“One's dignity may be assaulted, vandalized and cruelly mocked, but cannot be taken away unless it is surrendered.”
Market Week Wrap-up
- Positive sentiment driven by strong corporate earnings won out over yet another round of Greek drama this week as the Dow pulled off its eighth consecutive week of gains for the first time since 2004. The signature events were blowout earnings from Goldman Sachs and Apple, and Greece's request to activate its package of emergency EU/IMF loans. Weekly employment claims saw mild improvements, while the March existing and new home sales data returned strongly to growth, aiding homebuilders and overall sentiment. On Monday Chicago Fed President Evans said the recession is "definitely over" and the odds of a "double-dip" are low, although the IMF is warning that a new phase of the economic crisis could grow out the sovereign debt situation. For the week the the DJIA rose 1.7%, the Nasdaq gained 2% and the S&P500 increased 2.1%.
- Markets opened on Monday in a wary mood as uncertainty over Europe's Greece trap persisted and financial names headed lower on speculation about a harsher US financial reform bill. Fears of debt crisis contagion metastasized midweek on a trio of S&P sovereign downgrades, as the firm cut Spain one notch, Portugal two notches and Greece three notches (to junk). These moves fired up risk aversion and drove triple-digit losses on DJIA, which tested below 11,000 on both Tuesday and Wednesday. Goldman executives were grilled all day long in Congressional testimony on Tuesday, as representatives delighted in reading profanity laced emails from Goldman traders regarding the low-quality mortgages they packaged into the now notorious Abacus CDO deal and others. Sentiment improved somewhat on Thursday, but an article in the Wall Street Journal on Friday morning stating that the DoJ had launched a preliminary criminal probe based on the SEC's allegations reignited risk aversion. Shares of Goldman were down around 7% on the week, with the other leading bank stocks down in the mid single digit range. The FOMC altered its statement only very slightly upgrading its outlook on the economy by a hair, while US economic data was relatively strong. The first reading of Q1 GDP was only a bit below expectations at +3.2% and the April Consumer Confidence reading moved out to its highest level since September 2008. The Chicago PMI survey marked its highest level since April 2005 and the prices paid component reached levels not seen since oil prices surged in late 2008. The US benchmark 10-year yield declined some 16 basis points on the week settling below 3.7%. For the week the the DJIA declined 1.2%, the Nasdaq fell 2.7% and the S&P500 dropped 2.5%.
- With front-month crude at or near post-crisis highs for most of the first quarter of 2010, leading energy producers and refiners have offered surprisingly mixed quarterly reports. Exxon missed top- and bottom line expectations. The company noted that lower refining margins offset the benefit of higher oil prices, while downstream results appear to be turning around. Chevron offered strong earnings and weak revenue; executives noted that profits benefitted from higher prices and higher production levels. Conoco's earnings exceeded expectations, although its refining business operated in the red in the quarter. Valero's top-line revenues crushed expectations and reported its fifth consecutive quarterly loss, although the loss was smaller than expected. Valero said it would return to profitability next quarter. In Europe, BP's quarterly profit was way ahead of expectations, while France's Total was in line.
- Industrial and manufacturing names offered strong earnings, although revenue results are still not showing the broad-based strength investors have been waiting for. Caterpillar lifted markets on Monday with very robust earnings. Cat's CEO said that activity and orders are significantly higher than last year and are at record levels in some areas. Chemical processors 3M and Du Pont both beat expectations in their first quarter reports and raised 2010 guidance. Du Pont cited particularly strong demand in Asia Pacific. Auto sector names had a very good quarter: Ford nearly doubled its quarterly profits on a sequential basis, while engine manufacturer Cummins reported twice the quarterly profit expected.
- A handful of tech names did not live up to Wall Street's expectations in quarterly reports this week, although the results can hardly be described as poor. Broadcom missed earnings targets, although its profits were up significantly on a sequential and y/y basis. Texas Instruments was largely in line with expectations; executives said demand has remained strong so far. MEMC Electronics reported a loss, instead of the small profit expected, and also guided well below par for next quarter. Two bright spots in tech were Corning, which beat estimates and once again increased its forecast for LCD glass industry demand, and First Solar, which crushed expectations, guided higher and said it would further expand manufacturing capacity. Sprint's quarterly loss was in line with expectations this morning, and it also reaffirmed that it would beginning stemming losses in post-paid and total subscriber losses this year.
- On the M&A front, Hewitt-Packard ended months worth of speculation about who would buy Palm, announcing that it would acquire the firm for $5.70 a share in cash, for a total deal worth $1.2B. Industry commentators expect HP integrating Palm's highly regarded WebOS operating system into tablet and netbook products. Reports circulated early in the week that United Airlines was negotiating terms of a tie-up with Continental, with other reports asserting that a deal was very close and could be finalized over the weekend. Airline industry consolidation has been widely expected in recent years, and United Airlines had been pursuing Continental back in 2008. The board of United Airlines is meeting on Friday and Sunday to discuss term, according to reports in the Wall Street Journal.
- US Treasury prices finished the week at their highest levels. A steady bid buoyed by risk adverse investors eyeing the Greek saga, more than offset any potential supply jitters that could have accompanied another $118B in coupon supply. The auction results were stellar especially in the context of the sharply declining yields/higher prices participants were forced to accept. By week's end those investors we rewarded as prices continued to climb and yields finished at the lowest levels in more than a month. US 10-year paper saw yields decline by more than 15 basis points for the week, while the 2-year note yield has dropped back below 1%. The spread between the US 2 and 10-year note narrowed towards 270 basis points.
- The European peripheral debt situation dictated FX trading again this week. Ten-year spreads and credit default swaps remained highly elevated as negotiations continued among the EU, IMF and Greek officials for a larger bailout fund. Following the midweek sovereign debt downgrades of Greece, Portugal and Spain, spreads between 10-year Portuguese/German and Greek/German bonds widened to post euro-launch records. The premium for 10-year Greek government bonds over euro zone benchmark German Bunds blew out to 1,000 basis points. Two-year Greek paper opened the week with a yield of 10.7% and then proceeded to climb above 13%, then approach 20%, nearly six times the level at which the EU plans to lend to Greece.
- In negotiations over the bailout package the focus remained on the German political scene, as officials tried to stall disclosure of an agreement (and the all important price tag) until after a key German state election on May 9th. Germany insisted that Greece firm up plans for multiple years' worth of deficit reductions before qualifying for aid. Bond markets felt anxious ahead of the next key date for Greece, namely the maturity of €8.5B of Greek debt on May 19th, with fears growing that the situation might shift to full contagion mode. Overall the market speculators continued to push Greece to provide detailed plans on its austerity measures.
- EUR/USD began the week approaching the 1.34 neighborhood, but turmoil in the European peripherals sent the pair back towards 1.3110 for fresh one-year lows early on. As the week ended and the likelihood a bigger bailout deal would be signed, sealed and delivered by EU governments in time for the above-mentioned debt maturity provided a muted relief rally in the euro and narrowed the related peripherals. The Greek/German 10-year spread dipped back below 500bps. Note that the EU confirmed it would hold a summit on May 10th to discuss Greece.
- In other FX news there was vague chatter circulating that the UK could lose its "AAA" sovereign rating due to the growing possibility of a hung Parliament emerging from the May 6th elections. GBP/USD tested the 1.5130 area during the week but found support from Far East and Middle-East sovereign names.
- USD/JPY maintained a footlhold over the 92 handle all week. Japanese Minister Haraguchi noted that Japanese Post Bank would invest ¥10T in foreign assets. Dealer sentiment noted that with Golden Week looming the prospect of a sub-90 reading appeared to be fading from the charts. There were moments of yen strength on risk aversion flows but dealers use the opportunity to sell JPY ahead of a flurry of investment trust launches.
- A Bank of Japan rate decision and subsequent statement offered little in fresh policy developments aside from calling for greater attention on higher bank capital needs. Bank of Japan Gov Shirakawa also reiterated that improving conditions do not require additional easing, and that a gradual rise in commodity prices is filtering through CPI, with inflation expected to keep narrowing in months to come. To that end, Japan's central bank also boosted its FY11/12 CPI forecast as part of its semiannual economic outlook report to 0.1% from -0.2%, and raised its current year GDP target to 1.8% from 1.3%.
- Ahead of the Reserve Bank of Australia interest rate decision next week, quarterly inflation data for Q1 topped estimates on both wholesale and retail metrics, tilting the even-split sentiment slightly in favor of yet another hike. Q1 PPI Q/Q figure of 1.0% marked the highest increase since Q4 of 2008. Likewise, Q1 CPI Y/Y headline saw the biggest rise since Q4 of 2008 at 0.9%. And although the RBA trimmed mean y/y rose at the slowest rate since Q3 at 3%, that figure is still on the cusp of the central bank target band, boosting the rate hike probabilities from around 25% to above 55% by the end of the week.
- Reserve Bank of New Zealand left interest rates unchanged at 2.50% as widely expected, reiterating commitment to tightening in the coming months, but also said inflation is expected to be in target range. RBNZ statement also suggested that credit growth is contained, business spending still weak, and household spending cautious. Kiwi Dollar sold off following the decision, with markets anticipating a firmer commitment to higher rates to come as early as the next decision in mid-June.
