Overnight Recap And Today's Key Events

Tyler Durden's picture


Following a series of bad economic news (Eurozone unemployment, rising inflation, plunging retail sales in Germany, Spain and Greece) out of Europe, and the usual sound and fury out of the ECB signifying nothing (was there finally news that Weidmann and/or the Buba are endorsing anything Draghi is doing - instead of seeking to potentially quit his post leaving the ECB in limbo? No? Then stop flashing red headlines which are completely irrelevant), the EURUSD has decided to go on its usual countersensical stop hunt higher in hopes an algo or two will push it even higher on nothing but momentum, with has one purpose only: to allow the pair enough of a buffer so that when it does fall after the J-Hole disappointment, it has more room to drop. And as European newsflow fades into the periphery, everyone is once again focusing on Wyoming where Bernanke is now broadly expected to do absolutely nothing. What else are market participants focusing on? Here is the full ist courtesy of Bloomberg daybook.

  • Treasuries decline before Bernanke’s Jackson Hole speech, scheduled for 10am New York time; 10-yr yields lead curve higher.
  • Economists and strategists don’t expect the Fed chairman to signal imminent policy moves
  • Euro-area unemployment rose to a record 11.3% in July and inflation quickened more than economists forecast as rising energy costs threaten to deepen the economic slump
  • The Bundesbank declined to be drawn on whether President Jens Weidmann considered resigning over the ECB’s plan to resume bond purchases, as tension between the two institutions mounts
  • ECB Executive Board member Joerg Asmussen said the IMF should be involved in setting conditions for countries applying for bond-buying aid from Europe’s bailout fund
  • The ECB would have the sole power to grant banking licenses under proposals to give the central bank supervisory powers and build a euro-area banking union, a EU official said
  • JPM economist Malcolm Barr expects ECB to implement “soft cap” on front-end yields, where purchases establish range wherein ECB resistance to higher yields becomes progressively stronger
  • French corporate leaders criticized Socialist President Francois Hollande’s government for policies they say hurt companies already battered by a slowing economy and decades of business-unfriendly practices
  • Mitt Romney accepted the Republican presidential nomination and reached out to disaffected supporters of President Barack Obama, framing the election as a choice between two visions of the role of government in America
  • Clint Eastwood said U.S. unemployment is a “national disgrace” and that the Obama administration isn’t “strong enough” in dealing with 23m unemployed
  • The ECB is using Europa, a figure from Greek mythology, improve security on new euro banknotes, four people familiar with the design said
  • EUR/USD gains, touching 100-DMA at $1.2584.  German bunds decline while Spanish and Italian 10-yrs gain. Peripheral
    spreads tighten. European stocks and U.S. equity-index futures rise. Crude gains
  • Credit steady amid a dearth of new issuance, with Markit IG at 103bps, Markit HY at 544bps

WHAT TO WATCH: (All times New York) Economic Data

  • 9:45 am: Chicago Purchasing Managers, Aug., est. 53.5 (prior 53.7)
  • 9:55 am: University of Michigan Sentiment, Aug. final, est. 73.6 (prior 73.6)
  • 10:00 am: Factory Orders, July, est. 2.0% (prior -0.5%)
  • TBA: NAPM-Milwaukee, Aug. (prior 46.7) Central Banks
  • 10:00 am: Fed’s Bernanke speaks at Jackson Hole conference
  • 11:55 am: BOE’s Haldane on financial stability at Jackson Hole
  • 1:15 pm: BOE’s Posen on monetary policy at Jackson Hole
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Fri, 08/31/2012 - 07:12 | 2751872 firstdivision
firstdivision's picture

Looking at the pre-market, one would think Ben announced QE3

Fri, 08/31/2012 - 07:19 | 2751876 Slack Jack
Slack Jack's picture

"the EURUSD has decided to go on its usual countersensical stop hunt higher"

I'm not so sure that the EURUSD going higher is countersensical,....



