DAILY US OPENING NEWS - 28/04/11
Macro
Seeking Alpha Analyst Since 2008
· Dovish comments from Fed’s Bernanke, in his press-conference following the FOMC rate decision yesterday, weighed upon the USD-Index
· BoJ and RBNZ kept key interest rates unchanged at 0.10% and 2.50% respectively, as expected
· Strong corporate earnings from Europe provided support to equities
· RANsquawk EU Morning Briefing Video: http://www.youtube.com/watch?v=CZ4v9OW98EU
Market Re-Cap
Dovish comments from Fed’s Bernanke, in his press-conference following the FOMC rate decision yesterday, weighed upon the USD-Index, which in turn provided support to EUR/USD and GBP/USD. In other forex news, weakness was observed in NZD after the Reserve Bank of New Zealand kept its key interest rate unchanged at 2.50% as expected and reaffirmed that it would keep them at a record low to aid recovery from the devastating Christchurch earthquake. Elsewhere, Bund futures traded higher during the session, taking cues from the strength in T-Notes on the back of Fed’s dovish tone, whereas European peripheral 10-year government bond yield spreads remained tighter due to a lack of fresh news flow related to Eurozone sovereign and debt concerns.
Moving forward, markets look ahead to key economic data from the US in the form of jobless figures, advanced quarterly GDP, as well as pending home sales. In fixed income, USD 29bln 7-year note auction, allied with another Fed’s Outright Treasury Coupon purchase operation in the maturity range of Apr’15 – Sep’16, with a purchase target of USD 5-7bln is scheduled for later in the session. Markets also keep an eye on corporate earnings results from the US.
Asian Headlines
BOJ Target Rate (Apr) M/M 0.10% vs. Exp. 0.10% (Prev. 0.10%) (Sources)
The BOJ kept monetary policy steady, opting to wait for more clues on weather the damage from last month’s devastating earthquake is big enough to threaten the economy’s return to moderate recovery. But in a surprise move, Deputy Governor Nishimura proposed expanding the BOJ’s pool of funds for asset buying and market operations by JPY 5tln, to JPY 45tln. The proposal was rejected by a vote of one to eight.
In other news, the World Bank raised its forecast of China’s economic growth in 2011 for the second time in as many months and said it was too early for Beijing to halt policy tightening, not least because of inflationary risks. It said the GDP is now likely to expand 9.3% in 2011, it had forecast 9.0% in a regional survey in March and 8.7% in its previous China update last November. The bank slashed its projection of China’s 2011 current account surplus to 3.6% of GDP. (RTRS)
· Japan National CPI (Mar) Y/Y 0.0% vs. Exp. 0.0% (Prev. 0.0%)
· Japan Jobless Rate (Mar) M/M 4.6% vs. Exp. 4.8% (Prev. 4.6%)
· Japan Markit/JMMA Manufacturing PMI (Apr) M/M 45.7 vs. Prev. 46.4
· Japan Industrial Production (Mar) M/M -15.3% vs. Exp. -10.6% (Prev. 1.8%);
· Japan Industrial Production (Mar) Y/Y -12.9% vs. Exp. -8.5% (Prev. 2.9%) (RTRS)
EU and UK Headlines:
ECB's Mersch said non-standard measures are temporary, and the ECB will continue the gradual exit at an appropriate pace. (Sources)
· German Unemployment Change (000's) (Apr) M/M -37K vs. Exp. -37K (Prev. -55K)
· German Unemployment Rate (Apr) M/M 7.1% vs. Exp. 7.0% (Prev. 7.1%)
· UK GFK Consumer Confidence Survey (Apr) M/M -31 vs. Exp. -27 (Prev. -28) (RTRS)
· Italian BTP auction for EUR 3.21bln, 3% 01-Apr-14, bid/cover 1.58 vs. Prev 1.30 (yield 3.45% vs. Prev. 3.24%)
· Italian BTP auction for EUR 3.35bln, 4.75% 01-Sep-21, bid/cover 1.41 vs. Prev. 1.50 (yield 4.84% vs. Prev. 4.80%) (RTRS)
EQUITIES
Most European indices traded higher primarily on the back of strong corporate earnings from the likes of Royal Dutch Shell, Deutsche Bank, and AstraZeneca, although FTSE 100 index underperformed its European peers pressured down by weakness in BP shares. Moving into the North American open, European equities retain their strength, with utilities and financials as best performing sectors.
For all US corporate earnings in full detail please refer to www.ransquawk.com or alternatively a US equity opening news report shall be sent out to professional users at 1300BST/0700CDT.
