2013 May 9 by Graham
I will be on annual leave from tomorrow until Thursday, as such the OPI output will take a break until then.
# European stocks were buoyed by the 2nd consecutive day of positive German data surprise, the Eurostoxx600 rising 0.64%. Meanwhile, the S&P500 advanced for the 5th straight day once again setting new all-time highs. The S&P500 rose 0.41%v ending on its intraday high.
# German Industrial Production helped underpin the EUR and European stocks. March IP rose 1.2%m/m, well above the 0.1% decline expected. Coming just a day after the similarly upbeat German factory orders figures, the data has buoyed hopesGermanymay yet avoid recession.
# One of the market trends that has occurred recently, and largely without fanfare, is the decline in borrowing cost for the European ‘periphery’. From 350bps in early April, Italian-German 10-year bond spreads have fallen to almost 250bps. Spanish equivalents have plunged from 375bps to 280bps over the same period. As various commentators have noted, these declines are doing far more to ease European financial conditions than the ECB’s 25bps refi rate cut.
# Legendary investor Stanley Druckenmiller, ex Soros Fund, hit the wires saying the commodity swoon is not just a correction, the party is over due to oversupply and the AUD is going to come down hard. http://au.businessinsider.com/druckenmiller-pessimistic-on-commodities-2013-5
# The U.S. Treasury’s sale of $24 billion in 10-year notes got a lukewarm reception from investors, drawing $2.70 in bids for every $1 worth of notes on sale, below the average.
$2.89 from the past eight auctions, according to CRT Capital Group. As a result, theU.S.government is paying a higher interest rate of 1.810% for the new notes, more than the 1.800% for similar notes already in circulation before the auction.
# Commodities were well bid, Gold futures posted the biggest gain in almost two weeks as demand for bars and jewellery increased in India and China, the world’s largest consumers of the metal. Gold futures for June delivery advanced 1.7 % to settle at $1,473.70 an ounce. U.S. Crude rose to a one-month high after supplies fell at Cushing, Oklahoma, the delivery point for the contract. Brent oil’s premium to WTI shrank below $8 for the first time since January 2011. U.S. Crude for June delivery increased $1 to $96.62. Dr Copper also rose, climbing 2.0% on the back of the strong China trade data yesterday and the German IP data overnight.
Ahead (big day in this neck of the woods)
# NZ Employment Change
# Australian Employment Change
# China CPI
# Japan Leading Indicators
# UK Manufacturing and Industrial Production
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
2013 May 3 by Graham
# Equity markets benefitted from more monetary policy stimulus, this time form the ECB who cut their benchmark rate by 0.25%. The after a topsy turvy session the EuroStoxx600 rallied late to end up 0.32%. The S&P500 forged to new all-time highs, rising 0.94%.
# As was widely expected, in light of the recent stream of poor European data, the ECB cut 0.25% to take its target interest rate to 0.50%. President Draghi did not rule out further action saying the ECB is “technically ready” for negative deposit rates. He also said the ECB was consulting with other parties on ways to stimulate lending, particularly to SMEs. Finally the ECB’s statement emphasised that the risks surrounding the economic outlook for the Eurozone continue to be to the downside.
# The EUR was hit hard on the decision. After initially trying the topside, rallying to 1.3220, the EUR then slumped to sit at 1.3050 this morning.
# After last night’s ECB announcement German 10-year yields dropped to within a whisker of last year’s all-time lows, at 1.16%. Peripheral spreads to German bonds inched lower. Spanish-Italian 10-year bonds spreads narrowed to 290bps, their lowest level since October 2011.
# U.S Jobless Claims unexpectedly fell to a 5 year low with 18,000 less applying for job insurance. The headline drop to 324k contradicts yesterday’s ADP report and sets up an interesting end to the week with the official Non-Farm Payrolls number due tonight where the unemployment rate is expected to stay at 7.6%. (One evolving story is the suspicion that there is an ever growing ‘black/grey’ labour market in the U.S. This line of thinking is built upon the huge drop in the participation rate in recent years (normal participation would suggest unemployment over 10%) but data like retail sales remaining relatively stronger than would be expected).
