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  • DAILY US OPENING NEWS - 13/04/12 0 comments
    Apr 13, 2012 8:06 AM

    · Spanish Banks net borrowing from the ECB EUR 227.6bln in March.

    · Chinese Real GDP (Q1) Y/Y 8.1% vs. Exp. 8.4% (Prev. 8.9%).

    · JP Morgan Q1 EPS USD 1.31 vs. Exp. USD 1.17, Q1 Revenue USD 27.4bln vs. Exp. USD 24.14bln.

    · RANsquawk European Morning Briefing Video: http://youtu.be/oyRM4tqXxzY

    Market Re-Cap

    Risk-aversion is noted in the European markets with all major European bourses trading lower heading into the US open. Participants remain particularly sensitive to Spain following a release from the ECB showing that Spanish bank's net borrowing from the ECB hit a new record high at EUR 227.6bln in March against EUR 152.4bln in February. Further pressure on the equity markets was observed following the overnight release of a below-expected Chinese GDP reading, coming in at 8.1% against a consensus estimate of 8.4%. As such, markets have witnessed a flight to safety, with Bund futures up over 40 ticks on the day.

    In the energy complex, WTI and Brent futures are also trading lower, as the disappointing Chinese GDP data dampens future oil demand, however a failed rocket launch from North Korea may have capped the losses.

    No particularly notable data releases so far today, although UK PPI came in slightly above expectations across all indicators, pressed upwards by elevated energy prices.

    Global Headlines

    G20 may increase IMF resources by USD 400-500bln, not USD 600bln according to G20 officials. (RTRS)

    Asian Headlines

    Chinese Real GDP (Q1) Y/Y 8.1% vs. Exp. 8.4% (Prev. 8.9%)

    Chinese Real GDP (Q1) Q/Q 1.8% vs. Exp. 1.9% (Prev. 2.0%)

    Chinese Real GDP YTD (Q1) Y/Y 8.1% vs. Exp. 8.4% (Prev. 9.2%)

    Chinese Industrial Production (Mar) Y/Y 11.9% vs. Exp. 11.6%

    Chinese Industrial Production YTD (Mar) Y/Y 11.6% vs. Exp. 11.3% (Prev. 11.4%)

    Chinese Retail Sales (Mar) Y/Y 15.2% vs. Exp. 15.1%

    Chinese Retail Sales YTD (Mar) Y/Y 14.8% vs. Exp. 14.8% (Prev. 14.7%) (Sources)

    The Chinese stats bureau has said that China face increasing difficulty in stabilizing exports and the economy is still facing inflationary pressure, but Q1 growth was still reasonable. (Sources)

    China cuts reserve ratios for some financial institutions according to Sina; says the cut is to last for one year. (Sina)

    - The PBOC has lowered the required deposit reserve ratio by one percentage point for some rural financial institutions according to Sina.

    The BoJ have released the minutes from the March 12-13th policy board meeting. A board member proposed additional monetary easing steps to further spread understanding of the easing in February and to help realize potential demand in the economy. The proposal was rejected by the other eight board members. (Sources)

    US Headlines

    Looking ahead into the US session CPI data is due at 1330BST.

    EU and UK Headlines

    Spanish Banks' net ECB borrowings climb to EUR 227.6bln in March vs. EUR 152.4bln in February

    Spanish Bank's gross ECB borrowing EUR 316.3bln vs. EUR 169.8bln in February (Sources)

    Italian Industrial Production s.a. (Feb) M/M -0.7% vs. Exp. -0.7% (Prev. -2.5%, Rev. -2.6%)

    Italian Industrial Production WDA (Feb) Y/Y -6.8% vs. Exp. -5.1% (Prev. -5.0%, Rev. -4.6%)

    Italian Industrial Production NSA (Feb) Y/Y -3.5% vs. Prev. -2.1%, Rev. -1.7% (Sources)

    The Spanish government has attacked what it calls the 'excesses' of some of the 17 autonomous regions and vowed to make them conform to drastic spending cuts agreed by Madrid and the EU. (FT-More) PM Rajoy's party pushed through a budget stability law yesterday obliging Spain to cut its annual budget deficit to zero by 2020, from EUR 90bln or 8.5% of GDP last year.

