount of European bonds, according to central bank adviser Li Daokui. However, China should continue to buy Italian bonds in the short term to stabilise confidence, he said. (RTRS/Sources)
 
In other news, Chinese central bank adviser Li Daokui said the nation should ‘pull out of’ US treasuries when confidence returns. (Sources)
 
US Headlines:
 
The US Treasury would effectively accommodate a possible Federal Reserve stimulus, via “operation twist” to drive down long-term interest rates, according to people familiar with the matter. (FT-More)
 
•    US MBA Mortgage Applications (Sep 9) 6.3% vs. Prev. -4.9% (RTRS)
 
EU and UK Headlines:
 
Two proposals were adopted by the European Commission today, suggesting reduced interest rate margins and extended maturities for loans granted by the European Union (EU) to Ireland and Portugal. The loans are provided by the EU under the European Financial Stabilisation Mechanism (EFSM) as part of financial assistance packages to the two countries. The improved terms are expected to enhance liquidity and contribute to the sustainability of both countries in support of their strong economic and reform programmes. (europa.eu)
 
In other news, according to a French government spokeswoman, the French government is still hopeful it can pass its fiscal rule proposal via a joint parliamentary vote. She further said that French President Sarkozy told Cabinet that France will do everything to save Greece, however there will be no communication after the conference call with Athens and Berlin. She also said that French banks' ratings are still very good despite Moody’s downgrade. (RTRS/Sources)
 
•    UK Claimant Count Rate (Aug) M/M 4.9% vs. Exp. 5.0% (Prev. 4.9%)
•    UK Jobless Claims Change (Aug) M/M 20.3K vs. Exp. 35.0K (Prev. 37.1K, Rev. to 33.7K)
•    UK ILO Unemployment Rate (Jul) 3M/Y 7.9% vs. Exp. 7.9% (Prev. 7.9%) (RTRS)
 
•    German Schatz auction for EUR 4.125bln, 0.75% Sep'13, bid/cover 1.8 vs. Prev. 1.4 (yield 0.510% vs. Prev. 0.730%, retention 17.5% vs. Prev. 19.79%) (RTRS)
 
EQUITIES
 
Moody's downgraded long-term debt and deposit ratings for Societe Generale and Credit Agricole by one notch each, whereas extended its review for a downgrade on BNP Paribas ratings, which weighed on equities, led by financials, in early trade. However, as the session progressed, equities pared earlier losses partly on the back of comments from EU's Barroso who said that the European Commission will soon present options for the introduction of Eurobonds. Moving into the North American open, equities continue to trade higher, with oil & gas and utilities as the best performing sectors.

FX
 
EUR moved higher amid risk-appetite, as the session progressed, partly on the back of supportive comments from  EU’s Barroso on Eurobonds, and ahead of a teleconference between the Greek PM Papandreou, German Chancellor Merkel, and French President Sarkozy later today. In other news, GBP/USD moved up over 40 pips following an unexpected decline in jobless claims data from the UK. Elsewhere, commodity-linked currencies came off their earlier lows as the USD-Index weakened later in the European session.

COMMODITIES
 
WTI and Brent crude futures came off their session lows as risk sentiment returned to the market allied with weakness in the USD-Index heading into the North American open.
 
Oil & Gas News:

•    Libya to seek large OPEC quota at December’s meeting according to a Libyan official. Long-term prices shouldn't exceed USD 100 BPD.
 
Geopolitical News:
•    Arab League urges Syria to 'stop bloodshed' and pressure on Damascus to end violence intensifies, but activists say 23 more people were killed on Tuesday.
•    Libyan fighters handed out free petrol to help hundreds of civilians flee a desert town held by Gaddafi’s forces ahead of an onslaught aimed at capturing one of the ousted ruler’s last bastions.

Full report:

Comments

[Freewheelin Franklin]

Barroso ---> Commie prick.

[AnAnonymous]

No. Barroso--->US citizen. This guy is playing from the US play book. Remove taxation power to merge people. Going to be ugly.

[firstdivision]

Oil seems to be sending a signal in a half today.  It is collapsing while equities are rising. 

[Quadlet]

I wouldn't call down 0.5% "collapsing"

[Quadlet]

Forget the market for a day and go to Union Sq...

http://www.huffingtonpost.com/2011/09/13/union-square-peepers-get-_n_960116.html

[max2205]

Moody's downgraded long-term debt and deposit ratings for Societe Generale and Credit Agricole by one notch each

what a joke, one "notch"....?  Buffet's/Zandi  Moodys is a horrible joke

[Manthong]

Just heard summary comments of Geithner talking to sage Kramer.. something about "no chance of Lehman event in Europe".

If true, that boy needs to reconsider his style of public comments when comes to things like risk events and credit ratings.