European Market Update: UK Claims for jobless benefits rise to 1.64M, the highest since April 1997; Reserve diversification issue overhangs recent dollar upward trend
Wednesday, February 17, 2010
European Market Update: UK Claims for jobless benefits rise to 1.64M, the highest since April 1997; Reserve diversification issue overhangs recent dollar upward trend
*** ECONOMIC DATA *** - (FI) Finland Jan PPI M/M: 1.1% v 0.4% prior; Y/Y: -0.1% v -2.6% prior - (SP) Spain Q4 Final GDP Q/Q: -0.1% v -0.1%e; Y/Y: -3.1% v -3.1%e - (SW) Sweden Jan Avg House Prices (SEK) 2.07M v 1.95M prior - (GE) Germany DIHK Industry economic survey: Raises German 2010 GDP forecast to 2.3% from 2.0% prior - (SA) South Africa Dec Retail Sales Y/Y: -3.7% v -5.6%e - (UK) BOE Minutes: Voted unanimous to maintain both interest rates and Quantitative Easing (QE) at current levels of 0.50% and Â£200B respectively - (UK) Jan Jobless Claims Change: +23.5K v -10.0Ke; Claimant Count Rate: 5.0% v 5.0%e - (UK) Dec Weekly Earnings (with bonus) 3M/Y: 0.8% v 0.9%e; Weekly Earnings (ex bonus) 3M/Y: 1.2% v 1.1%e - (UK) Dec ILO Unemployment Rate: 7.8% v 7.8%e - (EU) Euro-Zone Dec Construction Output M/M: 0.5% v -0.8% prior; Y/Y: -3.1% v -6.8% prior - (EU) Euro-Zone Dec Trade Balance â‚¬4.4B v â‚¬5.0Be; Trade Balance Seasonal Adj: â‚¬7.0B v â‚¬3.9Be - (IT) Italy Dec Current Account: -â‚¬3.8 v -â‚¬4.6B prior - (PO) Portugal Q4 Unemployment: 10.1% v 9.8% prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** - Equities: European markets are seeking to print three consecutive sessions of gains. Trading in Asia is winding back up to speed with Hong Kong coming off holiday with a strong +1.31% showing. Gains in Australia, Japan and India set the tone for Europe. Asian tone, being set by triple digit gains in NY appears for the time being to have tipped the risk theme to full on, from full off. Earnings figures continued their fast and furious pace with financials BNP Paribas [BNP.FR] and ING [INGA.NV] leading the offerings. Figures from both firms were not as strong as those seen in yesterday's session from Barclays [BARC.UK], but banks maintained their positive tone and traded broadly higher. Financial sector earnings from Deutsche Bourse [DB1.GE] furthered this rotation. Other positive movers included EADS [EAD.FR] following French press reports that the firm was nearing an agreement on a revised payment scheme for the A400M. UK listed hedge fund Man Group [EMG.UK] has been well bid following renewed takeover speculation and solid weekly NAV figures. Equity markets in the UK shook of disappointing unemployment figures that showed claims at the highest levels in 13 years. Trading volumes have maintained their high tempos with all core European bourses trading at or ahead of their moving averages.
- In individual equities: BNP Paribas [BNP.FR]: Reports Q4 Net â‚¬1.37B v â‚¬1.06Me, Rev â‚¬10.06B v â‚¬10.11Be. || ING [INGA.NV]: Reports Q4 Net loss adj â‚¬712M v loss â‚¬306Me, Rev â‚¬10.0B v â‚¬13.8Be. || Legal and General [LGEN.UK]: Interim Management Statement: Q4 APE Â£1.39B v Â£1.5B y/y. || Atos Origin [ATO.FR]: Reports FY09 Net â‚¬32M v â‚¬67Me, Rev â‚¬5.1B v â‚¬5.1Be; will not pay 2009 dividend. || Publicis Groupe [PUB.FR]: Reports FY09 Net â‚¬403M v â‚¬412Me, Rev â‚¬4.5B v â‚¬4.6Be; Q4 organic growth -5.4% y/y. ||
- Speakers: Spain PM Zapatero commented that he expected GDP growth to return in the first half of 2010 and employment growth during the second half of the year. He stated that Spain must return to deficit/GDP ratio to 3% by 2013 (Maastricht Stability Pact criteria) as the country cannot maintain such high public deficit figures. Fiscal consolidation was the government's priority and now was the right time to implement austerity programs. He pointed out the good health of Spain's public debt situation as the country's debt to GDP ratio was below the EU average. ***Bank of Korea Gov Lee commented that the long-term USD trend was likely to see further weakness but did concede that the dollar could endure temporarily gains due to instability. On domestic rates, Lee added that the central bank would raise interest rates once private sector recovery was confirmed ***BoE Agents commented that the outlook for employment has improved marginally but few employers plan on hiring full time positions. The agents stated that employers look to fill rising demand via temporary workers***Germany DIHK Industry economic survey raised its 2010 GDP growth to 2.3% v 2.0% prior. It noted that German business outlook was higher on the back of exports and investment spending but financing ability to companies remained key downside risk. It did note that business optimism now outweighed gloom for first time since economic crisis began *** BoE Agents stated that the outlook for employment had improved marginally although few employers planned on hiring full time positions. It noted that employers looked to fill rising demand via temporary workers ** Turkey Central Bank Yilmaz commented that the central bank was not considering change in policy stance*** Bank of Italy (BOI) comments on the country's tax amnesty program and stated that it had collected â‚¬85.1B to date with â‚¬60B of the total coming from Switzerland.
