European Market Update: Peripherals spreads continue to signal contagion fears (TTN)
Tuesday, November 30, 2010
European Market Update: Peripherals spreads continue to signal contagion fears
***Economic Data*** - (GE) ILO Unemployment Rate: 6.7% v 6.7% prior - (FI) Finland Sept Final Trade Balance: -â‚¬121 v -â‚¬140M prelim - (SZ) Swiss Oct UBS Consumption Indicator: 1.716 v 1.695 prior - (TH) Thailand Oct Current Account: $2.9B v $2.4Be; Total Trade Balance: $2.4B v $3.2B prior; Overall Trade Balance: $5.8B v 4.3B prior - (TH) Thailand Oct Business Sentiment: 50.0 v 50.6 prior - (FR) France Oct Producer Prices M/M: 0.8% v 0.4%e; Y/Y: 4.3% v 4.1%e - (HU) Hungary Oct Producer Prices M/M: -0.8% v -0.9% prior; Y/Y: 7.1% v 7.0%e - (TU) Turkey Oct Trade Balance (TRY) -6.3BB v -5.8Be - (DE) Denmark Q3 Preliminary GDP Q/Q: 0.7% v 0.2%e; Y/Y: 3.0% v 3.0%e - (SW) Sweden Sept Non-Manual Wages Y/Y: 1.5% v 1.3% prior - (HK) Hong Kong Oct Retail Sales Value Y/Y:21.6 % v 16.3%e; Retail Sales Volume Y/Y: 19.6% v 15.1%e - (HK) Hong Kong Oct M3 Money Supply Y/Y: 14.7% v 8.7% prior - (GE) Germany Nov Unemployment Change: -9K v -20Ke; Unemployment Rate: 7.5% v 7.5%e - (PD) Poland Q3 GDP Y/Y: 4.2% v 3.6%e - (CZ) Czech Oct Money Supply Y/Y: 4.4% v 4.7% prior - (HK) Hong Kong Oct Gov't Budget (HKD) +14.1B v -5.0B prior - (IC) Iceland Oct Final Trade Balance (ISK): 10.1B v 10.0B prior - (NO) Norway Oct Credit Indicator Growth Y/Y: 5.4% v 5.0%e - (NO) Norway Oct Retail sales Volume M/M: 0.1% v 0.2%e; Y/Y: -0.5% v 2.4%e - (SP) Spain Sept Current Account: -â‚¬3.7B v -â‚¬2.9B prior - (EU) Euro-Zone Oct Unemployment Rate: 10.1% v 10.1%e - (EU) Euro-Zone Nov CPI Estimate Y/Y: 1.9% v 1.9%e - (IT) Italy Nov Preliminary CPI (NIC incl. tobacco) M/M: 0.0% v 0.1%e; Y/Y: 1.7% v 1.8%e - (IT) Italy Nov Preliminary CPI EU Harmonized M/M: -0.1% v +0.1%e; Y/Y: 1.8% v 2.0%e - (GR) Greece Sept Retail Sales Y/Y: -3.9% v -8.5%e - (IT) Italy Oct Unemployment Rate: 8.6% v 8.4%e
Fixed Income: - (SA) South Africa Debt Agency sold total ZAR2.1B in 2018 and 2031 bonds - (EU) ECB allotted â‚¬179.7B in its 7-Day Main Refi Tender at a fixed rate of 1.0%; recd 163 bids vs. 165 prior - (HU) Hungary Debt Agency sells HUF30B vs HUF40B Targeted in 3-Month Bills; avg yield 5.78% v 5.28% prior - (BE) Belgium Debt Agency sold approx â‚¬2.8B vs. â‚¬2.5-3.0B Indicated in 3-month and 6-month Bills - Sold â‚¬1.425B in 3-month Bills, avg yield 0.864% v 0.784% prior; Bid-to-cover: 1.48x v 3.52x prior - Sold â‚¬1.37B in 6-month Bills, avg yield 1.00% v 0.901% prior; Bid-to-cover: 2.11x v 2.67x prior
- Eurostoxx at 2673, +0.12%, FTSE100 at 5571, +0.38%, CAC40 at 3641, +0.15%, DAX at 6750, +0.78%
- European shares opened higher but eroded their earlier gains on European debt concerns. Healthy retail figures post-Thanksgiving did not offset the Eurozone crisis driving Wall Street shares to close lower on Monday which in turn affected Asian equities as well. Market chatter also fueled contagion fears as dealers chatter noted that Germany's Landesbank is facing liquidity problems and that S&P may change France's outlook to negative. Meanwhile spreads are soaring, not only between the PIIGs and the Bunds but also between the semi-core and core EU states such as, respectively, Belgium and France. There is much speculation that Portugal is next in the bailout line as well as Spain and maybe Italy which are also being eyed constantly by investors. French and Spanish banks were trading lower. - Thyssenkrup [TKA.GE] reported its final figures for the year, returning to profit after last year's loss of â‚¬1.9B. Company