European Market Update: BOE Inflation report less dovish (TTN)
Wednesday, November 10, 2010
European Market Update: BOE Inflation report less dovish
***Economic Data*** - (FR) France Oct Consumer Price Index M/M: 0.1% v 0.1%e; Y/Y: 1.6% v 1.6%e; CPI Ex Tobacco Index: 120.03 v 120.04e - (FR) France Oct CPI EU Harmonized M/M: 0.1% v 0.2%e; Y/Y: 1.8% v 1.8%e - (FI) Finland Sept Industrial Production M/M: 1.1% v 2.4% prior; Y/Y: 8.6% v 6.3% prior - (GE) Germany Oct Wholesale Price Index M/M: -0.3% v 1.0% prior; Y/Y: 7.7% v 7.6% prior - (FR) France Industrial Production M/M: 0.1% v 0.5%e; Y/Y: 5.1% v 4.7%e - (FR) France Manufacturing Production M/M: -0.1% v 0.6%e; Y/Y: 4.9% v 5.1%e - (SP) Spain Sept House transactions Y/Y: -4.1% v 29.6% prior - (DE) Denmark Oct CPI M/M: -0.1% v 0.1%e; Y/Y: 2.5% v 2.6%e - (DE) Denmark Oct CPI EU Harmonized M/M: -0.1% v 0.1%e; Y/Y: 2.4% v 2.6%e - (SW) Sweden Sept Industrial Production M/M: 2.7% v 2.1%e; Y/Y: 10.5% v 11.0%e - (SW) Sweden Sept Industrial Orders M/M: +5.6% v -5.9% prior; Y/Y: 13.7% v 12.6% prior - (IT) Italy Sept Industrial Production M/M: % v -0.3%e; Y/Y: % v 12.8% prior; Industrial Production WDA Y/Y: % v 7.6%e prior - (NO) Norway Oct CPI M/M: 0.1% v 0.2%e; Y/Y: 2.0% v 2.2%e - (NO) Norway Oct CPI Underlying M/M: 0.0% v 0.1%e; Y/Y: 1.0% v 1.1%e - (NO) Norway Oct Producer Prices incl.Oil M/M: 0.5% v 0.1%e; Y/Y: 18.0% v 19.7% prior
Fixed Income - (EU) ECB allotted $65M in 6-day USD liquidity operation at fixed 1.19% - (IT) Italy Debt Agency (Tesoro) sold â‚¬5.5B vs â‚¬5.5B Indicated in 12-month Bills; avg yield 1.778% v 1.441% prior; Bid-to-cover: 2.09x v 2.16x prior - (GE) Germany sold â‚¬4.93B in New Dec 2012 Schatz; avg yield 0.980% v 0.760%; Bid-to-cover: 1.4x v 2.2x prior - (RU) Russia sells RUB487M vs RUB15B Indicated in OFZ Bonds; avg yeld 4.29% (SW) Sweden Debt Agency sells SEK2.5B in 5% 2020 Bonds; avg yield 2.822%; Bid-to-cover: - (PO) Portugal Debt Agency (IGCP) sold total â‚¬1.24 vs â‚¬1.25B Indicated in 2016 and 2020 Bonds - Sold â‚¬556M in 4.20% Oct 2016 OTs; avg yield: 6.156% v 4.371% prior; Bid-to-cover: 2.3x v 2.1x prior - Sold â‚¬686M in 4.80% Jun 2020 OTs; avg yield: 6.806% v 6.242% prior; Bid-to-cover: 2.1x v 4.9x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ** Notes/Observations: - BOE Inflation report less dovish than expected - Australia's confidence numbers decline after the RBA rate hike - China selectively tightens rate and confirms RRR hike - G20 leaders gather in South Korea
Equities: Eurostoxx 50 at 2871, -0.65%, FTSE100 at 5845, -0.51%, CAC40 at 3918, -0.70%, DAX at 6758m, -0.43%
- European shares were down this morning following losses on Wall Street and Asia. The decline was led by a fall in the financial sector and the mining names which slipped along with commodities prices. Investors are taking a cautious stance ahead of the G20 this weekend. Today, markets are eyeing BoE inflation report and jobless claims in the US. In banking names, Natixis [KN.FR] which reported yesterday during the NY session, fell 10% at the open after missing both net earnings and revenues, citing changes in value of company's own debt. UniCredit [UCG.IT] also lost about 1.7% after bank missed expectations. The bank reported a decrease in loan loss for provisions which was not enough to offset the significant decrease in trading income during the year. The ROE had also declined on a yearly basis. These results dragged down Credit Agricole [ACA.FR] which is expected to reported today after the European close. On the other hand, ING [INGA.NV] gained during the session after its Q3 results. The underlying pretax profit for the banking unit had increased over the year, while insurance posted a significant decline due to an annuities charge. The shares were also lifted by the announcement that the company would bring hedging and accounting for US business more into line with US peers. - In insurance name, Allianz [ALV.GE] fell at the open by about 1.2% despite exceeding expectations. Net income fell to â‚¬1.3B