Forex Blog - European Market Update: Lloyds considering other alternatives to entering into asset protection scheme
Friday, September 18, 2009
European Market Update: Lloyds considering other alternatives to entering into asset protection scheme
*** ECONOMIC DATA *** - (GE) German Producer Prices M/M: 0.5% v 0.2%e; Y/Y: -6.9% v -7.2%e - (FR) French Q2 Final Wages: 0.4% v 0.4%e - (SP) Spanish Q2 Labor Costs: 3.9% v 3.9% prior - (NV) Netherlands Sep Consumer Confidence: -17 v -15e - (IT) Italian July Industrial Orders M/M: 3.2% v 0.4%e; Y/Y: -23.2% v -32.2%e - (IT) July Industrial Sales M/M: 0.7% v -1.0%e Y/Y: -21.7% v -22.8%e - (EU) ECB Euro-zone Jul Current Account: â‚¬6.6B v -â‚¬5.3B prior, Current Account NSA: â‚¬8.8B v â‚¬0.8B prior - (UK) Aug Public Finances (PSNCR): Â£10.4B v Â£14.5Be; Net Borrowing: Â£16.1B v Â£17.6Be - (UK) Aug Prelim M4 Money Supply M/M: 0.1% v 0.8%e; Y/Y: 12.6% v 13.8%e - (UK) BoE Trends in Lending Report: M/M: -13%; Y/Y: -37%
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** - In equities news overnight: European equity markets opened to the downside following a rapidly declining Chinese close. China's Shanghai and Shenzhen made strong closing downside pushes with both exchanges closing down over 3%. This momentum carried in European pre-market trading and joined risk adverse sentiment emanating from the UK financial sector. The UK's FSA abruptly placed the breaks on Lloyds Banking Group's [LLOY.UK] hopes of avoiding the APS. FSA's view that Lloyd's could not pass a stress test absent the APS graphically resurfaced the lingering troubles in the broader at large banking sector. With equity markets looking forward to quarterly index changes and rebalances (on FTSE, DAX, CAC and Euro Stoxx), markets have shown a choppy pattern with the FTSE (also on options expiration) and DAX bouncing above and below the unchanged mark on lighter than average volumes. With a slight risk aversion theme in the air, Health care and Utilities names outperformed on the EuroStoxx50 while Industrials and Technology lagged. Note: Highlights of rebalances: EuroStoxx50: RWE, Anheuser Inbev and CRH added, Philips, Fortis and Renault deleted; FTSE100: Segro, Whitbread, Rentokil Initial added, Balfour Beatty, Foreign & Col Invest Trust, Pennon deleted; DAX: Infineion added, Hannover Re deleted.
-In individual equities: Lloyds [LLOY.UK] considering other alternatives to entering into Asset Protection scheme; Sees possibility of reducing the amount of assets covered by the program. Reminder: On March 7 it cpnfirmed participating in UK asset protection program; to put about Â£260B of assets into UK protection program. || BritishLand [BLND.UK] Confirms Â£2.13B Broadgate jv with Blackstone. The Blackstone Partners' share of the gross attributable value includes Â£987M of third party debt, being 50 per cent of the debt secured against the assets of Broadgate, and the net consideration paid for their 50 per cent interest in Broadgate valued at Â£77M. || GlaxoSmithKline/Dr Reddy's [GSK.UK]: GlaxoSmithKline in talks to acquire a 5% stake - Economic Times. Reminder: On June 15 -Entering strategic agreement with Glaxo to develop, sell products in emerging markets. || BlueBay [BBAY.UK] Reports FY09 Prelim Pretax Â£22.3M v Â£23Me, Rev Â£100.9M v Â£104Me, Total AUM $24.3B v $21.0B y/y, launches 6.6M share placement (3.5% of capital). || EADs [EAD.FR] Follow up: Firm confirms WSJ report that 2010 production levels may be reduced on lower commercial demand. || Carbone Lorraine [CRL.FR] Launches â‚¬63.4M (about 15% of market cap) 4 for 17 rights issue at â‚¬17/share (35% discount from Thursday's close). || Munich Re [MUV2.GE] Has taken a provision against a potential $200M loss related to its exposure to South Korean container shipbuilding companies - FTD|| VW [VOW.GE] Follow up: Group considering integrating three truck makers (VW, MAN and Scania) into one partnership. Reminder: On Sept 16 -May restructure truck unit; Under the plan, the company may eventually partner with Man AG - FT.|| Novolipetsk Steel [NLMK.RU] Approves RUB50B bond program (4% of current market cap). ||
