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DAILY US OPENING NEWS - 17/03/11

 

 

·   Overnight, strength was observed in JPY, with USD/JPY printed record lows, however as the session progressed, USD/JPY came off its earlier lows

 

·   Well received bond auction from Spain provided support to EUR/USD and European equities

 

·   WTI crude futures continued its ascent on the back of the escalation of geopolitical tension in Egypt

 

·   RANsquawk EU Morning Briefing Video: http://www.youtube.com/watch?v=e3zvJZ4hZdY

 

Market Re-Cap

 

Overnight, strength was observed in JPY, with USD/JPY printed record lows, although Japan's economy minister denied rumours that Japanese insurers are repatriating assets, however as the session progressed, USD/JPY came off its earlier lows. Also, Japanese finance minister declined to comment on any potential intervention from the BOJ. In Europe, European equities traded in positive territory, led by basic materials, which weighed upon bunds, with bunds coming under further pressure following a well-received bond auction from Spain, which also helped EUR/USD. Weakness in the USD-index provided further support to EUR/USD and GBP/USD. Elsewhere, WTI crude futures continued to climb higher during the session as the geopolitical tension in Libya escalated.

 

Moving into the North American open, markets look ahead to a slew of key economic data from the US in the form of CPI, and industrial production, allied with another Fed's Outright Treasury Coupon Purchase operation in the maturity range of Sep'13-Feb'15, with a price target of USD 5.5-7.5bln. It is also worth noting that markets will keep a close eye on developments in Japan as well as the Middle East.

 

Asian Headlines

 

JAPAN UPDATE (RTRS/Sources)

·   USD/JPY printed another new post WW2 low at 76.73 in early Asian trade.

·   Nikkei closed 1.44% lower after falling 5% in early trade in Tokyo

·   Japan’s Noda has declined to comment on whether there will be intervention from the BOJ in the currency markets.

·   Japan’s Yosano has called rumours that Japanese insurers are repatriating assets groundless and blamed the moves on speculators.

·   G7 finance ministers and central bankers will hold a teleconference at 2200GMT tonight to discuss possible steps to calm volatile financial markets

·   The BOJ has injected a further JPY 6trl into money markets

 

EU and UK Headlines:

 

·   Eurozone Construction Output SA (Jan) M/M 1.8% vs. Prev. -1.8% (Rev. to -2.0%)

·   Eurozone Construction Output WDA (Jan) Y/Y -4.5% vs. Prev. -12.0% (Rev. to -14.0%) (RTRS)

 

·   Spanish Bond Auction result for EUR  3219Mln, line 5.50% Apr'21, bid/cover 1.8 vs. Prev. 1.54 (yield  5.162% vs. Prev. 5.200%)

·   Spanish Bond Auction result for EUR  911Mln, line 4.70% Jul'41, bid/cover 2.1 vs. 2.05 (yield  5.875% vs. Prev. 5.488%)

·   French BTAN Auction Result for EUR  2.905Bln, line 2.25% Feb'16, bid/cover 2.583 vs. 1.845 (yield  2.63% vs. Prev. 2.69%)

·   UK Conventional Gilt auction for GBP Bln, 3.75% Sep'21, bid/cover 2.01 vs. Prev. 2.06 (RTRS)

 

EQUITIES

 

European equities traded higher during the session, with basic materials and oil & gas performing well partly due to weakness in the USD-index. Further positive sentiment came in the market after a well-received bond auction from Spain, and moving into the North American open, equities continue to trade higher with industrials and oil & gas as the best performing sectors.

 

 

 

 

Index

DAX

CAC

FTSE

EUROSTOXX

SMI

Level

6579.05

3729.19

5645.81

2746.29

6037.46

Change (ticks)

65.21

32.63

47.58

25.05

15.91

 

FX

 

Overnight, strength was observed in JPY, with USD/JPY printed record lows, although Japan's economy minister denied rumours that Japanese insurers are repatriating assets, however as the session progressed, USD/JPY came off its earlier lows. In other news, the USD-index continued to weaken as the session progressed, breaching its 4-month low level, which in turn provided strength to GBP/USD and EUR/USD, with the EUR/USD also helped by a well received bond auction from Spain.

