This page has been archived and commenting is disabled.
Preview Of The Action-Packed Week Ahead And Overnight Recap
Suddenly the delicate balancing of variables is once again an art and not a science, ahead of a week packed with binary outcomes in which the market is already priced in for absolute perfection. Per DB: We have another blockbuster week ahead of us so let's jump straight into previewing it. One of the main highlights is the German Constitutional Court's ruling on the ESM and fiscal compact on Wednesday. On the same day we will also see the Dutch go to the polls for the Lower House elections. Thursday then sees a big FOMC meeting where the probabilities of QE3 will have increased after the weak payrolls last Friday. The G20 Finance Ministers and Central Bank Governors will meet on Thursday in Mexico before the ECOFIN/Eurogroup meeting in Cyprus rounds out the week on Friday. These are also several other meetings/events taking place outside of these main ones. In Greece, PM Samaras is set to meet with representatives of the troika today, before flying to Frankfurt for a meeting with Draghi on Tuesday. The EC will also present proposals on a single banking supervision mechanism for the Euro area on Tuesday. If these weren't enough to look forward to, Apple is expected to release details of its new iPhone on Wednesday. In summary, it will be a good week to test the theory that algos buy stocks on any flashing red headlines, no longer even pretending to care about the content. Think of the cash savings on the algo "reading" software: in a fumes-driven market in which even the HFTs no longer can make money frontrunning and subpennyiong order flow, they need it.
On overnight action from Jim Reid:
As we start this big week, Asian markets are somewhat mixed overnight although Chinese equities are being led higher by stimulus hopes. The latest Chinese trade numbers show that imports fell 2.6% yoy (vs +3.5% expected) while export growth was marginally below expectations at 2.7% (vs 2.9% expected). The weekend data from China wasn't great either. IP growth slowed to 8.9% yoy in August, down from 9.2% in July and the lowest since May 2009. PPI (-3.5% v -3.2%) also came in below consensus. Fixed asset investment and retail sales were broadly in line with expectations. In other data, Japan's government downgraded its GDP growth estimate for Q2 2012 to 0.7% annualised, or half of its preliminary estimate of 1.4%.
Recapping Friday's moves, the S&P500 (+0.4%) finished higher as the weak payroll report increased expectations of further QE at this week's FOMC meeting. August nonfarm payrolls rose 96k (vs 130k expected) but also came with 41k in net downward revisions to the previous two months. Meanwhile, the unemployment rate fell to 8.11% from 8.25%, but only due to a 0.2% fall in the labour force participation rate to 63.5% - a level last seen in September 1981. Joe LaVorgna believes the weak employment data is sufficient to push the FOMC into announcing on Thursday a third round of QE (likely to be data dependent and open-ended) on top of his expectations of a verbal easing by extending the forward rate guidance out beyond late 2014. We note that a Reuters poll of 59 economists after the jobs report showed 60% believe the Fed will introduce further QE on Thursday (from 45% a fortnight earlier).
In other markets commodities outperformed on Friday given the fresh QE hopes. Gold added +2.1% to close at the highest since Feb 2012. Brent also rose 0.67% to $114.25/bbl. Iron ore had its best day of the year by gaining +2.3% to close at $89/mt. The 10-year UST yield dropped by a sharp 14bps right after payrolls before reversing those gains throughout the day to close only 1bp lower. In Europe Spain and Italy's 10yr yields rallied 40bp and 20bp on Friday, taking their weekly gains to 122bp and 76bp respectively.
There were a number of supportive Euro headlines on Friday and over the weekend. Merkel expressed support for the ECB's OMT operations with a German government spokesperson saying that the "the ECB is acting independently and within the framework of its mandate". German Finance Minister Schauble also offered his support, commenting that ECB officials "know very well what they have to do. It's not the beginning of monetary financing of sovereign debt."
Meanwhile, Italy and Spain remained non-committal about entering a programme. Italian finance minister Grilli said over the weekend that the Italian view on EU aid has not changed, with the country seeking to avoid a bailout. Spain's deputy PM said that more details are needed on EU aid conditionality. Fitch added that Draghi's seniority clarification was positive for Eurozone sovereigns, reducing the risk premia for bonds, while reiterating that a request for EFSF/ESM support would not automatically lead to negative rating actions from Fitch, if a sovereign was able to maintain market funding access.
In an interview on German radio, German Finance Minister Schauble provided some upbeat comments ahead of the German's Constitutional Court ruling on the ESM on Wednesday. Schauble said that he sees the court dismissing a challenge to the ESM and that the legality of the ESM was "thoroughly" probed at its inception. He said in an interview that the Constitutional Court has never seen the course of European integration as being unconstitutional. Regardless of the outcome, it seems that the ESM remains relatively unpopular with the German public. According to a Der Spiegel poll, 54% of Germans want the court to reject the ESM outright, while only 23% of Germans want the court to rule in favour of the ESM.
