European Market Update: German IFO beats expectations but sovereign woes ebb enthusiasm (Trade the News)
Wednesday, August 25, 2010
European Market Update: German IFO beats expectations but sovereign woes ebb enthusiasm
***Economic Data*** - (HU) Hungary Jun Retail Trade Y/Y: -4.6% v -5.6%e - (SP) Spain July Producer Prices M/M: % v 0.1% prior; Y/Y: % v 3.2% prior - (SW) Sweden Aug Consumer Confidence: 25.2 v 23.0e; Manufacturing Confidence: 6 v 6e; Economic Tendency Survey: 109.9 v 112.0e - (TH) Thailand Central Bank raised the Benchmark Interest by 25bps to 1.75%; As expected - (GE) Germany Aug IFO Business Climate: 106.7 v 105.7e (highest reading since Jun 2007); Current Assessment: 108.2 v 107.5e; Expectations Survey: 105.2 v 104.3e - (NO) Norway Jun AKU Unemployment Rate: 3.5% v 3.6%e - (SA) South Africa July CPI (all items) M/M: 0.6% v 0.9%e; Y/Y: 3.7% v 4.0%e - (IR) Ireland July PPI M/M: -0.6 v -0.4% prior; Y/Y: 0.9% v 1.2% prior
Fixed Income: - (EU) ECB alloted $40M in 7-day USD liquidity operation - (EU) ECB allotted â‚¬19.1B in 91-day refi tender - (PO) Portugal Debt Agency (IGCP) sold total â‚¬1.301B versus â‚¬1.25B indicated in 2016 and 2020 Bonds - Sold â‚¬ in 4.2% Oct 2016 OTs; avg yield 4.371% v 4.128% prior; Bid-to-cover: 2.1 x v 2.0x prior (first tap of this issue launched back in Jan 2007) - Sold â‚¬ in 4.8% Jun 2020 OTs; avg yield 5.312% v 5.225% prior; Bid-to-cover: 1.8x v 1.8x prior
- Equities: - As of 5:30am ET Euro Stoxx 50 Index -0.3% at 2,607; DAX Index -0.2% at 5,924; CAC-40 Index -0.3% at 3,480 and FTSE 100 Index -0.2% at 5,146
- Better German IFO data help to sooth recent risk aversion sentiment but concerns over the Portugal bond auction erased any positive momentum. European stocks back in the red as the NY morning approached
- World's biggest miner BHP [BHP.AU] reported a 47% increase in net profit which came in line with analysts estimates, due to increases in iron ore and copper prices and with a notable increase in base metals revenues. Weak USD had impacted negatively the results by $2.51B. Outlook for short-term was cautious as company expected Chinese growth to decline from recent highs to more sustainable levels of 8% in 2011. Nonetheless, domestic consumption is expected to remain strong in medium term. Short-term outlook for commodities was mixed noting strong demand for copper but softer steel output. In the medium term company expects commodity demand to remain dependent on emerging market. CEO, in follow up comments, stated that the company would be disciplined in the Potash bid implying that BHP would not acquire Potash for more than what it thinks is worth. Industry analysts welcomed but were unsurprised by results and its stance on Potash. They noted the strong cash flow and diversity of the business. - Heineken [HEIA.NV] traded higher in the open after the results came in slightly higher than estimates. Beer volumes declined by 3.4% which was a better figure than the first quarter's decline of 8.0%. Additionally, the CEE region continues to decline but less sharply than first quarter while African and Middle Eastern region reported an increase in its beer volumes. Outlook was positive especially in Africa, Asia and Latin America where company expected volumes to continue to grow. Company guided a net profit growth of at least at a low double digit growth and raised its interim dividend. Disappointing results for Dutch insurer SNS Reaal [SR.NV] whose net income failed to meet expectations and its net premium income and net interest income decreased on a yearly basis. Company was unenthusiastic about the future outlook expecting pressures in the real estate market. Furthermore, unrealized mark-to-market results may impact profit 'sharply'. Company will not pay an interim dividend. Shares were trading 3.3% lower at the open. - Among UK names, Tullow Oil [TLW.UK] reported strong results which had increased over the year but disappointed investors by forecasting a delay in the Uganda field due to a tax payments dispute with the government. The government is withholding an approval for Tullow to sell interests in the Ugandan field to Total and China National Offshore Oil Corp and an extension of the drilling license. The CEO while confident that the dispute would be resolved in a matter of weeks, this would nonetheless delay development works. Aggreko [AGK.UK] was up in early trading after reporting an improvement in its results and was positive for the outlook raising expectations.