beat estimates and guided FY11 sales to rise 10-15% but it also remained cautiously optimistic. Back in October, the company had guided FY10 profit to reach above â‚¬1B which was significantly higher than the consensus range at the time of â‚¬600-850M. Shares opened lower by 0.5% and are continuing to trade in the red. Remy Cointreau [RCO.FR] opened lower by 4% following its H1 results which reported a 65% decrease in net income. The decline was due to the decline in Metaxa brand sales in Greece prompting the company to write down its value. However, sales rose about 21%. - In M&A news, Hochtief [HOT.GE] was up by more than 2% after the German regulator BaFin gave Spanish ACS the green light to bid for the Hochtief. Market chatter has placed the bid at â‚¬72/shr while BaFin had determined that the min offer price for Hochtief needed to be â‚¬50.97/shr. Hochtief advised shareholders not to take any action until the bid offer was published.
Notes/Observations: - US Online sales on "Cyber Monday" rose 15-21% y/y - EU unable to contain the fears of contagion. Spreads and CDS at/near record levels for most peripherals. Spain braces for crisis made in Germany - Wikileaks are everywhere with potential of a large US bank documents to be unveiled in early 2011 - Emerging markets continue to hum along as both India and Poland Q3 GDP exceed expectations
Speakers: - ECB's Kranjec reiterated the G7 view that global imbalances could allow for 'currency wars' and viewed that both the European and global economies were stabilizing. On the peripherals he noted that the euro was certain to survive and that Euro membership was 'irrevocable' and did not allow withdrawal - OECD chief economist commented that it did not sees issues with Italian debt in both the short and long-term maturities. It added that even though Italy had high debt levels it believed that stabilization effort was less compared to other are less compared peripherals. - The OECD did call for more leadership in the European debt crisis coupled with more signals that countries are doing their part in resolving the matter - BoE Dale reiterate BOE majority view that economic recovery will continue and that CPI to remain above target for a year or so - The UK Debt Management Office (DMO) amended its 2010/11 Gilt issuance higher to Â£165.2B v Â£165.0Be but noted there were no changes to the number of auctions. It was to increase the number of short and long dated conventional sales by Â£100M - Japan MoF confirmed that the central bank did not intervene in currency markets during Nov on its behalf
Currencies: - The price action for the Euro remained at the mercy of the peripheral situation and the scenario remain similar to yesterdays price action as widening spreads and CDSs continued to reverberate in the session despite the weekend Irish bailout. The current atmosphere failed to contain the fears of a possible contagion and widening was exhibited in semi-core and even core . The EUR/USD initially tried to move back above its 200-day moving average (now at 1.3117) but succumbed to the peripheral pressures to test below the 1.30 for the first time since Mid-Sept. The euro weakness was again broad with EUR/CHF cross back below the 1.30 as well and EUR/JPY dipping below the 109 handle. - The sentiment of the session was more about safe-haven flows rather than typical risk aversion as the dollar, CHF and JPY reasserted their roles and strengthened against other various pairs. Spot Gold again decoupled from its typical inverse relationship with the USD and rose by almost $10/oz towards $1,375/oz.
