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DAILY US OPENING NEWS - 05/01/12

 

  • Further UniCredit Volatility pushes shares down 12%

 

  • French Treasury sells at the top end of the range, just under EUR8bln bonds, but fails to boost sentiment as spreads continue to widen

 

 Market Re-Cap

Equities are down due to banking activity this morning including: UniCredit had another disrupted morning suspending shares, only to resume trading around 10.3% down. Rumours also suggested Deutsche Bank were considering a capital hike, resulting in a quick fall in shares, these bounced back slightly however are still down. Spanish banking also appeared unstable, with announcements that banks are expected to face a EUR 50bln hit as part of a financial sector reform scheme. France held an OAT auction earlier this morning raising just under EUR 8bln, in line with an expected EUR 7-8bln sale. (High Yields, with bid/covers average). The Bund is up as a result of risk averse sentiment in reaction to the fall in equities and rose, the French-German bond yield spread has risen to 150bps, a rise of 11bps.

 Asia Headlines

 China HSBC Services PMI (Dec) M/M 52.5 vs. Prev. 52.5 (Sources)

China plans to create a body to facilitate short selling as early as this quarter (FT-More)

 US Headlines

 US Challenger Job Cuts (Dec) Y/Y 41.8K vs. Prev. 42.5K

 EU and UK Headlines

 ·  French OAT auction for EUR 4.02bln, 3.25% Oct'21, bid/cover 1.643 vs. Prev. 3.046 (yield 3.29% vs. Prev. 3.18%)

·   French OAT auction for EUR 690mln, 4.25% Oct'23, bid/cover 3.225 vs. Prev. 1.97 (yield 3,50% vs. Prev. 3.630%)

·   French OAT auction for EUR 1.088bln, 4.75% Apr'35, bid/cover 2.016 vs. Prev. 2.05 (yield 3.96% vs. Prev. 4.140%)

·   French OAT auction for EUR 2.165bln, 4.50% Apr'41, bid/cover 1.817 vs. Prev. 2.257 (yield 3.97% vs. Prev. 3.94%)

 

·  Eurozone PPI (Nov) M/M 0.2% vs. Exp. 0.1% (Prev. 0.1%)

·  Eurozone PPI (Nov) Y/Y 5.3% vs. Exp. 5.2% (Prev. 5.5%)

·  French Consumer Confidence (Dec) M/M 80 vs. Exp. 80 (Prev. 79, Rev. to 80)

·  Italian Unemployment Rate (NYSEMKT:SA) (Nov P) M/M 8.6% vs. Exp. 8.5% (Prev. 8.5%)

·  German Retail Sales (Nov) M/M -0.9% vs. Exp. 0.2% (Prev. 0.7%, Rev. -0.2%)

·  German Retail Sales (Nov) Y/Y 0.8% vs. Exp. 0.7% (Prev. -0.4%, Rev. -0.6%)

 

·  UK Services PMI (Dec) M/M 54.0 vs. Exp. 51.5 (Prev. 52.1)

·  UK Official Reserves (Changes) (NYSEARCA:USD) M/M (Dec) -1.943mln (Prev. -249mln)

EQUITIES

 

Financials continue to be the worst performing sector, following further banking activity from UniCredit and DeutscheBank, pushing equities downwards this morning.

In the UK, Moody’s continues to view the operating environment for British banks as negative.

 

Index

DAX

CAC

FTSE

EUROSTOXX

SMI

Level

6071.7

3166.79

5643.06

2324.83

6023

Change (ticks)

-39.85

-26.86

-25.39

-25.06

-35.08

 FX

 

EURUSD is trading sharply lower after further volatility due to risk averse activity following UniCredit’s actions and rumours surrounding Deutsche Bank. This was further compounded by an average OAT auction held in France.

 

Currency

EURUSD

GBPUSD

USDJPY

Level

1.2842

1.5531

76.83

Change (pips)

-0.0101

-0.0089

0.1100

 

 

COMMODITIES

 

WTI and Brent crude futures traded lower during the European session as strength came into the USD-index (+0.50%), allied with concerns surrounding the European banking sector.

 

HSBC lowers 2012 Gold forecast 9% to USD 1850/oz

 

Oil & Gas News:

·   Oil & Natural Gas Corp., India’s largest energy explorer, plans to produce natural gas from discoveries off the country’s west coast in four years in a move that may boost its output of fuel by 13%.

·   National Iranian Co. is poised to reduce price premiums for February crude sales to Asia from record highs after cuts by Saudi Arabia yesterday 

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

·   China is to extend cuts in Iran oil purchases into February as two sides continue to haggle over 2012 terms. 

Corporate News:

·   Exxon reports compressor shutdown at 238,600 Joilet, Illinois refinery.

·   Petrofac has signed a co-operation agreement with US oil services group Schlumberger

 

Commodity

WTI Nymex

OTC Spot Gold

Level

103

1616.33

Change (USD)

-0.22

4.73

 
LOOKING AHEAD

 

Economic Releases

 

CST

GMT

 

DATA

EXP

PREV

0700

1300

US

RBC Consumer Outlook Index M/M (Jan)

 

40.3

0700

1300

US

ADP Employment Change M/M (Dec)

178K

206K

0730

1330

US

Initial Jobless Claims W/W (Dec 31)

375K

381K

0730

1330

US

Continuing Claims W/W (Dec 24)

3570K

3601K

0730

1330

CA

Producer Prices M/M (Nov)

 

-0.1%

0730

1330

CA

Producer Prices Y/Y (Nov)

 

4.7%

0730

1330

CA

Industrial Product Price M/M (Nov)

-0.1%

-0.1%

0730

1330

CA

Raw Materials Price Index M/M (Nov)

0.5%

-1.2%

0900

1500

US

ISM Non Manufacturing Composite M/M (Dec)

53.0

52.0

0900

1500

CA

IVEY PMI M/M (Dec)

58.0

59.9

0930

1530

US

EIA Natural Gas Storage Change W/W (Dec 30)

-84

-81

1000

1600

US

DOE Crude Oil Inventories W/W (Dec 30)

-1000K

3899K

1000

1600

US

DOE Gasoline Inventories W/W (Dec 30)

1000K

-692K

1000

1600

US

DOE Distillate Inventory W/W (Dec 30)

1000K

1205K

1000

1600

US

DOE Cushing Crude Inventory W/W (Dec 30)

 

-289K

1000

1600

US

DOE Refinery Utilisation W/W (Dec 30)

0.50%

-0.70%

N/A

N/A

US

ICSC Chain Store Sales Y/Y (Dec)

 

3.2%

 

 

 

 

 

 

 

 

 

Auctions

 

 

1000

1600

US

3-, 10-, and 30-year Note Refunding Announcement

 

 

1000

1600

US

Fed’s Outright Trea. Coup. Sales Apr’12-Apr’14 (USD 1-1.5bln)

 

 

1000

1600

UK

BoE APF Schedule

 

 

N/A

N/A

EU

EFSF EUR 3bln 3-year Bond

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

 

 

 

UK

IAG (Traffic)

 

 

 

 

EU

N/A

 

 

 

 

SZ

N/A

 

 

 

 

US

Monsanto

 

 

 

Prices taken at 1239GMT