"The main dangers in this life are the people who want to change everything - or nothing. ”
Market Week Wrap-Up
- Global equity markets traded sideways this week in the absence of any particularly good news. The peripheral European debt drama dominated headlines (the tabloids stuck to salacious coverage of the D.S.K. story), starting with the approval of Portugal's €78B bailout package and continuing with European official's semantic shift to discussions of Greek debt "rescheduling" or "reprofiling." No matter what the words were used to describe it, some form of restructuring is looking more and more likely. The euro fared well for most of the week, until a confluence of a cautious economic growth forecast in Germany, jitters ahead of local elections in Spain, and Norway suspending some minor aid to Greece forced EUR/USD to give up about half its gains on the week. On Friday, Greece was also hit with another downgrade from Fitch, which warned Europe that any extension of the maturity of existing bonds would be considered to be a "default event." Treasury yields consolidated at multi-month lows, and corporate America used the opportunity to rush to market with billions in new debt offerings. Continuing caution about the global economic recovery kept WTI crude below $100 all week, while spot gold only regained the $1,500 handle on Friday. All three leading US equity indices were lost some ground this week, with the DJIA down 0.7%, the S&P500 off 0.3% and the Nasdaq falling 0.9%.
- Manufacturing has led the emerging economic recovery for the last six months or so and economic data out this week suggested the US manufacturing sector has weakened recently, although market participants continue to debate whether this reflects momentary softness or a fundamental slowing of the recovery. The Commerce Department's April report on Industrial Production showed growth was flat y/y, the worst reading in six months. Two regional Fed industrial surveys for the month of May were also quite poor: the Philly Fed index hit its lowest level since last October, while the New York Fed's Empire Manufacturing survey dropped sharply from April levels, including a notably lower new orders sub-index, even as the prices paid and employment components stayed strong.
- Monday saw the Nasdaq/ICE consortium withdraw its takeover proposal for NYSE Euronext. The move comes following discussions with the US DoJ, which had told Nasdaq that the DoJ would have filed suit to block Nasdaq's bid for NYSE due to competition concerns. In other M&A news, Teva acquired a 57% majority stake in Japanese generic drug maker Taiyo Pharmaceuticals for $1.3B, expanding its global generic empire. Recall that earlier this month Teva agreed to buy Cephalon for $6.8B, and just last August it acquired Germany's Ratiopharm for $5B. Liberty Media offered to acquire Barnes & Noble for $17/share in cash, but Barnes & Noble has yet to acknowledged or comment on the offer. Shares of BKS jumped more than 30% on the news. Finally Thermo Fisher Scientific signed a deal to acquire allergy and autoimmunity diagnostics firm Phadia for €2.5B in cash.
- Quarterly earnings reports from Hewlett-Packard and Dell stood in stark contrast to each other this week. H-P announced its results a day ahead of schedule after the leak of an internal memo in which CEO Apotheker warned of a tough July quarter and ordered executives to maintain an iron grip on costs. The quarterly results were poor and the firm cut guidance on softness in services revenues. Dell, on the other hand, beat profit expectations thanks to a gross margin rate around two-decade highs and offered unusually strong revenue guidance. Both H-P and Dell offered cautious comments about the consumer PC markets, while also saying that commercial sales remain strong. Note that last Friday, Gartner's Q1 preliminary global PC shipments data was -1.1% y/y to 84.3M units, the first decline in the series in six quarters.
- The major US retailers offered March quarter results this week. Wal-Mart and Target just met expectations on disappointing comps, and executives from both firms had little in the way of positive commentary on the US consumer during their conference calls. Discounter BJs did quite well, and including gasoline sales racked up an impressive +6.3% quarterly comp figure, although executives warned that purchasing behavior in the quarter was impacted by inflation. Among the big misses were Sears and Gap, after the former racked up another sizable loss and the latter slashed its full-year outlook. Note also that teen apparel name Aeropostale declined to reiterate its full-year outlook due to the lack of visibility on consumer trends.
- US Treasury prices were little changed on the week which allowed yields to consolidate at multi-month lows. The benchmark 10-year yield briefly dipped below 3.10% for the first time since December. Inflation gauges also continued to drift lower with the 5-year TIPS breakeven falling below 2.5%. European peripheral spreads remain stressed as safe have flows picked up in the wake of the renewed uncertainty surrounding Greece. The German Bund yield is drifting back towards 3% while Spanish 10-year debt is only a hair below 5.5%.
