Friday 11 May 2012
11 May 2012 – "Moby Dick" (Led Zeppelin , 1969)
11 May 2012 – "Moby Dick" (Led Zeppelin , 1969)
http://www.youtube.com/watch?v=cRuTcnd8YLU
Starting the day with a platter of whale sashimi. US bank trading losses were not the one thing that was needed to close the week in relaxed manner, as it just adds to the Spanish banking woes. Initial pressure on credit and financial indices wasn’t excessive nevertheless. Pressure on bank stocks, though.
Had a raft of overnight data out of China. Industrial Production grew only 9.3% YoY (after 11.9% and expected over 12%), likewise Retail Sales at 14.1%, which by and large looks healthy, is rather on the lows of the last couple of years and below the 15% forecast. New loans running a slower pace, too. CPI tame at 3.4%. Points to the widely expected view of a rather controlled soft landing? Might revive stimulus hopes (ex housing).
Asia closing the week quite strongly in the red (roughly minus 3 to 5%). Sashimi time.
German CPI unchanged at 2.2% YoY. Spain 2%. Had BuBa’s Weidman strongly refuting suggestions Ur-Frankfurt was getting soft on the matter. French biz sentiment
European Commission forecast unsurprising (link). Might actually be a little on the benign / optimistic side with regards to the outlook. EZ 0.3% contraction A mild, short-lived recession? Ollli Rehn as TV show master: Restraint in credit supply? Bah, balanced by limited credit demand… Oh! And everyone is on track in the deficit cutting competition and everyone is doing just fine, despite the struggle. Everyone is a winner! (But, just a reminder, France is still expected to spell out how to cut the deficit Tzz tzz tzz.).
Italy fared very well with its bill auction: EUR 3bn 3m bills at 0.87% (prior1.25% early April) and EUR 7bn 12m at 2.34% (prior 2.84%). One month ago, BTPs were trading about unchanged at 5.52% (but trading +383 to Bunds). Still successfully flying under the radar screens and rather successfully wiggling off Spanish contagion. Still has lots of funding to do for the year and hasn’t issued much longer debt. Still faring ok at these levels.
Not much in new issues to close the week.
US PPI slightly below consensus at -2.7% ex YoY. Didn’t rock the world. Whale induced weakness with equities down 1% by early afternoon. Credit heavier still. Bunds trying to breach 1.50% for good, but to no avail. University of Michigan confidence indicator at 77.8 after 76 forecast and prior 76.4 stronger than expected. This helped to put a floor under the gloom and to shift equities back to unchanged. Credit remained on the weaker side, though.
Had 10 YRS swaps briefly ticking below 2% today.
Self-inflicted Iberian pain. Spanish banks will be forced to heavily provision real estate and recap via CoCos at the FROB. Question is who funds the FROB…Hasn’t issued much lately. Trades some 50bp over Spain. Pushed Spain wider. Then again, once the real-estate, the banking industry and the refinancing of the regions will be marked-to-market, yes, there won’t be any doubts about Spain left. Full clarity. And Spanish equities down 20% YTD. Question is though if this forced honesty course won’t spiral out of control at some time. Spanish 10s stuck around 6%.
Greek bonds now probably worth 24.5% and 18.75% (in yield), up another 50 bp. Quotes were 20.25% & 16.75% last Friday. And there are EUR 450m non-PSIed FRNs due next week on 15 May.
Closing levels:
10 YRS Yields: Germany 1,51% (-3); Luxembourg 1,97% (-2); Finland 1,96% (-5); Swaps 2,02% (-3); Netherlands 2,03% (-5); Austria 2,59% (-4); EIB 2,67% (-3); France 2,80% (-1); EFSF 2,85% (-3); Belgium 3,15% (-3); Italy 5,50% (unch); Spain 5,99% (+4).
