Overnight Points of Interest
2013 April 3 by Graham
Good morning
Overnight
# European stocks rose sharply as the new quarter spurred fresh position taking and merger and acquisition news (M&A) boosted sentiment. The EuroStoxx600 ended up a healthy 1.27%. Stateside, stocks are giving back early gains as we head into the close with the S&P500 ending up 0.50%, a new all-time closing high.
# Shares of Vodafone rose 2.9% to the highest level in more than five years, as the Financial Times reported that Verizon Communications and AT&T T are working on a bid for the U.K. telecommunications firm. At that the rumoured priced, about 260p per share, the deal would be the biggest acquisition ever. It would dwarf the previous M&A record holder, AOL’s $182bn takeover of Time Warner in 2000.
# The NZD was the strongest of its peers as Global Dairy prices hit a new record high, after rising 14.2% on average since the previous auction a fortnight ago. This is the third consecutive auction with double digit price gains, as the short supply of product squeezes prices upward. Dairy prices have more than doubled since the mid-May 2012 low. The strength was particularly evident against the GBP after data showed the UK manufacturing sector shrinking more than anticipated in March with UK PMI coming in at 48.3 vs. 48.7 expected. NZD/GBP now sits at a new post float high of 0.5575.
# The final reading of Eurozone Manufacturing PMI fell to 46.8 points last month, up from an initial estimate of 46.6, but well short of the already-weak 47.9 points posted in February. The downturn in the 17-nation Eurozone’s manufacturing sector deepened sharply last month, with even powerhouse Germany dragged down, the key indicator showed. The outcome left the closely followed indicator at a 3 month low and firmly below the 50-points boom-bust line since August 2011.
# Unemployment across the 17 European Union countries that use the Euro has struck 12 % for the first time since the currency was launched in 1999. Over the month, a net 33,000 people in the Eurozone joined the ranks of the unemployed. Spain and Greece continued to suffer from unemployment rates above 26 %, and many other countries were seeing their numbers swell to uncomfortable levels. Showing how Germany, Europe’s biggest economy, has benefitted from the single currency union their unemployment rate is only 5.4% significantly better than the U.S. rate of 7.7 %.
# Orders for US Factory Goods escalated in February on aircraft and car bookings even as the business spending indicator declined, pointing to a mixed picture of the country’s manufacturing sector. Orders for manufactured goods rose 3 %, following a 1 % decline in January, which was better than initially reported.
# Gold tumbled the most in more than 5 weeks (Silver lower for the ride too!) as physical demand ebbed and a stronger dollar trimmed demand for the precious metal as an alternative investment. Adding to the bear sentiment Societe Generale SA analysts said Gold is in a bubble and will head into a so-called bear market as improving U.S. economic growth prompts the Federal Reserve to curb stimulus efforts. The U.S. Mint sales of American Eagle gold coins slumped 23 % in March from a month earlier to 62,000 ounces. Gold fell 1.6 % to settle at $1,575.90 an ounce the biggest decline since Feb. 20. Prices have fallen 6 % this year, after 12 straight annual gains.
# Various FED speakers were somewhat contradictory with the Fed’s Kocherlakota repeating call for more monetary accommodation, again urging the Fed to vow low rates until unemployment falls to 5.5% whilst the Fed’s Lockhart said the central bank could begin to curtail asset purchases later this year or early next year without harming economic momentum.
Ahead
# Australian New Home Sales
# Australian Trade Balance
# China Non-Manufacturing PMI
Regards and have great (trading) day
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Market Insight Newsletter – Vol. 2, Issue 32 Futures, FX, CFDs, Equities
2013 February 11 by Company
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Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 October 15 by Graham
Good morning
Friday night
# Equity markets rounded out what has been a poor week with more mild losses. The EuroStoxx600 fell 0.52% to be down 1.71% for the week and the S&P500 fell 0.30% to be down 2.21% for the period. This was the worst week for equity markets since June.
# Eurozone officials told Reuters speaking under anonymity that Spain will most likely seek aid from the Eurozone in November. Sovereign debt markets responded positively to the speculation – with the 10-year Spanish bond closing at 5.64% down from 5.78% at Thursday’s close.
# Eurozone Industrial Production surprised positively in as much as the output was less negative than the downbeat expectations. The common zone’s production came in at -2.9% against expectations of a 4.2% decline.