Week of 5/3/2010 thru 5/7/2010
Monday, May 03, 2010
Economic
08:30 March Personal Income, Personal Spending, PCE Core, PCE Deflator
09:00 Brazil April Manufacturing PMI, Brazil April Trade Balance
10:00 April ISM Manufacturing, April ISM Prices Paid, March Construction Spending
Tuesday, May 04, 2010
Economic
08:00 Brazil March Industrial Production
10:00 March Factory Orders, March Pending Home Sales, Mexico April Consumer Confidence
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, May 05, 2010
Economic
07:30 April Challenger Job Cuts
08:15 April ADP Employment Change
08:30 Chile March Economic Activity
10:00 April ISM Non-Manufacturing
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
20:00 Colombia April Consumer Price Index
Thursday, May 06, 2010
Economic
07:45 ECB rate decision
08:30 Q1 Prelim Nonfarm Productivity, Q1 Prelim Unit Labor costs, Initial Jobless Claims, Continuing Claims, Canada March Building Permits
10:00 Canada April Ivey Purchasing Managers Index
10:30 Natural Gas Inventories
Friday, May 07, 2010
Economic
08:00 Chile April CPI, Chile April Trade Balance
08:30 April Unemployment Rate, April Nonfarm Payrolls, April Manufacturing Payrolls, April Average Hourly Earnings
15:00 March Consumer Credit
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Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 Advance Q1 GDP (1st reading), Q1 GDP Price Index, Q1 Personal Consumption, Q1 Core PCE, Canada Feb GDP
09:00 Colombia March Unemployment
09:30 Brazil March Budget
09:45 April Chicago PMI
09:55 April Final University of Michigan Confidence
10:00 April NAPM Milwaukee
15:00 Argentina March Construction Activity
15:30 Mexico March Budget Balance
Today’s Headlines
4:30:26 AM
(EU) ECB's Trichet: Greek irresponsibility made the debt crisis possible, quick German approval of new aid package is "highly recommended"
- Confident about results of Greek discussiions
- String sense of direction is needed
- Call for "courageous and specific action" by Greek government.
- Greece must show action in cutting defcits
5:10:02 AM
(US) Preview: Initial Jobless Claims due at 08:30ET (12:30 GMT)
- Expectations for initial claims are 445Ke v prior week at 456K (range seen from 430K to 460K)
- Continuing claims seen at 4.618Me v prior week at 4.646M (range seen from 4.500M to 4.650M)
5:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 448K V 445KE; CONTINUING CLAIMS: 4.645M V 4.618ME
- Prior Initial Claims revised higher from 456K to 459K
- Prior Continuing Claims higher revised from 4.646M to 4.663M
6:20:14 AM
(GE) German Banking Assoc: EU/IMF needs to work on implementation of Greek Aid
- Greece needs to consolidate its fiscal situation.
- Warns of contagion if Euro Zone fails to take immediate action.
7:05:44 AM
(US) Pres Obama formally puts forward three name for US Federal Reserve Board (as expected)
- Names Janet Yellen to US Fed Reserve Vice Chair
- Names Peter Diamond, Sarah Rasking to Fed Board
8:29:02 AM
(GE) German Fin Min: Greek exit from euro would be a negative for Germany
- European unity is still "existential."
- says financial crisis is largely over in Germany and in Europe.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:00 Brazil March Unemployment
08:30 Initial Jobless Claims, Continuing Claims
10:30 Natural Gas Inventories
13:00 Treasury's $32B 7-yr auction
Today’s Headlines
6:01:03 AM
(PD) Poland Central Bank Sees risks to inflation target as balanced - press conference
- Sees inflation slowing in coming months
- Says Apr 9th PLN currency intervention as appropriate
6:26:55 AM
(GR) IMF's Strauss-Kahn: Negotiations with Greece are difficult, deal with Greece will not avoid pain
- Reforms in Greece will be painful, will take time for Greece to return to normality.
- Confidence in the Euro Zone is at stake in Greek deal. Failure would have "many consequences" for the EU.
- Failure to act timely on Greece will have contagion consequences beyond Europe
6:31:39 AM
(GE) Fin Min Schaeuble: EU is acting to protect the stability of the euro currency; not just a Greek problem
- notes Eurogroup could provide as much as €30B in aid to Greece in the first year of three year package
- Followup: IMF and ECB to provide Greek assessment by weekend ; Germany intends to visit Portugal for discussions
6:57:55 AM
(IT) Italy: Fitch does not see any risks to Italy sov ratings at this time (currently rated AA-)
- State faces a smaller challenge in stabilizing its debts in comparison to other Eurozone peripherals
- State must act on medium term finance issues
8:28:11 AM
*(SP) S&P DOWNGRADES SPAIN LONG TERM RATING ONE NOTCH TO AA FROM AA+; OUTLOOK NEGATIVE
- S&P: "In our opinion, Spain is likely to have an extended period of subdued economic growth, which weakens its budgetary position. The negative outlook reflects the possibility of a downgrade if Spain's budgetary position underperforms to a greater extent than we currently anticipate."
- "The downgrade primarily reflects Standard & Poor's downward revision of its medium-term macroeconomic projections. "We now believe that the Spanish economy's shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed."
10:01:39 AM
*(US)TREASURY'S $42B 5-YEAR NOTE AUCTION DRAWS 2.54%; BID-TO-COVER RATIO: 2.75 V 2.55 PRIOR AND 2.55 AVG OVER THE LAST 10 AUCTIONS
- indirect bidders take 48.93% of competitive bids with 90.56% allotted at the high.
- direct bidders take 14.3%, primary dealers 36.74%.
- median 2.488%, low 2.42%.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
09:00 Canada Feb House Price Index, Chile March Industrial Production, March Copper Production
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 Treasury's $42B 5-yr auction
14:15 FOMC Rate decision
Today’s Headlines
6:02:37 AM
(GR) Greece Fin Min Papaconstantinou: Need for credit adjustment is greater after deficit to GDP revision to 13.6%
- Expects the EU-IMF talks to conclude next week
- Talks with EU/IMF must be completed by May 19th, deemed as a pivotal date
- Is "absolutely sure" will have funds by May 19th
- No room to waver from budget targets
- Says is prepared to "clash on making reforms"
7:00:17 AM
(US) Fed Chairman Bernanke: US needs to start cutting budget deficit soon, cannot grow our way out of the deficit
- Investor confidence in the ability of the government to pay debt is a key issue.
- Budget deficits over time could increase interest rates
- Budget deficits could put th recovery at risk.
- US health costs and the aging population are the main causes of the deficit.
- Urges the debt commission to focus on changing the US tax code.
7:45:36 AM
ECB's Tumpel-Gugerell: ECB is opposed to full fair value accounting; global accounting standards and banking rules should be consistent worldwide
- calls for implementation of rules worldwide on a wind down of systemic banks who are failing
- calls for a forward looking accounting methodology
8:23:15 AM
*(GR) S&P CUTS GREECE THREE NOTCHES FROM BBB+ TO BB+ (now junk status); outlook Negative
- S&P: The negative outlook reflects the possibility of a further downgrade if the Greek government's ability to implement its fiscal and structural reform program materially weakens in our view, undermined by domestic political opposition at home or by even weaker economic conditions than we currently assume.
9:40:29 AM
(US) Treasury's Geithner: Financial reforms need to be clear, have teeth, US economy is rebounding more quickly than many expected
- Sees businesses starting to hire workers and expand investments
- Home prices are rising, not falling
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:00 April Brazil Consumer Confidence
09:00 Feb S&P/CS Home Price Index, Feb S&P/CS Composite-20
10:00 April Consumer Confidence, April Richmond Fed Manufacturing
13:00 Treasury's $44B 2-yr auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
1:07:51 AM
(SW) Sweden Central Bank (Riksbank) Oberg: Sees risk of more dramatic developments in Europe; Greece is not the only problem in Europe
- Other countries could have major problems and could be a debt crisis in several countries
- Risk developments could be more dramatic then expected
- Riksbank supports 1% surplus target in budget act
- Important to have sustainable public finances
2:12:20 AM
(GE) Germany's SPD: Creditor banks of Greece should give to bailout; aid depends on potential risk to euro
- Should not reward bad fiscal policy.
**Note: In terms of exposure to Greece, French banks have $76B, banks in Switzerland have $64B and German banks have $43B.
- Also, US banks have exposure of $16.4B and $12.3B for UK banks.
4:04:31 AM
(GE) German Fin Min Schaeuble: Euro must remain stable; Members are ready for decisive action on Greece
- Determined to defend Euro stability
- Greece must take action to reduce its deficit
- German Gov't has asked that the Greece/IMF discussions end by the weekend (May 2nd)
- IMF head to meet German Parliamentarians mid-week
- Terms for aid must first be agreed upon in discussions with IMF
6:16:18 AM
(GR) Germany Merkel: Greece must show that it is on the path to a sustainable budget level; Greece must save more
- Sees a 3-year timeframe for Greek aid operations as appropriate; Greece must accept 'tough conditions' for years.
- Germany will move to launch aid process when Greece meets financial conditions.
- Germany has large obligation to maintain the stability of the Euro; In Germany's interest for a strong euro; Euro Zone without Greece is not an option.
- Have spoke with directors at the IMF; Talks with Greece seen going into early May (as expected).