China and Germany will no longer do business in USD, Euros and Yuan preferred;


Doesn't this justify some rise in the EURUSD ????????

Fri, 08/31/2012 - 07:21 | 2751886 firstdivision
firstdivision's picture

Just gives me a better position to sell some EUR's.  Also a good day to put on some strangles as it will be an idiotic vol day. 

In other news, I had to lol at the revision of the M2 from last week.  It was reported to expand 51.6B, revised to +8.5B, and this week came in at a wopping +3.5B

Fri, 08/31/2012 - 07:29 | 2751895 Slack Jack
Slack Jack's picture

Someone is buying. What's the short interest like?

Fri, 08/31/2012 - 07:22 | 2751890 Muppet of the U...
Muppet of the Universe's picture

they are opening trade to other currencies.  petro dollar accord is still here.  stfu and calm down.


TY Durdens for the timeline.  Very helpful indeed.

Fri, 08/31/2012 - 07:31 | 2751899 fonzannoon
fonzannoon's picture

effective when?sounds like some typical post meeting press release

Fri, 08/31/2012 - 07:12 | 2751873 Josephine29
Josephine29's picture

But if more monetary stimulus and QE is the answer why is this happening in the place that has tried it for the longest?

The land of the rising sun

Here we have seen some worrying signs overnight. From METI we received this.

Industrial Production in July decreased -1.2% from the previous month, showing a decrease for the first time in two months. It showed a decrease of -1.0% from the previous year. The index in July was 91.5(seasonally adjusted).

So Japanese industrial production is falling on a monthly and a year on year basis. And an inventory ratio of 128.3 poses its own questions which seem to have fed into future expectations.

According to the Survey of Production Forecast in Manufacturing, Production is expected to increase 0.1% in August and to decrease 3.3% in September.



Still I am sure Ben Bernanke has all the answers, or rather not...

Fri, 08/31/2012 - 07:17 | 2751882 Muppet of the U...
Muppet of the Universe's picture

is anyone going to trade live through the speech?  I mean people are placing so much emphasis on this shit and bots will likely go berserk... is anyone crazy enough to algo through this thing?

Fri, 08/31/2012 - 07:30 | 2751898 malikai
malikai's picture

I probably will, if I see something that looks just too mental to be real. But I'll be doing small lots. Days like today are too dangerous to go balls deep, IMO.

Fri, 08/31/2012 - 07:17 | 2751883 dcb
dcb's picture

I take a look at  the markets, early am, huge down, wake up, up.one more funny stuff in europe, purse silly algo crap. 

becasue we have to stay in a down channel? people wonder why folks are leaving the equity market in droves????



Fri, 08/31/2012 - 07:21 | 2751889 dcb
dcb's picture

all short squeeze rally at this point then. I bought into some emerging markets because it hit my point yesterday, but nothing else makes any sense

Fri, 08/31/2012 - 07:18 | 2751884 dannyboy
dannyboy's picture

money making day for zh readers :) have fun all

Fri, 08/31/2012 - 07:21 | 2751888 stocktivity
stocktivity's picture

It's all Bullshit!

Fri, 08/31/2012 - 07:32 | 2751900 q99x2
q99x2's picture

In August markets move higher on Fridays.

Fri, 08/31/2012 - 07:33 | 2751901 Yen Cross
Yen Cross's picture

 Over Night (re-Cap) Shooting pool in san luis obispo/     and smoking a Cohiba @ Madonna Inn!

Fri, 08/31/2012 - 07:48 | 2751917 Rathmullan
Rathmullan's picture

Bubble Boy Ben will attempt to jawbone equities higher in order to foster the ultimate trickle down central planner strategy (it's great if your a pool boy, stable boy, nanny, gourmet chef or helicopter pilot in the hamptons). Why will he do this? Because realistically it's all he can do ahead of the election. bbbb will promise knowing he can't deliver.

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