European Market Update: Higher Chinese 3-month bill rate hints at potential tightening; risk aversion aids dollar; 'Wrath of Kan" weakens JPY
Thursday, January 07, 2010
European Market Update: Higher Chinese 3-month bill rate hints at potential tightening; risk aversion aids dollar; 'Wrath of Kan" weakens JPY
*** ECONOMIC DATA *** - (GE) Germany Nov Retail Sales M/M: -1.1% v 0.3%e; Y/Y: -2.8% v -1.7%e - (TT) Taiwan Dec Total Trade Balance: $1.7B v $2.2Be; Exports Y/Y: 46.9% v 45.2%e; Imports Y/Y: 56.2% v 49.6%e - (CZ) Czech Nov Trade Balance (CZK): 14.5B v 12.5Be - (SZ) Swiss Dec CPI M/M: -0.2% v 0.0%e; Y/Y: 0.3% v 0.5%e - (DE) Denmark Nov Unemployment Rate SA: 4.4% v 4.4%e - (NE) Netherlands Dec CPI M/M: -0.6% v -0.5%e; Y/Y: 1.1% v 1.2%e - (NE) Netherlands Dec CPI EU Harmonized M/M: -0.7% v -0.5%e; Y/Y: 0.7% v 0.9%e - (AS) Austria Dec Wholesale Price Index /M: 0.1% v 0.2% prior; Y/Y: -1.1% v -3.0% prior - (UK) Dec New car Registrations: 38.9% v 57.6% prior; 2009 figures -6.4% y/y and at lowest reading since 1995 - (UK) Dec Halifax House Prices M/M: 1.0% v 0.5%e; 3M/Y: 1.1% v 1.6%e; First annual increase since Mar 2008 - (SA) South Africa Dec SACCI Business Confidence: 83.5 v 84.1 prior - (EU) Euro-Zone Dec Business Climate Indicator: -1.22 v -1.43e; Consumer Confidence: -16 v -16e; Economic Confidence: 91.3 v 90.0e; Industrial Confidence: -16 v -17e ; Services Confidence: -3 v -3e - (EU) Euro-zone Nov Retail Sales M/M: -1.2% v 0.0%e; Y/Y: -4.0% v -1.9%e - (MA) Malaysia Nov Trade Balance (MYR): 8.9B v 11.6Be; Exports Y/Y: -3.3% v 3.0%e; Imports Y/Y: 2.3% v 2.0%e
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** - Equities: European equity markets continued a heavy tone that rotated out of Asia. Asian market closed lower on fears of tightening out of China as the rate in 3-month bills showed an increase for the first time in over one year. This action sent banking shares lower and tech followed suit on moves in the Korean Won and earnings guidance. In Europe, disappointing data, specifically German and EU retail sales continued to show declines, raising risk aversion and sending consumer names lower (ex-Sainsbury [SBRY.UK] that reported expectation busting SSS figures). European banks continued a negative rotation with the sector being cut to Neutral at KBW. Investors and traders through the session remain cautious ahead of key data and corporate news in the NY morning. The BoE will provide an interest rate decision (the first of the new year) at 7:00EST and US retailers will provide a range of December SSS figures ahead of the NY open. Volume levels in Europe continue on a strong footing, easily outpacing their reduced holiday averages.