7:30:05 AM
*(IS) ISRAEL CENTRAL BANK LEAVES BASE RATE AT 1.50%; NOT EXPECTED
- Path of rate hikes to depend on economy, inflation and global trends in the shekel.
- Monetary policy at this time remains expansionary.
- Current economic conditions support a gradual base rate increase.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
“Good people are good because they've come to wisdom through failure.”
Market Week Wrap-up
- Positive sentiment driven by strong corporate earnings won out over yet another round of Greek drama this week as the Dow pulled off its eighth consecutive week of gains for the first time since 2004. The signature events were blowout earnings from Goldman Sachs and Apple, and Greece's request to activate its package of emergency EU/IMF loans. Weekly employment claims saw mild improvements, while the March existing and new home sales data returned strongly to growth, aiding homebuilders and overall sentiment. On Monday Chicago Fed President Evans said the recession is "definitely over" and the odds of a "double-dip" are low, although the IMF is warning that a new phase of the economic crisis could grow out the sovereign debt situation. For the week the the DJIA rose 1.7%, the Nasdaq gained 2% and the S&P500 increased 2.1%.
- Quarterly results from Goldman Sachs, Morgan Stanley and Citigroup blew earnings targets out of the water this week. For Citi and Morgan Stanley, the numbers were an impressive rebound from the doldrums, while Goldman continued its streak of meeting or beating expectations every quarter since early 2005. Both Goldman and Morgan Stanley disclosed strong increases in revenue from proprietary trading. But Goldman's killer results only slightly offset the intensely negative fallout from the SEC's fraud charges - Goldman's shares fell 2% on the week, while Morgan Stanley's are up nearly 10%. Goldman had a very bad week in the court of public opinion, thanks to heaps of bad press coverage and statements from several European governments noting that they would review relationships with the bank.
- Wells Fargo and much of the other regional and super regional banks offered strong results. PNC Bank and BB&T crushed expectations. SunTrust, Zion Bancorp and KeyCorp all disclosed smaller-than-expected quarterly losses, while US Bank and Regions Financial met expectations. A broad improvement was seen in credit quality among the regionals, with loss provisions, non-performing assets and charge offs declining at most institutions. SunTrust's CEO said his bank is seeing a significant decrease in credit-related costs. Credit card names American Express and Capital One both indicated that they are turning the corner on credit losses.
- Apple destroyed consensus estimates as sales of iPhones soared, while Microsoft offered the usual staid, inline report, noting that revenue has been driven by strong demand for Windows 7. Korea's Hynix reported Q1 earnings and revenues well ahead of estimates, supporting the case that supply conditions remain tight in chip markets. Amazon offered solid quarterly results free of any surprises. The company insists that sales of its Kindle eReader remain strong despite competition from iPad. IBM, Coca Cola and J&J remain in the red on the week thanks to various sour notes in their earnings reports. IBM's backlog fell slightly over last quarter, J&J trimmed its 2010 outlook slightly and guided full-year revenue slightly below par, and Coca Cola missed revenue targets. Verizon and AT&T largely met analysts' expectations, while wireless customer additions slipped on a m/m basis at both firms. Verizon highlighted the recovery in its FiOS business. US comps are finally taking off for McDonalds, after flattish to negative quarterly comparisons more recently.
- Greece remained the central theme in both FX and fixed income markets. Last week the IMF and the Euro Zone disclosed that their combined debt backstop would amount to €40B, helping deflate CDS spreads and letting the Hellenic Republic sell some short term paper. Early this week Greece sold another €450M in 13-week notes, although the steep 3.65% rate seemed to knock things off balance and kick spreads back into uncharted territory. At its worst point, late in the week the 10-year Greek/German spread widened out to 590 bps while the 5-year CDS tested 645 bps. Meanwhile, the yield on two-year Greek government debt soared to over 11%, making it clear that activation was nigh. The final blow came as the EU stats agency revised Greece's 2009 budget deficit-to-GDP ratio up by almost a full percentage point to 13.6%, noting that it had "reservations" about Greek data. In a final curtain call, Moody's promptly downgraded Greece's credit rating one notch. The Greek government requested activation of the debt backstop on Friday morning, virtually guaranteeing a weeks-long encore of intra-European squabbling and multiple national- and EU-level votes to fully release the funding (that's before questions of what happens when Greece eventually has to borrow in markets again). EUR/USD was testing one-year lows at 1.3201 on Friday.
- Contagion fears quickly spread into other Euro Zone peripheral sovereign debt markets, as five-year CDS spreads for both Portugal (500 bps) and Spain (175 bps) pushed out to fresh all-time highs. Overall the budding sentiment appeared to be that the Euro-Zone would need a weaker currency to offset deflationary policies in peripheral member states. The ECB collateral rules might be another pothole, given recent sovereign downgrades. The Moody's cut left Greece's ratings three notches above the equivalent rating at Fitch, and one notch above S&P. Crucially, this means Greek paper is still eligible collateral for ECB refinancing operations. The weekend will feature G7, G20, IMF and World Bank meetings in Washington, DC with Greece fiscal crisis and the Chinese currencies likely to dominate agendas.
- For the better part of the week US Treasury prices benefitted from turmoil across the Atlantic. Risk adverse traders kept a lid on yields, but by weeks' end they were seen rising in the wake of stronger US data and ahead of a fresh $118B in coupon supply scheduled for next week. The benchmark 10-year yield dipped back below 3.75% midweek only to retake 3.8% on Friday. The spread between 2 and 10-year notes narrowed below 275 basis points, helped by media reports Friday morning indicating an increasing number of Fed officials are beginning to give serious thought to shrinking the balance through MBS sales in particular. Next week's FOMC policy meeting may yield more decisive signals on the exit policy in general and Fed asset sales in particular.
- UK news has been dominated by politics, politics, politics this week, especially the second televised debate between the three main candidates for PM. When the dust settled, pundits seem to agree that Liberal Democrat leader Nick Clegg managed to escape with the momentum from his surprise victory in round one (and subsequent poll boost) still intact. A third debate takes place next week and with the election to be held on May 6th the prospects for a 'hung parliament' (in which no party has a majority in the House of Commons) is growing stronger by the day. It is territory the UK has not ventured into for decades, and an outcome increasingly being priced into FTSE, Gilts and sterling. UK inflation exceeded expectations while other UK economic data seems to favor PM Brown ahead of May 6th election. Sterling maintained a firm tone following the claimant data which showed a larger-than-expected decline in March by almost 33K. GBP/USD tested above the 1.54 level while EUR/GBP approached the 0.8600 area. The BoE MPC minutes from the April showed an unanimous board in favor of a steady repo rate and keeping the asset purchase target at £200B.
- In Japan, USD/JPY moved away from the risk aversion theme early in the week and reflected the fundamental economic problems and interest rate differentials. Fitch commented that Japan's Sovereign Creditworthiness was at risk from rising government debt. Fitch noted that the Japanese government was one of the most indebted in the world. In the absence of sustained economic recovery and fiscal consolidation, government debt would continue to rise, placing downwards pressure on sovereign credit and ratings over the medium term. USD/JPY hit two-week highs with US rates firming following the Durable Ex Transportation data and talk that at least 6 FOMC members were favoring asset sales to implement the US exit strategy.
- The Canadian Dollar surged mid-week after the Bank of Canada removed its pledge to maintain interest rates at the 0.25% level through the end of Q2. USD/CAD dipped below parity on rate-hike expectations. By Friday, some of the upward momentum was sidelined by tepid Canadian inflation and retail sales data. USD/CAD held above parity with USD as the week drew to a close, with buy-stops building above the 1.01 area. Dealers noted that the loonie has been aided by reserve diversification in every overnight session for the last three weeks.
- In China, equities took heat from government efforts to rein in excessive mortgage lending. On Monday, the Chinese State Council ordered yet another tightening measure, requesting that banks suspend loans on purchases of third homes and also called on banks not to lend to applicants who have no verified proof of income. Then on Thursday, an editorial in the China Securities Journal warned that delaying policy action risks economic health and social stability. Finally, the head of the CBRC announced that policymakers will begin to monitor mortgage lending on a family, rather than individual basis, suggesting that some families had gamed the system to obtain better loans by submitting applications through a relative. A report in the local press underscored growing concern regarding speculative property lending by some of the banks calling for as much as a 60% down payment for loans on purchases 3rd homes - above the current 40% requirement.
- With ten days to go until the next Reserve Bank of Australia decision, the week offered mixed signals about policymakers' expectations for tightening. On Tuesday, the minutes of the April meeting strengthened the possibility of yet another tightening, revealing central bankers to believe that interest rates remain below average, with expectations for a trade surplus rising from February and the "buoyant" housing market contradicting the recent decline in home loan approvals. However, late on Friday, Governor Stevens clarified that the adjustment would proceed in a "timely manner" and policy options still remain open. More notably, Stevens finally acknowledged soft patches in the retail sector. Recall the RBA neglected to comment on monthly declines in retail sales the past two out of three months going into the last rate decision. The market interpreted these most recent comments as a signal the central bank would be more cautious about another hike in early May, as the probability for another 25bp move fell over 10 points to below 25%.