 

·   Swiss SNB's 3-month Libor Target Rate (Mar) M/M 0.25% vs. Exp. 0.25% (Prev. 0.25%) (RTRS)

 

Currency

EURUSD

GBPUSD

USDJPY

Level

1.4016

1.6128

78.42

Change (pips)

0.0116

0.0104

-1.1700

 

COMMMODITIES

 

Despite the ongoing issues in Japan, WTI Crude Futures rose today around 1.75%, close to the USD 100 level and Brent Crude rose USD 2.00 as violence in the MENA region continued, with Gaddafi forces tightening their grip on the Rebel Opposition.

 

Geopolitical News:

·   Libyan aircraft have bombed an airport 10km from the Rebel stronghold Town of Benghazi.  

·   Son of Gaddafi says war will be over in 48 hours as Gaddafi forces seize Ajdabiya, 100 miles west of Benghazi. In other news Gaddafi has called on Rebels to flee to Egypt while they can, stating he believes many have already left Libya to evade capture.

·   Libyan TV says Gaddafi forces control the Western City of Misrata, although this is denied by residents who claim Rebels are still in control.

·   Members of the Rebel opposition council still hope for help from the UN Security Council, following yesterday’s council meeting and debate over a formal cease-fire.

·   French President Sarkozy has called on UN Council Nations to respond to the Libya situation with a no-fly zone.

·   Bahraini Security Forces have arrested six opposition leaders in a move to quell more than a month of protests from Shi’ite groups.

 

Oil & Gas News:

·   UBS increased its 2011 forecast for Brent Crude by 22% to USD 103.75 vs. USD 85, citing cuts to output due to escalating violence in Libya.

·   Kuwait’s Oil Minister has said no decision has been made on OPEC meeting. Furthermore he added that exports will not be affected by the Japanese Earthquake disaster.

 

Commodity

WTI Nymex

OTC Spot Gold

Level

99.78

1402.73

Change (NYSEARCA:USD)

1.80

3.85

 

 

 

 

 

 

 

 

 

LOOKING AHEAD

 

Economic Releases

 

CST

GMT

 

DATA

EXP

PREV

0730

1230

US

Initial Jobless Claims W/W (Mar 12)

387K

397K

0730

1230

US

Continuing Claims W/W (Mar 5)

3750K

3771K

0730

1230

US

CPI M/M (Feb)

0.4%

0.4%

0730

1230

US

CPI Y/Y (Feb)

2.0%

1.6%

0730

1230

US

CPI ex. Food & Energy M/M (Feb)

0.1%

0.2%

0730

1230

US

CPI ex. Food & Energy Y/Y (Feb)

1.0%

1.0%

0730

1230

US

CPI Core Index SA M/M (Feb)

 

222.587

0730

1230

US

CPI NSA Y/Y (Feb)

221.084

220.223

0730

1230

US

Midwest Manufacturing M/M (Jan)

 

81.5

0730

1230

CA

International Securities Transactions M/M (Jan)

6.000B

9.626B

0730

1230

CA

Wholesale Sales M/M (Jan)

 

0.8%

0815

1315

US

Industrial Production M/M (Feb)

0.6%

-0.1%

0815

1315

US

Capacity Utilisation M/M (Feb)

76.5%

76.1%

0900

1400

US

Leading Indicators M/M (Feb)

1.0%

0.1%

0900

1400

US

Philadelphia Fed M/M (Mar)

30.0

35.9

0930

1430

US

EIA Natural Gas Storage Change W/W (Mar 11)

-42

-71

1030

1530

US

Cleveland Fed CPI M/M (Feb)

 

0.2%

1850

2350

JN

BOJ’s Monetary Policy Meeting Minutes

 

 

N/A

N/A

WLD

IFO Spring Conference on World Economic Crisis

 

 

 

Speakers

0830

1330

EU

European Banking Authority Chairman Enria

1400

1900

US

Treasury Secretary Geithner

1800

2300

EU

ECB’s Trichet at an event in the European Parliament

1800

2300

EU

EU’s Juncker at an event in the European Parliament

N/A

N/A

GE

German Finance Minister Schauble

 

Auction

1000

1500

US

Fed’s Outright Trea. Coup. Purch. Sep’13-Feb’15 (USD 5.5-7.5bln)

 

Earnings

US

Nike, Ross Stores

 

**Notes:

WTI Crude April options expiry

NASDAQ 100/S&P 500 March options and futures expiry

 

Market Holiday: Ireland and Italy

 

 

Prices taken at 1150GMT