    George Soros has said bureaucrats at the Bundesbank are in the process of destroying the EUR and the rise and fall of Europe will be only a financial bubble if the policy is not changed. (Sueddeutsche Zeitung)

    Private-sector debt is arguably a more intricate problem than public-sector debt in the Eurozone, and governments appear unlikely to embrace bold policies that would ease its burden on the European economy, according to the WSJ. (WSJ)

    EQUITIES

    In Europe, equity markets are trading lower amid renewed concerns over Spain as data releases show that Spanish Bank's net borrowing from the ECB reached record highs of EUR 227.6bln in March. As such, financials are taking the biggest hits with Spanish banks the top losers of the day with Banco Santander showing the steepest losses, trading lower by 3.85%.

    German software firm SAP reported their Q1 earnings earlier in the session, recording Q1 revenues up 12% at EUR 2.63bln, confirming their forecast and predicting a strong Q2. As such, SAP shares currently trade higher by 2.3%.

    Across the Atlantic, JP Morgan released their Q1 earnings, beating estimates on EPS. (Sources)

    JP Morgan (NYSE:JPM) Q1 EPS USD 1.31 vs. Exp. USD 1.17

    - Q1 Revenue USD 27.4bln vs. Exp. USD 24.14bln

    - Q1 Net USD 5.4bln

    - Q1 included USD 0.14 cut or USD 0.9bln pretax dva loss

    - Q1 Tier 1 common equity ratio of 10.4% on Sept. 30th; tier 1 capital ratio 12.6%

    - Q1 estimated Basel III tier 1 common ratio 8.4%

    - Q1 investment bank revenue USD 7.321bln, down 29%

    Reiterates that:

    - Co. raises dividend to USD 0.30

    - Co. expects to buy back USD 15bln in common equity

    Top performing sectors in the BE500: Technology (+0.41%), Basic Materials (+0.15%), Oil & Gas (-0.20%)

    Worst performing sectors in the BE500: Telecommunications (-1.15%), Utilities (-0.94%), Financials (-0.91%)

     

     

    Index

    DAX

    CAC

    FTSE

    EUROSTOXX

    SMI

    Level

    6707.38

    3243.28

    5700.45

    2332.28

    6108.1

    Change (ticks)

    -35.86

    -26.51

    -10.01

    -19.96

    -17.29

    **Note: For US equity news in detail, refer to the RANsquawk Daily US Equity Opening News report.

    FX

    USD is modestly stronger today, benefitting from safe-haven flows after the release of a disappointing set of GDP figures from China. EUR/USD has been trading within a tight range today but has come under some selling pressure from renewed concerns over the Spanish banking system.

    Commodity-linked currencies are seen lower heading into the US open, failing to recapture ground lost following the weak Chinese GDP data. As such, AUD/USD is back above 1.0400 after dipping to a session low of 1.0369, but remains well below unchanged.

    Currency

    EURUSD

    GBPUSD

    USDJPY

    Level

    1.3168

    1.5954

    81.01

    Change (pips)

    -0.0020

    -0.0006

    0.1200

    **Note:

    Eurodollar April options expiry (1100BST/0500CDT),

    COMMODITIES

    WTI and Brent crude futures are trading lower following the release of a below-expected Chinese GDP figure, dampening future oil demand. Oil losses may have been somewhat capped following a failed North Korean rocket launch, possibly relieving tension in some energy market players.

    Oil & Gas News:

    · Saudi Oil Minister Naimi has said he sees a prolonged period of high oil prices and is not happy about it. Naimi added that Saudi Arabia will use spare output capacity to supply any additional oil.

