Forex Blog - European Market Update: Risk aversion continues to simmer over health of global financial sector; UK Gov't provides more aid to Lloyds, RBS; EU Commission sees more banking sector losses
Tuesday, November 03, 2009
European Market Update: Risk aversion continues to simmer over health of global financial sector; UK Gov't provides more aid to Lloyds, RBS; EU Commission sees more banking sector losses in region
*** ECONOMIC DATA *** - (IN) India Sept Trade balance: -$7.8B v -$8.4B prior - (SP) Spanish Oct Net Unemployment M/M: 98.9K v 80.4K prior - (NO) Norwegian Oct PMI: 45.8 v 49.0e - (SP) Spanish Oct Consumer Confidence: 69.2 v 70.3 prior - (UK) Oct PMI Construction: 46.2 v 47.2e - (EU) EU Commission releases forecasts: Euro-zone 2010 GDP 0.7% v +0.4% prior, Unemployment to hit 10.9% in 2011; Outlook For EU, Euro-Zone remain "Highly Uncertain" - (GE) German VDIK Oct New Car Registrations at 312K, +24% y/y; YTD registrations +26%
***SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** - Equities: European equity markets have traded under pressure since before the open. Corporate earnings news out of BMW [BMW.GE], Commerzbank [CBK.GE], UBS [UBSN.SZ] (all of which were disappointing) and Swiss Re [RUKN.SZ] were all put on the side burner following updated Lloyds [LLOY.UK] and RBS [RBS.UK] APS updates. In a massive and highly detailed series of releases, Lloyds announced that it would avoid the Asset Protection Scheme, raise Â£21B in new capital and divest a series of assets. RBS announced that it would participate in the APS (at a lower level) and take a massive Â£25.5B cash injection from the UK along with wide asset sales. Financial names traded broadly lower (ex Lloyds) on this news and led the negative pressure on the EuroStoxx50. EU Commission forecasts at 4:45EST calling for further 2009/10 banking sector losses pushed markets to new lows. Trading volumes have been high with all major bourses trading above their moving averages. Leading lagers by sectors included financials, industrials and consumer names.
In individual equities: RBS [RBS.UK] Agrees to participate in UK Asset Protection Scheme (APS), banks first loss exposure raised to Â£60B from Â£42B, UK stake to rise to 84%. ||Lloyds [LLOY.UK] Will not participate in UK Asset Protection Scheme (APS), will instead raise Â£21B (90% of market cap) in private sector capital and pay a fee to the taxpayer for the implicit protection provided to date. || UBS [UBSN.SZ] Reports Q3 Net loss CHF 564M v loss CHF267Me, Rev CHF 5.8B v CHF6.5Be. || BMW [BMW.GE] Reports Q3 Net â‚¬78M v â‚¬115Me, Rev â‚¬11.8B v â‚¬12.2Be; FY09 earnings likely to be positive. || Metro [MEO.GE] Reports Q3 Net â‚¬72M v â‚¬99Me, Rev â‚¬15.6B v â‚¬15.6Be. || Commerzbank [CBK.GE] Reports prelim Q3 Op profit at â‚¬120M v loss â‚¬170Me, Net loss â‚¬1B v loss â‚¬745Me; Continue to see FY09 Net loss, No 2009 Dividend. || Swiss Re [RUKN.SZ] Reports Q3 Net CHF334M v CHF150Me, Rev CHF11.05B v CHF6.2B y/y. ||
- Speakers: EU Commission releases forecasts: Euro-zone 2010 GDP 0.7% v +0.4% prior, Unemployment to hit 10.9% in 2011; Outlook For EU, Euro-Zone remain "Highly Uncertain". The report forecasted further bank sector losses between â‚¬200B to â‚¬400B in 2009/10 period ||EU's Alumunia commented that he believed the economic situation was improving in the Euro-Zone but credit flows were close to zero possibly even negative ||ECB's Bini Smaghi commented that margins for growth and deficit cuts were limited in a Newspaper interview || French Presidential Advisor Devedjian commented that France had completed 75% of its economic stimulus plan as it had injected â‚¬25.2B into economy . he noted that the stimulus has created or saved 400,000 jobs || India Ministry of Commerce and Industry Gov't advisor believes the declining trend in India's exports might reverse by December or January period. || German Chemical Assoc VCI commented that it saw Demand stabilized further in Q3 and that the worst was over for industry at this time. It guided 2009 Chemical sales decline of 12% y/y and Chemical Production seen down 10% y/y. Upward trend in chemical sector aided by demand from Asia and Latin America but that the situation remained difficult despite demand up tick. Production to stay below pre-crisis level for some time || Czech Constitutional Court rejected challenges to the European Union's Lisbon Treaty (as expected). Ruling bring accord to the verge of adoption with Czech President Klaus yet to sign ||
