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DAILY US OPENING NEWS - 28/09/11

 

· EU's Barroso says EC is considering a wider guarantee mechanism to help Greek banks and lend again.

 

· EU Commission says the Troika of EU/ECB and IMF has decided to return to Greece.

 

· Greek press reports that indicative bondholder participation in a voluntary swap of Greek debt reached the 90% target..

 

· Finnish parliament approves stronger EFSF.

 

· RANsquawk European Morning Briefing Video: http://www.youtube.com/watch?v=QW7vyctfCOg

 

 

Market Re-Cap

 

European markets have again been driven by developments in Greece, with equities opening lower after the sell-off into the Wall Street close yesterday, in reaction to the FT article regarding 7 Eurozone countries requesting larger haircuts on Greek bonds.  Risk appetite has seen equity markets come back into positive territory across the board following Greek press reports that the 90% PSI target has been reached, the confirmation of the Troika’s return to Greece and EU’s Barroso Print saying the Commission is considering a wider guarantee mechanism to help Greek banks and lend again.  In the forex space, the positive news has helped support EUR/GBP with the USD-index softening throughout the session.  This was allied with higher than previous German state CPI’s and market talk that a UK clearer was pushing EUR/USD to a 2-day high.  Elsewhere the JPY has remained relatively strong across the board with JPMorgan analysts noting that there is a heightened risk of JPY intervention between now and Friday which the Japanese fiscal half year.  In fixed income, Bund futures have slipped lower in conjunction with equities moving higher, but have also witnessed increased selling pressure following an uncovered Bobl auction with the weakest cover on record, before finding support at the 2.00% yield mark. 

 

Moving into the North American session focus will be on the US Durable Goods data and the USD 35bln 5-year note auction with comments from Fed’s Bernanke expected after the market close.  

 

Asian Headlines

 

·   China’s economic growth this year may exceed 9% and inflation peaked in July according to a State Council researcher. (Sources)

 

EU and UK Headlines:

 

·  EU Commission says the Troika of EU/ECB and IMF has decided to return to Greece. (RTRS)

·  Finnish parliament approves stronger EFSF. (RTRS)

·  EU's Barroso says EC is considering a wider guarantee mechanism to help Greek banks and lend again. (RTRS)

·  Greek press reports that indicative bondholder participation in a voluntary swap of Greek debt reached the 90% target.(Naftemporiki)

·  The German government privately anticipates a default by Greece as early as this year. Chancellor Merkel told the CDU lawmakers that Greece’s insolvency couldn’t be rules out. (Bild)

 

EQUITIES

 

European markets have again been driven by developments in Greece, with equities opening lower after the sell-off into the Wall Street close yesterday, in reaction to the FT article regarding 7 Eurozone countries requesting larger haircuts on Greek bonds.  Risk appetite has seen equity markets come back into positive territory across the board following Greek press reports that the 90% PSI target has been reached, the confirmation of the Troika’s return to Greece and EU’s Barroso Print saying the Commission is considering a wider guarantee mechanism to help Greek banks and lend again.  Financials are still the worst performing sector in Europe despite the rally as markets are reluctant to fully endorse any Greek measures with another USD 500mln being tapped from the ECB.  The FTSE 100 has slightly underperformed its peers due to some poor earnings from the likes of MAN Group who opened down 18%. 

 

 

 

 

Index

DAX

CAC

FTSE

EUROSTOXX

SMI

Level

5646.41

3023.88

5282.58

2197.79

5580.03

Change (ticks)

17.97

0.50

-11.47

3.76

15.41

 

 

FX

 

The generally positive news in relation to Greece has helped support EUR/USD with the USD-index softening throughout the session.  This was allied with higher than previous German state CPI’s and market talk that a UK clearer was pushing EUR/GBP to a 2-day high.  Elsewhere the JPY has remained relatively strong across the board with JPMorgan analysts noting that there is a heightened risk of JPY intervention between now and Friday which the Japanese fiscal half year.  Commodity linked currencies have rebounded well off Asian session lows as the Energy complex has rallied.

 

Currency

EURUSD

GBPUSD

USDJPY

Level

1.3658

1.5664

76.39

Change (pips)

0.0073

0.0030

-0.4200

 

 

COMMMODITIES

 

WTI and Brent Crude futures have lacked direction today after yesterday saw WTI’s largest gain in four months.

 

 

Oil & Gas News:

·   French oil refineries and fuel supplies are under threat from possible strike action by labour unions protesting the closure of LyondellBasel’s Berre plant.