Geopolitical/In the papers: - The Telegraph's Evans-Pritchard commented on Germany's stability efforts noting that the country may need to do more to assist Spain in order to avoid a collapse of the EMU. Despite the worsening liquidity situation in Europe, Germany has supported the ECB's plan to exit from its extraordinary measures. He included comments made by Citigroup economist and former Bank of England member Willem Buiter that Portugal may need to be rescued before the year-end with Spain to eventually follow. A separate analyst at Deutsche Bank believed that Spain could require an IMF credit agreement in the near term. Markets are pricing close to a 23% chance of a default for Spain, 34% for Portugal and 39% for Ireland. Addressing the cost of a Spanish bailout, Evan-Pritchard said it would completely exhaust the European Stability Fund (EFSF). As a reminder, back on the 26th of November, Evans-Pritchard discussed how the costs of the EU's bailouts were starting to threaten Germany. When adjusted for demographics, Germany is one of the most indebted countries in the world due to its ageing population. - Also reported in the Telegraph were persistent contagion concerns related to Spain and Portugal as the EU bailout plan for Ireland failed to restore market confidence. According to RBS analyst Nick Matthews, the crisis is becoming stronger and the only way for the ECB to slow the contagion is to increase its bond purchases. The article adds that some traders have been aggressively selling 'Club Med' bonds in order to comply with their value-at-risk models before closing their books for the year.
***Looking Ahead *** - (PO) Portugal Oct Industrial Production M/M: No est v -4.8% prior; Y/Y: No est v -2.4% prior - (IS) Israel Q3 Unemployment Rate: No est v 6.2% prior - (BE) Belgium Oct Budget Balance (YTD): No est v -â‚¬12.5B prior - (BE) Belgium Oct Unemployment Rate: No est v 8.7% prior - 7:00 (EU) ECB to drain â‚¬67B in 7-day Term Deposit Tender - 7:00 (CL) Chile Oct Unemployment Rate: 7.8%e v 8.0% prior - 7:00 (SA) South Africa Oct Budget (ZAR): No est v -12.4B prior - 7:00 (SA) South Africa Oct Trade Balance (ZAR): No est v 3.6B prior - 7:30 (BR) Brazil Oct Primary Budget (BRL): No est v 27.8B prior; Nominal Budget: No est v 11.8B prior; Net Debt to GDP Ratio: No est v 41.0% prior - 7:45 (US) Weekly ICSC Chain Store Sales - 8:30 (CA) Canada Sept Gross Domestic Product M/M: 0.1%e v 0.3% prior; Q3 GDP Annualized: 1.5%e v 2.0% prior - 8:55 (US) Redbook Weekly Retail Sales - 9:00 (US) Sept S&P/CaseShiller Home Price Index: No est v 148.59 prior; Composite-20 Y/Y: No est v 1.7% prior - 9:00 (US) Q3 S&P/CaseShiller Home Price Index: No est v 138 prior; HPI Y/Y: No est v 3.6% prior - 9:45 (US) Nov Chicago Purchasing Manager: 60.0e v 60.6 prior - 10:00 (US) Nov Consumer Confidence: 52.1e v 50.2 prior - 10:00 (US) Nov NAPM Milwaukee: No est v 56 prior - 11:00 (CO) Colombia Oct Urban Unemployment Rate: No est v 11.5% prior - 11:00 (US) Fed to Purchase $6-8B in Notes/Bonds - 11:30 (US) Treasury to sell 4-Week Bills 12:00 (US) Treasurys SFP bills draw - 12:30 (US) Fed's Kocherlakota speaks on monetary policy in St. Paul, MN - 13:30 (MX) Mexico Oct YTD Budget Balance (MXN): No est v -176.8B prior - 14:00 (AR) Argentina Oct Construction Activity Y/Y: No est v 8.3% prior - 14:00 (US) House Subcommittee to review Fed Bond purchase program - 15:00 (US) Fed Chairman Bernanke speaks with business leaders in Ohio - 16:30 (US) API Weekly energy 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.
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.