# Commodities were generally well bid on the double whammy of more global stimulus and better than expected U.S. labour data. U.S. Crude was the standout, tracing out the biggest 1 day gain in 6 months.
# AIG Australian Services Index
# Australian PPI
# Eurozone Economic Forecasts
#U.S.Non- Farm Payrolls
#U.S.ISM Non-Manufacturing PMI
# U.S Factory Orders
Cheers and good weekend
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
2013 May 1 by Graham
# European stocks lost ground on a record Eurozone unemployment number howeverU.S.stocks made moderate gains with the S&P500 rallying to new all-time highs in the last few minutes of the session. The EuroStoxx600 ended down 0.23% whilst the S&P500 rose 0.25%.
# Eurozone unemployment for March rose to 12.1%, the highest since 1995. There is now more than 19 mio people out of work in the combined economic zone. The biggest rise in unemployment was inGreece, where the jobless rate jumped by almost a percentage point in one month to 27.2%. Youth unemployment in the bailed-out nation crept closer to 60%, with 59.1% of 16 to 24-year-olds out of work in January, compared with 58.4% in December.
# Meanwhile Eurozone inflation fell to a 3 year low of 1.2% in April, the biggest monthly drop in more than 4 years. The combined inflation and unemployment data has many analysts expecting an interest rate cut from the ECB this week.
# Spain announced that their economy, the 4th largest in the Eurozone contracted a further 0.5% in Q1, the 7th consecutive decline. The latest figure is in line with Bank of Spain forecasts which predict that Spain’s economy will shrink by around 1.3 % by year end and not begin to return to growth until well into 2014. Embattled Prime Minister Mariano Rajoy was forced to acknowledge that despite stringent austerity measures the nation would need an additional two years to bring its public deficit to within the 3 % limit demanded by European Union partners.
# German Retail Sales fell for a second month in March, adding to signs that Europe’s largest economy is struggling to recover.
# Despite the rotten data the EUR actually rallied against the greenback by as much as 1% at one stage, lifting from 1.3053 to 1.3184.
# The likely catalyst was the Chicago FED PMI which showed manufacturing conditions in the Chicago region contracted for the first time in 3.5 years. The index dropped to 49.0 from 52.4 in the month of April hitting its lowest level since September 2009.
# U.S. Consumer Confidence rebounded in April rising to 68.1% v 61.0 a 5 month high, most probably driven by improving house prices.
# S&P/Case Shiller US house price index a composite index of 20 metropolitan areas rose 1.2%m/m in February, the strongest in six years.
# Apple Inc. set a record for the global bond market with a blockbuster $17bn debt sale on Tuesday as the iPhone maker raised capital to fund its plan to return $100bn to shareholders. While Apple has $145bn of cash on its balance sheet, only $45bn is held in theUS and repatriating foreign reserves would be costly due to tax implications. This has motivated the company to access the US debt market for the first time.
# U.S. 10-year yields touched a 4-month low of 1.64% overnight as falling inflation (the core PCE fell to 1.1% on Monday) and deteriorating economic data has raised speculation the Fed could be a little more dovish this time around (no tapering talk).
# U.S Crude dropped 1.1% ahead of tonight’s stockpiles report which is expected to show ever increasing U.S. reserves.
# AIG Australian Manufacturing Index
#ChinaOfficial Manufacturing PMI
# RBA Assist Gov Edey Speaks
# ADP Non-Farm Employment report
#U.S.ISM Manufacturing PMI
# U.S Construction Spending
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
2013 April 29 by Graham
# Equity markets were predominantly in the red for the most part of offshore trade before late rallies improved the tone. The EuroStoxx600 ended down 0.33% however for the week the gains were an impressive 3.74%. Stateside it was a similar story with the S&P500 ending the day down 0.18% but up 1.7% for the week.
# The U.S. Q1 GDP outcome confirmed the poor tone of recentU.S.data, missing the 3.0% expectation coming in at 2.5%.
# TheUniversityofMichigan Consumer Sentimentsurvey came in better than expected but none the less weaker than a month ago. The reading of 76.4 beat the expected 72.3 but was down from 78.6 in March.