- Speakers: - Australia PM Gillard commented during a press conference that she had productive discussions with key independent MPs and that she responded positively to all points raised by key non-party lawmakers. She did note that some of their requests go beyond the normal caretaker rules that operate before a new government takes shape. She guaranteed to serve a full term if a deal was reached. - German IFO: German economy was stable at high level but noted that companies were expecting a slight weakening of export growth - IFO Abberger commented after the better then expected data that German H1 growth rate could not be sustained but added that there was no cooling seen either. He did caution that Germany would be impacted if US and Asia slipped back into recession as the main risk to its were from overseas (external) sources. Germany would see slight growth in consumption in 2010 and saw no reason for any change in ECB interest rate policy at this time - PM Kan and former PM Hatoyama were to meet regarding the upcoming DPJ leadership race to be held on Sept 14th - Spain revised its 2009 GDP to -3.7% from -3.6% prior; cites weaker exports - Stats Agency - Greece Fin Min reiterated that there was no issue of debt restructuring. He added that the current Greek recession had been more shallow than expected and that the 2010 GDP could contract less than 4% - German Farm Association expected its 2010 domestic grain harvest to decline to 43.9M tons v 49.7M y/y on weather conditions - Turkey Econ Min commented that the country might not reach its privatization goal in 2010. He noted that upcoming discussion with IMF to be about its regular review and reiterates Gov't view that there is no need for new financing deal with IMF
- Currencies/Fixed Income: - The session saw a reprieve from recent trends aided by a better German IFO series. EUR/USD tested 1.2725 in the aftermath of IFO but the level continued to act as fierce resistance in recent sessions and proved to be the case once again. Concerns over the Portugal debt auction following the Moody sovereign downgrade of Irish debt during Asia weighed upon the Euro as the NY morning approached. EUR/USD at 1.2670 as the NY approached. The JPY was off its multi-year highs as Japanese officials and press report continue to point out how evil a strong JPY currency could be. Japan: Dealers noted that despite the numerous comments there was little chance of successful action to stem the JPY trend. Nonetheless the USD/JPY was up over 30 pips from the Tokyo open and trading at 84.50 heading into the NY morning. EUR/CHF cross was off its all-time lows registered in late Asia under the 1.30 handle and now little change from the Far East open.
- In the Papers-Geopolitical: - In Germany it was reported that the country's Cabinet approved the bank restructuring bill, as expected. The bill is to allow for the orderly restructuring of failed banks, and may include a bank tax which will be used to finance a restructuring fund. - Following S&P's downgrade of Ireland's long-term sovereign rating, the Irish Debt Agency (NTMA) stated that the ratings were based on extreme estimates of bank recapitalisation costs. Also it believed that the S&P's approach was flawed, placing no value to current assets of bad banks. The Financial Times Alphaville also added comments on Ireland's downgrade. According to Otis Casey of Markit, the downgrade confirmed what the credit default swaps (CDS) market was already signaling, but does note that there may be a market impact to the news when London opens. - The Telegraph's Ambrose Evans-Pritchard commented on how equity traders are becoming more concerned about an economic slowdown. He noted that until recently, equity markets have downplayed the risks of a slowdown in the US and southern Europe. With respect to reports of disagreements at the Fed about the central bank's recent easing measures, there is no agreement at the Fed on additional monetary actions and some at the central bank are concerned that the Fed does not have the means to help the economy rebound. Regarding the yen, he cites Goldman Sachs, stating that the Japanese currency is overvalued by about 20%. In the Telegraph, Britain's HM Revenue & Customs survey found about 1 in 5 British companies are considering re-domiciling due to disenchantment with UK taxes reflecting the negative business sentiment in the country.
***Looking Ahead*** - (BR) Brazil July Central Gov't Budget (BRL) 3.0Be v 630M prior - 6:00 (RU) Russia to Sell Up to RUB15B in OFZ Bonds - 7:00 (US) MBA Mortgage Applications w/e Aug 20th: No est v 13.0% prior - 7:30 (GE) German Chancellor Merkel meets with Slovak PM Radicova - 8:30 (GE) German Fin Min Schaeuble at press event - 8:30 (US) July Durable Goods Orders: 3.0%e v -1.2% (revised); Drables Ex Transportation: 0.5%e v -0.9% prior (revised); Cap Goods Orders Non-defense: No est v 0.2% prior; Cap Goods Shipments Non-defense Ex Air: No est v 0.5% prior - 9:00 (CA) Canada Teranet/National Bank House Price Index: No est v 13.6% prior - 9:30 (BR) Brazil July Nominal Budget Balance (BRL): No est v -13.6B prior; Primary Budget Balance: No est v 2.1B prior; Net Debt /GDP ratio: No est v 41.4% prior - 9:30 (TU) Turkey Aug Capacity Utilization: No est v 74.7% prior; Industrial Confidence: No est v 112.7 prior - 10:00 (US) July New Home Sales: 330Ke v 330K prior - 10:00 (US) Jun House Price Purchase Index M/M: 0.1%e v 0.5% prior; Q/Q: -0.4%e v -1.9% prior - 10:00 (MX) Q2 Current Account Balance: -$659Me v -$765M prior; GDP Y/Y: 12.3%e v 9.9% prior - 10:00 (MX) July Unemployment Rate: 5.5%e v 5.1% prior - 10:30 (US) DOE weekly energy inventories: Crude: +400Ke; Gasoline: -300Ke; Distillate: +1Me; Utilization: 89.5%e - 12:00 (FR) France July Net Change Jobseekers: +14.0Ke v -8.6K prior; Total Jobseekers: No est v 2.69M prior - 13:00 (US) Treasury to Sell $36B in 5-Year Notes
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.
Tue 17 July 2018 AA 08:30 GB- Employment A 13:15 US- Industrial Production AA 14:00 US-Powell Testimony Wed 18 July 2018 AA 08:30 GB- CPI A 12:30 US- Housing Starts/Permits AA 14:00 US-Powell Testimony Thu 19 July 2018 AA 1:30 AU- Employment AA 08:30 GB- Retail Sales A 14:30 US- EIA Crude A 12:30 US- Weekly Jobless Fri 20 Jun 2018 A 12:30 CA- CPI/Retail Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
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.