from â‚¬1.37B last year but it was still above analysts estimates. Company gave a bullish guidance forecasting FY10 Op profit at upper range of goal at â‚¬7.2B. Solvency ratio fell to 168% from 170% last quarter. This is against the general trend noted in European insurance names so far which reported an increase in profit, except Zurich Financial reporting a decrease in net income due to an exceptional charge. Its home rival, Hannover Re [HNR1.GE] reported a 66% increase in net income and boosted its profit. Shares earned about 3.1%. - In UK names, Prudential [PRU.UK] rose about 8% in London trading after its third quarter update. Sales for the third quarter had increased by 17% and company noted a robust trading in Asia as earnings in the region grew 34% bringing 9-month profit from new business at Â£1.3B. J Sainsbury [SBRY.UK] fell about 3.4% in the session despite an increase in net earnings. However, pretax profit failed to meet expectations. Also, in line with most UK retailers, company expects environment to remain challenging and are anticipating the toughest Christmas season 'in many years'. - AP Moller Maersk [MAERSKB.DE] exceeded expectations and boosted guidance for net profit to $5B from $4B. Shares gained about 1%. Swiss cement maker Holcim [HOLN.SZ] fell about 3% after reporting a decrease in its results and noting that it would be challenging for the firm to meet its EBITDA of previous years.
Speakers: - US President Obama issued letter to G20 members and stressed that the global economic recovery was most important issue . The letter noted that the United States would do its part to restore strong growth, reduce economic imbalances, and calm markets. A strong recovery that creates jobs, income and spending was the most important contribution the United States can make to the global recovery". The letter noted that the USD's strength ultimately rested on the fundamental strength of the U.S. economy. - Canada Fin Min Flaherty commented on G20 Communiquand stated that he did not expect the formal document to mention the Fed's launch of QE2 but should address protectionism. -The impact of QE was likely 'appreciative' on currencies like CAD but conceded that the Fed had no choice on the matter as additionally fiscal stimulus politically was unlikely. He noted that G20 language on currency valuation was a 'work in progress' and that the Fed's QE might be one of a series of variables to be discussed at the leader summit. He stressed that Brazil's use of currency control was a source of concern. Undervalued currencies like China's CNY must be more flexible and done so more quickly. - China President Hu reiterates his country's view that global economic recovery was fragile and imbalanced - Canada Central Bank (BOC) Gov Carney: There is a limit to withdrawing ultra-loose monetary policy given US economic weakness and currency tensions - Brazil Fin Min Mantega commented that the 'currency war ' has gained in intensity adding that the Fed's monetary policy was to weaken the greenback. The minister stated that Brazil would continue to take measures to slow the appreciation of the BRL as the USD/BRL rate at 1.69/USD was not satisfactory. On the reserve currency front, he reiterated the BRIC members view that the USD should replaced by a basket of currencies, which should include the BRL and CNY pairs. The Greece 2010 budget deficit is expected to be revised wider to 9.2-9.3% of GDP compared to the official Gov't target of 7.8%. The Greek 2010 deficit to be higher than expected on weak revenues and the resulting revision of 2009 deficit by EuroStat - Bank of England Quarterly Inflation Report largely reflected its Aug views and stressed that CPI was seen picking up further near term and staying above 2% through 201. The central bank again noted that CPI would fall back below target in 2 years assuming constant policy.The BOE noted that the timing and extent of CPI decline was uncertain, roughly equal chance CPI above or below target in 2 years time.