# After a 2 month stalemateItalyhas finally formed a 3 party coalition government. The alliance is one of previous bitter rivals with former premier Berlusconi integral in the mix.
#Spainrevised down its 2013 growth forecast to -1.3% from -0.5%, and optimistically forecast +0.5% growth in 2014.
# The USD/JPY pair bore the brunt of the weaker U.S GDP data falling from 99.50 to 97.50 in the process confirming that the approach to 100.00 has formidable resistance.
Best to worst performing currencies last week
CCY Apr19 Apr26 % change
GBP 1.5230 1.5480 1.64%
JPY 99.50 98.05 1.46%
CAD 1.0270 1.0173 0.94%
NZD 0.8421 0.8475 0.65%
AUD 1.0275 1.0279 0.04%
EUR 1.3111 1.3026 -0.65%
CHF 0.9332 0.9422 -0.96%
# You would have to conclude that a lot of last week’s net/net FX movement was the result of position adjustments rather than fundamental analysis. The IMM data released on Friday showed the speculative community was extremely short the JPY, GBP and CAD heading into last week and they ended up being the best performing currencies by far. The specs were very long the AUD and it ended up underperforming even though equity and commodity markets performed very well in the past week. The EUR lost ground against every currency except the CHF as the run of very poor EZ data has raised expectations the ECB will ease in the coming week.
# Key commodities gave some of the large gains made on Thursday. Copper fell 1.62% and U.S. Crude ended a six-day winning streak to close 0.68% lower. Iron Ore had a bad close to a bad week falling 2.1% to 132.84. Gold was very choppy on Friday and fell sharply after twice failing to break above the 1,480/1,485 level. Gold fell as low as 1,448 after the US GDP data before recovering to close at 1,462 down slightly from 1,466 late Thursday. For the week Copper gained 0.78%, Crude rose 5.42% while Iron Ore ran its own race falling 4.4% on the week. Gold posted its biggest weekly gain in three months, as bargain hunting investors and central banks bought from the extreme lows hit following a capitulation in Gold ETFs. Gold gained 4.18% for the week and is up close to 7% from the April 16 low at 1,321.35.
The week ahead (quite busy!)
2013 April 19 by Graham
Good Friday morning
# European stocks spent most of the evening in positive territory up around 0.5% before poor U.S. data sent the EuroStoxx600 to a perfectly flat close (0.00% change). Stateside it was generally just down, after a full slate of uninspiring corporate earnings and a weaker than expect Philly Fed survey, before a mild recovery in the last hour saw the S&P500 close down 0.67%
# The U.S Philadelphia FED Survey of Manufacturing showed general business activity within its regional factory sector slowed to 1.3 in April from 2.0 in March. Economists had expected little change at 2.5. The Philadelphia report follows another survey showing an April slowdown in manufacturing. On Monday, the New York Fed said its survey of regional factories showed conditions slowed significantly this month but remained in expansionary territory.
# The NZD was strangely the weakest of the G-10 currencies despite yesterday’s robust ANZ-Roy Morgan confidence survey. The reading of 119.20 from 114.8 in March puts the index back above its 10-year average of 117.5. Overall, confidence levels suggest solid real spending growth ahead to the tune of about 3% pa. The NZD/USD traded as low as 0.8400 whilst NZD/AUD could not hold its brief foray above 0.8200 and has slumped back to near support at 0.8160.
# Despite the generally dour tone of recent sessions Spain surprisingly managed to sell 10-year bonds at the lowest yield since September 2010. It would appear the appetite for ‘peripheral’ European debt may be tied to the growing expectation of further monetary easing in the Eurozone following Bundesbanker Weidman’s comments earlier in the week.
# Bolstering the ECB easing talk IMF Managing Director Christine Lagarde said that the ECB is the only central bank with “a bit of space” to cut rates.
# U.S. Jobless Claims were largely unchanged coming in at 352k against expectations of a 350k result.
# Gold ground higher but the gains are miniscule in relation to the hammering the precious metal has had in recent days. Currently Gold sits at US$1,390.00 well off its US$1,321 lows earlier in the week.
