" Those who cannot remember the past are condemned to repeat it.”
Market Week Wrap-Up
Entering the week all eyes were on the US Fed. The Chairman's historic post rate decision press conference would hopefully shed some light on what was driving the FOMC's decision to stick to its ultra accommodative policies in the face of surging commodity prices, a declining US dollar and a growing number of central banks undertaking tightening measures to combat inflation. Though Bernanke did acknowledge a recent uptick in inflation he declined to offer any color on exactly how long it could be until the tightening process might begin, ultimately signaling the all clear to investors who wanted to continue the recent trend of gobbling up risk investments. Equity and commodity markets surged, reaching new yearly and all time highs. Gold traded above $1560 for the first time ever while silver is nearing $50 for the first time since 1980. Crude finished near levels not seen since 2008 closing just shy of $114, up roughly 7% in April. The Russell 2000 and Dow Jones Transports Index reached new all time highs trading above 2007 levels. The Greenback continued to tumble, suffering from its growing perception as a funding currency. US Treasury markets remain bid up sending yields lower on the week. Mildly disappointing Q1 GDP and manufacturing data, along with price index figures broadly in line with expectations, helped offset a couple of mediocre coupon auctions. For the week, The DJIA gained 2.4%, the Nasdaq rose 1.9%, and the S&P500 added 2%.
Earnings season has swung into full gear and it has certainly been a factor in propelling indices to new 2011 highs. A wide range of companies and sectors have chimed in and for the most part corporations are meeting and or exceeding consensus expectations. Some groups are doing better than others, but in general industries are weathering higher input costs and headwinds associated with the crisis in Japan and unrest in North Africa. Going forward, corporations have indicated they expect selling price increases to offset rising operating costs, but importantly at this time they are not experiencing any offset in end demand.
A plethora of major US multi-national corporations reported strong Q1 results and provided encouraging forward looking guidance. These companies' international exposure continues to serve them well by providing growth and offsetting some of the effects of a weaker currency. Reports from Coca-Cola, Caterpillar, Boeing, 3M, Dupont, Merck and P&G drove the Dow Jones Industrial Average higher. The S&P got a significant boost from the likes of Cummins, Colgate, Dow, Apache, Goodyear Tire, Illinois Tool Works, Aetna, General Dynamics, Ford, and Northrop Grumman among others. Despite surging energy prices, the Dow Jones Transport Index touched a new all time high on Friday above 5500. Components UPS, Delta Airlines, Ryder, Norfolk Southern all reported results this week.
The NASDAQ composite underperformed other US stock indices during the latter part of the week, as some technology earnings reports were not greeted with enthusiasm. Focus on higher input and acquisition costs along with the possibility of lingering supply disruptions resulted in some profit taking. After their respective earnings reports, shares of Broadcom and Netflix traded down sharply while Amazon initially moved lower before rebounding to fresh all time highs. Microsoft slid 4% after earnings and the CFO noted they are still experiencing some issues integrating the Bing/Yahoo search deal. Microsoft management also refused to discuss sales of windows based smartphones after Reseach in Motion cut its Q1 outlook on weaker BlackBerry sales. RIMM slipped below $50 for the first time since last fall losing 14%.
Consolidation continues to be a key theme for equity markets globally. Johnson & Johnson offered more than $21B for Swiss medical device maker Synthes. US utility Exelon offered nearly $8B worth of its stock for Constellation Energy. The cloud computing space continues to consolidate after Century Link offered $40/share for Savvis Communications. Barrick Gold entered into the fray by bidding for Canada's Equinox. Barrick's C$7.3B bid topped Minmentals previous offer for Equinox and forced its Board to withdraw an offer attempting to acquire Lundin Mining.
US Treasury prices pushed higher this week on the continued prospects of accommodative monetary policy and some softer US economic data. The unprecedented FOMC press conference did little to alter expectations. Despite a sharp move higher in precious metals prices and continued selling in the dollar inflation expectations have not moved all that much, though they do remain near the upper end of their recent ranges. The 10-year TIPS breakeven remains at roughly 260 basis points, still some 6 basis points below multi-year highs seen earlier this month. The final April University of Michigan confidence reading showed 5-year inflation expectations remained in line with the preliminary reading at 2.9%. The US benchmark 10-year yield declined roughly 10 basis points on the week making a new no month low below 3.3%.
Throughout week the same old themes eroded the value of the USD. The Dollar Index fell below 73 to the lowest level since 2008. US Treasury Secretary Geithner and Fed Chairman Bernanke both reiterated the standard mantra "a strong dollar is in the United States best interest", but ultimately it had no effect. The FOMC press conference only emboldened Greenback bears by indicating US monetary tightening was still at least several meetings away, and confirming initially the Fed intends to reinvest the proceeds from maturing mortgage securities after ending large scale purchases in June. Subsequently numerous central banks commented that they expected their respective home currencies to appreciate against the dollar. The Thai Fin Min confirmed what the FX markets had long suspected about the Far East economies, when he suggested his government has been both buying and selling USD in the FX markets in a two-step intervention process. The Asian Developing bank even commented there is a growing consensus among major Asian countries to draft an accord for joint appreciation of their currencies.
Choppy US data and a hotter than expected initial estimate for April Euro-zone CPI solidified the diverging views for US and European rates. European peripheral spreads also remained wider for the most part as Greek debt restructuring speculation failed to dissipate. Interestingly, higher yields in the periphery seemed to only propel the Euro higher buoying the carry traders. The EUR/USD traded above 1.4850 to retest its 16-month highs while USD/CHF again hit fresh post WWII lows below 0.8650. The GBP was softer ahead of Wednesday's release of the UK's Q1 GDP data but held above the key pivot point of 1.6430 against the USD. The GDP data met expectations and sent the GBP higher on a 'relief rally' above 1.67
JPY entered the week with a softer tone after S&P cut Japan's sovereign rating outlook to negative amid deficit concerns following the recent earthquake. Later in the week, the Bank of Japan kept its Overnight Call Rate unchanged while expanding loan collateral requirements to financial institutions in the earthquake-affected area as part of its latest ¥1T funding measure. Moreover, BOJ semiannual economic report cut its GDP assessment for the current fiscal year from 1.6% to 0.6%, pushing forward expectations for a more pronounced recovery into FY12/13. The Golden Week holiday for Japan markets should be a busy one for Tokyo lawmakers, as the Finance Ministry's ¥4T extraordinary earthquake relief budget heads to the Diet. Despite the doldrums in Japan, the overall weakness of the greenback kept JPY on a firm tone, as USD/JPY ended the week below the 82 handle.
