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DAILY US OPENING NEWS - 04/01/12

 

  • UniCredit shares are down heavily after a capital-raising programme

 

  • Spain denies reports that it is going to request EU/IMF loans to restructure its financial sector

 

 

Market Re-Cap

 

Equities are lower on the back of an announcement by UniCredit to sell their shares at a heavy discount as well as reports that Spain may request EU/IMF loans to help restructure its financial sector. This was later denied by the Spanish government, however the Spanish bond yield remained near session wide levels (+10bps). As we enter the US session the Bund has climbed back to near unchanged after clearing this morning’s sovereign supply. Data being announced later today includes Durables revisions, Factory orders, APIs and Vehicle sales. The Fed is also holding an Outright Treasury Coupon sale.

 

Asia Headlines

 

The Chinese authorities’ resolution to continue property tightening measures will not necessarily result in a hard landing in the real estate sector, according to two government researchers. China has uncovered CNY 530bln worth of irregularities with local government debt, according to the National Audit Office.

 

US Headlines

 

Mitt Romney wins the Iowa Caucuses by eight votes, a thin victory, edging out Rick Santorum, and Ron Paul coming third.

 

EU and UK Headlines:

 

·         European Composite PMI M/M (Dec F) 48.3 vs. Exp 47.9 (Prev. 47.0)

·         European Services PMI M/M (Dec F) 48.8 vs. Exp 48.3 (Prev. 47.5)

·         German Services PMI M/M (Dec F) 52.4 vs. Exp 52.7 (Prev. 50.3)

·         Italian Services PMI M/M (Dec) 44.5 vs. Exp 45.2 (Prev. 45.8)

·         French Services PMI M/M (Dec F) 50.3 vs. Exp 50.2 (Prev. 50.2)

 

·         UK Mortgage Approvals (Nov) M/M 52.9K vs. Exp. 52.5K (Prev. 52.5K, Rev. 52.8K)

·         UK Construction PMI M/M (Dec) 53.2 vs. Exp 51.5 (Prev. 52.3)

 

·         UK Conventional Gilt auction for GBP 3.75bln, 1.75% 2017 Gilt, bid/cover 2.02 vs. Prev. 1.27

·         German Bund auction for 4.057bln, 2.00% Jan'22, bid/cover 1.3 vs. Prev. 1.1 (yield 1.93% vs. Prev. 1.980%, retention 18.9% vs. Prev. 39.2%)

 

Spanish government denies reports that it will seek loans from the EU/IMF to restructure its financial sector, this led to the IBEX 35 underperforming and falling by 1.76%.

 

 

EQUITIES

 

European equities fell earlier this morning, with Euro Stoxx falling by 1.25% with Financials being the worst performing sector due to UniCredit shares taking a dive.

 

Index

DAX

CAC

FTSE

EUROSTOXX

SMI

Level

6121.87

3218.59

5696.37

2359.89

6047.7

Change (ticks)

-44.70

-26.81

-3.54

-30.02

-3.23

 

 

 

 

 

 

FX

 

EURUSD fell due to a strengthening USD despite positive UK and Eurozone data being released. This fall could be attributed to the fall in financials observed earlier today.  In spite of broadly positive EU and UK data, EURUSD and GBPUSD remained under pressure on the back of a stronger USD as risk averse sentiment took hold.

 

Currency

EURUSD

GBPUSD

USDJPY

Level

1.2983

1.5605

76.73

Change (pips)

-0.0067

-0.0044

-0.0100

 

 

COMMMODITIES

 

WTI and Brent crude futures traded lower during the European session as strength came into the USD-index (+0.4%)

 

Oil & Gas News:

·   China plans to set up state oil product reserves this year according to a source.

·   Saudi Arabia may cut premiums for February shipments from record levels for all of its oil grades to buyers in Asia on signs of falling demand in Q2.

 

Geopolitical News:

·   China repeats opposition to unilateral sanctions on Iran. China today restated its opposition to the US led push for unilateral sanctions on Iran over Tehran’s nuclear programme and said the crisis should be resolved through diplomacy, as Iran lashed out with threats against Washington

 

Corporate News:

·  An Ecuadorean appeals court upheld a ruling that Chevron Corp should pay USD 18bln in damages to plaintiffs who accused the co. of polluting the Amazon rainforest and damaging their health.

 

Commodity

WTI Nymex

OTC Spot Gold

Level

102.29

1597.1

Change (NYSEARCA:USD)

-0.67

-6.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOOKING AHEAD

 

Economic Releases

 

CST

GMT

 

DATA

EXP

PREV

0755

1355

US

Redbook M/M (Jan 4)

 

-2.4%

0755

1355

US

Redbook Y/Y (Jan 4)

 

4.3%

0900

1500

US

Factory Orders M/M (Nov)

2.0%

-0.4%

0900

1500

US

Durable Goods Revision M/M (Nov)

 

3.8%

0900

1500

US

Durables ex-Transportation Revision M/M (Nov)

 

0.3%

0900

1500

US

Nondef Cap ex-Air Revision M/M (Nov)

 

-1.2%

1530

2130

US

API Crude Oil Inventories W/W (Dec 30)

 

9570K

1530

2130

US

API Gasoline Inventories W/W (Dec 30)

 

1859K

1530

2130

US

API Distillate Inventory W/W (Dec 30)

 

554K

1600

2200

US

Total Vehicle Sales Y/Y (Dec)

13.50M

13.59M

1600

2200

US

Domestic Vehicle Sales Y/Y (Dec)

10.35M

10.53M

 

 

 

 

 

 

 

 

 

Auctions

 

 

0845

1445

UK

BoE Asset Purchase Facility 2022-2036

 

 

1000

1600

US

Fed’s Outright Trea. Coup. Sales May’13-Oct’13 (USD 8-8.75bln)

 

 

1030

1630

US

USD 35bln 4-week T-Bill Auction

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

US

Mosaic (Aft-Mkt)

 

 

 

 

Prices taken at 1250GMT