# U.S. Oct University of Michigan Sentiment Survey also surprised coming in much stronger than anticipated at 83.1 against a forecast 78.0.
# The best to worst performing currencies in the past week were in almost reverse order from the previous week. That indicates there isn’t a lot of conviction out there and cross positions taken the previous week were unwound last week. The market was particularly long the EUR/AUD coming into last week and there was a decent unwinding of those longs, as the on-going dramas involving Spain and Italy weighed on the EUR and better Australian jobs data tempered some of the calls for extreme AUD weakness.
# Key commodities were weak on Friday and weighed on other risk assets and /commodity risk currencies as well. Copper fell 1.30% to a one month low settlement price – as investors were anxious ahead of a stack of key China data starting on the weekend. NYMEX Crude fell 0.23% while gold suffered its biggest daily drop in more than 2 months – falling 0.80% to 1,754 from Thursday’s close at 1,768.
# Some analysts suggested the gold market may have reacted to JPMorgan CEO Dimon’s comments that the US housing markets has “turned the corner” and interest rates would probably rise some time in 2013 – even though the Fed has pledged to keep them near zero for the next three years.
Over the weekend
# China’s Trade Balance blew away even the most optimistic of expectations soaring to a 27.7 BLN USD surplus vs forecast for 20.7 BLN USD. The headline figures were simply stunning with exports rising 9.9% Y/Y against a forecast of a 5.0% rise whilst imports came in + 2.4% as expected up from – 2.6%. The export data in particular will shock China bears – as it grew at roughly twice the rate expected. While exports to Europe fell 10.7% Y/Y and there was a mild 5.5% improvement in exports to the US – it was the stunning 25.5% Y/Y rise in exports to ASEAN countries that caught the eye. Evidence of strengthening trade between ASEAN neighbours showed up in the import numbers with a 19.9% Y/Y rise in imports from Taiwan and a 9.0% rise in imports from S Korea Y/Y.
# The details of the data were a bit less flattering – with imports of raw materials from Australia and Brazil falling sharply Y/Y. This was despite imports of iron ore rising 4.1% – highest rise since Jan 2011. This was due to steel makers taking advantage of the fall in the price to rely on cheaper imports rather than relying on inventories purchased at higher prices.
# According to various weekend reports – the IMF Greek debt sustainability study shows that Greece’s debt to GDP ratio will seriously deteriorate to close to 180% in 2013 and would likely be closer to 150% in 2020 – much worse than the 120% target all rescue deals are based off. Adding to the woe Sweden’s Finance Minister Borg said on Saturday Greece was likely going to exit the Euro within six months saying that Greece situation is so bad they need a much weaker currency to boost their competitiveness.
This week (major events in bold)
# 15 October: NZ PSI; UK house prices; AU home loans; China CPI & PPI; US Empire manufacturing; US retail sales; US Fed’s Lacker and Bullard speak; 16 October: NZ CPI; AU RBA Board minutes; UK CPI; EU German ZEW; US CPI; 17 October: UK BoE minutes; US housing starts; 18 October: NZ job ads; AU NAB business conditions; China industrial production, GDP, retail sales & investment; US Philadelphia Fed index; EU European Summit begins in Brussels; 19 October: NZ net migration; US home sales.
Today
# Australian Home Loans
# China CPI and PPI
# U.S. Retail Sales
# U.S. Empire State Manufacturing Index
Good trading
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 August 26 by Graham
Overnight
# Equity markets finished the week on a positive note. The EuroStoxx600 eked out a minor gain of 0.12% whilst the S&P500 fared somewhat better rising 0.65% after a Bernanke letter to Congress was tabled.
# Bernanke ‘s letter detailed that “FOMC voters saw a need for further stimulus at last meeting”
# U.S. Durable Goods Orders for July did not make the case for immediate action coming in much better than expected up 4.2% against forecasts of +2.4% and +1.6% previously ( the survey is notoriously volatile however with the likes of aircraft orders distorting readings month to month).
# Euro crisis headlines were mixed. On one hand German Chancellor Merkel said that she wants Greece to remain in the EZ whilst in a somewhat contradictory statement the German Finance Ministry stated that they were “seriously considering a plan for a temporary Greek exit”.
# UK Q2 GDP was revised for the better (less bad) to -0.5% from -0.7% however, as always, the devil was in the detail with figures for consumption, exports and investment all weaker. As a result GBP underperformed against most currencies.