Greece remained in headlines over the weekend with the ekathmerini reporting that members of the Prime Minister's coalition are opposed to some of the measures forming part of the EU11.5bn in targeted budget cuts including cuts to low-level pensions and civil servants salaries. The same newspaper is reporting that there is "a long way to go" in talks between the Greek government and the troika.
Moving on to the day ahead, it will be a relatively light data day with French manufacturing likely to be the main focus on top of the final Italian Q2 GDP reading. In the US, July consumer credit is the only notable report. Beyond today and outside of the main events already previewed we have French and Italian IP reports, some European inflation data, US trade data, PPI, IP and consumer confidence but data will probably take a backseat to events in Germany, the Netherlands and the FOMC meeting.
In summary via GS:
The Week Ahead
MONDAY SEPTEMBER 10
- Interesting: France IP, Sweden IP, China Trade balance, Turkey GDP
TUESDAY SEPTEMBER 11
- US Trade Balance: We expect a reading of -$43.0 bn vs. consensus of -$44.5 bn.
- Also Interesting: South Africa GDP, Mexico IP
WEDNESDAY SEPTEMBER 12
- German constitutional court decision
- Dutch parliamentary elections
- Euro area IP (July): Consensus expects -0.3%mom, up from -0.6%mom in June.
- India IP (July): We forecast industrial production to remain weak at 0.5%.
- Also Interesting: France HCPI, Germany HCPI, Spain HCPI, UK ILO Unemployment, Italy IP
THURSDAY SEPTEMBER 13
- FOMC Meeting: We expect the announcement of QE3, an extension of forward guidance, and the interest rate to remain unchanged.
- US Producer Price Index: We forecast a plus of 0.6%, up from last month’s +0.3% but below consensus at +1.2%.
- Russia Monetary Policy Meeting: We forecast a policy rate hike by 25 bps to 5.5%, versus a consensus expectation of leaving the rate unchanged at 5.25%.
- Korea Central Bank Meeting: The MPC is likely to cut the policy rate by 25 bp to 2.75% at the upcoming meeting.
- Switzerland Monetary Policy Meeting: We and consensus expect the policy rates to remain unchanged at 0 – 0.25%.
- Chile MPC: We and consensus expect no change in the base rate at 5.0%
- Indonesia Central Bank Meeting: Consensus expects the reference rate to stay flat at 5.75%.
- Philippines Central Bank Meeting: In line with consensus, we continue to forecast a 25bp cut to 3.75%.
- Also Interesting: Italy HCPI, Sweden CPI, Poland CPI, Sweden Unemployment rate
FRIDAY SEPTEMBER 14
- Start of 2-day European finance ministers meeting.
- Euro Area HCPI: We expect HCPI to rise by 2.5% yoy, slightly lower than consensus at 2.6%yoy.
- US Retail Sales: Our forecast predicts an increase by 0.8%, similar to last month’s reading, and higher than consensus expectations at +0.5%
- US IP: We forecast a contraction by -0.1%, below consensus at +0.2%, and down from last month’s figure at +0.6%.
- US CPI: We expect a reading of +0.5%, slightly below consensus at +0.6%, up from a flat reading the month before.
- US U. of Michigan Consumer Sentiment: We are in line with consensus at 74.0 in this advanced reading, versus 74.3 last month.
- Also Interesting: Mexico GDP, Sweden GDP, Hungary IP, Israel CPI
»
- 5281 reads
- Printer-friendly version
- Send to friend
- advertisements -
The WORSE weekend movie receipts in over 10 years!!! Shit movies? Or some interesting data?
There simply isn't a movie that is worth watching. Like TV, it's all manufactured crap that the commercials for the movies are far to revealing about the simplicity of the formulaic scripts that border on retarded.
You want to see a marker or how bad things are getting. Toilet paper. It comes in different grades from waxy sandpaper that spreads the shit all over ass cheeks to uber three ply awesomeness that a Sultan would have in the can.
Guess which one doesn't sell anymore and got the product shrink ray to reduce "costs" even though mark up on a pack of TP is around 5600% by the time it's on the shelf.
Expendables 2, i love the cast!!
wiping your ass with sandpaper, ouch!
Every man has measured the waxy sandpaper versus the sock on his foot to make sure his shorts aren't skid tracked when sitting in a gas station bathroom after a night of grease and beer.
I always wet the wads of TP in the sink before using them. Better for the haemmorhoids.