07:00 April Brazil Consumer Confidence
09:00 Feb S&P/CS Home Price Index, Feb S&P/CS Composite-20
10:00 April Consumer Confidence, April Richmond Fed Manufacturing
13:00 Treasury's $44B 2-yr auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, April 28, 2010
Economic
09:00 Canada Feb House Price Index, Chile March Industrial Production, March Copper Production
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 Treasury's $42B 5-yr auction
14:15 FOMC Rate decision
Thursday, April 29, 2010
Economic
08:00 Brazil March Unemployment
08:30 Initial Jobless Claims, Continuing Claims
10:30 Natural Gas Inventories
13:00 Treasury's $32B 7-yr auction
Friday, April 30, 2010
Economic
08:30 Advance Q1 GDP (1st reading), Q1 GDP Price Index, Q1 Personal Consumption, Q1 Core PCE, Canada Feb GDP
09:00 Colombia March Unemployment
09:30 Brazil March Budget
09:45 April Chicago PMI
09:55 April Final University of Michigan Confidence
10:00 April NAPM Milwaukee
15:00 Argentina March Construction Activity
15:30 Mexico March Budget Balance
< BR>
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 March Durable Orders
10:00 March New Home Sales
Today’s Headlines
6:19:55 AM
IMF's Stauss-Kahn: Recovery has come faster and sooner than expected, reiterates economic recovery is still fragile
- Huge capital flows to emerging economies pose a risk of asset bubbles
- Private demand continues to remain weak
- Sees need for financial sector reform and need for cross-border resolution
- tax system could help to rduce fears of future crisis
- Notes that some countries could move faster on financial market reform
6:38:38 AM
(GR) IMF not working on plan for Greece debt restructuring
- EU and IMF currently have correct data to make necessary aid program.
- Continue to be concerned about Greece's risk to broader economic stability.
- do not see a need to focus on any nation besides Greece; Iceland program with IMF is on track.
6:40:31 AM
(PO) Portugal Fin Min Dos Santos: Greek situation could lead to contagion
***Reminder: On Apr 21st ECB's Nowotny stated that a comprehensive debt solution was needed to avoid contagion risk. Conversely, on Apr 20th the IMF stated that it does not see contagion emerging from Greece situation.
7:30:24 AM
(CA) Bank of Canada monetary policy report: Appropriate to start raising interest rates; sees 5.8% annualized GDP growth in Q1, sees 2010 GDP +3.7%
- Sees 2011 GDP +3.1%, 2012 GDP +1.9%.
- Expects Canada economy to return to capacity by Q2 of 2011.
- Strong CAD and low productivity could slow growth, put downward pressure on inflation.
8:52:01 AM
(US) President Obama: Senate and House versions of the financial regulation overhaul are a "significant improvement" to current rules, reforms are "absolutely necessary"
- derivatives market needs transparency, to be conducted "in the light of day."
- Some huge executive bonuses stoked "perverse incentives" for bankers to take reckless risks, these must change.
- Seeing hopeful signs in the US economy.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 March PPI, March Core PPI, Initial Jobless Claims, Continuing Claims
10:00 March Existing Home Sales, Feb Home Price Index
10:30 Natural Gas Inventories
11:00 US Treasury's note announcement
Today’s Headlines
5:23:27 AM
(UK) Northern Rock: CFO David Jones has left the Company, effective immediately
- This enables Mr Jones to focus on an ongoing FSA investigation into matters relating to a period before the Company entered public ownership.The Company is not subject to any sanction from the FSA as a result of this investigation.
- The Company confirms that Hugh Graham, head of the Company's treasury operation, has been appointed as its interim Chief Financial Officer, subject to FSA approval.
6:00:22 AM
IMF updates World Economic Outlook: Adjusts 2010 global growth outlook to 4.2% v 3.9% prior; maintains 2011 GDP forecast unchanged at 4.3%
- Advanced economies 2010 GPD target 2.3% v 2.1% prior; 2011 GDP targets held at 2.4%
- Emerging economies 2010 GDP target 6.3% v 6.0% prior; 2011 GPD 6.5% v 6.3%
6:13:52 AM
(CA) Canada Fin Min: Agrees taxpayers should not pay for bank bailouts, but believes special taxes on banks weaken financial sector's ability to deal with losses
- Reiterates that Canada will not levy a special bank tax to pay for bailouts.
6:19:02 AM
IMF Chief Economist Blanchard: Output gap in advanced countries likely to remain in place for some time to come
- Reiterates view that fiscal troubles in advanced countries could cause a 'debt explosion' if not contained
- Advanced economies might need to depreciate their curencies to increase export sectors (conversely developing countries need to appreciate their currencies)
7:03:20 AM
(GE) German Fin Min Schaeuble: Would be a mistake to allow a Eurozone state to default, consequences are unforeseeable - comments to German legislature
- Cannot speculate whether Greece would activate the EU aid package.
- Says its possible Greece could ask for more than €30B in aid.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:00 MBA Mortgage Applications. Trades Ex-dividend: CVS $0.088.
Today’s Headlines
6:00:02 AM
*(CA) BANK OF CANADA (BOC) LEAVES INTEREST RATES AT UNCHANGED AT 0.25%; AS EXPECTED
- Removes pledge to maintain interest rates at 0.25% until July
- Canada growth and inflation 'somewhat' above projection
- "Appropriate" to begin to lessen degree of stimulus
- Growth profile more 'front-loaded' than Jan forecast
6:44:58 AM
(BR) Brazil Central Bank's Meirelles: Sees GDP +5.8% in 2010; rate hikes could potentially be needed as an inflation curb, don't believe higher rates would reduce investments
- follow up: comments that G20 will be discussing the Chinese currency; believes China must allow its currency to appreciate;a revalued Yuan is 'critical' for worldwide economic equilibrium
7:00:09 AM
(EU) Reportedly airlines have moved to call on the EU for support following travel ban
- Follow up: UK airlines asking UK gov for aid due to travel ban -FT
7:33:52 AM
(GR) German lawmaker: Reiterates views that Greece might need more aid if the country cannot reassure markets
-Reminder: On Apr 19th: ECB's Weber stated that Greece might need additional aid beyond the €30B pledged under current framework in comments made to to lawmakers . The WSJ reported that Weber Feels Greece could need approx €80B
9:00:13 AM
(EU) ECB's Weber: "Divergence" in the Euro Zone could hamper monetary policy, sees an "urgent need" to manage the exit from extraordinary policies
- Reiterates that current rates are appropriate.
- Only inflation rates will dictate rate moves.
- ECB to use fine tuning tenders in order to ease any tension in June.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
16:30 API Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
4:21:10 AM
(EU) ECB's Bonello: Reiterates view that interest rates are appropriate and inline with inflation expectations
- No pressure to change rates
- Eurozone growth curve will not be steep this year, expected to be moderate
- To quicken the withdrawl can undermine confidence and potential economic recovery
- Inflation within ECB's limit for this year and next
- European economy is below its growth potential
4:42:11 AM
(EU) ECB's Wellink: Reiterates view that monetary policy is appropriate; No need to enlarge covered bond program
- Notes that perspectives for price stability are good.
- Inflation outlook remains unchanged.
5:17:51 AM
(CZ) Czech Central Bank's Hampl: Sees some new "anti-inflationary" risks stemming from both financial sector and real economy
- Concerned over the high end of the yield curve
- Fiscal deficits could keep interest rates higher
- Keeping open mind on Czech interest rates
- Question remains when easing cycle would end
5:44:54 AM
(FR) France official: Global economic recovery increases risks to imbalances
- G20 nations have to review strategies in order to tackle imbalances
- The economic impact of Basel 3 and of any tax on banks needs to be studied
7:56:28 AM
(US) Fed's Evans: Accomodative policy will remain for quite some time, policy may shift if the economy begins improving quickly
- Reiterates that "extended period" means three or four FOMC meetings.
- Not seeing much inflation pressure.
**Reminder: On 03/22 Fed's Evans reiterated that the "extended period" means 3-4 meetings or about 6 months.
8:29:35 AM
(GE) German Econ Min: There is no guarantee that airlines will receive subsidies for losses related to Iceland volcano ash cloud; need to loosen restriction on nighttime flying and weekend trucking to offset impact
- European transport ministers to hold videoconference at 16:00GMT to discuss trucking rules.
- May take two weeks to cover air traffic schedules following cancellations.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
“You can't separate peace from freedom because no one can be at peace unless he has his freedom.”
Market Week Wrap-up
- It has been another relatively quiet week of trading, with little economic data or corporate news to provide fuel for the next big move in markets. Volumes moved back into line with three-month moving averages as traders returned from the holiday weekend basking in the afterglow of data showing jobs growth released by the US government as markets were closed last Friday. A spate of risk aversion weighed down markets mid week, as yet another round of uncertainty over Greece's finances drove investors to take shelter in Treasuries, the dollar and gold. Despite the trouble in Europe, there was no shortage of positive news to buoy sentiment: the March ISM non-manufacturing index hit its highest level since May 2006 on Monday, while the new orders sub-index hit its highest level since August 2005. Strong March same-stores sales figures and excellent y/y comps for February Nevada casino revenue shed a positive light on consumer sentiment. The upward momentum in crude has been checked, with the contract bumping up against the $86 handle after a two-month rally up from around $71. Gold made fresh YTD highs briefly thanks to the Greece situation and ended the week at around $1,161. Hawks and doves on the FOMC continued to illustrate the state of the exit strategy at the Fed. On Wednesday , chief dissenter Hoenig said rates at 1% could still be considered "highly accommodative," while later in the week Tarullo and Lacker took a more dovish stance, with Lacker insisting that rate increases are still "over the horizon." In Washington, Former Fed Chairman Alan Greenspan made a spectacle of himself before Congress, deflecting all blame for the economic crisis and claiming that he was right "70% of the time" during his stewardship of the US economy. For the week stocks posted modest gains: the Nasdaq rose 2.2%, the S&P500 climbed 1.4%, and : the DJIA added 0.7%, briefly hitting 11,000 for the first time since Sept 2008 just before the close on Friday.