10 YRS Spreads: Luxembourg 46bp (+1); Finland 45bp (-2); Swaps 52bp (+1); Netherlands 51bp (-3); Austria 108bp (-1); EIB 116bp (unch); France 128bp (+1); EFSF 134bp (0); Belgium 163bp (-1); Italy 399bp (+3); Spain 447bp (+6).
EUR swap curve 2-5 YRS 39,1bp (-1,3); 5-10 YRS 65bp (-3,9) 10-30 YRS 24bp (-4,2).
2 YRS German BKOs closed 0,08% (+1) and 5 YRS OBLs 0,55% (unch). Say, didn’t we see yet another new low????
Main at 158 from 156; Financials at 265 after 264. SovX at 285 from 283. Cross at 687 from 685.
Stoxx Futures at 2232 / +0,6% (from 2218) with the S&P at 1362 (+0,2% from 1360, at European close).
VIX index at 18,9 after 19,7 yesterday same time.
EUR 1,294 after 1,296
ECB deposits EUR 703bn after EUR 696bn.
Oil 96,7/112,5 (WTI/Brent) from 97,1/112,7 (-0,4%/-0,2%). Gold at 1589 after 1596 (-0,4%). Copper at 366 from 370 (-1,0%). CRB closes 293,1 from 295,3 (-0,8%).
Too much bad news… China-induced copper weakness
Baltic Dry going further into reverse at 1138 from 1146 before.
All levels European COB 17:30 CET
On the week (compared to Fri 04 Mai close):
Soooo. Another week, another new Bund lows… Eventually the French elections were taken rather bravely (more than I expected) with France barely budging.
Greece and Spain were this week’s spoilers and while 10 YRS BONOs managed to remain South of 6% (although barely) at the end of the week, they shot up by 35bp. Contagion to Italy limited, but existent. Volatile week in equities, but with a week on week result that actually shows a gain. Much more resilient that credit indices, which traded heavily most days and ended the week much wider.
10 YRS Yields: Germany 1,51% (-7); Luxembourg 1,97% (-7); Finland 1,96% (-10); Swaps 2,02% (-5); Netherlands 2,03% (-12); Austria 2,59% (-10); EIB 2,67% (-6); France 2,80% (-3); EFSF 2,85% (-4); Belgium 3,15% (-3); Italy 5,50% (+7); Spain 5,99% (+27).
10 YRS Spreads: Luxembourg 46bp (+1); Finland 45bp (-3); Swaps 52bp (+2); Netherlands 51bp (-4); Austria 108bp (-2); EFSF 134bp (+3); France 128bp (+5); Belgium 163bp (+4); Italy 399bp (+14); Spain 447bp (+35).
EUR swap curve 2-5 YRS 38,8bp (-3,0); 5-10 YRS 65bp (-9,9) 10-30 YRS 24,1bp (-10,2).
2 YRS German BKOs closed 0,08% (+0) and 5 YRS OBLs 0,55% (+0), on the week.
Traded new intra-day lows at 0.065% and 0.55% this week. Trading new Bund lows every week anyway…
Portugal quiet with 2YRS unchanged at 11.50%, with 5 YRS a bit wider at 12.25% and 10 YRS unchanged 10.75%.
Greek yields have risen strongly to 24.5% from 20.25% in 2023s and to 18.75% from 16.75% in 2042s.
Main at 158 from 144 (9,6% wider); Financials at 265 after 244 (8,5% wider). SovX at 285 from 273. Cross at 687 from 654.
Heavy, heavy, very heavy...
Stoxx Futures surprisingly at 2232 / +1,0% from 2209 with the S&P at 1362 / -1,0% from 1375, at European COB last week.
VIX index at 18,9 after 18,6 last week.
Oil 96,7/112,5 (WTI/Brent) from 99,5/113,3 (-2,8%/-0,7%). Gold at 1589 after 1640 (-3,1%). Copper at 366 from 374 (-2,1%) . CRB closes 293,1 from 298,1 (-1,7%). Gold waiting for QE and inflation. Copper waiting for Chinese growth.