    · Credit Suisse have raised their Brent forecast to USD 125/BBL in 2012, USD 132.5/BBL in 2013 and USD 135/BBL in 2014. Credit Suisse have also cut their 2012 US natural gas forecast to USD 2.64, and USD 3.70 for 2013.

    · Chinese shipyards are expected to deliver the first of 12 supertankers to Iranian oil shipping operator NITC in May, two months ahead of the European ban.

    · Kinder Morgan Energy Partners have said it would more than double the size of its TransMountain oil pipeline with a USD 5bln project to add 550,000BPD capacity to the line that carries oil from Vancouver and Washington.

    · Iraq are to raise their Basrah light crude exports in the second half of April up to 31.53mln BBLs.

    · As of April 16th, the CME has lowered initial and maintenance margins on silver by 12.5%, and copper margins by 20%.

    Geopolitical News:

    · North Korea have launched their rocket from its Sohae Satellite Launching Station, however it exploded within minutes, according to the South Korean Defence Ministry. A US Official has confirmed that the rocket was launched and it broke apart soon after. North Korea have acknowledged the failure of the launch on state television. Germany has called for a strong UN response to the launch and the UK is to summon the North Korean ambassador, echoing Germany as the launch is a clear violation of the UN Security Council resolution.

    · Iran's President Ahmadinejad has stressed that Tehran will stand firm on its basic rights and will not retreat from its nuclear rights even under the harshest pressures, according to Iranian state TV.

    Commodity

    WTI Nymex

    OTC Spot Gold

     

    Level

    103.54

    1674.45

     

    Change (NYSEARCA:USD)

    -0.10

    -1.33

     

    **Note:

    Brent Crude May futures expiry (1930BST/1330CDT)

    For commodities news in detail, refer to the RANsquawk Daily Energy Commentary report.

    LOOKING AHEAD

    Economic Releases

    CDT

    BST

     

    DATA

    EXP

    PREV

    0730

    1330

    US

    CPI M/M (Mar)

    0.3%

    0.4%

    0730

    1330

    US

    CPI Y/Y (Mar)

    2.7%

    2.9%

    0730

    1330

    US

    CPI Ex Food & Energy M/M (Mar)

    0.2%

    0.1%

    0730

    1330

    US

    CPI Ex Food & Energy Y/Y (Mar)

    2.2%

    2.2%

    0730

    1330

    US

    CPI NSA M/M (Mar)

    229.327

    227.663

    0730

    1330

    US

    Core CPI SA M/M (Mar)

     

    227.907

    0855

    1455

    US

    Univ. of Michigan Confidence M/M (Apr P)

    76.2

    76.2

    0930

    1530

    US

    ECRI Weekly Index W/W (Apr 13)

     

    126.5

    0930

    1530

    US

    ECRI Weekly Index Annualized W/W (Apr 13)

     

    1.0%

    1200

    1800

    US

    Baker Hughes US Rig Count W/W (Apr 13)

     

    1979

     

    Speakers

    0700

    1300

    US

    Fed's Dudley speaks on economy in Buffalo

    0800

    1400

    EU

    ECB's Knot speaks at the University of Amsterdam

    0900

    1500

    EU

    ECB's Costa speaks at Parliamentary Commission

    1100

    1700

    US

    Treasury releases primary dealer meeting agenda

    1200

    1800

    US

    Fed's Bernanke speak in New York

    1415

    1915

    US

    Fed's Dudley speaks in Buffalo

     

    Auctions

    1000

    1600

    US

    Fed's Trea. Coup. Purch. Feb'36 - Feb'42 (USD 1.5-2.0bln)

     

    Earnings

    UK

    N/A

    EU

    N/A

    SZ

    N/A

    US

    Wells Fargo

    Prices taken at 1234BST

    'Market talk' - Signifies information that has not been formally tested through traditional journalistic channels and therefore is to be treated as unsubstantiated. Any interpretation of the talk is taken at the readers own risk and is a representation of the rumours within the market place and never generated by ourselves.

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