Down Under, the Australian dollar remained the darling of the currency markets, extending its gains for much of the week to trade within 50 pips of the $1.10 level by Friday - a fresh 29-year post-flotation high. AUD received an added boost from a hotter than expected Q1 CPI print of 1.6% q/q - its highest since Q2 of 2006. The RBA is still widely expected to leave rates unchanged at its Tuesday decision, having warned about rising Q1 inflation in its prior statement. In New Zealand, the RBNZ left its key rate unchanged at 2.50% - contradicting some of the recent hawkish comments out Governor Bollard - citing continued economic disruption from the Christchurch earthquake for keeping rates low for some time. Despite further strength against the greenback, the kiwi saw its biggest decline in AUD/NZD cross in 9 weeks.
In China, PBoC strengthened the Yuan more aggressively, setting USD/CNY below 6.50 for the first time since 1993. Dealers have attributed more pronounced USD weakness to the concerted efforts by Chinese monetary authorities, who are buying fewer dollars to counter the market demand for the Yuan. Note that China will release its Manufacturing PMI around 9pmET on Saturday night, with expectations that the reading will continue its bounce from a February low. Ahead of this data it is worth pointing out copper futures dramatically underperformed other commodity markets this week finishing lower by almost 5%.
Week of 5/2/2011 thru 5/6/2011
Monday, May 02, 2011
Economic
10:00 Mar Construction Spending, April ISM Manufacturing, Prices Paid
15:00 US Treasury's refinancing estimates
Tuesday, May 03, 2011
Economic
10:00 Mar Factory Orders
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, May 04, 2011
Economic
7:30 April Challenger job cuts
8:15 ADP employment change
9:00 US Treasury's quarterly refunding announcement
10:00 ISM Non manufacturing
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, May 05, 2011
Economic
8:30 Q1 Non farm productivity, Unit labor costs; Initial Jobless Claims, Continuing claims
10:30 DoE Natural Gas Inventories
Friday, May 06, 2011
Economic
8:30 April non farm payrolls, Unemployment rate, Private payrolls, Hourly Earnings
15:00 Mar Consumer Credit
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 Canada Feb GDP, US March Personal Income, March Personal Spending, March PCE Core
09:45 US April Chicago PMI
09:55 US April Final University of Michigan Confidence
10:00 US April NAPM Milwaukee
Todays Headlines
8:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 429K V 395KE (highest since Jan 27th); CONTINUING CLAIMS: 3.641M V 3.68ME
- Prior Initial Jobless Claims revised higher from 403K to 404K
- Prior Continuing Claims revised higher from 3.695M to 3.709M
9:41:40 AM
(US) Preview: Mar Pending Home Sales due out at 10:00 ET
**Consensus expectations:
- MoM: 1.5%e v 2.1% prior
- YoY: No est v -9.3% prior
10:00:02 AM
*(US) MAR PENDING HOME SALES M/M: 5.1% V 1.5%E; Y/Y: -11.5% V -9.3% PRIOR
- Prior MoM revised lower from 2.1% to 0.7%
- Prior YoY revised lower from -9.3% to -10.5%
10:33:04 AM
Market Internals update at 10:30ET
- NYSE volume 195M shares, about 10% below its three-month average; advancers lead decliners by 1.1:1.
- NASDAQ volume 450M shares, about 4% below its three-month average; decliners lead advancers by 1.3:1.
- VIX index -1.5% at just over 15.00
11:02:47 AM
NY Fed: Purchased $6.68B in outright coupon purchase; dealers submitted $21.11B for consideration (bid to cover 3.16)
- Heaviest purchase was $2.09B in the 03/31/16 maturity
- Purchased maturities dated 04/30/2015 - 09/30/2016
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 US Q1 Advance GDP, Q1 GDP Price Index, Q1 Core PCE, Q1 Personal Consumption, March Chicago Fed Index, Initial Jobless Claims, Continuing Claims
10:00 US March Pending Home Sales
10:30 DoE Natural Gas Inventories
11:00 US Treasury's TIPS annoucement
13:00 US Treasury's 30-year bond auction
Todays Headlines
8:30:03 AM
*(US) MAR DURABLE GOODS ORDERS: 2.5% V 2.3%E; DURABLES EX TRANSPORTATION: 1.3% V 2.0%E
- Durable Goods Orders, Ex-Defense: +2.3% v +0.4% prior
- Capital Goods Orders Non-defense Ex-aircraft: +3.7% v +3.8%e
- Capital Goods Shipments Non-defense Ex-aircraft: +2.2% v 0.4% prior (revised from 0.8%)
9:33:54 AM
*(BR) BRAZIL MAR TOTAL OUTSTANDING LOANS (BRL): 1.752T V 1.735T PRIOR; PRIVATE BANKS LENDING: 1.015T V 1.003T PRIOR
- Prior Total Outstanding Loans revised from 1.738T to 1.735T
- Prior Private Banks Lending revised from 1.006T to 1.003T
11:31:43 AM
*(US) TREASURY'S $35B 5-YEAR NOTE AUCTION DRAWS: 2.124%; BID-TO-COVER RATIO: 2.77 V 2.79 PRIOR AND 2.80 AVG OVER THE LAST 10 AUCTIONS
- Indirect bidders take 39.99% of competitive bids with 22.1% allotted at the high.
- Direct bidders take 11.2%, primary dealers 48.8%.
- Median 2.07%, low 1.98%
11:41:00 AM
(IS) Palestinian's Hamas and Fatah organizations sign reconcilation deal that calls for a transitional unity govt in the Palestinian Authority
- Hamas claims that 'all points of differences with Fatah have been overcome'
- Will be forming an interim unity Govt and holding elections
2:17:00 PM
(US) Fed's Bernanke: To reflect consensus of FOMC committee; Reiterates Fed prepared to adjust its holding of assets; Underlying inflation remains subdued
- New claims on unemployment show modest improvement
- Sees moderate recovery to persist through 2011; Acceleration of growth seen into 2012-13.
- Unemployment rate remains above the FOMC central tendency of 5.2-5.4%.
- Lower 2011 growth projections are the result of weak Q1.
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 US March Durable Goods Orders
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
12:30 FOMC Rate Decision
13:00 US Treasury's 5-year note auction
14:15 FOMC Press Conference
Todays Headlines
8:36:24 AM
(US) US Treasury Sec Geithner: Sees economic headwinds from oil prices; expects GDP at 3-4% over coming 2 years - press interview
- Oil prices at current level [$112/bbl currently] are not a threat to the global economic recovery.
- Underlying trends show resilience in the economy.
- Unemployment remains 'very high', current deficits are unsustainable and do matter as they impact growth. Should be able to achieve private job growth of 200K per month if US hits growth forecasts of 3-4%.
