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Forex Blog - European Market Update for Wednesday August 6th: Markets quiet ahead of Thursday's European rate decisions
Â·*** ECONOMIC DATA ***
- (SP) Spain Jun Industrial Output
NSA Y/Y: -9.5% v -7.6% prior
- (SP) Spain Jun Industrial Output WDA
Y/Y: -9.0% v -5.8% prior
- (IC) Iceland July Trade Balance: deficit
ISK1.82B v ISK 2.33B prior
- (UK) July BRC Shop Price Index: M/M: 0.
1% v 0.9% prior; Y/Y: 3.2% v 2.5% prior
- Yet To be released: (GE)
Factory orders M/M sa: Expected at 0.4%, prior -0.9%; Y/Y: Expected at -4.
7%, prior -2.0%
Â·*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
- In equity news: overnight: BNP Paribas [GLE.FR] reported Q2
Net â‚¬1.51B and in line with v â‚¬1.52B consensus. Revenues came in lower at
â‚¬7.51B v â‚¬8.21B year ago. Writes down totaled â‚¬457M v 475Me.\ Commerzbank
[CBK.GE] reported Q2 operating profit â‚¬484M v â‚¬466Me (â‚¬1.08B y/y); Net
â‚¬817M v â‚¬768M y/y. Says that commercial real estate portfolio has taken a
write down of â‚¬250M, says new business has been restrained. Says the global
economic slowdown has reached Germany, even if there are no signs of a
recession. Bank is comfortable with Tier 1 ratio target of 6.5% to 7.5%\
Munich Re [MUV2.GE] Reports H1 Net Profit â‚¬1.37B v â‚¬2.098B y/y; Operating
Profit â‚¬2.17B v â‚¬2.85B y/y. Munich Re stated that they remained confident
about reinsurance market.\ Henkel [HEN3.GE] Reported Q2 net â‚¬38M (-84%
y/y), Sales â‚¬3.67B (+11.4% y/y). Henkel says it plans to raise prices by
5%-10% during the H2 2008. \ Lonmin PLC [LMI.UK] received Â£33/share in
cash from Xstrata [XTA.UK]. Lonmin later stated that the offer is
'opportunistic' and unwelcome. Lonmin added that its holders should take no
action as offer undervalues company's assets.
- In the papers: FT
reported that UK pension plans to show deficit after market turmoil.
Article notes that FTSE 100 companies recorded an aggregate deficit of
GBP41B in July v surplus of GBP12B y/y.
The Independent reported
that the irish Government may raise taxes arevenue drops â‚¬2bn
There was no new supply of fixed-income overnight.
- In energy: an
explosion in Eastern Turkey halted oil flow; Turkish official says pipeline
blast was not sabotage. BP stated that that oil output is unaffected and
that the BTC's Ceyhan Oil Storage exports could last a few days. However,
BP added uncertain how long the fire would last. The Turk- Azeri gas link
was reopened during the European mid-morning following the fire. \
Reportedly the US and its allies are rejecting Iranian nuclear letter that
was delivered n Tuesday.
\IEA Tanaka stated that recent drop in oil
prices would not make Asian countries stockpile inventories
- The USD was slightly softer during the European session
as firmer oil and gold helped to ensue some consolidation in the USD recent
gains. EUR/USD hovered around the 1.55 level. Dealers were noting that the
USD slippage was reflecting some disappointment over the 'dovish' tone out
of Tuesday's FOMC. Where dealers were expecting a bit more 'bite' from the
FED. Overall USD was steady despite gold up $10 in the session. USD/JPY
continued to encounter some resistance at the 108.60 approach.
Polish Econ Min Pawlak says now is the time to talk about intervention to
stop Zloty appreciation\- India Economic Panel stated that inflation could
moderate to 8%-9% by March 2009
Â·*** NOTES ***
- The data
front was light in Europe ahead of Thursday's BOE and ECB interest rate
decisions. Better financial notes from BNP help set the stage in Europe as
post FOMC sentiment helped the financial sector to rally.
economic data releases were light ahead of Thursdays BOE and ECB interest
rate decisions. Dealers continue to discuss the implications of the
'leaked' Q2 German GDP just ahead of the ECB policy meeting and press
In oil geopolitical and supply concerns helped to
stabilized crude from its recent sell-off. A Turkish pipeline fire helped
to erode opening level gains in the European Bourses. However, after
British Petroleum stated that it has sufficient reserves to last a few days,
the equity markets rebounded from session lows. Oil was back in positive
territory after US and Allies reportedly were rejecting the Iranian
nuclear letter delivered on Tuesday. Thus, US will state to its Allies that
they have no choice but to take punitive steps on Iran.
ahead there are a number of notables due in the US this morning including
Blackstone Group (BX), El Paso Corp (EP), Freddie Mac (FRE), Mylan Labs
(MYL), Quest Communication (Q), Sprint Nextel (S) and Time Warner
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