European Market Update: Japan PM accepts letter of resignation from Fin Min Fujii; Greece downplays the need for bailout or assistance
Wednesday, January 06, 2010
European Market Update: Japan PM accepts letter of resignation from Fin Min Fujii; Greece downplays the need for bailout or assistance
*** ECONOMIC DATA *** - (ID) Indonesia Dec Consumer Confidence: 108.7 v 111.0 prior - (BR) Brazil Dec FIPE CPI 0.2% v 0.2%e - (HU) Hungary Nov Unemployment Rate: 10.5% v 10.6%e - (IR) Ireland Dec NCB Services PMI: 48.3v 46.8 prior - (SP) Spain Dec Services PMI: 45.0 v 46.1 prior - (IT) Italy Dec PMI Services: 53.9 v 49.8 prior; highest since Oct 2007 - (FR) France Dec PMI Services: 58.7 v 60.1e - (GE) Germany Dec PMI Services: 52.7 v 53.1e - (EU) Euro-Zone Dec PMI Services: 53.6 v 53.7e; PMI Composite: 54.2 v 54.2e - (IC) Iceland Nov Final Trade Balance (ISK): 6.2B v 6.0B prior - (UK) Dec PMI Services: 56.8 v 56.8e - (EU) Euro-Zone Nov PPI M/M: 0.1% v 0.2%e; Y/Y: -4.4% v -4.5%e - (EU) Euro-Zone Oct Industrial Orders M/M: -2.2% v -1.0%e; Y/Y: -14.5% v -11.0%e - (BR) Brazil Nov Industrial Production M/M: -0.2% v 1.0%e; Y/Y: 5.1% v 5.5%e; First positive YoY reading since Oct 2008
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** - Equities: European equity markets printed a positive open but quickly fell into negative territory. A mixed close in Asia was driven on the positive side by US auto sale figures and the financial sector. Equities have been driven lower in Europe by retail names as another UK flagship department store, Marks & Spencer [MKS.UK], reported LFL sales over the holiday period. M&S posted y/y growth but missed expectations and traded down from the open. Other sectors that traded lower through the morning included Energy, Financials and Industrials. German banking group Deutsche Bank [DBK.GE] led the decline in Frankfurt and hotel/services firm Accor [AC.FR] in Paris. As oil eased off its multi-day upward trend, the broader energy sector rotated lower in sympathy. European markets looked to build a bottom at -0.4-0.5% past 5:00EST. Despite weather issues in Europe, trading volumes have remained high across the board with the FTSE and DAX specifically outperforming.
-In individual equities: Marks & Spencer [MKS.UK]: Provides Q3 trading statement: 13 week UK LFL Sales +0.8%. || Prudential [PRU.UK]: Announces new JV with UOB; to pay Â£192M for Life Assurance unit. || Sodexo [SW.FR]: Reports Q1 Rev â‚¬3.74B v â‚¬3.8Be; Confirms 2010 targets. || KBC [KBC.BE]: Listing of Stake in Czech unit seen floating by April 2010 -WSJ. ||
- Speakers: ECB's Stark commented in a press interview that the EU will not save Greece and noted that Greek deficit was too high. He added that EU membership did not allow member nations to ask for a bailout and could not assume other EU states would rescue Greece. He did concede that the Euro-zone economic outlook had improved, reiterated that the outlook remained uncertain. Lastly he reiterated that current ECB interest rates are appropriate at 1.0%*** China's PBoC reiterates to maintain an appropriately loose monetary policy and noted that it would push forward with "multi-polarization" of international financial system. The PboC reiterated the view that it would maintain "basically stable" Yuan at "reasonable levels" and noted that it would explore ways of using FX to support companies' expansion overseas. The central bank noted that credit growth had played a critical role in 2009 in bringing economic turnaround but did concede to pay close attention to property market, strictly implement credit policies related to property. It reaffirmed commitment to curb lending in industry sectors with overcapacity yet still prevent credit and systemic financial risks. To promote Yuan trade settlement in Hong Kong and Macau. Other key points noted that the PBoC would seek to increasethe role of domestic consumption in Chinese economy (rebalancing) and stabilize prices and effectively manage inflationary expectations. Last ly it noted that it would try to stabilize operation of stock market ***Greece Fin Min Papaconstaninou responded to ECB's Stark press interview and stressed that Greece did not need a bailout nor outside aid in its fiscal situation. The finance minister reiterated his pledged that 2010 will see a 4% drop in its deficit levels from the 12.7% in 2009 and that the country was doing what was needed to cut the deficit. He forecasted 2010 borrowing requirements at â‚¬54B and would look at all instruments and options to fund deficits. He did note that Greece had lots of interest from overseas investors. Lastly he stated that ECB' member Stark did not need to make the comment regarding Greece in newspaper interview and that the ministry would explain its programs and procedures to the EU later today andreassure markets in regards to its budget*** UK 2009 new car registrations seen above 1.92M, likely below 2008 levels - SMMT
- Currencies: The Euro was offered ahead of the European morning following a newspaper interview with ECB member Stark, who commented that Greece would not be bailed out. The pair moved from 1.4350 to test 1.4280 before stabilizing ahead of the equity open. As the European session wore on the EUR/USD managed to recoup all of its losses attributed to the Stark comment as Greece resorted to 'damage control' and again reassured the markets that it has the ability to meet its funding requirements and place measures to reduce the deficit to GDP ratio. Also, as the Euro moved below the 1.43 handle, dealers were noting that the 200-day moving avg in pair was seen as a pivot support and currently stands at 1.4241 level. This moving average was last tested back in late Dec when the EUR/USD pair was trading at 1.4200 (Dec low in pair was 1.4215 on Dec 22nd). The 200-day mvg avg last breeched back in early May 2008 at the 1.3460 level. Vague chatter of 'official' names taking advantages of the weakness in the pair were also cited as a stabilizing factor in the session.
- The JPY was broadly weaker against the major pairs. Dealers were citing a few factors for the soft tone in the yen currency against the majors. First the article in the UK Telegraph on the Japanese sovereign situation (See our "In the papers section below). Also the growing speculations that health reason would have the Japanese PM finally accept the resignation of Fin Min Fujii. As the NY morning approach, the PM did concede to the wishes and formally accepted the Fin Min's letter of resignation. Deputy PM Kan will now move into the position of Finance minister. FX dealers noting that Fujii was viewed as the architect of the firm JPY policy since the government took over power last year. The JPY is also weaker on the political fallout of the pending acceptance of the official in the short tenure of the new Gov't. USD/JPY tested above 92.40 on the formal acceptance of resignation.
-The market focus to gauge the employment situation in the US to see if Non-farm payroll could register a positive number for the first time since Dec 2007. Dealers note a fading bias in holding dollar carry-related trades as the Fed might move towards an earlier exit strategy than previous anticipated.
- Fixed Income: Debt markets are awash with cash as trading books are reopened for the new year, helping 2010 issuance in both the UK and Germany get off to a good start and putting sovereign debt related fears to rest , at least for the time being. The UK's Â£4B 5 year Gilt auction was covered a well above average 2.68 times while Germany's 10y Bund was reopened at 3.38% and covered 1.6 times. PIMCO's assertion that the UK stood an 80% chance of losing its AAA status garnered attention, as did a similarly opinion piece report from the Telegraph's Ambrose Evans Prtichard which foretold "a muddle of sovereign failures in 2010", including in Japan, the euro-zone and UK. But ultimately neither had any market impact. Greek debt was back in focus after the ECB's Stark rejected the notion of any Euro-zone bailout for the beleaguered nation. Greek 10s are 3bps wider at Bunds+229bps.
- In the papers: UK Telegraph's Ambrose Evans-Pritchard commented that the global bear rally will deflate as Japan leads world in sovereign bond crisis. The article noted The contraction of M3 money in the US and Europe over the last six months will slowly puncture economic recovery as 2010 unfolds, with the time-honored lag of a year or so. Ben Bernanke will be caught off guard, just as he was in mid-2008 when the Fed drove straight through a red warning light with talk of imminent rate rises - the final error that triggered the implosion of Lehman, AIG, and the Western banking system. be reminded too that the West's fiscal blitz - while vital to halt a self-feeding crash last year - has merely shifted the debt burden onto sovereign shoulders, where it may do more harm in the end if handled with the sort of insouciance now on display in Britain. Article noted that great bear rally of 2009 runs into the greater Chinese Wall of excess global capacity. The surplus regions (China, Japan, Germania, Gulf ) have not increased demand enough to compensate for belt-tightening in the deficit bloc (Anglo-sphere, Club Med, East Europe), and fiscal adrenalin is already fading in Europe. The vast East-West imbalances that caused the credit crisis are no better a year later, and perhaps worse. Household debt as a share of GDP sits near record levels in two-fifths of the world economy.
-Geo/political: -Geo/Political: Iranian themes continue to dominate waves in the geo/political realm as the NYT looks at the countries development of a massive underground based system to hide and protect its developing nuclear program. This commentary has followed statements from China's UN ambassador who reiterated the Russian position and killed any immediate possibility of new sanction against the regime. In macro flows, 2009 data has shown that China has overtaken export rival as the world's largest merchandise exporter at $957B in goods over the first 10-month period of the year (despite a 20.4% y/y reduction). In political news, two key US Senators appear to be on the way out. ND (D) Sen Dorgan has confirmed his intention to not run in this November's election and multiple sources have speculated that CT (D) Sen Dodd will make a similar announcement at a schedule press conference today. On a similar thread, the term of Japanese Fin Min Fujii came to a close as long term speculation regarding health and age came to a close as PM Hatoyama accepted his resignation, naming Naoto Kan.
***Notes: - US employment picture moving towards the front burner over the next few sessions. The ADP report will be seen as a gauge to determine if Friday's payroll report could register its first positive reading since Dec 2007 - Chinese govt think tank (CASS) has called for a tighter monetary policy and a one-off 10% appreciation in the Yuan currency versus US Dollar. But PBoC reiterates a steady Yuan policy - Japan PM accepts resignation of Finance Minister Fujii for health reasons - Greece and ECB's Stark trade barbs on the Greek fiscal situation and funding requirement - Euro-Zone Service PMI register mixed readings and misses a majority of analyst expectations - FOMC minutes later today and BOE rate decision on Thursday
***Looking Ahead: - 7:00 (US) MBA Mortgage Applications w/e Jan 1st: v -10.7% last release (Data was not released last week due to holiday) - 7:30 (US) Dec Challenger Job Cuts Y/Y: No est v -72.3% prior; No est v 50.4K prior - 8:15 (US) Dec ADP Employment Change: -75Ke v -169K prior - 10:00 (US) Dec ISM Non-Manufacturing Composite: 50.5e v 48.7 prior - 10:30 (US) DoE weekly inventories: Crude: -500Ke; Gasoline: +500Ke; Distillate: -2Me; Capacity Utilization: 80.8%e - 14:00 (US) FOMC minutes from Dec 16th policy meeting
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.
Mon 18 Dec
10:00 EZ- final HICP Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes Mon 25 Dec
00:00 Christmas Holidays
Potential Trading Opportunities
POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
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.