8:50:25 AM
(UK) BOE's Sentance: His differences with MPC are significant; UK inflation could stay higher than Euro Area
- Concerned that BoE's commitment to 2% inflation target has already been eroded by not raising rates
- Oil at $150 quite conceivable
- Notes that the BOE has allowed GBP to depreciate more than than was necessary to assist exports
- BOE has sent signal that it is prepared to accommodate price increases as economy adjusts
9:00:04 AM
*(US) FEB S&P/CASESHILLER 20 CITY M/M: -0.2% V -0.4%E; Y/Y: -3.33% V -3.3%E; HOME PRICE INDEX: 139.27 V 140.86 PRIOR
- Prior Composite-20 MoM revised from -0.22% to -0.25%
- Prior Composite-20 YoY revised from -3.06% to -3.10%
- Prior Home Price Index revised from 140.86 to 140.81
9:15:44 AM
(US) US Treasury Sec Geithner: Strong dollar is in US interest
- US will never engage in a strategy to drive the USD lower for trade advantage
- Can give Congress until end of June on the debt limit; Congress will pass the debt limit increase
- US confidence must be earned
10:45:57 AM
(EU) ECB's Gonzalez-Paramo reiterates rates remain accomodative, period of abnormally low rates could be nearing an end
- Notes rating agencies have not been a positive contributors, calls for more competitors in the rating agency sector.
- Suggests Spain should move away from CPI wage-indexation
11:02:37 AM
NY Fed: Purchased $1.99B in outright coupon purchase; dealers submitted $11.4B for consideration (bid to cover 5.7)
- Heaviest purchase was $762M in the 11/15/21 maturity
- Purchased maturities dated 05/15/2021 - 11/15/2027
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 US Feb S&P/CS Home Price Index, Feb S&P/CS Composite-20
10:00 US April Consumer Confidence, April Richmond Fed Manufacturing
16:30 API Crude Oil/Gasoline/Distillate Inventories
11:30 US Treasury's 4-week bill auction
13:00 US Treasury's 2-year note auction
Todays Headlines
1:52:27 AM
Moody's comments on global economic recovery: Sees rising momentum in global economic recovery but some challenges remain
- Higher oil prices are also a risk as it raises inflationary pressures
- Sees risks from rising real interest rates in advanced economies
- Emerging markets ability to manage overheating economies is also a risk
- Low availability of credit remains a risk
1:10:12 AM
*SPOT SILVER MOVES ABOVE $49.45 FOR FRESH ALL-TIME HIGH
- The level corresponds to the London fix on Jan 18th, 1980
**Insight:
$50.36 January 18, 1980 Intraday COMEX High
$52.50 January 18, 1980 Intraday CBOT High
10:00:02 AM
*(US) MAR NEW HOME SALES 300K V 280KE
- Prior revised higher from 250K to 270K
- Median price $213.8K v $207.7K (revised from $202.1K m/m)
- Months supply: 7.3 v 8.2 (revised from 8.9 prior)
- Homes for sale: 183K v 185K (revised from 186K prior)
10:30:06 AM
*(US) APR DALLAS FED MANUFACTURING ACTIVITY: 10.5 V 13.4E
- Manufacturing Production 8.1 v 24.1 prior
- Capacity Utilization 9.7 v 18.7 prior
- New orders 4.3 v 13.6 prior
- New order growth rate 5.0 v 10.0 prior
- Raw materials prices paid 56.6 v 57.2 prior
- Wages and benefits 15.9 v 11.9 prior
11:02:44 AM
NY Fed: Purchased $7.24B in outright coupon purchase; dealers submitted $16.95B for consideration (bid to cover 2.34)
- Heaviest purchase was $1.5B in the 03/31/18 maturity
- Purchased maturities dated 10/31/2016 - 03/31/2018
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.
*(CA) CANADA FEB RETAIL SALES M/M: 0.4% V 0.5%E; RETAIL SALES LESS AUTOS M/M:0.7% V 0.5%E
- Prior MoM revised lower from -0.3% to -0.4%
- Prior YoY revised lower from 0.0% to -0.2%
8:30:03 AM
*(US) INITIAL JOBLESS CLAIMS: 403K V 390KE; CONTINUING CLAIMS: 3.695M V 3.675ME
- Prior Initial Jobless Claims revised higher from 412K to 416K
- Prior Continuing Claims revised higher from 3.680M to 3.702M
9:45:39 AM
(UK) BOE Weale: Q1 GDP growth likely to be weaker than expectations; Biggest surprise has been weak output rather than the inflation data
- Construction a substantial drag
- decline seen in inflation data is good news but only reflects one month of data
11:20:50 AM
Preview: (US) Treasury's $14B 5-year TIPS results due out at 11:30ET
- $3B increase from April 2010 auction
- prior bid to cover ratio 3.15 with an average of 2.67 over the last 3 auctions
- prior indirect bidders took 23.1% of competitive bids
11:31:47 AM
*(US) TREASURY'S $14B 5-YEAR TIPS DRAW -0.18%; BID-TO-COVER RATIO 2.57 V 3.15 AT LAST YEARS AUCTION AND 2.67 OVER THE LAST 3
- 40.46% allotted at the high.
- indirect bidders take 39.46% of competitive bids, Directs 2.7%, primary dealers 57.8%.
- median -0.26%, Low -0.40%.
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 US Feb Existing Home sales MoM
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
7:59:37 AM
(CL) Chile Central Bank Gov de Gregorio: Inflation is the biggest challange for the economy
- Sees end-2011 Inflation at 4.3% vs. 3.0% target
- Country's consumption continues to show vigor
8:00:41 AM
(GR) Greece Fin Min Papaconstantinou: Again rules out debt restructuring, reiterates that debt load is sustainable
- €15B in State sales is resonable
- Greece still intends to go to debt market in early 2012 at the latest
9:46:04 AM
(GR) ECB's Orphanides: Greece debt restructuring would be harmful and unwise, speculation about Greek debt restructuring is damaging the eurozone
- There is absolutely no reason for concern about the sustainability of Greece's debt, notes that "all of Europe" is backing up Greece.
- Confident that Greece will be able to get its fiscal house in order.
- The trouble with the euro concerns poor government discipline, the currency itself has done what it was supposed to do.
- Interest rate corridor should be re-widened sooner rather than later.
11:02:25 AM
NY Fed: Purchased $1.5B in TIPS securities; dealers submitted $7.36B for consideration (bid to cover 4.91)
- Heaviest purchase $802M in the 02/15/41 maturity (longest dated)
- Purchased maturities dated 04/15/2013 - 02/15/2041
10:00:05 AM
*(US) MAR EXISTING HOME SALES: 5.1M V 5.00ME
- Prior revised higher from 4.88M to 4.92M
**Metrics:
- Median existing home price: $159.6K v $156.1K prior (-5.9% y/y, +2.2% m/m)
- Total Months Supply: 8.4 months vs. 8.5 (revised from 8.6 months prior)
- Distressed sales: 40% v 39% prior
- Condo sales: +1.6% v -10% m/m
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 CPI
10:00 US Feb Existing Home sales MoM
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
8:21:00 AM
(US) China rating agency Dagong chief Guan: Agrees with S&P's downgrade of US sovereign outlook
- Views S&P outlook move as mere "gesture," Believes that S&P would nott actually downgrade the US sovereign AAA-rating.
