European Market Update: The dawning of the Age of Austerity
Monday, May 24, 2010
European Market Update: The dawning of the Age of Austerity
***Economic Data*** - (CZ) Czech Apr Business Confidence: 8.8 v 6.6 prior; Consumer Confidence: -11.0 v -5.8 prior; Business&Consumer Confidence: 4.8 v 4.6 prior - (TT) Taiwan Apr Unemployment Rate: 5.4% v 5.6%e - (TT) Taiwan Apr Industrial Production Y/Y: 31.4% v 29.0%e; Commercial Sales Y/Y: 13.0% v 12.7%e
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** - Equities: European equities opened the session higher, with the exception of Italy's FTSE MIB, tracking the sharp gains seen in China on the Shanghai Composite, amid speculation that China would delay further tightening measures due to the EU debt crisis. Additionally, the positive equity open coincided with the tightening of the EU peripheral debt spreads. Currently, equities are off by their best levels on factors including the possibly of a labor strike in Spain and concerns about Spanish banks, after it was reported over the weekend that Spanish savings bank CajaSur (â‚¬19B in assets) was placed into receivership by the Bank of Spain. As of , FTSE 100 is flat, DAX -0.50%, IBEX -0.90%, FTSE MIB -1.8%, CAC +0.47%.
- In Individual Stocks: BP [BP.UK) issued an update on the Gulf of Mexico oil spill in which it said oil collection estimates ranged from 1,360 bpd to 3,000 from 5,000 bpd on May 20th. || Deutsche Bank [DBK.GE] CFO the weekend said the bank might increase its dividend in coming years on the expectation that earnings will improve. || Invensys [ISYS.UK] reported FY10 results (Reports FY10 Net Â£147M v Â£130M y/y, Rev Â£2.24B v Â£2.28B y/y). || Chloride [CHLD.UK] issued FY10 results and said it sees positive signs in its end markets and order intake trends. || British Airways [BAY.UK] cabin crew started its 5-day strike today, following the break down in talks with management.
- Speakers: The BOJ May monthly report noted that the Japanese economy was starting to recover moderately amid overseas demand and improved capital spending and reiterated views that capital expenditure indicated signs of recovery and that private demand was expected to continue to improve. *** Japan Finance Min Kan stated that he would not label the current economic recovery as sustainable. He also noted that the direct impact from Greece situation on Japan was limited and that the MOF had no gaps in its views on economy with BoJ. *** White House official commented that measures taken by South Korea to punish North Korea 'entirely appropriate. President Obama had ordered review policies towards North Korea. Sec of State Clinton commented that the US was working hard to avoid escalation of the 'precarious' situation on the KoreanPeninsula *** UK Chancellor Osborne: Deficit needs to be dealt with or else economic consequences to be severe. He added that the deficit needed to be dealt with or else economic consequences would be severe. The UK should not build economy on 'shifting sands of debt' *** China Commerce Ministry (MOFCOM) stated that the US High Tech exports were at the core of trade imbalance issue and added that it was tough to balance trade without US lifting high-tech exports restrictions. China was concerned over the European debt crisis and was monitoring the developments there. China hopes and believes that Europe would overcome its crisis but note d the global impact was 'not too big' at this time. *** PBoC Zhou commented that it mainly considered domestic factors in deciding on monetary policy and noted that the US and China discussed yuan currency issue in speeches. He noted that the pace of global recovery would continue amid EU crisis. ***BoE's Miles commented that inflation to fall towards target during next 6 months and that higher inflation caused by external influence in the UK . he noted that the Euro Area problems were a risk to the UK ***
-Currencies/Fixed income: Risk appetite initially received a reprieve as speculation that China would delay or perhaps lessen measures to rein in its stimulus measures due to the euro area debt crisis. The European and commodity currencies were steady in the early going. However, the dawning of the age of austerity weighed upon sentiment as the session progressed. Comments from Spain's largest union talks about moving towards a general strike sent the European bourses into negative territory and the USD and JPY pairs firmer. The European peripheral situation remained precarious with a Spanish T-Bill auction set for Tuesday and a Portuguese auctions mid-week. ***The GBP/USD probed suspected Sterling buy-stops orders above the 1.45 level in early trading to test above its 200-hour moving average for the first time in over three weeks. The confirmation of Â£6.2B in spending cuts in the UK by Chancellor Osborne weighed upon risk appetite. He added that the debt situation was a 'huge risk' to UK economy and stressed that the deficit needed to be dealt with or else economic consequences would be severe. ***The JPY moved off its worst levels as the European morning wore on. The BOJ monthly report noted that the economic activity was picking up steadily, but kept its assessment unchanged in its May report. It was cautious because of the risk from overseas economies***
- In the Papers: FT article noting that Germany sought to cut its budget by â‚¬10B annually until 2016. The purpose of the cuts would be to set an example for the EU and to comply with budget deficit rules in the constitution. The cuts could be made through tax increases and reduced spending and the article noted that Germany could target lower subsidies for Germany's federal states. ***
***Notes/Observations: - Whit Monday holiday in Europe limiting market liquidity conditions . - Chinese equities surged over 3% on Chinese denials regarding property tax implementation. - Spanish saving bank Cajasur seized by regulator. - UK unveils over Â£6B in spending cuts as age of austerity dawns.
***Looking Ahead**** - 8:30 (US) Apr Chicago National Activity Index: No est v -0.07 prior - 9:30 (TU) Turkey May Capacity Utilization: No est v 72.2% prior; Industrial Confidence: No est v 118.8 prior - 10:00 (US) Apr existing Home Sales: 5.65M v 5.35M prior - 10:00 (MX) Mexico Apr preliminary Trade Balance: $21.5Me v $237.3M prior - 10:30 (IS) Israel Central Bank Interest Rate Decision: No change expected in the base rate from the 1.50% current level
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.
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.