EUR 1,294 after 1,310 last Friday
Next week:
Ascension Day on Thu in most of Cont Europe, which will probably be bridged by numerous players. Hence a shortened week with quite some heavy auction supply until Wednesday. Spain a little alone with its auction on Thu. French BTAN auction same day as German 10s on Wed.
Again rather light on hard data, although GDP reading s across Europe will probably revive growth versus austerity discussions.
Germany: Tue GDP +0.1% QoQ sa and especially ZEW 40 fcst for current situation. Fri PPI
France: Tue CPI. Wed GDP 0.0% QoQ
EZ: EU commission growth forecast
Other EU: IT CPI on Mon & GDP Wed -0.7% QoQ and Ind orders Fri. SP GDP on Fri. Greek GDP on Tue
US: PPI and U Michigan Fri.
Asia: Chinese data flow mainly on Thu & Fri (Trade balance, IP, Retail Sales). Japan likewise empty until end of the week.
Click link on title or below for today’s musical support:
http://www.youtube.com/watch?v=cRuTcnd8YLU
( Bonzo just ruled!!! And Jimmy still does!)
Thursday 10 May 2012
10 May 2012 – "You Spin Me Round" (Dead or Alive , 1984)
10 May 2012 – "You Spin Me Round" (Dead or Alive , 1984)
Repeating patterns. US closing down, but off lows, Asia hanging in there bravely, waiting for the next sandal to drop inEurope . European equities trying to lurch on, following their late rebound, but failing to do so on the second rebound and testing the downside by noon, although off yesterday’s low by noon.
Chinese trade data showing euro depression impact with exports only +4.9% (fcst 8.5% after 8.9%) and imports grinding to a halt at +0.3% (fcst +10.9% after +5.3%), resulting in a ballooning trade balance. Need to check how the Baltic Canary will react in the coming weeks.
French biz sentiment unchanged and as forecasted at 95. Industrial production and manufacturing beating forecasts and with Feb figures revised upwards (respectively -0.9% and -0.3% YoY after -1.4% and -3.2%). Other figures showed a surprisingly weak Finnish economy (IP -5.7% nsa), Spanish housing transaction down -22.7% YoY (after -31.8% prior), the 13th monthly decline in a row. Italian IP better than expected, but still down -5.8% YoY. Greek IP -8.5% after -8.3% and unemployment stable at 21.7%. Greek youth unemployment an untenable 53.8%.
Had the EFSF transfer EUR 4.2bn to Greece Greece Greece
No European government supply (for once).
Not much in EUR New Issue land. Sweden getting strong demand for its USD 2.25bn 3 YRS issue at MS -19 and UBS placing its own signature via a 2 YRS FRN to the tune of EUR 750m at 3mE +60. Had as well Slovakia raising USD 1.5bn 10 YRS at UST +262.
Nothing good. Nothing too bad either, after all. Hence rather sideways into lunchtime after the ups and downs. 10 YRS govies about unchanged in Europe . Equities slightly lower. Credit again slightly wider.
Just ahead of the US
Must be those iPads. And oil, before the slump (Mar average was 107 for WTI… Jobless claims about in line with forecast with the now usual upwards revision of prior data. Doesn’t seem to spoil the mood.
Happy and positive session for most of the afternoon: moderately growing risk appetite– in absence of any low-flying shoe today…But then again, no visible presence doesn’t mean there’s no risk. Ouch, those shoes!
In the meantime, Luxembourg Finland
More to the point and probably more followed, plain and simple EUR 10 YRS swaps have traded a new historic low at 2.045%. As the EIB is brought back more and more into the discussion on growth issues, I’ll paste that one into the report, too.
Greek bonds now probably 24% and 18.75% (in yield), up another 50 bp. Quotes were 20.25% & 16.75% last Friday.