- Currencies: A backdrop of improving risk appetite continued to weigh upon the USD and JPY currencies in the early part of the European morning. Asian equities posted their biggest daily gain in three months earlier and commodity prices maintained a buoyant tone but off their session highs. The US Dec TIC flow data provided rationale to resurface the reserve diversification issue which previous hampered the dollar throughout 2009. The reserve issue highlighted by the $34B decline in the Chinese US Treasury holdings buried in the Dec TIC data. Gold benefited from the implications that paper currencies had fiscal and budget concerns in both Europe and the US. However, the European peripheral situation had not faded from memory. The EUR/USD was unable to move above the 1.38 handle as dealers again noted that the ECB overnight loan facility continued to have larger than usual borrowing. Dealers pointed out that the facility typically sees around â‚¬300M borrowed and this amount has climbed above â‚¬3B since last Friday with some speculation that it might be Greece-related
- Fixed Income: Gilt markets were knocked around by the simultaneous release of BoE Minutes and jobless data. The former drew more of a reaction, with some expectations for dissent from the likes of Miles the unanimous vote against expanding QE seems to have put the kybosh on any further Gilt purchases for the foreseeable future. But a pretty weak reading in jobless claims managed to cap yields with the 2y holding below 1.20% and the 10y holding below 4.05% as we go to press. In continental markets, Germany sold â‚¬6.27B in a new 2 year Schatz at an avg yield of 1.07%. Meanwhile peripherals have improved against the core thanks to burgeoning risk appetite. Greek 10s have shed 6bp on the day to trade at Bunds +310bps
- Geopolitical: Energy and industry giants BP, ConocoPhillips and Caterpillar have announced intentions to leave a public/private JV, the US Climate Action Partnership. The decision follows the widely seen failure at Copenhagen (mostly attributed to China) to reach any fundamental goals, along with a growing anti-global warming movement in certain circles. The possibility of US legislation on climate change is seen as unlikely, as it is vehemently opposed by Republicans who are expected to make electoral gains in November. All three firms stated that they remained committed to lowering greenhouse gasses, but would pursue operations outside of USCAP. ***Celebrations for the Birthday of Kim Jong Il have continued into their second day today. Scheduled events are to run through Thursday and have been noted as significantly larger than prior years. Kin Jong Il's birth years, like much of the secretive state, is hotly debated between 1942 (inside Korea) and 1941 (inside the USSR). Analysts have speculated that the ramp up of events is most likely a sign of the government seeking to express continued authority following a year that saw further international break downs, and a crackdown on illegal 'grey-area' private industry activities.
- In the papers: UK Independent article noting that the Eurozone contagion fears have spread to Spain. Article debated which nation might next suffer from the dreaded "contagion". The fear was that the next member of the so-called "PIIGS" - Portugal, Ireland, Italy, Greece and Spain - to suffer a crisis of confidence would be Spain. At first glance, Spain is in a much more secure position than her "Club Med" neighbors, because she starts with a level of national debt that is comparable to the UK, France and Germany - around 60% of GDP (against well over 100% in Greece) - and her banking sector has not, yet, suffered from quite the same meltdown as other economies that enjoyed a property bubble in the early years of this decade, notably the British, and Irish. The problem is size. The Nobel Prize-winning economist Paul Krugman put it this way: "In economic terms the heart of the crisis is in Spain, which is much bigger". The EU's Competition Commissioner Joaquin Almunia - a Spaniard - has suggested that Spain's economic problems look increasingly like those of Greece and Portugal. But in a worst case scenario, Greece is affordable - about 2.5% of European GDP. Spain, conversely, accounts for about 16% of EU GDP, and is a much more expensive proposition for restoration work.
***Notes: - The issue of reserve diversification resurfaces after Tuesday US TIC data as China and other BRICs buying less US paper - ECB's Quaden: No risks to inflation for the moment. No need to raise rates - UK Claims for jobless benefits rise to 1.64M, the highest since April 1997
***Looking Ahead: - 7:00 (US) MBA Mortgage Applications w/e Feb 12th: No est v -1.2% prior - 7:45 (US) ICSC weekly Chain Store sales w/e Feb 13th - 8:30 (CA) Canada Dec Wholesale Sales M/M: 0.8%e v 2.5% prior - 8:30 (US) Jan Import Prices M/M: 1.0%e v 0.0% prior; Y/Y: 10.8%e v 8.6% prior - 8:30 (US) Jan Housing Starts: 580Ke v 557K prior; Building Permit: 620Ke v 653K prior - 8:55 (Redbook Retail sales w/e Feb 13th - 9:00 (BE) Belgium Q4 Preliminary GDP Q/Q: No est v 0.5% prior; Y/Y: No est v % prior - 9:15 (US) Jan Industrial Production: 0.7%e v 0.6% prior; Capacity Utilization: 72.6%e v 72.0% prior - 11:00 (IT) Itlay Fin Min Tremonti in Parliament - 12:00 (GE) Chancellor Merkel policy speech - 12:00 (CA) Canada to sell 30-year bonds - 12:20 (CA) Bank of Canada Dep Gov Longworth - 12:30 (MX) Mexico bond auction - 12:45 Fed's Plosser - 14:00 (US) FOMC minutes from Jan 26th-27th policy meeting - 14:00 (US) Jan Monthly Budget Statement: -$46.0Be v -$63.5B prior - 16:30 (US) 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.
POTENTIAL PRICE RISK: HIGH to Medium- Wed --14:15 GMT-- US- Industrial Production
POTENTIAL PRICE RISK: HIGH- Wed -- 15:00 GMT-- CA- Bank Of Canada Decision
John M. Bland, MBA co-founding Partner, Global-View.com
Max McKegg's Daily Forex Trading Forecasts
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.