- Speakers: Japanese Fin Min Fujii commented about the JPY currency and that its FX rates should be set on economic market conditions. He did not wish to be labeled as supporting a strong Yen currency and should not comment on JPY FX rates However, he did note that actions to drive currencies lower were not good for the global economy. He strongly supported BoJ independence and added that monetary policy was up to the central bank. Could not provide comment on if BOJ should extend corporate funding activities and that continued low employment and income levels would challenge consumption || Riksbank's Ekholm commented that Sweden's economy still needed monetary stimulus to stabilize economy; The Repo rate should remain low for several quarters. He could provide explanation for strength in SEK currency but noted that the Swedish Krona was not a key factor in determining monetary policy. SEK appreciation had reduced banks exposure to Baltic region but the funding of Swedish companies remain strained || BOE Miles stated that the UK economy might be out recession in 6 to 9 months time but it would be some time before growth would curtail the rise in the unemployment trend. Decline in yields due to quantitative easing was "pretty strong" evidence that QE had worked. The central banker did caution that any exit from QE required careful judgment. Inflationary pressures are likely to be subdued for next 2-3 years as there was considerable spare capacity within the UK economy. The member noted that he has an open mind on the issue of lowering deposit rates and described any change to remuneration of deposits as merely "fine tuning" || China PBoC member Zheng commented that the Yuan currency was pegged to USD for regional stability purposes || EU's Almunia commented that the concept of using SDR's as replacement for USD as reserve currency was not viable. Europe would not desire too much Chinese reserve diversification into Euros. On the topic of the Tobin tax, he noted that more work was needed to make a such a tax more viable and noted that the concept was a good idea || BOE trends in lending report noted that net lending to business fell by 3.3% y/y or -Â£15.5B, which was the weakest reading since series began. Lenders reported weak demand for loans and remained cautious on house prices and the employment outlook. || Moody's raised Turkey's "Ba3" sovereign outlook to positive from stable. The move reflected the economy's improved resilience in the face of shocks, as illustrated by its unassisted performance during the global crisis of the past two years || German Chancellor Merkel stated that she expected new financial market regulation to be ready by mid 2010
- In Currencies: GBP sentiment was soft heading into the European morning as dealers focused on speculation that Lloyds bank failed a stress test. Also contributing to the weaker GBP sentiment is a WSJ "Currency Section" column about the GBP now being a 'carry-trade' currency. The GBP/USD traded as low as 1.6296 before retracing back towards the 1.6370 area following the UK net lending data. EUR/GBP tested the 0.90 level during the session but was off its session highs. || - The JPY was mixed in the European morning but within recent it recent 48-hpour ranges against the major. Japanese Fin Min Fujii tried to clarify his recent comments on the JPY currency front. Fujii noted that He did not wish to be labeled as supporting a strong Yen currency but noted that actions to drive currencies lower were not good for the global economy. USD/JPY again probed the 5-week downtrend line in the cross and was unable to break above the 91.60 intra-day high from Thursday's price action. USD buy stops continue to build above the 91.70 level as the NY morning approached.