# G-20 Meetings
# IMF Meetings
2013 April 3 by Graham
# 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.
# Australian New Home Sales
# Australian Trade Balance
# China Non-Manufacturing PMI
Regards and have great (trading) day
2013 March 25 by Graham
Good Monday morning
# As offshore trading sessions progressed Friday the market moved ever more confidently towards pricing a positive resolution to the Cyprus drama. The EuroStoxx600 ended down a marginal 0.15% whilst stateside U.S bourses rose solidly, the S&P500 ending up 0.72%. For the week the EuroStoxx fell 1.14% whilst the S&P eased 0.24%.
# Mirroring the stock markets’ positive expectations for a Cyprus solution, two of the key ‘risk’ barometers for the Eurozone, Italian and Spanish bond yields fell. The Italian bond yield fell sharply to 4.51% from 4.64% whilst the 10-year Spanish bond yield eased to 4.86% from 4.89%. Amazingly Italian and Spanish bond yields are lower than they were before the Cyprus crisis started. (Is that confidence or perhaps blind faith that investors have in the ECB and its ability to manage a crisis?).
# U.S Treasury yields closed at 1.92% up slightly from Thursday’s close at 1.91% but well lower than last week’s 1.99% close.
# The German IFO Mar Business Climate fell to 106.7 vs 107.4, the first drop since October.
# GBP showed minimal reaction to news that ratings agency Fitch had placed the UK on ratings watch- negative, saying they are to complete review by end of April.
# The ‘Troika’, demanding more of Cyprus, increased the size of the contribution by Cyprus for the bailout package to EUR6.7 bln from the original EUR5.8 bln. In a reworked attempt at the bailout savings accounts of €100k or less will now be protected but over that benchmark will be subject to a whopping 20% levy.
#Best to worst performing currencies last week
CCY Mar15 Mar22 % change
JPY 95.25 94.53 0.76%
NZD 0.8290 0.8352 0.75%
GBP 1.5123 1.5230 0.71%
CHF 0.9468 0.9406 0.65%
AUD 1.0409 1.0443 0.33%
CAD 1.0205 1.0233 -0.27%
EUR 1.3075 1.2988 -0.67%
# The EUR was the centre of attention last week, as the Cyprus crisis dominated the headlines. It isn’t surprising the EUR ended the week as the worst performing currency, but it is a bit surprising it managed to hold up as well as it did. The JPY edged out the NZD as the best performing currency, as the first speech given by new BOJ chief Kuroda wasn’t as aggressively dovish as the market was expecting. The NZD made solid gains as stronger NZ growth data forced some paring back of long AUD/NZD positions.
# Copper rebounded 1.08%, Crude jumped 1.46% while unwinding of safe-haven strategies weighed on gold which eased to $1,608 from $1,615 at Thursday’s close. Iron Ore gained 0.43% to close at 134.89. For the week Copper fell 1.37%; U.S Crude gained 0.37%, Gold gained 1% and Iron Ore fell 0.29%.
2013 March 21 by Graham
# European stocks regained a fraction of the recent losses, edging higher as no new news on Cyprus was forthcoming. The EuroStoxx600 ended up 0.32%. U.S stocks meanwhile, meandered in a very narrow range until the FED’s FOMC statement. Following the promise of continued monetary policy accommodation from the FED the indexes moved moderately higher with the S&P500 rising 0.67% and the Dow edging its way to another record close.
# In a virtually unchanged statement the Fed said it would stick to its stimulus program, buying $85 billion in bonds each month to support the economic recovery. The fate of the program presumably cemented for even longer as the central bank lowered its forecast for the U.S. economy, cutting growth estimates slightly from December projections. The Fed reduced its forecast saying the economy would expand at no greater than 2.8%, down from a projected maximum of 3% made in December. Regarding the promise to keep policy intact until unemployment reaches 6.5%, most members of the committee don’t see the unemployment rate, currently 7.7%, reaching that level until 2015.