# Pouring more fuel on the fire that is the claim that the great Australian resource boom is over was BHP CEO Marius Klopper . Speaking over the weekend on Inside Business on ABC Klopper said they expect “long-term” price declines for its commodities as slower economic expansion in China weighs on demand. Full article here http://www.bloomberg.com/news/2012-08-26/kloppers-sees-long-term-price-decline-for-bhp-s-commodities.html
This week (major events in bold)
Event Calendar: 27 August: German IFO; US Fed’s Evans speaks; US Fed’s Pianalto speaks; US Dallas Fed index; ECB’s Asmussen speaks; 28 August: AUS home sales; US consumer confidence; US Richmond Fed index; 29 August: AUS construction; US Q2 GDP (revision only); US pending home sales; US Fed Beige Book 30 August: NZ building permits; NZ NBNZ business confidence; Japan retail trade; AUS Capex; AUS building approvals; GE unemployment; US personal income & jobless claims; 31 August: JN CPI & jobless rate; EU CPI; ECB’s Coeure & Nowotny speak; US Fed’s Bernanke speaks at Jackson Hole Economic Symposium;
Today
# German IFO
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 July 29 by Graham
Overnight
# Global equity markets enjoyed their 2nd strong day in a row to round out an eventful week. Thursday nights watershed “will do whatever it takes” comments from ECB president Draghi remained the driving force, sending the EuroStoxx600 up 1.26% and the S&P500 up a healthy 1.91%.
# European newspapers carried reports suggesting that the ECB will now soon take action to lower spiralling European borrowing costs which sent all ‘risk’ or ‘growth sensitive’ assets marching higher. The ECB have their monthly announcement on monetary policy this Thursday so the market will be in a frenzy of expectation.
# The NZD/USD was one of the better performers, climbing to 10 week highs above 0.8100 whilst reclaiming some of the recent losses against the AUD to 0.7730.
# Commodity prices rose but were relatively muted, failing to keep abreast of the currency and equity market moves. Copper rose 1%, Crude 0.8% and Gold 0.45%.
# U.S. Q2 GDP beat expectations, coming in at +1.5% y/y against an expected 1.4%. Further Q1’s +1.9% was revised positively to 2.0%. Despite the better than forecast result the trend does show a slowing of output and lifts market the expectations of further non-traditional (hocus pocus!) monetary policy response from the FED.
# The spread between core and peripheral European benchmark 10 year bonds again narrowed, with the ‘core’ yields rising and the ‘peripheral’ yields dropping. These moves are an unwind of the extreme fear apparent over the last few months suggesting the market has a new found faith in the ECB after Draghi’s comments.
# In a show of apparent unity with the ECB, German Chancellor Angela Merkel and French President Francois Hollande expressed their ongoing determination “ to do all they can to safeguard the Euro”.
# Not everyone shared the markets enthusiasm with leading think tank Open Europe being reported in the UK Telegraph as saying a full blown bailout of Spain is impossible. Joining them was Goldman Sachs Jim O’Neil who said there was nothing further Spain could do and it was now down to Germany to embrace the previously rejected Eurobonds (recall Markel’s ‘not in my lifetime” quote some weeks ago).
The week ahead – Plenty!(major releases in bold)
:30 July: NZ building permits; JN IP; Italy sells bonds; EU economic confidence; US Dallas Fed index; 31 July: NZ NBNZ business confidence; JN jobless rate; AU home sales; AU building permits; EU German unemployment; EU CPI; US PCE; US consumer confidence; 1 August: China PMI; China HSBC manufacturing PMI; EU & UK PMI manufacturing; US ADP employment; US ISM manufacturing; NZ dairy price auction; 2 August: US FOMC decision; NZ ANZ commodity prices; AU trade balance; AU retail sales; UK BoE meeting; EU ECB meeting; US factory orders; Monti & Rajoy meeting; 3 August: CH non-manufacturing PMI; EU retail sales; EU & UK PMI services; US non-farm payrolls
Today
# NZ Building consents
# Spanish ‘flash’ GDP
# Italian 10 year bond auction
# U.K. Consumer Confidence
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 July 22 by Graham
Overnight
# A worsening of the Spanish situation drove markets Friday. Spain’s Ibex exchange fell a whopping 5.82% pulling the EuroStox600 down 1.41% and the S&P500 down 1.01%.