The worst brands are the ones that disintegrate when wet.
There simply isn't a movie that is worth watching. Like TV, it's all manufactured crap that the commercials for the movies are far to revealing about the simplicity of the formulaic scripts that border on retarded.
PLUS, every show on the MSM's is pushing the Homosexual agenda, all of them.And as I told my wife, when was the last time you saw a normal looking person in a show?.
Sex sells, and everyone is Bootiful.
All about brainwashing, and pushing lies,corruption, and sex.
The WORSE weekend movie receipts in over 10 years!!! Shit movies? Or some interesting data?
COMBO of both, Hollywood is turning out crap no one wants to see,especially when the conscession stands prices are thru the roof.
2yrs ago you could go to a movie, for $6.50(non evening hours),and buy a Large refillable bucket of Popcorn, for $4.75, and a Large Coke for $2.75.
Now, the price of getting in in is the same, but the popcorn is $7.50 & the drink is $4.75.
Making a couples date out $20.40.
So that same date night/couples night is $25.25.For a piss poor flic..................people are staying away in droves.
Dont forget live fire ICBMS http://en.rian.ru/mlitary_news/20120807/175040093.html
The Kavkaz-2012 military exercises, which will take place in southern Russia in September, will involve the live firing of Iskander ballistic missile complexes, the deputy chief of the General Staff of the Russian Armed Forces, Colonel General Alexander Postnikov, said on Tuesday. Sea- and air-launched cruise missiles, as well as anti-ship complexes will also be fired during the drills, which will take place on September 17-23 and involve some 8,000 Russian troops.
And the US coalition exercises
http://www.bloomberg.com/news/2012-07-17/u-s-allies-to-stage-persian-gul...
And nato air exercises
http://praguemonitor.com/2012/08/13/nato-air-forces-have-exercise-czech-...
Chinese testing their own
The Chinese are continuing to test new road-mobile intercontinental ballistic missiles (ICBM), conducting the fourth such flight test of an upgraded DF-31A last week, the Washington Free Beacon reported.
The online newspaper, quoting unnamed officials, said U.S. intelligence agencies monitored the latest flight test, which was launched from a Space and Missile Test Center in north China's Shanxi to an impact range in China's west.
The test was the fourth since July of upgraded, road-mobile Chinese ICBMs.
http://english.sina.com/china/2012/0905/503813.html
The jumpsuit arrogantly said the USSA can just ignore the UN and international law and attack anywhere they want, with out conferring with anyone:
--
--
And as a result this laughably self-righteous ego-tripping psycho-bitch will at a minimum kill tens of thousands more Syrians, due to her opinion ... of her own opinion.
Ego is the only thing that would make her and Obama forget how outraged there where at Bush pulling the same stuff in Iraq. it isn't even somewhat similar, its almost exact. I think she my have even plagerized a Bush administration speach on Iraq here. wow. But the left is ok with war, as long as they pull the trigger. oh yes, and the right is ok with spending, as long it's on their watch.
look for a vile of white powder to be presented at the next UN meeting on Syria.
SDRII
GOOD, the more of this going on the less the Admin can screw with US.
"We expect the announcement of QE3" , whaeva'! At this point we dont fucknig care anymore, if they want S&P 1500 so fucking be it, S&W and Gold bitchez!
PS: I didnt get the part where the fed can run out of cash to buy teh short term bonds (that there are approx $600bn left for purchases). They can buy an unlimited amount of US debt, or cant they?
They can, but right now that 600 billion is ONLY for interest. Not one penny is for operational needs.
Not...one...single...penny is going into productive work. It's all for interest payments.
...yet the World banks are going to print. I hope you have physical silver/gold in your possession. Not to invest into to make sure your savings, if you have any, hold value. All those FIAT currencies will be, not might be, turned into new currencies and I'll make mention now that if you have anything locked in or are holding any of the currency when the switch comes, you will lose big.
Just ask any Peruian on their good times with the "new" Sol.
So... Basically.
Given Apples percentage of the Nasdaq and S&P. If everyone says "iphone sucks" on twitter come the launch, they could bring down western civilisation as we know it.
For WilliamBanzai7 - be careful:
Outrage over India cartoonist arrest"The arrest of an anti-corruption cartoonist in India on charges of sedition has sparked criticism.
Aseem Trivedi was held in the city of Mumbai over the weekend for his cartoons allegedly mocking the Indian constitution.
He was also charged with insulting the national flag and remanded in police custody until 16 September.
The cartoonist has been participating in the anti-corruption movement led by campaigner Anna Hazare."
http://www.bbc.co.uk/news/world-asia-india-19540565#sa-ns_mchannel=rss&n...