# Minutes from the Bank of England’s March policy meeting showed a minority of three members called for expanding the bank’s asset-buying program but also noted concerns over the potential impact of a rapid fall by the pound on the central bank’s credibility. ”Further monetary stimulus might increase that risk. It might also lead to an unwarranted depreciation of sterling if it were misinterpreted as a lack of commitment to maintaining low inflation in the medium term,” the minutes said.
# Also in the UK, British finance minister George Osborne has admitted that economic growth there this year will be half the 1.2 %t that was forecast just three months ago, but said he would not change course on austerity. GDP for the last year turned out to be a little higher than the OBR forecast in December, but this year their output forecast is reduced to 0.6 % growth. And despite the recession in the Eurozone, the OBR’s central forecast today is that we [will] avoid a second quarter of negative growth here in the UK,” Osborne told lawmakers.
# Concerns about Cyprus were clearly evident at an auction of German government bonds, seen as a European safe haven. The sale of 3.36 billion euros in new 10-year securities drew strong demand and sold at an average yield of 1.36 p%, the lowest auction price since July last year.
# Banks in Cyprus to remain closed Thursday & Friday – Govt Official.
# Ratings agency Fitch said it will conduct formal review of UK this year including analysis of latest budget; current rating AAA & outlook negative.
# Spain’s PM Says Expects To Cut Current Economic Forecasts.
# The number of Britons claiming unemployment benefit fell in February to a 20-month low. The Office for National Statistics said the number of people claiming jobless benefit dropped by 1,500 last month to 1.542 million – the lowest level since June 2011.
# Commodities gained in tandem with the better stock market tone, Copper advanced 1.2% whilst Crude climbed 0.9%, the most in 2 weeks.
# The NZD/USD continued to languish ahead of this morning’s Q4 GDP result. A deteriorating Current Account balance, the continuing drought and the RBNZ’s less hawkish tone at the last meeting all weighing. The kiwi sits at the bottom of its ranges at 0.8220 USD and 0.7920 AUD.
# N.Z. Q4 GDP
# Japan Trade Balance
# Australian RBA Bulletin
# China HSBC Flash Manufacturing PMI
# N.Z Credit Card Spending
# European Manufacturing PMI’s
# U.K. Retail Sales
# U.S. Employment Claims
# U.S Flash Manufacturing PMI
# U.S. Philadelphia Fed Manufacturing Index
Big day ahead, good luck
2013 March 19 by Graham
# The EuroStoxx600 was remarkably resilient in the face of the Cyprus bailout announcement, clawing back early losses to end the session down only -0.21%. Stateside, the S&P500 did not fare quite so well, selling off ahead of the closing bell to end down 0.55%. To no one’s surprise banking stocks led the declines on both bourses.
# The key indicators for stress in the European periphery, Spanish and Italian bond yields, rose in response to the Cyprus news. Conversely German debt, seen as least risky in the euro zone, pushed 10-year Bund yields to their lowest levels this year. Spanish 10-year yields rose 8 basis points to 5.01 % while the Italian equivalent was up 6 bps at 4.67 %. German 10-year yields dropped to a 2013 low of 1.37 %.
#Like their German counterparts, U.S 10 year Bond yields also fell, dropping back below the psychological 2.0% level to end at 1.97% on the potential for global growth to slow if Europe indeed drifts to crisis again.
# Gold, underlining its haven qualities, consolidated the sharp early gains seen here yesterday currently up $14 to US$1,604.00 from NY close Friday.
# Industrial commodities however, slumped across the board also on concerns that Europe’s debt crisis may deepen, hurting demand prospects for raw materials from oil to copper. The Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 1.2 % the biggest drop in. Copper dropped by the most in five months, pacing declines in industrial metals, while crude oil headed for the biggest loss since March 1.
# Confidence among U.S. homebuilders unexpectedly fell for a second month in March, a sign the residential real-estate market will take time to strengthen. The NAHB/Wells Fargo index of builder confidence dropped by 2 points to 44 this month, due to a decrease in the measure of current sales. Expectations were for a gain to 47. Readings below 50 mean more respondents said conditions were poor.