- In Currencies: The USD firmed during the session against the European currencies as concerns over the health of the financial sector continued to simmer. The session began with UK banks of RBS and Lloyds receiving an additional Â£31.3B from UK Gov't in what dealers label a 'second bailout'. Swiss banking giant UBS reported its fourth straight quarterly loss. The EU noted that it saw further bank sector losses between â‚¬200B to â‚¬400B in 2009/10 period for the region. The EUR/USD saw a steady erosion as the session progressed and tested below the 1.4680 level tested during the thin hours on Sunday prior to the Tokyo open for the week. Risk aversion helping both the USD and JPY firm up against the European pairs. The dollar also benefited as commodity prices moved lower. NYMEX Dec crude futures were off about $1.00 barrel to approach $77/barrel while spot gold retreated to move back below the 1,058/oz level. - The AUD/USD retreated following its decision to raise interest rate for the second straight month by 25bps to 3.50%. Dealers quickly pointed out that the RBA in its history had never lifted interest rates for three consecutive meetings, thus a holding pattern likely to ensue at this time.
- Fixed income: With a number of developments re-igniting uneasiness over the global financial sector, money has flowed into government bonds this morning in Europe. Yields are lower across the curve on both sides of the Atlantic with investors happy to get hold of paper of any duration. Treasuries are outperforming Gilts and Bunds on a relative basis and the 10-year Note yield is back below 3.40%. Supply has been well received with the UK selling Â£4.75B in new 5 Gilts with healthy results, alongside Austria's â‚¬500M in 2037 RAGB's and Spain's sale of â‚¬2.3B in floating rate notes. Orders are said to be in excess of â‚¬9B on Greece's new 15-year syndicated benchmark, while Italy's ratings were affirmed at Aa2 by fitch, and as a result pephiperal spreads are steady against the core.
*** NOTES *** - RBA raised its cash rate target by +25bps to 3.50%. Statement suggested that central bank policy could now be put on hold for a while - Another round of capital infusions to U.K. banks - EU Commission: Forecasts further European bank sector losses between â‚¬200B to â‚¬400B in 2009/10 period - China regulator: plans to review debt levels at some real-estate developers
- Looking Ahead: - Major US earnings expected before the opening bell include: ABC, ADM, COL, HNT, MHS, - (RU) Russian Oct CPI M/M: % v 0.0%e, Y/Y: % v 9.7%e, Core M/M: % v 0.4%e - 6:00 (BR) Brazil Sept Industrial production M/M: % v 1.7%e; Y/Y: % v -6.4%e - 7:00 (BR) Brazil Oct PMI Manufacturing: No est v 52.3 prior - 7:35 ICSC/UBSW Chain Store Sales No estimate versus +0.1% prior - 8:00 (BR) Brazil Oct Trade Balance: $1.6Be v $1.3B prior - 8:30 (SI) Singapore Oct PMI: 51.8e v 50.6 prior; Electronic Sector: 52.8e v 52.4 prior - 8:55 (US) Redbook Retail Sales: No estimate versus +0.6% prior - 9:00 (EU) ECB's Mersch and Weber speak in Luxembourg -10:00 (US) Sept Factory Orders: 0.8%e v -0.8% prior - 10:00 (TU) Turkish Oct Consumer Prices M/M:2.0%e v 0.4% prior, Y/Y: 4.6%e v 5.3% prior - 10:00 (TU) Turkish Oct Producer Prices M/M: 1.0%e v 0.6% prior, Y/Y: 0.9%e v 0.5% prior - 13:00 (MX) Oct IMEF Manufacturing Index: 52.0e v 51.6 prior; IMEF Non-Manufacturing Index: 52.1e v 51.8 prior - 16:30 (US) API Crude Oil/Gasoline/Distillate Inventories
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."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
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.