Index | DAX | CAC | FTSE | EUROSTOXX | SMI |
Level | 7434.62 | 4085.93 | 6054.58 | 2991.87 | 6493.4 |
Change (ticks) | 29.67 | 18.21 | -13.58 | 14.28 | 20.98 |
FX
Dovish comments from Fed’s Bernanke, in his press-conference following the FOMC rate decision yesterday, weighed upon the USD-Index, which in turn provided support to EUR/USD and GBP/USD. In other forex news, weakness was observed in NZD after the Reserve Bank of New Zealand kept its key interest rate unchanged at 2.50% as expected and reaffirmed that it would keep them at a record low to aid recovery from the devastating Christchurch earthquake.
· New Zealand RBNZ Official Cash Rate (Apr 28) M/M 2.50% vs. Exp. 2.50% (Prev. 2.50) (RTRS)
Currency | EURUSD | GBPUSD | USDJPY |
Level | 1.4803 | 1.6656 | 81.75 |
Change (pips) | 0.0015 | 0.0029 | -0.4100 |
COMMODITIES
Overnight, WTI crude futures traded higher on the back of weakness in the USD-Index, allied with anticipation of enhanced demand in the US after the Fed refrained from monetary tightening anytime soon. However, moving into the NYMEX pit open, prices pared earlier gains and ventured into negative territory due to lack of substantial news-flow.
Oil & Gas News:
· Fed’s Bernanke said oil prices will begin to stabilise and help bring down inflation.
· Russian Energy Minister said that Russian oil companies will stop exporting gasoline in May to help Russia cope with the fuel shortage on domestic markets. He added that he does not think it is possible to regulate oil product prices, and he expects gasoline prices to rise 5% in the near future.
· According to National Business Daily, China may raise fuel prices in the second week of May, adding that China may increase the price of gasoline and diesel by CNY 150 to CNY 200 a ton.
Geopolitical News:
· According to Al Jazeera, Gaddafi forces clashed with rebels in Libya’s remote Southeast Kufra region. Also, according to a local doctor, pro-Gaddafi artillery fire killed 7 rebel fighters overnight in Misrata.
· Syrian President Assad faced dissent within government ranks with more than 200 members of his Baath Party resigning and signs of discontent within the army over the violent repression of pro-democracy protests. Diplomats said signs were also emerging of discontent within the army where the majority of troops are Sunni Muslims, but most officers belong to the same minority Alawite sect as Assad.
· Former US President Carter said there is no sign of an imminent breakthrough on North Korea, however Kim Jong Il has sent a message that North Korea is willing to hold South Korea summit. He added that North Korea is willing to hold talks with anyone without any preconditions.
Commodity | WTI Nymex | OTC Spot Gold |
Level | 112.66 | 1529.98 |
Change (USD) | -0.10 | 2.63 |
LOOKING AHEAD
Economic Releases
CDT | BST |
| DATA | EXP | PREV |
0730 | 1330 | US | Initial Jobless Claims W/W (Apr 23) | 395K | 403K |
0730 | 1330 | US | Continuing Claims W/W (Apr 16) | 3680K | 3695K |
0730 | 1330 | US | GDP Annualised Q/Q (Q1 A) | 2.0% | 3.1% |
0730 | 1330 | US | GDP Price Index Q/Q (Q1 A) | 2.3% | 0.4% |
0730 | 1330 | US | Personal Consumption Q/Q (Q1 A) | 2.0% | 4.0% |
0730 | 1330 | US | Core PCE Q/Q (Q1 A) | 1.4% | 0.4% |
0730 | 1330 | US | Chicago Fed Nat. Activity Index M/M (Mar) |
| -0.04 |
0900 | 1500 | US | Pending Home Sales M/M (Mar) | 1.5% | 2.1% |
0900 | 1500 | US | Pending Home Sales Y/Y (Mar) |
| -9.3% |
0930 | 1530 | US | EIA Natural Gas Storage Change W/W (Apr 22) | 37 | 47 |
1000 | 1600 | US | Kansas City Fed Manufacturing M/M (Apr) |
| 39 |
1745 | 2345 | NZ | Trade Balance M/M (Mar) | 200M | 194M |
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Speaker | |||||
0730 | 1330 | US | Fed’s Duke | ||
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Auctions | |||||
1000 | 1600 | US | Fed’s Outright Trea. Coup. Purch. Apr’15-Sep’16 (USD 5-7bln) | ||
1200 | 1800 | US | USD 29bln 7y Note Auction | ||
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Earnings | |||||
US | Apache Corp, Expedia, ExxonMobil, Microsoft | ||||
Prices taken at 1248BST
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