**Reminder: Dagong cut its rating on the U.S. last November to A+ from AA
8:48:50 AM
(US) Treasury Sec Geithner: Prospects for improving the US fiscal situation are better, disagree with S&P's view as negative outlook for the US - CNBC interview
- Notes reforms are necessary to force the country to live within its means; US can lock in clear targets
- The $4T in deficit reduction is 'achievable'
8:30:03 AM
*(US) MAR HOUSING STARTS: 549K V 520KE; BUILDING PERMITS: 594K V 540KE
- Prior Housing Starts revised higher from 479K to 512K
- No further revision to Building permits
10:14:35 AM
(NZ) Fonterra Global Dairy Trade auction: Milk product prices +0.1% from prior auction on Apr 5th (-2.4% prior)
- Average winning auction price $4,293 /metric ton v $4,280/metric ton prior
- Whole milk powder +0.8% v -5.6% prior
- Anhydrous milk fat -0.8% v -1.7% prior
11:02:20 AM
NY Fed: Purchased $6.68B in outright coupon purchase; dealers submitted $30.09B for consideration (bid to cover 4.51)
- Heaviest purchase was $5.18B in the 04/15/14 maturity
- Purchased maturities dated 10/31/2013 - 03/31/2015
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 CPI
08:30 US March Housing Starts, Building Permits, Canada March Housing Starts, Building Permits
16:30 API Crude Oil/Gasoline/Distillate Inventories
11:30 US Treasury's 4-week bill auction
Todays Headlines
8:42:51 AM
(CH) China Central Bank (PBOC) advisor: More policy tightening should be expected all year
- PBOC's Zhou: Must stay on top of the issues in the property market, China currently has excessive liquidity
- Notes that current FX reserves are in excess of demand
9:41:58 AM
(US) Moody's issues comments on US debt, debate on whether debt is better for long term fiscal positioning is changing
- Notes that a change in the upward movement in debt path has yet to be seen, but the debate on the fiscal situation is ultimately a positive
9:45:41 AM
(US) S&P Analyst Beers: $4T cut in the US deficit cut is useful but not enough; change in outlook does not necessarily lead to a downgrade - TV interview
- Reiterates that S&P believes there is a one-in-three chance of a US sovereign downgrade.
- Not advocating any particular budget route
10:22:48 AM
(US) Fed's Fisher: Inflation pressures are present even in light of high unemployment levels; coordination on Global policy remains challenging
- The US is beginning to address its long-term financial problems.
- Reiterates that the Japan earthquake is unlikely to impact the US economy in a lasting way
- Spain is less of a concern, has made progress
10:42:26 AM
(US) Fed's Lockhart: A recessionary impact could be felt if oil moves above $150/bbl
- US Q1 growth likely to come in below prior forecasts, higher oil prices have hurt consumer activity, but not having a severe effect. Energy prices could remain elevated for some time.
- Unclear what 2nd and 3rd round impacts the Japan crisis may have
- Businesses access to credit is not a problem
12:00:21 PM
(US) Fed's Bullard: Use of core inflation metric is arbitrary, calls for more efforts to control headline inflation
- Q1 GDP may be weaker than expected, growth for rest of the year should be reasonably strong.
- Inflation is low but prices and inflation expectations are moving higher.
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.
"No one means all he says, and yet very few say all they mean, for words are slippery and thought is viscous.”
Market Week Wrap-Up
- The first quarter earnings season kicked off this week and investors will be watching results closely over the next few weeks for insight into the strength of the emerging recovery and to see whether rising commodities are a real threat to margins or just a passing problem. Poor showings from JP Morgan, Bank of America and Google helped weigh down equities this week, but benign US CPI data erased most of the index losses on Friday. Equities fell overseas after Japan raised the severity rating of its nuclear crisis to the highest level, equating the Fukushima incident with the 1986 Chernobyl disaster. For the week the NASDAQ dropped 0.6%, the S&P500 lost 0.6%, while the DJIA fell 0.3%. As the G20 continued discussions over global imbalance indicators, the week's trade data was mixed. The US trade deficit narrowed in February from a seven-month high in January, with imports down 1.7% y/y and exports down 1.4%. China reported a Q1 trade deficit as imports soared to an all-time high. Manufacturing is again looking strong, as the April Empire Manufacturing index rose to its highest level in a year and the employment component jumped to its highest since May 2004. The steady gains in US retail sales continued, growing in March for a ninth consecutive month. Congress managed to pass an FY11 budget with nearly $40B in cuts, but GOP leaders were forced to fall back on Democratic support in the face of 59 Republican no votes. The outcome augurs poorly for upcoming FY12 budget battles and the debt ceiling vote, both of which will surely provider investors with plenty to worry about. WTI crude, which came into the week very strong around $113, lost momentum on Monday, when Goldman Sachs advised investors to take profits before oil and other commodity markets roll over, sending crude back to $106 mid week. Crude climbed back toward $110 at week's end, while gold closed at another record above $1,486/oz.
- JP Morgan and Bank of America disappointed markets with their Q1 results. JP Morgan beat EPS expectations and grew earnings considerably on a y/y basis, although revenue was lower y/y and missed expectations. The big rise in profits was largely due to further releases from credit provisions, and the bank said it is still taking "extraordinarily high" losses from mortgages. The firm's outlook for the rest of 2011 was not especially rosy. Bank of America's first quarter profits fell nearly 40% y/y, missing estimates by a very wide margin, as higher expenses from delayed home foreclosures weighed on its mortgage business. These results shed some light on why the Fed refused to let the bank raise its dividend last month, and in fact CEO Moynihan said that the bank would continue to focus on its more immediate mortgage problems before getting around to raising the dividend. Citigroup, Goldman Sachs and Morgan Stanley will report next week.
- The results out of major tech names were also problematic. Shares of Google dropped 8% after the firm displayed unsettling trends in its first quarter report. Former CEO Eric Schmidt has taken the training wheels off and investors did not like the more than 50% surge in spending for new hires, rising salaries and more marketing expenditures disclosed with earnings. Multiple analysts cut their ratings on Google, with some analysts concerned about expenses growing quicker than sales. Fairchild was the first semiconductor name of the season to report results. The company met expectations and offered a strong revenue forecast for the second quarter, although the market was much more interested in the impact from the Japan crisis on the firm's results. Executives indicated that they were not seeing a surge of extra business yet (Fairchild has no operations in Japan), and Fairchild's shares traded off hard in the wake of the report. Analysts will be watching the industry closely for both positive and negative outcomes stemming from Japan. Cisco followed up on its warnings from last week and announced that it would restructure aspects of its consumer business, cut 550 jobs, kill off its Flip video recorder business and consolidate various video products.