- In Fixed Income: Government bonds have enjoyed a revival for most of the European morning whilst equities undergo something of a rethink. The UK was the focal point in terms of economic data with some interesting releases. The expansion of QE in August appears to have had little effect on the UK money supply with a sharp drop in M4 on a monthly basis, and the weakest annual reading since Sept 2008. The reasons behind the decline were illuminated by the BoE's Trends Lending report, released simultaneously, which revealed significant drops in lending for mortgages, consumer credit and the worst reading for net lending to business since the series began. On top of this, UK public finances and government borrowing for August were revealed to be a their worst ever levels for an August. The Gilt curve continues to hit fresh steepening highs with 2s10s though 280bps. The German yield curve has undergone bull flattening with better buying in the belly relative to the short end, but the long end is under pressure thanks to the launch of a syndicated 30y from Spain. Austria revealed it was planning another USD denominated issue following the successful sale of $1.5B in 3s earlier this week, with the upcoming sale likely to be in a longer part of the curve. Barclays analysts issued a bearish outlook for Treasuries, forecasting a yield of 3.85% in the 10y Note by year end, with the 2y Note expected to reach 1.3%.
- In Energy: Iran Pres Ahmadinejad reiterated his view that nuclear weapons were not part of his country's "peaceful" atomic program as Iran did not need weapons. He also reiterated that Iran would never stop enriching uranium for peaceful purposes. || WSJ's Heard on the Street" commented on recently announced oil discoveries and noted that in Sept, various companies have found about 10B barrels of oil equivalent of potential reserves. Noted that markets should be cautious in jumping to conclusions regarding the new oil discoveries because some of the countries where the oil was found have political barriers and commented about Mexico's oil industry being controlled by state oil companies. ||
- In commodities: During the Asian session it was noted that the IMF's executive board reportedly to consider Gold sales on today. The IMF is planning to sell about 13M ounces (12.5% of total holdings).***Reminder: The Apr 2nd G20 Summit in London G20 discussed the use of proceeds from planned gold sales by the IMF to increase funding for poor countries
- In the papers: An article in China's Caijing Magazine commented on the recent press reports noting that various Chinese state owned enterprises sent letters to their trading counter parties in relation to commodity derivatives contracts.- The letters were sent to 6 unnamed international investment banks. The letters noted that the state-owned companies had reserved the right to withhold payments related to commodity derivatives contracts. Caijing noted that 28 central government SOEs were involved in the financial derivatives business in Sept, and that most had faced losses. TTN points out that a Sept 9 WSJ op-ed article noted that China Eastern Airlines, Air China and COSCO had filed derivative-related documents with Deutsche Bank, Goldman Sachs, JP Morgan, Citi and Morgan Stanley involving a combined $2B in contracts. ||WSJ "Currency Trading" section commented on reclassification of UK's Pound Sterling (GBP) as a "funding currency" . The article saw GBP at decade-lows against high-yielding risk appetite driven AUD and NZD pairs. It noted that the traditional funding JPY currency has actually strengthened while Sterling lost ground. The article attributed weakness to outlook for UK rates after BOE Gov King suggested UK rates still have room to fall
*** NOTES *** - IMF to discuss proposal to sell a portion of its gold stocks. 1/8 of their holdings of their 13M ounces - Japan's Fin Min Fujii tries to clarify his recent currency comments - Talk of GBP as a carry trade funding currency
***Looking Ahead - (RU) Russian Aug Unemployment Rate: % v 8.3%e - (RU) Russian Aug Retail Sales M/M: % v 1.9% prior, Y/Y: % v -9.0%e - 7:00 (BR) Brazil Sep FGV Inflation IGP-10 M/M: 0.3%e v -0.6% prior - 8:30 (CA) Canadian Jun Wholesale Sales M/M: 0.9%e v 0.6% prior - 9:00 (BE) Belgian Sep Consumer Confidence: No estimates v -11.0 prior -10:00 (MX) Mexican Rate Decision: No change expected, current overnight rate is 4.50%
Legal disclaimer and risk disclosure
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Tue 17 July 2018 AA 08:30 GB- Employment A 13:15 US- Industrial Production AA 14:00 US-Powell Testimony Wed 18 July 2018 AA 08:30 GB- CPI A 12:30 US- Housing Starts/Permits AA 14:00 US-Powell Testimony Thu 19 July 2018 AA 1:30 AU- Employment AA 08:30 GB- Retail Sales A 14:30 US- EIA Crude A 12:30 US- Weekly Jobless Fri 20 Jun 2018 A 12:30 CA- CPI/Retail Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.