Currencies: The FX markets initially saw a gentle and tame European morning after the rise in volatility exhibited on Tuesday around the session's close. The EUR fell against the USD on Tuesday amid ongoing concerns over the unsustainable debt levels in Portugal (and other peripherals). The EUR/USD tested a pivotal support of 1.3730 in Asian and managed to climb back around the 1.38 area for most of the morning again aided by alleged Far East and Mid-East sovereign names. However, the release of the BOE quarterly inflation report was a bit more hawkish than expected and the report sent the GBP/USD higher by 60 pips to test 1.6050 area and the CPI concerns were reflected in fixed income as the UK 10-year Gilt yield rose by 6bps towards 3.13%
Geopolitical/In the papers: - The Wall Street Journal reported that the Head of the UN International Atomic Energy Agency said they were open to demand inspections of suspicious nuclear sites in Syria. It also wants to renew talks with Iran, as it has given no indication of being willing to suspend atomic work. - According to the Financial Times, banks with a domestic focus may be exempted from the Basel III capital requirements. The move may benefit domestically focused banks in countries such as China and Japan. The article adds that the G20 may classify banks into 2 groups, the first group would be firms that have the potential to destabilize the financial system and the second list would include banks that are important to the financial systems in their own countries.
***Looking Ahead *** - (PO) Portugal Sept Construction Works Index: v 69.4 prior - 6:00 (IR) Ireland Sept Industrial Production M/M: No est v -13.6% prior; Y/Y: No est v 9.6% prior - 6:00 (CZ) Czech Republic to sell CZK6B in 2.8% Sept 2013 Bonds - 6:00 (RU) Russia to sell Up to RUB15B in OFZ Bonds - 7:00 (US) MBA Mortgage Applications w/e Nov 5th: no est v -5.0% prior - 8:00 (PD) Poland Sept Current Account: -â‚¬1.3Be v -â‚¬1.1B prior; Trade Balance: -â‚¬569M v -â‚¬786M prior - 8:00 (RU) Russia to sell Up to RUB15B in OFZ Bonds - 8:30 (CA) Canada Sept Int'l Merchandise Trade: -C$1.6B v -C$1.3B prior - 8:30 (US) Sept Trade Balance: -$45.0Be v -$46.3B prior - 8:30 (US) Oct Import Price Index M/M: 1.2%e v -0.3% prior; Y/Y: 3.9%e v 3.5% prior - 8:30 (US) Initial Jobless Claims: 450Ke v 457K prior; Continuing Claims: 4.305Me v 4.340M prior - 10:00 (MX) Mexico Aug Gross Fixed Investment: 4.1%e v 0.8% prior - 10:30 (US) Weekly EIA Natural Gas Inventories - 13:00 (US) Treasury to sell $16B in 30-Year Bonds - 14:00 (US) Oct Monthly Budget Statement: -$140.0Be v -$176.4B prior - (PE) Peru Sept Trade Balance: No est v $395.6M prior -19:01 (UK) BOE's Haldane Speech - (KS) G20 Summit of World Leaders on Nov 11-12th - 21:00 (CH) China Oct Consumer Price Index Y/Y: 4.0%e v 3.6% prior - (CH) China Oct M2 Money Supply Y/Y: 19.0%e v 19.0% prior - (CH) China Oct New Yuan Loans (CNY): 437.5Be v 595.5B prior - (CH) China Oct China Property Prices: 8.9e v 9.1 prior
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.
Mon 10 Sep 2018 AA 08:30 GB- GDP, Trade, Output Tue 11 Sep 2018 AA 08:30 GB- Employment Decision A 09:00 DE- ZEW Survey Wed 12 Sep 2018 A 12:30 US- PPI A 14:30 US- EIA Crude A 18:00 US- Beige Book Thu 13 Sep 2018 A 1:30 AU- Employment AA 11:00 GB- Bank of England Decision AA 11:45 EZ- European Central Bank Decision A 12:30 US- Weekly Jobless AA 12:30 US- CPI Fri 14 Sep 2018 A 08:30 GB- GDP AA 12:30 US- Retail Sales A 13:15 US- Industrial Production AA 14:00 US- prelim University of Michigan
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.