# The International Monetary Fund told New Zealand there is no need to intervene against its strong dollar, even though the currency is overvalued and putting pressure on exports. The IMF mission to New Zealand, said the kiwi dollar is high partly because of capital inflows, but they are not threatening the broader economy, which is benefiting from its flexible adjustment. ”They (inflows) are putting pressure on the tradeable sector but at least they are not threatening macro and financial stability,” Bruce Aitken told reporters. “If your…stability is threatened by this flow, then you should consider whatever tools are available. Intervention is one of them.” The IMF team advised against intervention to lower the exchange rate, because it could distort prices and taxpayers would have to pay a “high price” to control one of the world’s most actively traded currencies.
# RBA Assist Gov. Debelle speaks
# RBA Deputy Gov. Lowe speaks
# RBA Monetary Meeting Minutes
# UK Inflation (and BOE Inflation Letter)
# German ZEW Economic Sentiment
# U.S Building Permits and Housing Starts
Regards and good trading
2013 March 8 by Graham
# Eurozone stocks erased early gains as an ECB downgrade for growth prospects weighed. The EuroStoxx 600 ended essentially flat, down 0.06%. Across the Atlantic U.S stocks had a particularly subdued session drifting in a tiny 0.25% range, currently up 0.17%. The blue chip Dow recorded yet another all-time high.
# The ECB left borrowing rates unchanged despite downgrading EuroZone growth prospects. The ECB now forecasts growth for the region to contract by 0.5% this year against a previous -0.3% whilst 2014 prospects were cut from 1.2% to 1.% expansion. Inflation, which the ECB is legislated to keep under 2%, was also forecast lower to 1.3% from 1.4% for 2014. The inflation outlook is broadly balanced, Draghi said, even though the risks to the economy are on the downside.
# In a rather perverse reaction the EUR/USD rallied the most in 8 weeks, rising from an intraday low yesterday of 1.2948 to 1.3118. That said, Spanish and Italian bond yields fell suggesting the market is feeling a little bit more confident with the situation in Europe.
# Similarly GBP/USD reversed some of its recent sharp losses after the Bank of England’s Monetary Policy Committee held its asset- purchase target at 375 billion pounds.
# USD/JPY screamed higher after Bank of Japan’s Masaaki Shirakawa’s final meeting amid speculation his successor will expand monetary stimulus and debase the currency. USD/JPY breached 95.00 for the first time since mid-2009.
# Another rosy piece of U.S labour market data as the number of Americans who filed for unemployment benefits declined to a six-week low. First-time U.S. jobless claims fell by 7,000 to 340,000 in the week ended March 2, the lowest since the period ended Jan 19, the Labor Department said. The median forecast of economists surveyed was for an increase to 355,000.
# Consumer credit in the U.S. rose in January by the most in five months as Americans took out loans for auto purchases and tuitions The $16.2 billion increase followed a revised $15.1 billion advance in December that was larger than initially reported. The median forecast of 27 economists surveyed called for a $14.7 billion gain in January. Non-revolving debt, which includes financing for auto purchases and college, climbed $16 billion.
# Ford Motor Co. had its best February sales in six years, with deliveries up 9.3 %, while General Motors Co. posted a 7.2 % increase as the recovery in home prices boosts confidence. Interestingly, but not surprisingly, the average age of cars and light trucks has reached a record high, according to data compiled by Polk, an auto industry information provider, which may be prompting consumers to replace their vehicles. Clearly Americans must have hunkered down amidst the GFC downturn.
# Net worth for households and non-profit groups increased by $1.17 trillion from October through December, or 1.8% from the previous three months, to $66.1 trillion, the Federal Reserve said today from Washington in its flow of funds report. Household wealth is approaching its pre-recession level, helping to limit the impact from higher fuel costs and payroll taxes.
# Crude rose on the better U.S. data with the optimism pushing the black gold 1.3% higher. Crude oil for April delivery rose $1.13 to settle at $91.56 a barrel
# U.S Bank Stress Test Results
# N.Z Manufacturing Sales
# Japan Current Account
# China Trade Balance
# BOJ Monthly Report
# German Industrial Production
# U.S Non-Farm Payrolls
# China Inflation, PPI, Industrial Production and Retail Sales