- In other earnings, Alcoa's first-quarter profits beat estimates, benefitting from higher alumina prices and climbing demand levels. Note that executives said demand was only growing in Q2, even as price pressures continue. Supervalu's Q4 profits were very strong, although revenues were just in line, and the firm offered very strong initial profit guidance for its full year. Shares of SVU were up 15% at one point following earnings.
- In merger news, Cephalon said it would be open to offers to acquire the company worth more than the $73/share bid Valeant announced last week. Endo Pharmaceuticals struck a deal to buy medical devices maker American Medical Systems for about $2.6 billion in cash, at $30/share. Level 3 Communications said it would buy smaller rival Global Crossing for about $1.9 billion in an all stock deal. Tyco International shares surged mid-week as reports emerged that Germany's Schneider Electric put out a tentative $30B offer, at $63/share, to entice Tyco into talks. Shares of Tyco tailed off on Friday on concerns that the leak to the media might scuttle any potential deal and that Schneider board members are not all on board with the idea of the merger.
- Demand for US Treasury debt was robust all week even in the face of $66B in coupon supply. Several influential economists downgraded their Q1 GDP forecasts after some choppy US trade data. Fed speak remained plentiful but it is clear the doves remain steadfast in their belief that commodity price gains will ultimately be transitory and now is not the time to start tightening policy. The growing divide between Fed and ECB policy continues to garner attention as was evident in the continued narrowing of the spread between the US 10-year and German bund yield. Friday's CPI data helped narrow that spread to less than three basis points. US bond bulls were aided by the softer than expected core CPI data and continued to bid up prices, putting this week's coupon auction participants well into the black. The benchmark 10-year is up more than half a point dropping the yield to 3.4%, down nearly 20 basis points this week.
- Peripheral debt concerns once again failed to derail euro sentiment, and EUR/USD traded in a relatively tight range, between 1.4500 and 1.4380 as inflation concerns and interest rate differentials continue to be the real force driving FX sentiment. The big gain in Germany's March wholesale price data reinforced hawkish views at the ECB in the wake of last week's 25 basis point hike. The UK's March CPI and RPI data was slightly softer than expected, forcing down gilt yields; at the same time, the UK's weekly jobless claims ticked up unexpectedly. The relatively soft March US inflation data was right in line with expectations, and some are saying that the Fed should see the mild core CPI increase as vindication for arguments that higher energy prices of late will only have a temporary effect on inflation. In a CNBC interview before the data, Fed Governor Plosser stated that in the medium- to long-term, only headline inflation matters, and core inflation is merely a useful guideline. Meanwhile, the G20 meeting in Washington DC prompted plenty of discussion about expanding the basket of currencies backing the IMF's Special Drawing Rights (SDRs), with plenty of focus on the yuan.
- There was a mild level of hysteria about potential Greek debt restructuring this week. Arguments about the inevitability or the impossibility of Greek restructuring have been percolating for months, although comments from German Finance Minister Schaeuble were the immediate catalyst this time around. During an interview with Die Welt on March 13th, Schaeuble held out the possibility that a June audit may show that Greece will not be able to overcome its debt load without relief and that "other steps" might need to be taken. European policymakers scrambled to reassure investors that restructuring was not on the agenda after spreads blew out, saying such a step could have dire consequences for banks and the fragile economy. Note that S&P commented midweek that there is a one-in-three chance of Greek restructuring being needed, while unnamed EU sources quoted in the press estimated that the country needs 40-50% of its debt wiped away to ensure sustainability.
- New York Fed President Dudley made an unusual foray into the world of FX earlier in the week. Dudley commented that the launch of QE2 was not designed to affect the USD in any particular way and also noted that USD price volatility - not the outright level of the USD - was the factor to watch. FX dealers seemed aghast that the Treasury had yielded its responsibility for talking about the dollar to Fed officials, and one pointed out that there was a time when no Fed official would dare comment on the dollar.
- Better-than-expected economic data out of China served as bookends to less upbeat developments stateside. Over the weekend, the China Commerce Ministry disclosed a March trade surplus of $140M against expectations for a second monthly deficit. While the financial press focused on the numbers Q1 trade deficit, the monthly surplus was particularly noteworthy given late March commentary from Commerce Minister Deming, who had forecasted a deficit even wider than the -$7.3B print in February. Both export and import components rose above expectations on a y/y basis, tempering skeptical sentiment calling for a slowdown in the world's growth engine. On Friday, China also released better than expected Q1 GDP, as well as March industrial production (9-month high), and fixed asset investment (8-month high) data. March CPI was likewise on the hotter side at 5.4%, above 5.2% consensus and at the highest y/y rate since September of 2008. Despite the rising expectations of another RRR rate hike, the PBoC merely reflected on rising inflationary pressures. In addition, it continued to strengthen the yuan to a new post-revaluation USD/CNY low of 6.53. Sentiment of stronger currency prerogative as an inflation-fighting tool was also floated at the Beijing meeting of the BRICS (now formally including South Africa), with members calling for a broader based international reserve currency system.
Week of 4/18/2011 thru 4/22/2011
Monday, April 18, 2011
Economic
10:00 US April NAHB Housing Index
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, April 19, 2011
Economic
07:00 Canada March CPI
08:30 US March Housing Starts, Building Permits, Canada March Housing Starts, Building Permits
16:30 API Crude Oil/Gasoline/Distillate Inventories
11:30 US Treasury's 4-week bill auction
Wednesday, April 20, 2011
Economic
10:00 US Feb Existing Home sales MoM
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, April 21, 2011
Economic
08:30 Canada Feb Retail Sales, US Initial Jobless Claims, Continuing Claims
10:00 US April Philadelphia Fed, March Leading Indicators, Feb House Price Index MoM
10:30 DoE Natural Gas Inventories
11:30 US Treasury's 5-year TIPS auction
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 US March CPI, March CPI Ex Food & Energy, March CPI Core Index SA, April Empire Manufacturing
09:00 US Feb Net TIC Flows
09:15 US March Industrial Production, March Capacity Utilization
09:55 US April University of Michigan Confidence
Todays Headlines
7:02:00 AM
(GE) Germany Finance Ministry releases new economic forecasts, raises 2011 GDP growth view to 2.6% from +2.3% prior (as expected)
- Sets initial 2012 GDP growth at 1.8%
- Forecasts growth to average around 1.75% annually through 2015
- Forecasts 2011 CPI at 2.4% and at 1.9% in 2012
- Forecasts 2011 Exports at 7.5% and at 6.5% in 2012
7:06:15 AM
(EU) PIMCO's El-Erian: Believes Portugal, Ireland and Greece will have to restructure debt, restructuring for these nations is currently being priced in - CNBC interview
- Sovereign crisis in Europe continues because debt issue cannot be resolved with more debt.
- Spain bailout may be next, but Spain will likely avoid debt restructuring.
- Does not expect the Fed to launch a QE3 program.