Closing levels:
10 YRS Yields: Germany 1,54% (+2); Luxembourg 1,99% (-3); Finland 2,01% (-4); Swaps 2,05% (-1); Netherlands 2,08% (-4); Austria 2,63% (-4); EIB 2,70% (-3);France 2,81% (-4); EFSF 2,88% (-1); Belgium 3,18% (-5); Italy 5,50% (-9); Spain 5,95% (-10).
10 YRS Spreads: Luxembourg 45bp (-5); Finland 47bp (-6); Swaps 52bp (-4); Netherlands 54bp (-6); Austria 109bp (-6); EIB 116bp (-5); France 127bp (-6); EFSF 134bp (-3); Belgium 164bp (-7); Italy 396bp (-11); Spain
EUR swap curve 2-5 YRS 40,4bp (+1,2); 5-10 YRS 68,9bp (-0,8) 10-30 YRS 28,2bp (-2,8).
2 YRS German BKOs closed 0,07% (unch) and 5 YRS OBLs 0,55% (+1). Don’t think we had new lows today. Maybe this morning. Whatever...
Main at 156 from 157 (-0,6%); Financials at 264 after 267 (-1,1%). SovX at 283 from 285. Cross at 685 from 696. Not exactly a roaring recovery.
Stoxx Futures at 2218 / +1,4% (from 2188) with the S&P at 1360 (+0,8% from 1348, at European close).
VIX index at 19,7 after 20,7 yesterday same time.
EUR 1,296 after 1,295
ECB deposits down to EUR 696bn after at EUR 823bn (- EUR 127bn). Drop in the continuity of prior end of reserve maintenance periods.
Oil 97,1/112,7 (WTI/Brent) from 96,1/112,2 (+1,0%/+0,5%). Gold at 1596 after 1589 (+0,4%). Copper at 370 from 364 (+1,6%). CRB closes 295,3 from 293,5 (+0,6%). Ok, better, but not roaring either...
Baltic Dry going into reverse at 1146 from 1156 before. Ah? China
All levels European COB 17:30 CET
Tomorrow:
EZ: EU commission growth forecast
Other EU: Spain CPI, Italy
US: PPI and U Michigan
Click link on title or below for today’s musical support:
( Stock Aitken Waterman What a producing machine…)
Wednesday 9 May 2012
09 May 2012 – "Physical" (Olivia Newton-John , 1981)
US closing down, but off lows, with Asia closing in line with Europe in the across the board -1.5% vicinity in equities. No real overnight data, with exception of Japanese reserve assets about stable and still near all-time highs. Can’t see much change in foreign currency assets, so whatever Japan has bought in Europe lately must have simply replaced maturing assets. There goes the support for Europe pitch. Still, better than outright sales anyway.
Had a see-saw opening with European equity futures attempting a 0.75% rebound in pre-open, just to crash back 1% once bourses starting trading, then up again 1% and down again 1.5%. All within one hour. Physical, very physical…
European data flow remains light and we had once more Germany
Greece of course on everyone’s mind, but the Spain thing brewing and Spanish bonds, as expected, driven past the 6% mark, trading off nearly 20 bp, and dragging Italy along (10 bp weaker) past the 5.50% mark.
Another German auction on historic lows drew EUR 5.8bn in demand for a new EUR 5bn 5 YRS 0.500% Apr 2017 issued, of which a short EUR 1bn was retained for market interventions by the Bundesbank. A chunky EUR 3.3bn of bids were unpriced, hence” at market”. Average yield at 0.56%... Pick up to the outstanding reference 2 bp.
After the last days of calendar disruptions (elections, holidays), finally some supply from Volkswagen on the corporate side with EUR 1.5bn 5 YRS at MS +65. Caterpillar shovelling in EUR 600m 3 YRS at MS +38. Both issues very oversubscribed with books in the EUR 4bn area. Had as well EUR 1bn 20 YRS government-guaranteed Austrian Railways at MS +95 flying out of the window at tight RAGB +20. But yield is hard to find these days.