·   BP CEO said expects crude prices to stay between USD 90-100 per barrel.

 

US API Inventory Data:

API Crude Oil Inventories (Sep 16) W/W 2574K vs. Prev. -5052K

API Gasoline Inventories (Sep 16) W/W 62K vs. Prev. 2758K

API Distillate Inventory (Sep 16) W/W 81K vs. Prev. 67K

API Cushing Crude Inventory (Sep 16) W/W -317K vs. Prev. -404K.

 

US DOE Inventory Data Estimates:

DOE Crude Oil Inventories (Sep 16) W/W Exp.: 2050K, Low Estimate: -3000K, High Estimate: 5000K, Prev.: -7336K

DOE Gasoline Inventories (Sep 16) W/W Exp.: 1000K, Low Estimate: -1400K, High Estimate: 2500K, Prev.: 3295K

DOE Distillate Inventory (Sep 16) W/W Exp.: -400K, Low Estimate: K, High Estimate: K, Prev.: -874K

DOE Cushing Crude Inventory (Sep 16) W/W Exp.: N/A, Low Estimate: N/A, High Estimate: N/A, Prev.: -231K

DOE Refinery Utilisation (Sep 16) W/W Exp.: -0.50%, Low Estimate: -1.40%, High Estimate: 0.50%, Prev.: 1.30%

 

Commodity

WTI Nymex

OTC Spot Gold

Level

84.43

1652.68

Change (NYSEARCA:USD)

-0.02

2.55

 

For a full energy briefing please refer to the Daily Energy Commentary report sent to your inbox earlier today or the RANsquawk website.

 

 

 

 

 

 

 

 

 

 

LOOKING AHEAD

 

Economic Releases

 

CDT

BST

 

DATA

EXP

PREV

0730

1330

US

Durable Goods Orders M/M (Aug)

-0.2%

4.0%

0730

1330

US

Durables ex-Transportation M/M (Aug)

-0.2%

0.7%

0730

1330

US

Cap Goods Orders Non-Def ex-Air

0.4%

-1.5%

0730

1330

US

Cap Goods Ship Non-Def ex-Air M/M (Aug)

 

0.2%

0930

1530

US

DOE Crude Oil Inventories W/W (Sep 23)

2200K

-7336K

0930

1530

US

DOE Gasoline Inventories W/W (Sep 23)

900K

3295K

0930

1530

US

DOE Distillate Inventory W/W (Sep 23)

0K

-874K

0930

1530

US

DOE Cushing Crude Inventory W/W (Sep 23)

 

-231K

0930

1530

US

DOE Refinery Utilisation W/W (Sep 23)

-0.60%

1.30%

N/A

N/A

GE

CPI M/M (Sep P)

-0.1%

0.0%

N/A

N/A

GE

CPI Y/Y (Sep P)

2.4%

2.4%

N/A

N/A

GE

CPI – Baden Wuerttemberg M/M (Sep)

 

-0.2%

N/A

N/A

GE

CPI – Baden Wuerttemberg Y/Y (Sep)

 

2.5%

N/A

N/A

GE

CPI – North Rhine-West M/M (Sep)

 

-0.2%

N/A

N/A

GE

CPI – North Rhine-West Y/Y (Sep)

 

2.3%

 

 

 

 

 

 

Speakers

0700

1300

EU

ECB’s Mersch

0700

1300

GE

FDP Lawmaker Schaeffler

0730

1330

US

Fed’s Hoenig (Non-Voting Member)

1115

1715

SZ

SNB’s Jordan

1200

1800

EU

ECB’s Governing Council Member Praet

1230

1830

US

President Obama

1340

1940

US

Fed’s Rosengren (Non-voting Member)

1600

2200

US

Fed’s Bernanke Speaks in Cleveland

N/A

N/A

FR

French Government Presents 2012 Budget

 

Auctions

1200

1800

US

USD 35bln 5y Note Auction

 

**Note: Long Gilt September futures expiry

            Natural Gas October futures expiry

 

 

Prices taken at 1239BST

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

**NYSE LIFFE US MINI MSCI EAFE AND EMERGING MARKETS INDEX FUTURES ARE HAVING A RECORD MONTH THIS SEPTEMBER UP 36% (155K) AND 47% (215K) RESPECTIVELY FROM ITS PREVIOUS RECORD SET BACK IN JUNE 2011. **