-In individual equities: Sainsbury SBRY.UK: Provides Q3 trading update: LFL sales +4.2% (excl fuel and VAT); +3.7% (excl fuel). || JD Sports [JD.UK]: Provides Christmas trading statement: 5-week LFL +6.6%. || AstraZeneca [AZN.UK]: Reaches agreement with Teva over Generic Prilosec and Nexium. || EADs [EAD.FR]: Astrium space unit has lost Galileo satellite contract to OHB -Les Echos. || Continental [CON.GE]: Approves terms of share sale; to issue 31M (18% of float) new shares at â‚¬35/share in deal managed by DB, Goldman, and JP Morgan. || Praktiker [PRA.GE]: Reports Q4 Rev -10.3% y/y; FY09 Rev approx â‚¬3.7B v â‚¬3.7Be. ||
- Speakers: Japan Fin Min Kan commented his desire for the s JPY to weaken more, must work with BoJ to bring Yen to more appropriate level, Japanese firms prefer USD/JPY around 95 area ***Fed's Bullard: Reiterates outlook that US consumption is stabilizing; employment markets are improving. US house prices are also stabilizing; prices may not likely fall from current levels *** France Pres Sarkozy commented that it would be considered 'suicidal' to withdraw economic stimulus and resists a return of protectionist measures. He noted that the global monetary disorder has become inacceptable and that the global monetary system should have a multi-currency system. Banks should be using profits to boost capital versus paying bonuses***China Commerce Min stated that the Yuan currency must retain its value and that either an appreciation or deprecation would not benefit the global economy. The minister also noted that he supported that the USD maintain its value *** (FR) France Fin Min Lagarde commented that global currency imbalances have not been addressed and need to be resolved
- Currencies: Some risk aversion crept back into the market sentiment aiding the USD's tone. China's central bank sold three-month bills at a higher interest rate for the first time in 19 weeks after saying its focus for 2010 is controlling the record expansion in lending and curbing price increases. Dealers took the 4bps rise in yield as signal that the PBoC was tightening liquidity. The USD was firmer against the major pairs but continue to hold within its recent ranges established during the late dec period. Newly appointed Japanese Fin Min Kan's first official briefing set the tone for the market and highlighted the deep contrast between the previous minister Fujii. The new Fin Min noted that he must work with the BoJ to bring yen to appropriate levels and many firms are in favor of USD/JPY at around 95.00. The USD/JPY continues to remain below the key 93.30 area and dealer are pondering whether Japanese exporters would be tempted to pull offers following the kan comments
- The CHF was softer in the session following a weaker Swiss inflation picture and some linger concerns that the SNB would not want to see tighter monetary conditions from the CHF
- Fixed Income: It has been generally a good session for bonds, with disappointing data helping Bunds and Gilts stay in positive territory across both yield curves. France sold a combined total of â‚¬8.7B in a range of off the run OAT's , with strong results, particularly for the Oct 2019, which were sold at 3.60% in an auction covered 3.26 times . Treasuries are a touch softer with the weak JPY cited as a potential factor. The 2y note has surrendered some of yesterdays fomc induced gains , pushing the yield back just above 1.00%
-Geo/political: /political: In the UK, PM Gordon Brown has survived another challenge to his leadership of the party following attempts by two former cabinet level ministers to hold a secret ballot on party leadership. Though the ballot was never undertaken, tepid to non-existing support for Brown that took hours to materialize have re-opened serious questions related to the strength and loyalty of the party ahead of a UK general election. New Japanese Fin Min Kan inaugurated his tenor with market moving Yen related comments (covered in FX section). Unrest in the Chechnya/Dagestan region has continued with the death of 5 Russian Interior Ministry Police officers in a suicide attack. A coordinated attack in Iraq failed to kill that states anti-terror Special Forces commander, while killing seven others, including five immediate family members. In Africa, concern regarding the health of Nigeria's Pres Yar'Adua have not be relieved by government reports that he is phone contact with state officials. Yar'Auda has been abroad for hospital treatment for the past 44 days. On a similar note, it has been reported that Guinean coup leader General Konae is successfully recovering from a Dec 2009 assassination attempt
***Notes: - China guides T-Bill yields higher as it seeks to limit loan growth and signaling tightening; risk aversion sentiment simmers as a result - Newly appointed Japanese Fin Min talks down the JPY currency - Fed debates whether economy strong enough to end asset purchases. - BoE interest rate and APF decision today with no changes expected
***Looking Ahead: - US Same Store sales data - 6:30 (CL) Chile Dec Trade Balance: $1.5Be v $1.1B prior - 7:00 (UK) BOE Interest rate Decision: Expected to hold interest rates at 0.50% and maintains Asset Purchase Target at Â£200B - 8:30 (US) Initial Jobless Claims: 440Ke v 432K prior; Continuing Claims: 4.975Me v 4.981M prior - 10:00 (CA) Canada Dec Ivey Purchasing Managers Index: 52.0e v 55.9 prior - 10:00 (MX) Mexico Dec Consumer Prices M/M: 0.55e v 0.5% prior; Y/Y: 3.7%e v 3.9% prior; CPI Core M/M: 0.5%e v 0.2% prior - 10:30 (US) Weekly Natural Gas Inventories - 11:00 (US) US Treasury's Note Announcement - 13:00 Fed's Hoenig to discuss US economic outlook
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.