- US Q1 GDP may be at 2% or below.
8:00:22 AM
(CZ) Czech Republic releases updated economic forecasts: Lowers 2011 and 2012 GDP
- Cuts 2011 GDP to 1.9% from +2.2% prior view
- Cuts 2012 GDP to 2.3% from +2.7% prior view
- Lowers 2011 CPI view to 2.1% from 2.3% prior
- Raises 2012 CPI view to 3.2% from 2.4% prior
- Lowers end-2011 Debt to GDP Ratio at 41.4% from 42.1% prior
- Lowers 2011 Fiscal Deficit to GDP Ratio to 4.2% from 4.6% prior
8:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 412K V 380KE; CONTINUING CLAIMS: 3.68M V 3.705ME (highest intial jobless claims in in two months)
- Prior Initial Jobless Claims revised higher from 382K to 385K
- Prior Continuing Claims revised higher from 3.723M to 3.738M
8:34:39 AM
(US) Treasury Sec Geithner: Confident that Congress will raise the debt ceiling; The budget is going to be the dominant policy issue; need to refocus on financial reform
- Global economy is gradually strengthening, despite ongoing risks from higher crude prices, the Japan situation and the EU debt crisis.
- US has more room to raise taxes than other countries do; low taxes on the very wealthy are unsustainably low.
- Does not see any enthusiam for implementing a federal value added tax (VAT).
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 US March PPI, March Feb PPI Ex Food & Energy, March PPI Core, Initial Jobless Claims, Continuing Claims
10:30 DoE Natural Gas Inventories
11:00 US Treasury's TIPS annoucement
13:00 US Treasury's 30-year bond auction
Maintenance
MAITENANACE
Todays Headlines
8:30:05 AM
*(US) FEB TRADE BALANCE: -$45.8B V -$44.0BE
- Prior Trade Balance revised lower from -$46.3B to -$47B
9:21:52 AM
(GR) ECB's Mersch: There are no signs that Greece cannot carry out its reforms; Eurobond concept is premature
- Euro area must pursue structural and budgetary reforms
- Low interest rate policy can only be temporary and could lead to distortions
- ECB responds to inflation in Euro area, not Germany
10:30:50 AM
(CA) Bank of Canada Monetary Policy Report: Sees gradual rate hikes over projection period to 2013
- Reiterates view that further rate hikes need to be carefully considered
- Risks to inflation roughly balanced; Total CPI to peak around 3.0% on a monthly basis in Q2
- Key risks related to strong CAD currency and commodity prices
- Raises Q1 GDP growth to 4.2% from 2.5% prior
11:02:25 AM
NY Fed: Purchased $5.0B in outright coupon purchase; dealers submitted $42.88B for consideration (bid to cover 8.55)
- Heaviest purchase was $3.95B in the 02/28/13 maturity
- Purchased maturities dated 10/15/2012 - 09/30/20
11:22:58 AM
(CH) Energy researchers at China's National Development and Reform Commission (NDRC) say China should double solar energy targets through to 2015
- Cites recent danger following the Fukushima nuclear power plant
12:08:20 PM
(US) US President Obama's upcoming speech to outline cuts to budget of approx $4T over 12 years - financial press citing sources
- Will cut deficits to 2.5%/GDP in 2015 and closer to 2%/GDP by 2020
- Plan to include a failsafe that would be triggered that would cause broad cuts
- VP Biden to join bipartisan discussions on a framework
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 US March Retail Sales
10:00 US Feb Business Inventories
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's 10-year note auction
14:00 Fed's Beige Book
Todays Headlines
8:30:05 AM
*(US) FEB TRADE BALANCE: -$45.8B V -$44.0BE
- Prior Trade Balance revised lower from -$46.3B to -$47B
8:47:27 AM
(US) Fed's Dudley: US economic growth in Q1 may be a bit disappointing, at +3% or less - Q&A
- The risk of deflation has fallen significantly; inflation may peak in the 2.5-3.0% range
- Notes that paying interest on excess reserves could contain inflation
9:19:10 AM
(US) Fed's Hoenig: The biggest US banks still need to be broken up; believes Dodd-Frank legislation will fail to meet its goals
- Basel III capital requirements are far too low.
- The largest US banks, like Bank of America and Citibank, should be classified as GSEs, because that's what they are.
- Small banks are at a great disadvantage
10:00:44 AM
IMF: Debt ratios in advanced economies are still rising with risk to fiscal sustainability remaining elevated - fiscal monitor report
- Most economies are still facing difficult fiscal situations in the aftermath of the global economic downturn
- deficit-cutting efforts could be undermined by interest rates rising from their current exceptionally low levels, as well by implementation hurdles, citing elections coming up in 2012 in various countries
12:00:44 PM
OPEC April Monthly Report: Sees 2011 world demand +1.4M bpd v 2.0M bpd in 2010
- Non-OPEC oil supply is expected to increase by 0.6 mb/d in 2011, an upward revision of 0.1 mb/d from the previous month.
- The demand for OPEC crude in 2010 is estimated at 29.5 mb/d, around 0.2 mb/d higher than in the previous report. With this adjustment, the demand for OPEC crude stood at about 0.4 mb/d higher than the year before.
1:01:42 PM
*(US) TREASURY'S $32B 3-YEAR NOTE AUCTION DRAWS 1.28%; BID-TO-COVER RATIO: 3.25 V 3.22 PRIOR AND 3.13 AVG OVER THE LAST 10 AUCTIONS
- Indirect bidders take 33.7% of competitive bids; direct bidders take 8.93% of competitive bids, dealers take 57.4%.
- 76.1% allotted at high
- median 1.249%, low 1.192%
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 US Feb Trade Balance, March Import Price Index
10:00 US April IBD/TIPP Economic Optimism
16:30 API Crude Oil/Gasoline/Distillate Inventories
11:30 US Treasury's 4-week bill auction
13:00 US Treasury's 3-year note auction
14:00 US March Budget Statement
Todays Headlines
5:16:22 AM
*(RU) RUSSIA FEB TRADE BALANCE: $17.4B V $16.7BE
- Exports $39.0B v $37.0Be
- Imports: $21.6B v $21.5Be
6:01:44 AM
*(IR) IRELAND FEB INDUSTRIAL PRODUCTION M/M: -2.4% V +0.1% PRIOR; Y/Y: -0.3% V +3.4% PRIOR
- Prior MoM revised higher from -1.0% to +0.1%
- Prior YoY revised higher from 1.4% to 3.4%
6:02:31 AM
G20 to weigh currency reforms and consider rules for FX devaluation at this week's meeting - financial press citing German official
- G20 will also weigh guidelines for drawing developing world currencies more fully into a global system dominated by the dollar, euro, yen and pound.