# Fears that Spain would join Greece, Ireland and Portugal in needing a bailout intensified after the Valencia Region of Spain said it would apply to Madrid for financial help. Adding to the pressure on Spanish bonds is ambiguity on when and how the EFSF/EMS will deal with the issue of capitalizing Spanish banks and who is ultimately liable if losses are incurred.
# Over the weekend new reports from Spanish newspaper El Pais suggested another six regions (including Catalonia) will soon do the same.
# Further undermining sentiment, the Rheinische Post carried a report saying that the CSU, one of Merkel’s opposition partners, would back a Greek euro-exit.
# The ECB advised that Greek bonds ineligible as collateral from July 25.
# Spanish 10 year bond yields rose to new Euro era highs of 7.31% whilst the spread over Germany blew out to over 600 points for the first time ever. Italian yields moved in sympathy, the 10 year yield there moving from 5.99% to 6.31%.
# Surprising no one, the EUR/USD slipped to fresh 2 year lows below 1.2150 whilst many other currencies hit new life-time highs against the beleaguered common currency.
# Key commodities sold off in response to the Spain-led spike in risk aversion with NY Copper falling over 2.5% on the day – the biggest daily fall in a month. Crude retreated from its recent strong run falling 1.3% whilst Gold was stable, underpinned by expectations that the intensifying Eurozone debt crisis will inevitably force the ECB to engage in some form of QE.
# A Wall Street Journal article on Friday suggested that some members of the BOJ (including the governor) feel the strong JPY is helping economic growth. This story is a complete 180 degree turn on the long held belief that Japanese authorities want a weaker JPY and could have a significant impact if confirmed.
The week ahead
# 23 July: AU PPIs; US Chicago Fed index; 24 July: CH HSBC manufacturing PMI; AU RBA’s Stevens speaks; EU manufacturing/services PMIs; US Richmond Fed index; US house prices; 25 July: NZ trade balance; AU CPI; EU German IFO; UK Q2 GDP; US new home sales; 26 July: NZ RBNZ OCR review; NZ finance minister speaking; US durable goods orders; US jobless claims; US pending home sales; 27 July: EU German CPI; US Q2 GDP; US Michigan consumer confidence
Today
# Australian Producer Price Index
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 June 25 by Graham
Overnight
# Global equity markets were a sea of red as European law makers doused expectations for a long lasting solution to Europe’s problems ahead of Thursday’s EU Summit. The broad EuroStoxx 600 ended down 1.5%, as did the S&P500, falling a similar 1.6%
# German Chancellor Merkel said she is worried people are hoping for “easy solutions” and the ECB’s Nowotny said “don’t expected too much” from the Summit.
# Spain formally applied for extra bailout funds for its banks but details about the plan, including the specific sum it would involve, remain unclear.
# Another Euro member, albeit the smallest, applied for bailout funds as well. Cyprus has now joined the ranks of requesting a sovereign bailout.
# In a remarkably frank admission of the current state of affairs the ECB’s Weidmann said: Attempts by EZ to impress financial markets with ever larger sums of money will not work; Monetary financing is forbidden; Undermining rules is not a way to stabilize EZ; Lack of decision making by govts is taking the ECB to limit of its mandate, ECB bond-buy program cannot solve root cause of EZ crisis
# Currencies were strangely muted to the equity markets’ leads with EUR and AUD declining modestly whilst the NZD held its ground. NZD/AUD continued to grind higher as NZ-AUS 3 year swap prices have lifted to the highest since mid-2010.
# U.S. data was mixed, the Chicago Fed Index came in at -0.45 v-0.3 expected, the Dallas Fed manufacturing index rose to 5.8, well above market expectations of -2.0, whilst US new home sales posted 369k vs. 347k expected.
Ahead
# RBA Deputy Gov. Debelle speaks
# UK Public Spending and Inflation hearing
# U.S Consumer Confidence
# U.S Richmond manufacturing index
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 May 22 by Graham
Overnight
# The Eurostoxx600 was up a very strong 1.90% however U.S markets surrendered gains of up to 1% to finish flat for the session after a late selloff.
# Comments from ex Greek PM Papademos hurt morale “risk of Greece leaving Euro is real” and “Preparations for Greece Euro exit are being considered”.