- Corporate earnings helped keep markets buoyant for most of the week as the latest quarterly earnings season began. The DJIA opened above the 11,000 level on Monday morning and gained steadily through Thursday as strong results from JP Morgan, Intel and CSX, plus a very bullish guidance call from UPS drove investor appetite for risk. Although the NBER refrained from calling a bottom to the recession last week, the Fed Beige Book reported on Wednesday that 11 of 12 Fed districts were seeing economic improvement, with consumer spending and manufacturing activity increasing. The April Empire Manufacturing survey came in only a bit lower than the five-year high seen last October, with particular strength seen in the employment and prices paid sub components. But all the positive sentiment fell apart Friday morning when the SEC filed fraud charges against Goldman Sachs over the way it marketed a synthetic CDO made up of mostly subprime mortgage-backed securities. The SEC complaint alleged that after participating in building the CDO Paulson & Co. shorted the portfolio, a fact that Goldman concealed from long-side investors, who lost up to $1B on the deal. The DJIA and S&P500 gave up nearly all of their gains for the week in heavy trading on Friday, with the financials leading the way downwards. Goldman alone fell around 13%, propelling the the VIX volatility index up 15%. For the week the the DJIA rose 0.2%, the Nasdaq gained 1.1% and the S&P500, after hitting an 18 month high on Wednesday, shed 0.2%
- JP Morgan and Bank of America both reported very strong Q1 results this week, with JP Morgan's top line outperforming thanks to investment banking revenues that were more than one third higher than last quarter. Provisions for credit losses continue to fall at both institutions, although investors fretted over certain credit metrics out of BoA, where allowances for loan losses were seen still growing by hefty amounts and non-performing assets remained stubbornly high. Note that monthly data released by the major US credit-card issuers this week hinted at a turnaround in losses. The March Master Trust numbers indicate that while credit losses remain at elevated levels, the pace of increases is tempering for issuers and delinquency rates are slowing.
- Among industrial stocks top-line revenue performance was lacking. General Electric beat profit targets in its Q1 report, although revenue was disappointing and there was no large increase in the order backlog. GE Capital continues to stabilize, and executives insisted that losses at the firm's credit arm "seem to have peaked." Railroad major CSX beat earnings expectations, although revenue was in line with expectations. CSX said it has begun recalling furloughed workers, thanks to "stabilizing demand and improving global trade." Alcoa met earnings expectations (ex-charges) and missed revenue targets a bit. Alcoa executives continue to predict very strong aluminum demand growth this year.
- Google modestly exceeded expectations in its Q1 report on Thursday, growing earnings and revenue in double digits over last year's Q1. However, shares of the search behemoth fell 5% in after-market trading as commentators focused on a small decline in average ad prices. Chip rivals Intel and AMD both reported very strong results. Intel came in well ahead of expectations and guided above par for next quarter. AMD surprised investors with quarterly profits, beating expectations for yet another loss. Note that this is the firm's first quarter in the black since late 2006, due mainly to accounting footwork, namely excluding numbers from its spun off manufacturing operations. Executives from both firms discussed tight supplies and growing demand for their chips.
- Currency trading got off on the right foot on Sunday after EU members put a price tag of €30B on their backstop loan package for Greece, plus an additional $10B in funding from the IMF. The euro gapped higher from its 1.3490 Friday close to test 1.3690 area on Monday, with better risk appetite underpinning commodities and equity markets as well. However, EUR/USD succumbed to profit taking after it fell just short of 1.3700, which was cited as a 23.6% fib retracement level of recent cycle range of 1.5143 to 1.3267. Initially, the 10-year spread between Greek and German bonds narrowed to below 330bps after hitting a post-euro launch record of over 440bps last week. Credit-default swaps on Greek sovereign debt also tumbled almost 70 bps to move below 360 bps. Greece used the news to sell short-term paper with the bills yielding below 5% level. However, dealers pointed out that the response of bond investors moving forward would ultimately determine whether or not Greece needs to activate the aid backstop.
- There was plenty of speculation among dealing desks whether Fed Chair Bernanke might fine tune his language on the US interest rate outlook in a mid-week speech. But softer CPI data and nagging initial jobless claims data re-enforced the view that it might be some time before the Fed changes its thinking on rates. The US 2-year yield was probing under 0.95% by Friday, well off Monday highs near 1.10%.
- Fears about contagion from Greece continued throughout the week. An EU assessment of Portugal labeled the country's stability program "ambitious" and warned that Portugal might need additional measures this year. The EU added that the country's economic assumptions were "somewhat favorable" after 2010. By the end of the week, spreads on the European peripherals widened further as speculation surfaced that Greece might cancel its dollar-denominated bond issue if interest in the issue waned.
- Rising risk appetite and comments from government officials kept the yen softer early in the week. Japanese Finance Minister Kan commented that currency rates and JGB yields should be set by market forces and that a weakening JPY trend was desirable for companies, sending USD/JPY to the 93.50 area. A ruling party panel said that efforts should be made to maintain appropriate currency levels of around 120 yen per dollar, helping USD/JPY test 93.40 a few times. However, the pair continued to find its direction via the interest rate outlook.
- Illustrating the unevenness of the global economic recovery, China posted robust economic data this week: Q1 GDP was 11.9%, the country's highest rate of growth in three years, the March industrial production came in line just above 18% y/y and March CPI was 2.4%. China's Cabinet Stats Bureau pledged to keep a "moderately easy" monetary policy and a proactive fiscal policy, but also warned it may have difficulty reaching its annual 3% CPI target. Additionally, the Stats Bureau said economic recovery still faces difficulties even though the Q1 GDP figure provided a solid footing for the 8% annual GDP target. The data and commentary threw cold water on recent speculation that the PBoC would be raising interest rates sooner rather than later.
- The Chinese Commerce Ministry further diminished the case for yuan revaluation and tighter policy, suggesting monthly trade deficits may be frequent in the first half while also noting the US should not blame the yuan for its economic problems. Up until these comments, the monthly trade deficit reported in March had been treated as a "blip" by Chinese officials, blamed on seasonality and rising domestic demand. Meanwhile, President Obama met with President Hu as part of the nuclear security talks in Washington DC, securing China support for a tougher stance on Iran and urging his counterpart to move on the yuan.
- The shockingly high preliminary Q1 GDP data out of Singapore on Tuesday jolted the city-state's central bank into a surprise tightening action. Following the release of data, the Monetary Authority of Singapore revalued its currency by adjusting the exchange rate band from zero to "modest and gradual" appreciation. Policymakers also offered a more upbeat outlook for the rest of the year, raising 2010 GDP to +7-9% from +4.5-6.5% and CPI to +2.5-3.5% from +2.0-3.0%. The Singapore Dollar was the notable gainer among the emerging Asian currencies as USD/SGD fell below 1.3750, its lowest level since August 2008.
Week of 4/19/2010 thru 4/23/2010
Monday, April 19, 2010
Economic
10:00 March Leading Indicators
Tuesday, April 20, 2010
Economic
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, April 21, 2010
Economic
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, April 22, 2010
Economic
08:30 March PPI, March Core PPI, Initial Jobless Claims, Continuing Claims
10:00 March Existing Home Sales, Feb Home Price Index
10:30 Natural Gas Inventories
11:00 US Treasury's note announcement
Friday, April 23, 2010
Economic
08:30 March Durable Orders
10:00 March New Home Sales
< BR>
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 March Housing Starts, March Building Permits, Canada Feb Manufacturing Sales
09:55 April Prelim Univ of Michigan Confidence
10:00 Mexico Rate Decision
15:00 Argentina Feb Economic Activity
Today’s Headlines
6:00:03 AM
*(US) FEB NET LONG-TERM TIC FLOWS: $47.1B V 29.7BE; TOTAL NET TIC FLOWS: +$9.0B V -$10.2B PRIOR
- Prior Net Long-Term TIC revised lower from $19.1B to $15B
- Prior Total TIC Flows revised higher from -$33.4B to -$10.2B
6:01:02 AM
(EU) ECB's Stark: Inflation risk appears to be tilted to the upside, uncertain whether global recovery is sustainable, may have already entered sovereign debt crisis
- Sees big budget deficits possibly raising inflation expectations, pledges ECB will oppose any call to cut deficits with inflation. Expects inflation to remain moderate in mid-term.
- Speed of remaining ECB exit strategy depends on the market and the economy. Could restart variable refi tenders if needed.
- Expects European growth to be dampened for some time, concerned about fiscal deterioration.
6:35:29 AM
(GR) IMF confirms it will send team to Greece on April 19; will discuss possible IMF assistance as part of multi-year aid program (if Greece requests the aid)
- Could provide multi-year program should Greece ask for activation of agreement
- EU agreement and IMF go 'hand in hand' to support Greece
- Still working on the variety of policies that would be needed for Greece
- Says will work closely with and coordinate with Europe and ECB
6:15:03 AM
*(US) MAR INDUSTRIAL PRODUCTION: 0.1% V 0.7%E; CAPACITY UTILIZATION: 73.2% V 73.3%E
- prior Production revised higher from 0.1% to 0.3%
- prior Capacity revised higher from 72.7% to 73.0%
6:26:06 AM
(US) Fed's Fisher: The Fed's balance sheet is "way too big," the US deficit is the main issue at the moment - panel discussion
- the yield curve now reflects a healthier state of the US economy and it prices in prospects of future fiscal difficulties
- notes that unfunded liabilites are the main issue; Fed is now done being the lender of last resort, its not possible any more to print money to get out of crisis)
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 Initial Jobless Claims, Continuing Claims, April Empire Manufacturing, Chile March Copper Exports
09:00 Feb Long-Term TIC Flows
09:15 March Industrial Production, March Capacity Utilization
10:00 April Philadelphia Fed
10:30 Natural Gas Inventories
13:00 April NAHB Housing Market
18:00 Chile Rate Decision
Today’s Headlines
5:03:04 AM
(HU) Hungary Central Bank Minutes: Voted 4 to 3 to cut rates by 25bps to 5.50% at the March 29th meeting
- All minority votes sought a 50bps rate cut to 5.25%
- Reiterates statements made on March 29th
-Reminder:On Mar 29th Hungary cut its Base rate by 25bps to 5.50% (as expected). Further cuts to interest rate and noted that further cuts would depend on risk assesment findings and did considered a possible 50bps rate cut at MPC.
5:30:09 AM
*(US) MAR ADVANCE RETAIL SALES: 1.6% V 1.2%E; EX AUTOS: 0.6% V 0.5%E
- Retail Sales Ex Auto&Gas: 0.7% v 0.6%e
- Prior Jan Advance Retail Sales revised higher from 0.3% to 0.5%
- Prior Ex Auto revised higher from 0.8% to 1.0%
- Prior Ex Auto&Gas revised higher from 0.9% to 1.1%
6:45:33 AM
(EU) ECB's Wellink: External value of EUR is being influenced by quicker US economic recovery - German newspaper interview
- Regarding the Euro, no one can be happy with the current fiscal situation.
- Trade weighted Euro remain above the historic average
- Greek aid deal is an important part of resolving the country's problems.
- Collateral rule change had to do with Greece
8:02:24 AM
IMF: Advanced economies to deal with unemployment near 9% through 2011; trimming trade surpluses will not destroy growth
- currency appreciation does not have to reduce growth rates and play a role in reducing imbalances
- Unemployment to remain high even with job growth in 2010
- Continued accommodative polices are key to bring back job growth
8:42:39 AM
(US) US Senator McConnell (R): Bipartisan talks on financial reform have broken down
- Notes that the Dodd bill would provide for 'endless bailouts'
- US Rep Boehner (R) Comments that the current Democratic legislation in bill protects large banks and hurts small ones
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 March CPI, CPI Ex Food & Energy, CPI Core Index SA, March Advance Retail Sales
10:00 Feb Business Inventories
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
14:00 Fed Beige Book
15:00 Argentina March CPI
Today’s Headlines
2:19:47 AM
*(GR) GREECE DEBT AGENCY (PDMA) AUCTION RESULTS:
- Sells €780M in 26-week Bills; Avg yield at 4.55%; bid to cover at 7.67x v 4.9x prior (Note prior yield was 1.38% back in Jan and bid-to-cover avg was 6.2 x in 2009)
- Sells €780M in 52-week Bills; Avg yield at 4.85%; bid to cover at 6.54x (Note prior yield was 2.2% back in Jan)
4:42:38 AM
(JP) JP Morgan cut Japanese steel sector to Neutral
- 5411.JP cut to Neutral from Overweight
- 5401.JP cut to Neutral from Overweight
- ASCA cut to Neutral from Overweight
- HEIA.NV cut to Underweight from Neutral
5:30:05 AM
*(CA) CANADA FEB INTL MERCHANDISE TRADE: C$1.4B V C$600ME
- Exports C$34.0B v C$33.0B prior
- Imports: C$32.6B v C$32.2B prior
- Trade Balance with US: C$4.4B v C$4.1B prior
- Trade Balance non-US: -C$3.0B v -C$3.3B prior
7:01:41 AM
(US) FDIC: Plan to propose new bank assessment structure for riskier and larger institutions
- Proposing to eliminate LT IDR as factor in banking assessment levels; will add more factors and stress tests to review.
- Proposing to extend transaction account guarantee for additional 6-months.
- follow up: FDIC votes 5-0 to seek comment on the proposal.
7:21:52 AM
(US) DOD reiterates official opposition to extended/continued funding for secondary engine program for F-35
-Reminder: On Sept 9, 2009 - (US) Senate Defense Appropriations panel: Rejects funding for secondary/backup F-35 engines
- Does not provide funding for Pres helicopter program
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:00 Brazil Feb Retail Sales
08:30 Feb Trade Balance, March Import Price Index
10:00 April IBD/TIPP Economic Optimism
16:30 API Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
12:59:50 AM
ECB: European markets gradually returning to pre-crisis state - European Financial Market Integration report
- ECB presence in markets in marksts remains essential as full market functionality has yet to be restored
- Spreads on credit default swaps show investors have repriced sovereign risk in the euro region and CDS spreads have decreased considerably since
-March 2009, but remained far above the pre-crisis levels at the end of 2009
1:00:04 AM
*(IT) ITALY FEB INDUSTRIAL PRODUCTION M/M: 0.0% V -0.3%E; Y/Y: 2.7% V -1.0%E; IND PROD WDA Y/Y: 2.7% V 2.8%E
- Prior Industrial Production MoM revised lower from 2.6% to 1.9%
- Prior Industrial Production YoY revised lower from -3.3% to -3.4%
- Prior Ind Prod WDA YoY revised from lower 0.1% to -0.5%
1:14:23 AM
(EU) ECB's Papademos: Crisis has shown need for greater transparency, lowered complexity
- Must push for reform on all fronts
- Contagion effects from the Greek situation has been limited
- The roll over effects from soverign bond spreads to corporate bond spreads needs further analysis
- Bond spreads continue to stand at high levels internationally
2:36:20 AM
(GE) German Finance Ministry spokesperson: Reiterates that Greece has yet to request aid; says case of emergency has not been reached
- Greek aid rates are not subsidized . Conditions on Greece's aid package should not be automatic.
- Germany would contribute €8.4B (28%) to Greece's aid if needed.
- German Bundestag will have to be consulted on Greece's aid package.
- German KFW aid to Greece will not push up Federal debt and is off budget.
7:30:04 AM
*(CA) CANADA Q1 BUSINESS OUTLOOK FUTURE SALES: 44.00 V 49.0 PRIOR; BOC SENIOR LOAN OFFICER SURVEY: -18.7 V -8.7 PRIOR
- Firms saw an easing of credit for corporate borrowers, credit for small business only stabilized
- Balance of opinion regarding future growth moved slightly lower in Q1 v Q4
- 12% of firms saw labor shortage v 7% prior
- 50% of firms saw higher employment v 12% lower
- 64% of firms saw faster growth v 20$ slower
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
“My passions were all gathered together like fingers that made a fist. Drive is considered aggression today; I knew it then as purpose.”
Market Week Wrap-up
- It has been another relatively quiet week of trading, with little economic data or corporate news to provide fuel for the next big move in markets. Volumes moved back into line with three-month moving averages as traders returned from the holiday weekend basking in the afterglow of data showing jobs growth released by the US government as markets were closed last Friday. A spate of risk aversion weighed down markets mid week, as yet another round of uncertainty over Greece's finances drove investors to take shelter in Treasuries, the dollar and gold. Despite the trouble in Europe, there was no shortage of positive news to buoy sentiment: the March ISM non-manufacturing index hit its highest level since May 2006 on Monday, while the new orders sub-index hit its highest level since August 2005. Strong March same-stores sales figures and excellent y/y comps for February Nevada casino revenue shed a positive light on consumer sentiment. The upward momentum in crude has been checked, with the contract bumping up against the $86 handle after a two-month rally up from around $71. Gold made fresh YTD highs briefly thanks to the Greece situation and ended the week at around $1,161. Hawks and doves on the FOMC continued to illustrate the state of the exit strategy at the Fed. On Wednesday , chief dissenter Hoenig said rates at 1% could still be considered "highly accommodative," while later in the week Tarullo and Lacker took a more dovish stance, with Lacker insisting that rate increases are still "over the horizon." In Washington, Former Fed Chairman Alan Greenspan made a spectacle of himself before Congress, deflecting all blame for the economic crisis and claiming that he was right "70% of the time" during his stewardship of the US economy. For the week stocks posted modest gains: the Nasdaq rose 2.2%, the S&P500 climbed 1.4%, and : the DJIA added 0.7%, briefly hitting 11,000 for the first time since Sept 2008 just before the close on Friday.
- Three years ago, in the age before the financial crisis, Monsanto said it would double its annual profit by 2012. On Wednesday the 'Big Ag' leader reported less than stellar earnings and said it wouldn't likely hit its 2012 goal, citing losses in its dwindling Roundup business and weak performance in its next-generation biotech seeds. Many firms have raised guidance ahead of the March quarter earnings season (and a few offered profit warnings). Chevron said it expects its Q1 profit to be higher sequentially, driven by higher earnings from its production and exploration operations. Heavy vehicle maker Navistar raised its 2010 earnings view significantly while aerospace and defense manufacturer Alliant Techsystems said its earnings would be at the upper end of its prior range. Selected casino names gained on Thursday after Nevada disclosed robust sequential and y/y growth in casino spending, including 33% y/y growth on the Vegas strip. Coal miner Massey Energy has dominated national news this week following an underground explosion at its Upper Big Branch coal mine in West Virginia, with 25 confirmed fatalities.
- Apple scored coverage with the first full week of iPad sales and by holding an event on Thursday to preview iPhone OS 4.0l. At the event, CEO Steve Jobs said the company has sold 450K iPads so far. The iPhone OS 4.0 met most expectations, with the signature feature support for multitasking, a key advantage the Google Android OS has had until now. Apple also challenged Google on the ad front, announcing that it would develop a mobile advertising platform called iAd that would let developers put advertising in their apps, with the ads hosted and sold by Apple. In other tech news, selected solar names have been making substantial gains in the second half of the week. JA Solar made a big leg up thanks to very strong Q1 shipment guidance, citing robust demand in the quarter, while Credit Suisse upgraded the Taiwan solar sector.
- March same-store sales data came in even stronger than the positive figures seen in the past three months, although analysts pointed out that comparisons with last year are difficult due to the earlier Easter holiday plus last Spring's dismal economic conditions. The preponderance of comps were in the positive double-digit range, and only two major reports came in below estimates. Among the standouts were value apparel name Cato, with same store sales up 24%, and department store Kohl's, with 22.5% comps. Abercrombie and Fitch remains the laggard among major retailers, as the apparel name's comps were flat with last month's performance, missing expectations. Note that industry analysts at ICSC predict overall April same-store sales to be down 3% to flat, and multiple retailers have noted that the early Easter will negatively impact April comps.
- The US benchmark rate began the week testing 4% for only the second time since the 2008 financial crisis. Treasury markets were keying off of last Friday's improved March jobs report and Monday's ISM manufacturing reading. Traders were also leery of $74B in coupon supply that was set to come onto the market throughout the middle of the week. Wednesday's $21B 10-year note reopening put any supply concerns to bed after garnering a 3.72 bid-to-cover ratio and drawing 3.9%, which was roughly 7 basis points below where the when issued yield had been trading just that morning. Although Thursday's long bond reopening acceptance fell short of the 10-year's, markets have taken notice of the strong influx in demand surrounding the key 4% level in the benchmark rate. The 10-yr/2-yr spread remains above 280 basis points, still right near all time highs, but for the week prices look to finish higher than where they entered.
- In currency trading the greenback began the week on a firmer note in thin holiday trading as dealers focused on a Fed Discount Rate meeting on Monday while rumors made the rounds that the Fed might again raise the discount rate at the confab. In Europe, reports that Greek officials could be looking to renegotiate the standby financing aid package offered by the EU and IMF sparked fresh risk aversion. Various official comments sought to downplay the reports; a senior Greek official clarified that Greece was not trying to push the IMF out of the picture (as had been rumored) but did concede that Greece was seeking more "clarity" on the IMF package. Tension in Europe was illustrated by the spread between Greek and German 10-year bonds widened out to test 450bps by Thursday, the widest spread since the euro was launched in 1999. Dealers commented that buyers of Greece's looming USD-denominated 10-year bond issue might demand a yield of as much as 7.25%. Greece Fin Min Papaconstantinou commented that it would take time for Greek spreads to narrow and stated that the 2009 Greek deficit to GDP might be revised higher by Eurostat from 12.9%. All the turmoil was fuel for a softer euro, although a sense of calm enveloped the market by Friday morning, after the Greece finance ministry stated that its Q1 budget deficit was down 40% y/y at €4.3B and the country was on track to meet its 2010 deficit target of 8.7%. Fitch downgraded Greece's sovereign ratings by two notches later on Friday, although the move did not upset the euro's slight strengthening and lower spreads on Greek debt. Tentative details of the aid package leaked on Friday as a report emerged that EU ministers could make a formal statement on Greek aid next Friday and may charge Greece in excess of 6% for emergency loans.
- The BoE and ECB maintained rates at existing levels as expected on Thursday. The ECB press conference centered on the peripheral debt situation. Trichet commented that a Greek default was "not an issue" under the current information. EUR/USD maintained a foothold above the 1.33 area. In the UK, Prime Minister Brown formally asked Queen Elizabeth to dissolve the Parliament and set an election date for May 6th.
- US Treasury Secretary Geithner apparently chose diplomacy over political pressure to coax China into changing its FX policies. In order to avert a potential diplomatic gaffe, Geithner delayed publication of the semi-annual currency report to Congress due on April 15 until after a mid-month state visit by Chinese President Hu Jintao. Later in the week, Geithner made a surprise visit to Beijing for closed-door meetings with Vice Premier Wang to present the US case for revaluation of the renminbi.
- In China, rhetoric regarding yuan revaluation remained divided. China's Foreign Minister reiterated that yuan appreciation would not be a viable solution to rebalancing US-China trade and denied charges that China manipulates its currency for advantage in trading. A Chinese government economist stated that the country could return to a modest yuan appreciation policy and that a widening of the yuan trading band was possible. On the monetary front, one of the newly appointed central bank advisors, Li Daokui, warned the PBoC could consider raising interest rates as early as the current quarter if the rate of inflation exceeds 3%. Li also noted the PBoC would move unilaterally and without rate change by the US. As the currency issue heated up, there was also press speculation that China was close to announcing a revision of its currency policy with possible action similar to China's currency shift in policy back in 2005.
- Central banks across the Asia Pacific rim rendered rate decisions this week. The Reserve Bank of Australia raised its cash target rate for the fifth time in six meetings, shrugging off the recent deterioration in monthly trade, retail sales and dwelling approvals data. The accompanying statement was on balance more hawkish, containing a specific mention of economic recovery "contributing to pressure on prices for raw materials." Going forward, RBA said the buildup in investment the resources would lead to even higher pace of growth, even considering the diminishing effects of fiscal stimulus. Moreover, the RBA downgraded its assessment on sovereign risk, suggesting sovereign concerns "have been contained" (revised from "remain elevated"). The Australian dollar extended its gains following the RBA statement, approaching 0.93 handle for the first time in nearly three months.
- This week's Bank of Korea rate decision - the first under the leadership of new Governor Kim - also took a more hawkish turn, weighing on Korean equity and bond markets in the Friday trading session. The BoK left rates unchanged at 2.00%, as widely expected, and reiterated the need to maintain easy policy for the time being but also pointed out risks of higher inflation in months to come. Governor Kim said considerable upward pressure exists for the second half of the year and noted faster than previously expected growth in domestic economy.
- With little political pressure for further easing from the Bank of Japan following last month's expansion of the 3-month lending program. The BOJ maintained its economic assessment and kept rates ultralow at 0.1% with monthly JGB buying at ¥1.8T. The accompanying statement reiterated that economic activity is picking up but growth is expected to be gradual, reaffirming commitment to easy monetary conditions because of persisting downside risks to the economy.
Week of 4/12/2010 thru 4/16/2010
Monday, April 12, 2010
Economic
08:15 Canada March Housing Starts
10:00 Mexico Feb Industrial Production
14:00 March Budget Statement
Tuesday, April 13, 2010
Economic
08:00 Brazil Feb Retail Sales
08:30 Feb Trade Balance, March Import Price Index
10:00 April IBD/TIPP Economic Optimism
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, April 14, 2010
Economic
08:30 March CPI, CPI Ex Food & Energy, CPI Core Index SA, March Advance Retail Sales
10:00 Feb Business Inventories
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
14:00 Fed Beige Book
15:00 Argentina March CPI
Thursday, April 15, 2010
Economic
08:30 Initial Jobless Claims, Continuing Claims, April Empire Manufacturing, Chile March Copper Exports
09:00 Feb Long-Term TIC Flows
09:15 March Industrial Production, March Capacity Utilization
10:00 April Philadelphia Fed
10:30 Natural Gas Inventories
13:00 April NAHB Housing Market
18:00 Chile Rate Decision
Friday, April 16, 2010
Economic
08:30 March Housing Starts, March Building Permits, Canada Feb Manufacturing Sales
09:55 April Prelim Univ of Michigan Confidence
10:00 Mexico Rate Decision
15:00 Argentina Feb Economic Activity
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Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:00 Canada March Employment Change
10:00 Feb Wholesale Inventories, Mexico Feb Trade Balance
Today’s Headlines
5:25:31 AM
(EU) ECB's Trichet: Reiterates that ECB threshold for acceptable collateral to be BBB-, ABS exempt from extension of collateral rules
- There will be a new scale for haircuts on assets accepted as collateral.
- A new graduated haircut (discount) schedule will replace 5% haircut for assets rated below A-
- Decision on collateral change is for all country; did not mention Greece when rules changed announced
5:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 460K V 435KE; CONTINUING CLAIMS: 4.55M V 4.63ME
- Prior Initial Claims revised higher from 439K to 442K
- Prior Continuing Claims revised higher from 4.662M to 4.681M
- 4 week average for claims at 450.3K v 447K prior
6:06:59 AM
(GR) ECB's Trichet: It is up to EU governments to decide on rates for Greek aid; expect will be at least the cost of the refi for the governments involved
- Will not embark on details on what kind of rates might apply to Greek Aid.
- Says decision to prolong losser rules on collateral are meant to benefit the whole Euro Zone, not just one country.
- Says all of the Euro Zone countries "share a common destiny," the Euro moves up or down when an issue emerges "here or there."
6:17:35 AM
(GR) S&P: Risk of Greek default is low at current sovereign rating of "BBB+" but ratings depends on full implementation of austerity measures
- Could lower Greece sovereign ratings if borrowing costs persist and Gov't deviates from austerity measures
7:30:50 AM
(US) Fed's Tarullo: Large balances of reserves could undercut regular procedures, raising the target rate not enough to tighten policy
- May need to innovate various methods in order for interest rates to rise
- Currently developing a term deposit facility
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:00 BoE Rate Decision
07:45 ECB Rate Decision
08:00 Brazil March IPCA Inflation, Chile March CPI
08:30 Initial Jobless Claims, Continuing Claims
10:00 Mexico March Consumer Prices
10:30 Natural Gas Inventories
13:00 US Treasury to auction $13B in 30-yr bonds auction
Today’s Headlines
4:10:00 AM
(TH) Thai PM declares State of Emergency in Bangkok, notes that parliament has been occupied by protesters
- To take in political factors under consideration at rate meeting this month.
- Sees outflows late in the year reducing upward pressure on the baht currency
6:01:03 AM
(US) Former Fed Chairman Geenspan: Calls for higher capital and collateral standards -Congressional Testimony
- Reiterates that too big to fail must be brought to an end; markets can not be brought to expect a bailout for any and all large financial firms
- States that crisis did not emanate from subprime, rather from increase complex financial instruments
6:08:17 AM
June Gold moves out to one-month high ahead of the NYSE open
- desks are eyeing stops through the early March highs at 1146.60, while Gold vs Euro continues to make new record highs
- follow up: 10:30 ET spot silver moves out to best levels since Jan
7:00:26 AM
(US) SEC proposes new rules for ABS sales
- Proposes issuers retain 5% of Asset-Backed Securities, although only for shelf offerings.
- Proposes five-day waiting period before first sale of Asset-Backed Securities
- Proposes public notices for IPOs in private market
- Proposes scrapping rating requirement for expedited ABS sales
7:09:55 AM
(PD) Poland Central Banks Zielinska: Expects interest rates to remain on-hold until at least June
- Rates could be raised without an announcement of bias change/policy change
- Current PLN strength may be temporary, see no need for market intervention
7:30:05 AM
*DOE CRUDE: +2M V +1.5ME; GASOLINE: -2.5M V -1.8ME; DISTILLATE: +1.1M V -1.5ME; UTILIZATION: 84.5% V 83%E
- Distillate demand -10K bpd to 3.64M bpd
- Gasoline demand +15K bpd at 9.08M bpd
- 10th straight weekly build for Crude inventories
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 Chile March Exports
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury to auction $21B in 10-yr notes
15:00 Feb Consumer Credit
Today’s Headlines
1:07:50 AM
(CH) China Govt Economist Ba Shusong: Widening yuan trading band is possible, could return to modest yuan appreciation policy
- Reform of the currency regime is more important than adjusting the level of yuan.
- China should be prudent on timing of yuan reform depend on economic conditions in China and the US.
2:48:24 AM
*(UK) UK PM BROWN FORMALLY DECLARES THE QUEEN HAS AGREED TO DISSOLVE PARLIAMENT; CALLS FOR GENERAL ELECTIONS ON MAY 6
- UK on the road to recovery will be key poll message
- Reiterates that deficit will be cut in half in four years
- Reiterates that withdrawing support would put economic recovery at risk
3:55:18 AM
(GE) Germany faces freight train shortage as growth picks up - Spiegel (update)
- Thousands of freight train wagons and locomotives shunted into sidings during last year's economic slump have developed rust in their brake cylinders and need to be repaired just as demand for freight transport is picking up in line with Germany's economic recovery.
4:31:05 AM
(CH) Treasury Sec Geithner: Government has a legal obligation to release semi-annual currency report; China is part of a greater global rebalancing
- It is China's decision to revalue to yuan or not.
- Chances of global double-dip recession are minimal.
4:45:05 AM
(US) ICSC/GS weekly chain store sales w/w April 3rd: +2.1% w/w, +4.7% y/y
- Guides March SSS +8-10% y/y (prior target +3-3.5% y/y)
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
10:00 Mexico March Consumer Confidence
13:00 US Treasury to auction $40B in 3-yr notes
14:00 FOMC Minutes
16:30 API Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
11:50:03 PM
(TU) Preview: Turkey Mar Consumer and Producer price data expected at 3:00am ET (7:00 GMT)
- Consumer prices MoM: 0.6%e v 1.5% prior; YoY: 9.6%e v 10.1% prior
- Producer prices MoM: 0.8%e v 1.7% prior; YoY: 7.2%e v 6.8% prior
11:55:12 PM
(UK) UK's Darling: Reiterates that gov't borrowing must be brought down via combination of higher taxes and lower expenditures
- Reiterates that taking money out of the economy at this time would place the economic recovery at risk.
- Says National Insurance must be part of the package but not putting it up until the economy grows.
2:35:25 AM
(US) US Embassy confirms attack on its consulate in Peshawar, Pakistan
***There were reports of several blasts heard earlier today. No immediate information on the cause of the blast of if there had been casualties.
5:31:08 AM
(CL) Chile Central Bank minutes from Mar 18th: Voted unanimously to hold rates steady at 0.50%
- Effects from Feb's earthquake might be limited but too early to tell quake impact on interest rates
- Might be a short-term rise in inflation
- Sees improvement in credit volume and credit rise will be 'great challenge'
5:31:08 AM
(CL) Chile Central Bank minutes from Mar 18th: Voted unanimously to hold rates steady at 0.50%
- Effects from Feb's earthquake might be limited but too early to tell quake impact on interest rates
- Might be a short-term rise in inflation
- Sees improvement in credit volume and credit rise will be 'great challenge'
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 March Unemployment Rate, March Nonfarm Payrolls, March Manufacturing Payrolls, March Average Hourly Earnings
Recommended equity markets closed for the Good Friday Holiday. Recommended bond markets 12:00 close.
Today’s Headlines
4:30:04 AM
*(US) MAR CHALLENGER JOB CUTS: 67.6K V 42.1K PRIOR; Y/Y: -55% V -77.4% PRIOR
- Layoff intentions led by Gov't (post office) with 75% of cuts
- Hiring intentions 14.0K v 8.3K m/m
4:45:18 AM
Glencore launches $7B syndicated revolving credit facility to refinace current facility
- New facilities to be signed in May 2010
- Have agreed to new 3-year facility to refinace existing $8.2B credit line
- Have agreed to new 1-year Asian revolving facility
4:46:47 AM
(RU) Russia Fin Min Kudrin: Sees FY10 Budget deficit around 6-6.8% of GDP
- Stronger Ruble currency negates the benefits of higher oil prices, and limits govt revenues.
- USD/RUB could avg 28 to 29 in 2010 (Note: currently at 29.35)
5:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 439K V 440KE; CONTINUING CLAIMS: 4.662M V 4.618ME
- Prior Initial Claims revised higher from 442K to 445K
- Prior Continuing Claims revised higher from 4.648M to 4.668M
6:53:26 AM
(US) Preview: March ISM Manufacturing due out at 10:00ET
**consensus expectations: ISM Manufacturing: 57.0e v 56.5 prior (estimates range between 54-59).
- Prices Paid : 67.0e v 67.0 prior.
- Note: the Jan headline reading on Manufacturing Index of 58.4 was the highest level since Aug 2004.
7:00:04 AM
*(US) MAR ISM MANUFACTURING INDEX: 59.6 V 57.0E(highest since July 2004); PRICES PAID: 75.0 V 68.0E (highest since Aug 2008)
**sub-indices:
- New Orders Index: 61.5 v 59.5 prior
- Production index: 61.1 v 58.4 prior
- Employment Index: 55.1 v 56.1 prior
- Inventories index: 55.3 v 47.3 prior
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
SchoolOfTrade.com and United Business Servicing, Inc. are not registered investment or trading advisers. The services and content provided by SchoolOfTrade.com and United Business Servicing, Inc. are for educational purposes only, and should not be considered investment advice in any way. U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Futures and Options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. cftc rule 4.41. These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or-over-compensated for the impact, if any, of certain market factors, such as liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown. Testimonials may not be representative of the experience of other clients. Testimonials are not a guarantee of future performance or success. No compensation is ever paid in exchange for any testimonials. Testimonials have not been independently verified.