We as well saw a domestic-targeted senior bank exercise for German shipping finance specialist DVB. Very domestic, but we haven’t had much senior ware of late, so worth the mention. Then again, no seniors for known reasons…
As things never disappear, even if forgotten for a while, we should see Moody’s taking a shot at the European finance industry in the coming days/ weeks. Won’t help collateral posting issues… Stress is not the rating downgrades as such (Where’s the surprise here? Duh!) , but the following rating triggers.(Ouch! Financials up 10 bp again today…).
Lunchtime situation stabilizing on lower levels. Equities down 0.75%-1% (with the IBEX crashing 3%). Bunds yet again on new lows of 1.52%. Spain Italy France Main up 5 points and Financial aforementioned 10 points. Had bit of a rebound in commodity prices yesterday evening with the US
US mortgage applications higher than the prior week, then again rates are lower, too, with UST 10s at the lowest since early Feb (1.81%). Noisy figures, too. US inventories rising less than expected at +0.3% (fcst was +0.6% after prior +0.9%).
Stoxx nearing December 2011 lows at 2203.
Credit consistently weaker than equities throughout the day. There’s further pain to come in equities. Especially with the closing squeeze taking equities to more or less unchanged. Odd equity traders. Up, down, up, down, down, up, up. Physical...
Old habits die hard: had to check LIBOR-OIS spreads, but both EUR (0.376) and USD (0.316) haven’t really widened from their post Dec 2011 lows (yet). EURCHF at 1.201. Nope, no movement there either.
Spanish 10s at 6.05% by mid-afternoon, up nearly 25bp on the day, with Bunds quoted below 1.50% (Japan 0.86%). Bail-out trauma: check the curve. Ah! Italy and Spain bear-flatten. Bad. But get’s really worrisome once inverted – and there’s still room for that.
Had German officials forcefully reminding everyone felling concerned that they wouldn’t budge on any of their positions.Grexit certainly doesn’t seem a taboo anymore – seemingly for no one. (Greek bonds now 23.50% and 18.25% for the 2023s and 2042s, from yesterday’s 23.25% and 18%). Doesn’t look easy out there. Must keep in shape. Up, down, up, down, down, up, up. Physical...
Closing levels:
10 YRS Yields: Germany 1,52% (-1); Luxembourg 2,02% (+2); Swaps 2,06% (+1); Finland 2,05% (+2); Netherlands 2,12% (+2); Austria 2,68% (+3); France 2,85% (+5); EFSF 2,89% (+4); Belgium 3,23% (+11); Italy 5,58% (+14); Spain 6,05% (+23).
10 YRS Spreads: Luxembourg 50bp (+4); Swaps 55bp (+3); Finland 53bp (+3); Netherlands 60bp (+3); Austria 116bp (+5); France 133bp (+6); EFSF 137bp (+5); Belgium 171bp (+12); Italy 406bp (+15); Spain 453bp (+24).
EUR swap curve 2-5 YRS 39,2bp (-0,4); 5-10 YRS 69,6bp (-2,2) 10-30 YRS 31bp (-2,5).
2 YRS German BKOs closed 0,07% (-1) and 5 YRS OBLs 0,53% (+1). New lows. But German bonds trade new lows every day...
Main at 157 from 150 (4,4%); Financials at 267 after 256 (4,2% wider). SovX at 285 after 279. Cross at 696 after 676.
Stoxx Futures at 2188 / -0,4% (from 2197) with the S&P at 1348 (-0,3% from 1352, at European close).
VIX index at 20,7 after 20,5 yesterday same time.
EUR 1,295 after 1,299
ECB deposits closing the reserve maintenance period at EUR 823bn, up from EUR 782bn. This is near the all-time high of EUR 828bn, deposited early March. We were at EUR 788bn at the end of the last reserve maintenance period and then had a EUR 135bn drop as well EUR 130bn the month before.
Oil 96,1/112,2 (WTI/Brent) from 95,6/110,6 (+0,5%/+1,4%). Gold at 1589 after 1603 (-0,9%). Copper at 364 from 367 (-0,8%). CRB closes 293,5 from 293,6 (unch).
Baltic Dry falling back to 1156 from 1165 yesterday’s 2012 high (Thu & Friday were a new 2012 high at1157).
All levels European COB 17:30 CET
This week:
EZ: EU commission growth forecast on Friday
Other EU: Spain Housing transaction Thu, CPI Friday, Italian IP on Thu and a chunky EUR 10bn in bills (EUR 7bn 12m and EUR 3bn 3m)
Click link on title or below for today’s musical support:
(Too good! The 80s were fun J Awesome bass slapping solo here…)
Tuesday 8 May 2012
08 May 2012 – "Negative Creep" (Nirvana, 1989)
08 May 2012 – "Negative Creep" (Nirvana, 1989)
Reversing the reversal. Half-tainted split US close and similar Asian session. About unchanged with a slightly weaker bias. Weak European opening with equities falling out of bed after yesterday’s surge.
Themes of the day remain unchanged with Greece’s political vows the major driver, as the merry go-round of government set-up just starting with no more realistic end in sight than another election, seemingly already slated on 06 June. In the meantime, there are bonds to be redeemed that were not PSI-ed.
Adding to the tension is Spain’s recapitalization / nationalization talks of Bankia and its real estate exposure. Same question as yesterday’s: With whose money can Spain manage that without it appearing in its figures? The FROB is deconsolidated from the debt, but certainly is a REAL existent contingent liability.
European data flow again light, as everywhere else. Had yesterday record-breaking consumer credit in the US (Austerity? What austerity???), so the bit of US uptick is leveraged (again). Germany IP again beating expectation, but that was already the case yesterday, with +1.6% YoY ticking (after the prior -1% was revised to flat and against a forecast of -1.2%). Didn’t help the morning blues in Europe, though. US small biz optimism better than expected at 94.5 (fcst 93 and prior 92.5), but then again, if it’s leveraged on people maxing our their credit card...
On the whole, a pretty even and strong government bond performance in Europe in the morning with Bunds again tickling out new lows, but taking most others for the ride as well with exception of Spain as laggard, unchanged by midday, just below 5.75%
Italy once more tagging along the rest of Europe, as stealth rider, and much more discreet than Spain, although here as well, austerity versus growth starts to become a serious debate.
Note that 10 YRS EUR swaps trading a new all-time low at 2.05% today with 2 and 5 YRS back to the all-time lows of 0.90% and 1.32%.
Had a raft of European smaller auctions with the Netherlands selling EUR 2.5bn at 2.14% and Austria going for EUR 660m 5s at 1.41% and EUR 500m 10s at 2.63% (after 1.73% and 2.90% last month).
Bills on the chop as well with Greece (Yes, Greece) selling EUR 1.3bn in 6m bills at 4.69% (after 4.55%), which doesn’t seem that bad, given the short term outlook. Then again, bills never got PSI-ed, either. Belgium out for EUR 1.6bn 3m at 0.18% (after 0.23%) and EUR 1.6bn 6m at 0.23% (after 0.21%). Finally, the EFSF sold a short EUR 2bn at 0.17% after 0.12% with a smaller B/C. Of course, at some stage, the EFSF might get on the hook, which shows in pricing.
Germany will have another shot at auctioning on record lows tomorrow with EUR 5bn 5 YRS. Never mind if doesn’t go through at once...
New issue supply restricted to smaller, opportunistic SSA taps.
Bit of a market respite at US open, but the mood soured, unsurprisingly, as Greek’s left-wing Syriza, now in charge to attempt to form a government, kicked-off the proceed by calling to repels the Troika promises et al. Athens’ bourse at the lowest in 20 YRS. 2023s quoted 23.25% and 2042s 18.0% (from 20.25 and 16.75% last Friday, ahead of the elections).
Strong RISK OFF close. Eventually, first quotes on Monday morning were probably more right than wrong, as we’re fast nearing these levels again.
Note that French 10s eventually widened a little, as was Italy, a bit more, while Spain went back into reverse, probably targeting 6% very soon again. Credit very weak, too. Bad close, although somewhat off lows. Not sure this helps...
Closing levels:
10 YRS Yields: Germany 1,53% (-7); Luxembourg 2,00% (-6); Swaps 2,05% (-3); Finland 2,03% (-6); Netherlands 2,10% (-5); Austria 2,64% (-3); France 2,80% (+1); EFSF 2,85% (-4); Belgium 3,13% (-1); Italy 5,44% (+6); Spain 5,82% (+11).
10 YRS Spreads: Luxembourg 46bp (+1); Swaps 53bp (+4); Finland 50bp (+1); Netherlands 57bp (+2); Austria 111bp (+5); France 127bp (+9); EFSF 132bp (+3); Belgium 159bp (+6); Italy 391bp (+13); Spain 429bp (+18).
EUR swap curve 2-5 YRS 39,7bp (-6,3); 5-10 YRS 71,9bp (-0,6) 10-30 YRS 33,5bp (-0,8).
2 YRS German BKOs closed 0,08% (-2) and 5 YRS OBLs 0,52% (-6).
Main at 150 from 144 (4,4%); Financials at 256 after 243 (5,5%). SovX at 279 from 275. Cross at 676 from 653.
Stoxx Futures at 2197 / -2,2% (from 2247) with the S&P at 1352 (-1,2% from 1369, at European close).
VIX index at 20,5 after 19,2 yesterday same time.
EUR 1,299 after 1,305. Had traded through 30 handle Monday early morning.
ECB deposits down to EUR 782bn The end of the reserve maintenance period is today. We were at EUR 788bn at the end of the last reserve maintenance period and then had a EUR 135bn drop as well EUR 130bn the month before.
Oil 95,6/110,6 (WTI/Brent) from 97,8/113,0 (-2,3%/-2,1%). Gold at 1603 after 1639 (-2,2%). Copper at 367 from 372 (-1,3%). CRB closes 293,6 from 297,2 (-1,2%). Commodities throughout really weak, too.
Baltic Dry at 1165 from Thursday and Friday new 2012 high of 1157.
All levels European COB 17:30 CET
This week:
Note that today is be a public holiday (Victory Day) with in France.
Germany: Wed Trade Balance, Friday CPI
EZ: EU commission growth forecast
Other EU: Spain Housing transaction Thu, CPI Friday, Italian IP on Thu
US: Inventories on Wed, Trade balance and jobless claims Thu, PPI and U Michigan Fri.
Click link on title or below for today’s musical support:
Monday 7 May 2012
07 May 2012 – "After the Storm" (Mumford & Sons, 2009)
07 May 2012 – "After the Storm" (Mumford & Sons, 2009)
Quick post-election update
Ouch! That was a rocky start on the back of the French and especially Greek election results. Asia tanking big time, as catching up on negative Friday European and US sessions and pre-empting stress in Europe (Nikkei down 2.8%, HS likewise -2.6%).
German Factory orders eventually better than expected at -1.3% YoY (after -6.1%, revised to -6%) and expected -2.8%. On the softer side, and in the long list of soft Southern European data, Spanish Industrial output at -7.5% YoY, had been expected at -5.3% after -5.1%. The increasing speed of the deterioration of the Spanish economy is worrying.
Sentix investor sentiment falling to a dismal -24.5 (had been expected -15.3, after -14.7). This is taking us through last December depressed levels and back to post-summer 2009 levels. Ouch!
Had a fierce initial sell-off in equities, risk, the periphery, France with 10 YRS Bunds falling to a yet unprecedented 1.56%, before things steadily improved.
Had Holland selling EUR 1.2bn 3m and 1.4bn 6m bills at 0.004% and 0.035% (hence next to nothing), after last month’s 0.017% and 0.041%. France as well on the bills front with EUR 4bn 3m at 0.082% after 0.0088%, EUR 1.8bn 6m at 0.114% after 0.101% and EUR 2.2bn 12m at 0.174% after 0.205%.
US figures limited to minor consumer credit data. Strong equity squeeze in the afternoon, in absence of real bad (further) news. So, then again, with the UK closed, today’s closing levels will need to be revisited tomorrow and Wednesday, when everyone’s back on board.
In the meantime, the political situation in Greece might have become clearer – or not. EUR exit possibilities have certainly increased and the knock-on effect on the rest of the periphery should certainly not been underestimated.
Spain mulling to recap its banks, once more. With which money is not exactly clear. In the meantime, another week without ECB SMP buying.
Closing levels:
10 YRS Yields: Germany 1,60% (+2); Luxembourg 2,05% (+2); Swaps 2,07% (unch); Finland 2,09% (+2); Netherlands 2,15% (+0); Austria 2,67% (-2); France 2,79% (-3); EFSF 2,89% (0); Belgium 3,14% (-4); Italy 5,38% (-5); Spain 5,71% (-1).
10 YRS Spreads: Luxembourg 45bp (unch); Swaps 49bp (-1); Finland 48bp (unch); Netherlands 54bp (-1); Austria 107bp (-3); France 119bp (-5); EFSF 129bp (-2); Belgium 154bp (-6); Italy 378bp (-6); Spain 411bp (-2).
EUR swap curve 2-5 YRS 46bp (+4,2); 5-10 YRS 72,1bp (-2,8) 10-30 YRS 34,8bp (+0,5).
2 YRS German BKOs closed 0,10% (+1) and 5 YRS OBLs 0,58% (+3).
Main at 144 from 144 (-0,2%); Financials at 243 after 244 (-0,7%). SovX at 275 from 273. Cross at 653 from 654. Much tamer action than in equities.
Stoxx Futures at 2247 / +1,7% (from 2209) with the S&P at 1369 (-0,5% from 1375, at European close). Odd equity traders...
VIX index at 19,2 after 18,6 yesterday same time.
EUR 1,305 after 1,310. Had traded through 30 handle in early morning.
ECB deposits still a heavy EUR 802bn after EUR 806bn from. Highest ever were EUR 827.5bn early March, just after LTRO2 was paid out. Only had overall 8 readings above EUR 800bn. So what was the question about the utilization of the LTRO cash? No trickling into the economy yet… Bah, let’s wait a bit longer. Then again, we’re nearing the end of the reserve maintenance period on 08 May (Wed). Were at EUR 788bn at the end of the last reserve maintenance period and then had a EUR 135bn drop. EUR 130bn the month before. Still, this piling up of money seems
Oil 97,8/113,0 (WTI/Brent) from 99,5/113,3 (-1,7%/-0,3%). Gold at 1639 after 1640 (0,0%). Copper at 372 from 374 (-0,6%). CRB closes 297,2 from 298,1 (-0,3%).
No Baltic Dry fixing, given UK May Day. Had Friday unchanged from Thursday’s new 2012 high of 1157.
All levels European COB 17:30 CET
This week:
Note that following French election son Sunday 06 May, Tuesday will be a public holiday (Victory Day) with many players off on Monday, which happens to be the UK
Data flow rather thin. Auctions concentrated on Tuesday. As lately, markets open to any input…
Germany: Mon Tue IP -1.2% fcst (after -1% YoY), Wed Trade Balance, Friday CPI
EZ: Mon Sentix sentiment -14.5 fcst (after -14.7), EU commission growth forecast
Other EU: Spain Housing transaction Thu, CPI Friday, Italian IP on Thu
US: Inventories on Wed, Trade balance and jobless claims Thu, PPI and U Michigan Fri.
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