- US and Japan do not have effective medium term strategy for budget consolidation
7:57:43 AM
Barclays raised Europe Food & HPC to Overweight from Equal Weight
- RB.UK, BN.FR rated Equal Weight
- NESN.SZ, HEN.GE rated Overweight
- OR.FR, BEI.GE rated Underweight
10:00:29 AM
*IMF UPDATES WORLD ECONOMIC OUTLOOK: MAINTAINS WORLD ECONOMIC OUTPUT ESTIMATES AT 2011 +4.4%, 2012 +4.5%
- Emerging Asia and much of Latin America are now operating close to potential, while the economies at the center of the recent crisis, the United States and Europe, have substantial excess capacity. Emerging economies need to prevent boom conditions from developing into overheating conditions
11:03:06 AM
NY Fed: Purchased $7.86B in outright coupon purchase; dealers submitted $27.1B for consideration (bid to cover 3.45)
- Heaviest purchase was $1.82B in the 06/30/17 maturity
- Purchased maturities dated 10/31/2016 - 03/31/2018
12:15:19 PM
(US) Fed Vice Chair Yellen: Easy money policies are still needed, a sharp economic rebound in the US is unlikely
- Long-term inflation expectations remain anchored, if long-term expectations remain stable, there is no need for a substantial policy shift.
- Cannot take the stability of long-term inflation expectations for granted, underlying inflation level may be a better gauge of prices.
- Still expects inflation to eventually return to subdued growth.
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
10:00 US Feb Wholesale Inventories
Todays Headlines
8:30:02 AM
*(US) INITIAL JOBLESS CLAIMS: 382K V 385KE; CONTINUING CLAIMS: 3.723M V 3.70ME (lowest continuing claims since Oct 2008)
- Prior Initial Jobless Claims revised higher from 388K to 392K
- Prior Continuing Claims revised higher from 3.714M to 3.732M
8:32:32 AM
(EU) ECB's Trichet: Current policy is "very accomodative," rate hike was needed to curb inflationary risks to outlook - prepared remarks
- Liquidity remains plentiful, could add to price pressures.
- Reiterates that inflation expectations must remain anchored, important to avoid broad based medium term inflation pressures.
8:34:32 AM
*(EU) ECB'S TRICHET: TO CLOSELY MONITOR PRICE DEVELOPMENTS
- Sees potential risks from Japan crises, geopolitical risks are keeping oil prices high.
- Higher CPI rates largely reflect high commodity prices, CPI pressures are being seen in production.
- Reiterates that second-round wage effects must be avoided. Energy, commodities and tax effects are also risks to inflation outlook.
8:40:33 AM
(PO) Portugal to make formal request for aid later today; no comment on size of request- Aid request has certain limitations due to govt's caretaker capacity, and cannot be a short term loan.
***Reminder: Portugal's snap elections on Sunday, 5th June
8:47:05 AM
(EU) ECB Trichet: Rate hike decision was unanimous, have not decided whether today's increase is the first of a series or not - Q&A
- ECB will take the appropriate decisions to maintain price stabiliy as we have in the past
- ECB will not accept second-round effects of inflation. Has not seen an unanchoring of inflation expectations.
- Remain extremely alert to second round effects which will not be tolerated.
10:39:21 AM
(JP) Magnitude 7.1 (revised from 7.4) earthquake strikes offshore northeastern Japan, tsunami alert issued - Japan press
- Press reports indicate a one-meter high tsunami is expected.
- Quake was centered 61 miles east of Sendai, near the epicenter of the 9.0 quake last month.
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.
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
08:30 US Initial Jobless Claims, Continuing Claims
10:30 DoE Natural Gas Inventories
11:00 US Treasury's note announcement
15:00 US Consumer Credit
Todays Headlines
6:30:06 AM
(GR) EU Commission: Not aware of any Greek debt restructuring discussions; Reiterates view that country remains on the right path
- Every evaluation of Greece has been positive
- Follow up: Greek Parliamant Leader: Restructuring would be negative for both GGreece and the creditors; planned austerity measures are being implemented
6:00:02 AM
*(GE) GERMANY FEB FACTORY ORDERS M/M: 2.4% V 0.5%E; Y/Y: 20.1% V 17.4%E
- Prior MoM revised higher from 2.9% to 3.1%
- Prior YoY revised higher from 16.0% to 16.5%
6:34:50 AM
(PO) Portugal Finance Ministry: Current yields indicate 'irreparable damage' from austerity rejections; Reiterates Govt to take all measures to ensure liquidity and financing for the economy
- The treasury auctions earlier confirm deterioration of financing conditions.
- The govt is in conditions to meet the financial commitments.
- Govt is in constant contact with the central bank regarding finance conditions for the banking sector.
- No discussions with EU on how to meet the immediate borrowing needs.
7:27:00 AM
(US) Fed's Lockhart: Now is not the time for the Fed to reverse course on QE2, must remain flexible on monetary policy
- Tighther policy may not be needed by the end of 2011.
- Monetary policy is not fueling commodity prices; higher prices are the result of supply and demand issues.
- Budget deficit v GDP is approx 3x what it should be.
- Inflation had increased as hoped, sees it leveling off.
8:55:00 AM
(EU) Outright peripheral yields lower/Spreads/CDS tighter in early NY trading; Dealers cite position unwinding
- Portugal 10-year gov't yield at 8.85%; lower by over 10bps
- Portugal 5-year gov't yield at 9.85%; lower by over 30bps
- Irish 10-year gov't yield at 9.45% ; lower by almost 35bps (near 5-week lows)
10:51:23 AM
(EU) EU Publishes consultation paper on Corporate Governance and financial market issues
- Sovereign risk and banking sectors are still issues for financial markets
- Concerned about dollar funding at banks and maturity disparities
- Sees new risks to markets including commodities and high frequency trading
- Individual EU states must support the banking stress tests with commitments
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.
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
7:55:04 AM
*(PD) POLAND CENTRAL BANK RAISES BASE RATE BY 25BPS TO 4.00%; AS EXPECTED
- Press conference to begin at 10:00 ET (14:00 GMT)
**Insight: This is the second rate hike for a cumulative total of 50bps in the current tightening cycle in Jan 2011.
8:39:48 AM
(PD) Poland govt approves 2012 budget
- To extend freeze on public sector wages to 2012; Sees end-2012 unemployment rate at 10% with wage growth at 5.8% y/y
- Sets 2012 budget deficit at PLN37B, 2013 set at PLN30B, 2014 set at PLN28B
- Sets 2012 net borrowings needs at PLN51.9B, 2013 set at PLN32.1B, 2014 set at PLN35.1B
8:45:57 AM
(US) PIMCO's Gross: Fed's Bernanke is too optimistic about inflation; believes low rates will drive inflation higher
- Rebalancing of tax burden is required.