# The USD was strong in response with most currencies falling back toward recent lows. Commodities were also hit gold -1.6%, silver -1.15%; corn -5%, cocoa -2.8%, soy meal -2.5%; oil products -0.22/-1.22%.; only nat gas closed up (+3.1%).
# UK inflation data came in at the lowest level in two years (Feb 2010). Data showed headline CPI fell to 3.0%y/y (3.1% expected) in April from 3.5% previously.
# Spain held a successful auction of bills overnight. Spanish 10-year yields fell sharply from 6.28% to 6.08%, with Spanish-German spreads narrowing from 484bps to 461bps.
# Ratings agency Fitch announced its downgrade of Japan to A+ with a negative outlook.
# Facebook Inc. shares had another major fall, dropping almost 9% amid reports of underwriters cutting revenue estimates prior to the social network’s stock-market debut.
# A larger-than-expected jump in U.S. home sales was seen. The report showed that sales of previously owned homes rose 3.4% in April, adding to recent evidence suggesting the long-depressed housing market may have seen its worst days.
Ahead
# Japanese Monetary Policy Statement
# UK Monetary Policy Minutes
# UK Retail Sales
# U.S. New Home Sales
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 March 29 by Graham
Yesterday/Overnight
# BNZ commentary on the NBNZ Business Opinion Survey released yesterday – We thought last month’s National Bank Business Outlook was nothing short of staggering but this month’s efforts have completely blown the February report out of the water. A net 38.8% of businesses are optimistic about their own-activity prospects. This would appear to be consistent with GDP growth of around 4.0%. But if you seasonally adjust this reading, you can easily come up with a figure which is 2.0% higher still. Whichever way you look at it, the data imply a much stronger NZ economy than any of us are forecasting
# NZ wholesale interest rates fell in sympathy with offshore moves despite the strong NBNZ release
# Rating agency S&P reminded the market that Greece’s problems are not over and that they may default again
# A Spanish strike in protest of austerity measures also dampened sentiment
# The Euro Stoxx 50 closed down 1.80%
# FED chairman Bernanke told students at George Washington University on Thursday that U.S. growth was below its long-term trend, still in a relatively weak recovery following the 2007-09 financial crisis. Further, a government report on jobless claims contained figures, revised from 2007 and based on updated seasonal adjustment calculations, included a significant upward revision for the previous week’s jobless number. This led to talk that recent declines in new jobless claims might be less significant than first thought (these developments still have me quite comfortable that Bernanke is not done with ‘super easy U.S. monetary policy’)
# Final U.S. GDP figures came in a touch lower than expected at 3.0% versus 3.2% expected
# A late rally in the Dow, to end up 19 points, has seen ‘risk’ reverse earlier losses and end broadly where we left it yesterday from quite sharp dips overnight
# Ireland pulled off complex debt payment deferral. Seems the deal is so complicated that it was described as ‘the Irish government dabbling in the arcane arts of financial modeling’.
Ahead
# NZ building consents
# Japan manufacturing PMI
# Japan Core CPI
# Euro Finance Minister’s meeting
# Eurozone CPI
# US the Chicago PMI and University of Michigan Confidence surveys
# Chinese PMI data (released Sunday. Market talk suggests large players are whipping themselves into a frenzy over this release so Monday could be very interesting)
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 March 8 by Graham
Yesterday/Overnight
# The NZD is sharply higher against the field this morning despite almost a third of the RBNZ’s front page statement being dedicated to the’ too strong currency’.
# The RBNZ also pushed back the implied starting point of its rate hiking cycle from September to December
# The ECB kept rates on hold at 1.00%, as expected but lowered its 2012 GDP forecast to a -0.5% to+0.3% range
# President Draghi hailed the success of the LTRO and European reforms
# German industrial production for January was higher than expected coming in at 1.6% vs.1.1% expected.
# The Euro Stoxx 50 closed up 2.20% buoyed by optimism that a successful Greek debt swap is imminent.
# The BoE also left rates unchanged at 0.50% and its asset purchase target at £325b
# Japanese Q4 GDP came in at -0.7%ann v-0.6% expected.
Ahead
# Final announcement on the Greek PSI deal
# NZ electronic card transactions
# Chinese data releases include industrial production, CPI, fixed asset investment and retail sales
# U.S non-farm payrolls
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities