EU Market Update: Peripheral Euro Zone PMIs show improvement in Sept Mon, 01 Oct 2012 5:38 AM EST

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EU Market Update: Peripheral Euro Zone PMIs show improvement in Sept Mon, 01 Oct 2012 5:38 AM EST

01.10.2012 11:50 Monday
***Economic Data***
- (EU) EURO ZONE SEPT FINAL PMI MANUFACTURING: 46.1 V 46.0E
- (EU) EURO ZONE AUG UNEMPLOYMENT RATE: 11.4% V 11.5%E (fresh record high)
- (DE) GERMANY SEPT FINAL PMI MANUFACTURING: 47.4 V 47.3E
- (FR) FRANCE SEPT FINAL PMI MANUFACTURING: 42.7 V 42.6E (41 month low)
- (IT) ITALY SEPT PMI MANUFACTURING: 45.7 V 44.0E
- (CH) SWISS SEPT PMI MANUFACTURING: 43.6 V 47.5E (lowest level since June 2009)
- (CH) SWISS AUG REAL RETAIL SALES Y/Y: 5.9% V 4.5%E
- (ES) SPAIN SEPT MANUFACTURING PMI: 44.6 V 44.2E (highest since Feb 2012)
- (IE) IRELAND SEPT NCB MANUFACTURING PMI: 51.8 V 50.9 PRIOR (5th consecutive increase)
- (PL) POLAND SEPT MANUFACTURING PMI: 47.0 V 48.0E
- (HU) HUNGARY SEPT PMI: 52.5 V 49.6 PRIOR
- (NO) NORWAY SEPT PMI: 48.9 V 48.8 PRIOR
- (SE) SWEDEN SEPT SWEDBANK PMI SURVEY: 44.7 V 45.1 PRIOR
- (FR) FRANCE SEPT NEW CAR REGISTRATION Y/Y: -18.3% V -11.4% PRIOR
- (CZ) CZECH REPUBLIC SEPT MANUFACTURING PMI: 48.0 V 48.6E
- (TR) TURKEY SEPT MANUFACTURING PMI: 52.2 V 50.0 PRIOR
- (IT) ITALY AUG PRELIMINARY UNEMPLOYMENT RATE: 10.7% V 10.8%E
- (GR) GREECE SEPT MANUFACTURING PMI: 42.2 V 42.1 PRIOR
- (AT) AUSTRIA SEPT UNEMPLOYMENT: 6.1% V 6.2% PRIOR
- (UK) AUG M4 MONEY SUPPLY M/M: 0.2% V 0.0%E; Y/Y: -4.1% V -4.3%E; M4 EX IOFCS 3M ANNUALIZED: 7.8% V 5.0% PRIOR
- (DK) DENMARK SEPT PMI SURVEY: 50.1 V 51.4 PRIOR
- (ZA) SOUTH AFRICA SEPT KAGISO PMI: 46.2 V 49.7E
- (BE) BELGIUM AUG UNEMPLOYMENT RATE: 7.4% V 7.5% PRIOR
- (UK) AUG NET CONSUMER CREDIT: -£0.1B V +£0.1BE; NET LENDING: -£0.3B V +£0.8BE
- (UK) AUG MORTGAGE APPROVALS: 47.7K V 49.2KE
- (UK) SEPT PMI MANUFACTURING: 48.4 V 49.9E
- (RU) RUSSIA SEPT MANUFACTURING PMI: 52.4 V 51.0 PRIOR
- (NO) NORWAY AUG CREDIT INDICATOR GROWTH Y/Y: 6.8% V 6.9% PRIOR
- (IN) INDIA AUG FINAL TRADE BALANCE: -$15.7B V -$15.7B PRELIM
- (JP) JAPAN SEPT VEHICLE SALES Y/Y: -8.1% V +7.3% PRIOR
- (IN) INDIA SEPT MARKIT MANUFACTURING PMI: 52.8 V 52.8 PRIOR
- (TH) THAILAND SEPT CONSUMER PRICE INDEX M/M: 0.3% V 0.2%E; Y/Y: 3.4% V 3.3%E; CORE CPI Y/Y: 1.9% V 1.8%E
- (ID) INDONESIA AUG TOTAL TRADE BALANCE: $250M V -$62ME
- (ID) INDONESIA SEPT INFLATION (CPI) M/M: 0.1% V 0.3%E; Y/Y: 4.3% V 4.6%E; CORE INFLATION M/M: 4.1% V 4.2%E
- (ID) INDONESIA HSBC SEPT MANUFACTURING PMI: 50.5 V 51.6 PRIOR

Fixed Income:
- (NO) Norway sells NOK3.0B vs. NOK3.0B indicated in 12-month Bills; Yield 1.72% v 1.67%

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***

-Peripheral Euro Zone PMI data rises m/m, peripheral bond yields decline; Spain Sept manufacturing PMI hits highest level since Feb.
-Euro pares losses seen in Asia and holds above 200-day moving avg, amid the release of European PMI data
-Swiss Sept manufacturing PMI hits lowest level since June 2009, France Sept final manufacturing PMI at 41-month low
-AUD weaker ahead of RBA meeting
-Equity gains in Europe led by the Italian FTSE MIB on better than expected data
-Greek equities open higher by over 2%, amid speculation that the country's €31B aid tranche might be approved. Greece 2013 budget draft due to be submitted to parliament later today
-Traders still on the lookout for comments out of Moody's on Spain's sovereign rating. In its weekly credit outlook report, Moody's said that Spain's bank recapitalization plan was credit positive for the banking system, but may not be enough to full restore confidence
-Commodities trade lower, amid mixed PMI data out of China

***Equities***
- Indices: FTSE 100 +1% at 5,797, DAX +1.4% at 7,315, CAC-40 +1.3% at 3,399, IBEX-35 +1.1% at 7,791, FTSE MIB +1.7% at 15,359, SMI +1% at 6,562, S&P 500 Futures +0.40% at 1440

- European equity indices are trading higher, following the mixed opened. The gains come as euro zone peripheral PMI data improved m/m. Also, there was press speculation that Greece could receive its €31.5B aid tranche. European banks are broadly higher, led by Credit Agricole, as the company confirmed the exclusive talks related to its Greek unit. Spanish banks have underperformed. Resource related firms are gaining, as commodity prices pare losses.

- In London, shares of Coal of Africa [CZA.UK] have risen by over 19%, after the company announced a $100M financing agreement. Woseley [WOS.UK] is higher by over 1% on speculation that the firm could announce a special dividend. Xstrata [XTA.UK] has gained over 1%, as the firm recommended the transaction with Glencore [GLEN.UK]. Swiss oil services firm Transocean [RIGN.CH] has gained over 1.5%, amid reports that a Brazilian court partially removed a ban on the firm's operations.
- FTSE 100 movers (Woseley +3%, Barclays +2.8%, IAG +2.6%, Shire +2.3%, Schrolders +2.1%, Burberry +2.1%)
- CAC-40 movers (Credit Agricole +2.7%, Alstom +2.3%, Accor +2.2%, LVMH +2.1%, Danone +1.9%; Alcatel-Lucent -3.8%)
- DAX movers (Infineon +2.3%, Bayer +2.1%, Deutsche Bank +1.7%, Heidelberg Cement +1.7%, SAP +1.5%, Volkswagen -0.10%)
- IBEX-35 movers (Sacyr +3.1%, Gamesa +2.9%, Acerinox +2.9%, Abertis 2.8%, Ferrovial 2.8%)
- FTSE MIB movers (Finmeccanica +3.1%, Mediaset +3%, Fiat Industrial +2.9%, Buzzi Unicem +2.2%, Ferragamo +2%)
- SMI movers (Transocean +5.3%, Credit Suisse +2.7%, Julius Baer +1.9%, Richemont +1.5%, SGS +1.4%)

Speakers:
-Denmark FSA reported H1 Bank writedowns rose to DKK13.2B v DKK9B y/y, H1 Bank Pretax profits DKK4.2B v DKK6.4B y/y.
-Basel group said they see draft Basel III rules as flawed.
-Fitch Analyst Riley commented they aim to resolve UK sovereign rating by early 2014 and that the deficit is currently "standing still".
-India Finance Ministry to allow insurance companies to invest in special purpose vehicles for infrastructure.
-Hungary PM Orban said he can't contemplate bad IMF deal.
Currencies:
- EUR/GBP hit fresh session highs of £0.7975 after weaker UK manufacturing PMI and lower than expected consumer credit and mortgage approvals. Euro touched a 3-week low, $1.2804 and below 200 day moving average support of $1.2820. This fresh risk aversion came after the results of Spain bank stress test results Friday failed to put the market at ease. Traders also continue to be wary about Moody's pending action on Spain, which may see its sovereign rating downgraded to 'junk' status, and the return of the troika to Greece to negotiate the final austerity measures required for secure the next tranche of aid. With the flow to safe havens the Swissie gained to a high of CHF0.9438.

Political/ In the Papers:
-Man SE [MAN.DE]: Awarded order from Petrobras worth €150M - US financial press
-Roche [ROG.CH]: Hera study released on HERCEPTIN - US financial press
- Daimler [DAI.DE]: Reiterates that it has no plan to introduce shorter working hours - financial press
-Porsche [PAH3.DE]: Expects China unit to continue to show growth - financial press
-London Stamford LSP.UK: Sells 50% stake in Meadowhall to Norway's SWF for £750M - Telegraph
- EUR/USD: According to Citigroup, if the ECB cuts rates on Thursday the Euro could decline to the $1.2650 area - US financial press; Dealers are eyeing the 200-day moving avg for EUR/USD near $1.2825.
- (EU) Slovakia PM Fico: Believes one or two countries will be forced out of the euro zone - financial press
- (EU) JP Morgan has started to buy European mortgage bonds - FT
- (FR) France's 2013 budget may not please bond investors - Telegraph's Ambrose Evans-Pritchard
- Credit Agricole [ACA.FR]: Confirms exclusive talks with Alpha Bank related to Greek unit Emporiki; The recapitalisation of Emporiki by Crdit Agricole S.A., which has already injected EUR2.3 billion in July 2012, would be increased to EUR2.85 billion
- (DE) Germany to present plan for a central budget to be funded through transaction and national taxes to help debtor nations - Die Welt
- Commerzbank [CBK.DE]: There is speculation that the firm may be unable to pay a dividend - German Press
- ThyseenKrupp [TKA.DE]: Outokumpu may sell Inoxum Stainless Steel mill in Terni; divestment of Swedish melting and coil operations may not be enough
- (GR) Troika inspectors returning to Athens today after giving PM Samaras a week to finalize €13.5B austerity package to secure €31.5B frozen tranche of EU/IMF loans; Coalition still pushing for 2 year extension to implementation - financial press
- (GR) EU officials may soften the terms related to Greece's €31B aid payment - German Press
- (GR) Notes there is speculation that Germany is so concerned about the Greek debt crisis that it is prepared to support the next €31B payment to Greece - Telegraph's Ambrose Evans-Pritchard
- (PT) Moody's: Portugal's change of stance on social security tax is Credit Negative.
- (PT) Portugal FY12 social security deficit seen at -€700M, first deficit since 2001 - Economico
- (ES) Spain Budget Min Montoro: Intends to borrow about €207B in 2013; 2012 Budget gap to be 7.4% after banking bailout impact (vs. 6.3% target); Budget assumes 10-year borrowing cost of 5% - financial press
- (ES) Spain Econ Min Latorre: final total for bank aid request will be on the order of €40B (vs the €59.3B needed)
- (ES) Moody's: Spain banks' planned recapitalization is seen as Credit Positive for Spain's banking system, though it may not be enough to fully restore confidence
- (ES) Spain is close to running out of cash by end of year, ECB may want to see PM Rajoy replaced if he does not act on bailout request in the next few days - financial press; Aug cash balance is €19B, but burn rate is close to €4B a month
- (ES) According to local polls, about 55% of respondents are in favor of a Catalan independence from Spain- financial press
-Banco Popular [POP.ES]: Said to have approved a capital increase of up to €2.5B (72% of market cap) - financial press
- (UK) Fitch affirms UK AAA rating; outlook remains Negative; weaker than expected growth and fiscal outturns in 2012 have increased pressure on the UK's 'AAA' rating; Fitch judges the risk of a fiscal financing crisis to be negligible.

***Looking Ahead***
***All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- 06:30 (US) Daily Libor Fixings
- 07:00 (PE) Peru Sept Consumer Price Index M/M: No est v 0.5% prior; Y/Y: No est v 3.5% prior; Wholesale Prices M/M: No est v 0.2% prior
- 07:30 (BR) Brazil Central Bank Weekly Economists Survey
- 08:00 (EU) NATO's Rasmussen holds Monthly Press Conference
- 08:00 (RO) Romania to sell Bills
- 08:30 (CA) Canada Aug Industrial Product Price M/M: No est v -0.5% prior; Raw Materials Price Index M/M: no est v 0.9% prior
- 08:58 (US) Sept Final Markit US PMI Manufacturing: 51.5e v 51.5 prelim
- 09:00 (BR) Brazil Sept PMI Manufacturing: No est v 49.3 prior
- 09:00 (FR) France Debt Agency (AFT) to sell up to €7.0B in 3-month, 6-month and 12-month bills
- 09:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender
- 09:30 (EU) ECB announces weekly settlements in its Govt Bond Purchase program
- 09:45 (UK) BOE to buy back £1.0B in 2015-2019 Gilts via reverse auction
- 10:00 (MX) Mexico Central Bank Economist Survey
- 10:00 (MX) Mexico Aug Remittances: No est v $1.9B prior
- 10:00 (US) Sept ISM Manufacturing: 50.0e v 49.6 prior; Prices Paid: 55.1w v 54.0 prior
- 10:00 (US) Aug Construction Spending M/M: +0.5%e v -0.9% prior
- 10:30 (EU) World Bank briefing
- 11:30 (US) Treasury to sell combined $70.0B in3-Month and 6-Month Bills
- 12:00 (US) Fed's Williams speaks in San Francisco
- 12:00 (IT) Italy Sept New Car Registrations Y/Y: No est v -20.2% prior
- 12:30 (US) Fed Chairman Bernanke speaks on monetary policy in Indiana
- 12:30 (AT) ECB members Asmussen and Nowotny speak in Vienna
- 13:00 (MX) Mexico Sept IMEF Manufacturing Index: No est v 53.0 prior; Non-Manufacturing Index: No est v 52.8 prior
- 13:00 (IT) Italy Sept Budget Balance: No est v -€6.0B prior; Budget Balance YTD: No est v -€33.5B prior
- 14:00 (BR) Brazil Sept Trade Balance: No est v $3.2B prior; exports: No est v $22.4B prior; Imports: No est v $19.1B prior
- 16:00 (US) Crop Condition Report
- 00:30 (AU) Australia Central Bank (RBA) Interest Rate Decision: Expected to leave the Cash Target Rate unchanged at 3.50%

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