- Based on current conditions, a normalized 10-year treasury rate would be 4.5-5.0%
10:03:31 AM
(NZ) Fonterra Global Dairy Trade auction: Milk product prices -2.4% from prior auction on Mar 15 (-8.2% prior)
- Average winning auction price $4,280 /metric ton v $4,443/metric ton prior
- Whole milk powder -5.6% v -11.4% prior
- Anhydrous milk fat -1.7% v -4.5% prior
10:34:46 AM
(US) Treasury Sec Geithner reiterates a US default on obligations could be 'catastrophic', would be inconceivable for the US Congress not to raise debt limit
- Geithner yesterday commented that the US would reach its debt limit on May 16 even with the Treasury taking certain extraordinary measures to push back the date.
- Reiterates that deficit cutting should occur but not at the expense of the recovery
- Calls the housing market still in 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.
10:00 US March ISM Non-Manufacturing
11:30 US Treasury's 1-month and 1-year bill auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
14:00 FOMC minutes
Todays Headlines
5:00:44 AM
(US) Paynet Feb US Small Business Loan Accounts Behind Over 30 days: 2.46% v 2.49% prior
- Small business loan accounts behind more than 180 days: 0.75% v 0.79% m/m
- Small business lending index: +15% v +20% prior.
5:00:03 AM
*(EU) EURO ZONE FEB PPI M/M: 0.8% V 0.8%E; Y/Y: 6.6% V 6.7%E
- Prior MoM revised lower from 1.5% to 1.3%
- Prior YoY revised lower from 6.1% to 5.9%
8:54:45 AM
(FR) France Debt Agency (AFT) sells approx €8.0B vs. €8.0B Indicated in 3-month, 6-month and 12-month bills
- Sells €4.05B in 3-month Bills; avg yield 0.839%
- Sells €2.0B in 6-month Bills; avg yield 1.028%
- Sells €2.01B in 12-month Bills; avg yield 1.359%
8:54:45 AM
(FR) France Debt Agency (AFT) sells approx €8.0B vs. €8.0B Indicated in 3-month, 6-month and 12-month bills
- Sells €4.05B in 3-month Bills; avg yield 0.839%
- Sells €2.0B in 6-month Bills; avg yield 1.028%
- Sells €2.01B in 12-month Bills; avg yield 1.359%
11:02:39 AM
NY Fed: Purchased $8.03B in outright coupon purchase; dealers submitted $27.9B for consideration (bid to cover 3.48)
- Heaviest purchase was $5.99B in the 03/31/18 maturity (longest dated)
- Purchased maturities dated 10/31/2016 - 03/31/2018
11:32:27 AM
(BR) Fitch upgrades Brazil ratings one notch to BBB from BBB-; outlook revised to Stable from Positive
- The upgrade reflects Fitch's assessment that the sustainable potential growth rate of the Brazilian economy has increased to 4%-5%, supporting the medium-term fiscal outlook and the continued strengthening of its external liquidity position, which increases the country's shock-absorption capacity.
- The transition of power to the Rousseff administration has been smooth and the consensus on responsible macroeconomic policies remains well-anchored.
-Moreover, the Rousseff administration has displayed signs of greater fiscal restraint, which coupled with healthy growth prospects should allow for a fall in Brazil's heavy general government debt burden.
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.
"Laugh and the world laughs with you, snore and you sleep alone.”
Market Week Wrap-Up
- The DJIA is presently at three-year highs and the S&P500 is not far from three-year highs in the wake of this morning's March payrolls reports. While the numbers were not terribly higher than the Feb report, the higher-than-expected figures plus the breach of the 200K level is fueling optimism. Note that there have been some questions about the flat hourly earnings data, which may indicate that the jobs being created are not of the highest quality. The ISM manufacturing report was robust as well, although it backed off the nearly seven-year high hit in February.
With the recovery looking more entrenched than ever, the policy debate among Fed officials is heating up. Late yesterday Kocherlakota suggested the Fed could need to raise rates this year while hawk Plosser spoke this morning just before the jobs data, warning that the stronger rebound in the economy may require action on interest rates sooner than expected. Fed's Lacker took the middle road, noting that interest rate hikes could be warranted in 2011 but also said he does not feel the Fed is behind the curve. The Fed's Dudley confirmed his dovish credentials, saying that now is not the time to reverse policy and start to tighten. Initially the Greenback rallied pressuring commodities, metals in particular, and Treasury yields rose. The 10-year topped 3.5% for the first time since late Feb but by the late NY morning the dollar was reversing again led by gains in the Euro and Pound and yields were backing off from their highest levels.
- Two major deals were announced this morning. Nasdaq and IntercontinentalExchange launched a rival bid for NYSE Euronext, offering $42.50 a share in cash for the firm, 19% higher than the Deutsche Boerse bid. Under the proposal, ICE would get NYSE's derivatives business while Nasdaq would acquire its stock exchanges and options businesses. There is plenty of scope for antitrust problems with the deal, although they may be overshadowed by fears of losing the emblematic NYSE to foreign ownership. Shares of NYX are up nearly 12% on the news, NDAQ is up 2% and ICE was down as much as 4% at one point, though its coming back. SRA International received a $31.25/shr cash bid from PE name Providence Equity, in a deal valued at $1.88B.
- In other equity news, computer peripherals maker Logitech cut its FY11 revenue outlook due to projected shortfalls in sales from weak EMEA markets. Shares of LOGI are down 17%. A broad spectrum of gaming and hotel stocks are on the move this morning after Macau reported March gambling revenue that was up 48% y/y. Las Vegas Sands, which was down yesterday due to news of a Chinese investigation, is up 4% today on the news. Hotel names with big Macau exposure HMIN and SVN are up 8% and 6%, respectively. Gaming name Melco Crown gained 3% before the open, but has declined to unchanged in the early going. American Apparel is down approximately 25% this morning after warning that the company will declare bankruptcy shortly if it can't get more funding.
- The strong US employment report helped fuel the dollar's move higher against the major pairs. Continued hawkish Fed comments pointing in the direction of tighter policy also gave the greenback a lift, particularly in the JPY and CHF pairs. USD/JPY surged above the 84.70 level for its highest reading in almost four months. USD/CHF jumped a big figure to test the 0.9340 level. For the moment the market ignored Plosser's comment that the G7 currency intervention did not represent a fundamental policy shift and would not be an ongoing process. EUR/USD remained locked within its recent March trading range, hovering around the 1.41 level.
Week of 4/4/2011 thru 4/8/2011
Monday, April 04, 2011
Economic
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, April 05, 2011
Economic
10:00 US March ISM Non-Manufacturing
11:30 US Treasury's 1-month and 1-year bill auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
14:00 FOMC minutes
Wednesday, April 06, 2011
Economic
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, April 07, 2011
Economic
08:30 US Initial Jobless Claims, Continuing Claims
10:30 DoE Natural Gas Inventories
11:00 US Treasury's note announcement
15:00 US Consumer Credit
Friday, April 08, 2011
Economic
07:00 Canada March Employment
10:00 US Feb Wholesale 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.
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