- Corporate debt offerings surged as companies looked to take advantage of the recent dip in Treasury yields. In the company's first ever bond sale, Google sold $3B in notes at only a very modest discount to Treasuries. Google said they would be using the proceeds to repay outstanding commercial paper and for general corporate purposes. Norfolk Southern registered to sell 100-year notes also raising funds for general corporate purposes. Johnson & Johnson disclosed its intention to price a multi part benchmark offering to repay commercial paper.
- As anticipated, euro zone finance ministers meeting in Brussels granted Portugal a €78B bailout on Monday, Finland included. No solution was announced for Greece and officials reiterated that the EU will wait until the next progress report on the nation arrives next month before making any concrete moves. Meanwhile, EU officials have introduced new euphemisms for Greek debt restructuring - reprofiling or soft restructuring. The new names (for the same old idea) were met with strong opposition by the ECB, which holds more sovereign subprime bonds on its balance sheet than anybody else. Late in the week, the ECB threatened to remove liquidity measures if the EU decided to undertake any sort of debt restructuring for Greece. Despite the uncertainties surrounding the peripheral euro zone nations, the weaker than expected German ZEW and the Dominique Strauss-Kahn brouhaha, EUR/USD maintained a firm tone throughout most of the week in the 1.4200-1.4300 range thanks to hotter inflation data in the UK, a strong Spanish debt auction and bidding support. During the Friday's session, however, the pair erased its short-term gains as worries shifted back to the uncertainty of the Greek dilemma.
- GBP/USD tested the 1.63 level after UK inflation came in hotter than expected on Tuesday, prompting speculation that the Bank of England would have to embark on a tightening cycle. The central bank policy meeting minutes showed no change in the BoE's stance, with members again declaring a split decision on rate policy and the Asset Purchase Target. UK unemployment claims rose in April at the fastest pace since January 2010, helping sterling maintain a soft tone as traders faced the fragility of the UK economic recovery.
- The Swiss Franc rallied sharply during Friday's session as officials offered no resistance to the trend and in fact stated that the stalwart Swiss economy would be able to handle the currency's strength. Apart from risk aversion ahead of the Spanish regional elections this weekend, a Hungarian plan to assist defaulting mortgage borrowers also encouraged Swiss flows. The Hungarian government disclosed that it has entered into agreement with banks to correct the repayment rate on CHF-denominated mortgages at a CHF/HUF exchange rate of 180.
- In Japan, TEPCO reported the largest annual loss for a non-financial Japanese entity on record at ¥1.25T - well beyond the loss of ¥114B forecasted by analysts. President Shimizu took the brunt of the blame for the mishandled aftermath of the Fukushima nuclear disaster, as Japan's core utility announced leadership transition while also hinting it may not survive as a "going concern." With responsibility shifting toward the public sector, other Tokyo utilities bristled at the prospects of a TEPCO bailout, calling on Japan's government to clarify why TEPCO liabilities must be shouldered by its competitors. Separately, Bank of Japan left its economic assessment unchanged amid the post-earthquake slump in industrial production but reiterated its expectation for recovery in the second half of the year. Japan officially entered a double-dip recession this week with a second consecutive quarterly contraction in Q1. Cabinet officials also warning Q2 GDP may continue to slow on sequential basis.
- Down under, the Reserve Bank of Australia meeting minutes saw policymakers continue to straddle both sides of the fence on inflation expectations. RBA justified reiterating its "mildly restrictive" policy stance by suggesting it would look through the short term price spikes following Australia's natural disasters, but also cited evidence of a tightening labor market and improved household sentiment. Fixed income markets looked beyond the hawkish sentiment, heeding the central bank's warning of a potential contraction in Q1 GDP while downgrading the prospects for a 25 basis point tightening at the next policy meeting from near 20% down to about 10%. In New Zealand, the Treasury Department's annual budget prognosis soothed some of the fiscal concerns expressed by the ratings agencies, pushing forward its return to surplus by a year to FY14/15. NZD/USD spiked up to a 1-week high above $0.79 on the budget release and subsequent favorable comments from S&P, extending those gains to $0.80 late on Friday.
Week of 5/23/2011 thru 5/27/2011
Monday, May 23, 2011
Economic
08:30 US April Chicago Fed NAI
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, May 24, 2011
Economic
10:00 US April New Home Sales, May Richmond Fed Manufacturing
11:30 US Treasury's 4-week bill auction
13:00 US Treasury's 2-year note auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, May 25, 2011
Economic
08:30 US April Durable Goods Orders
10:00 US March House Price Index
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's 5-year note auction
Thursday, May 26, 2011
Economic
08:30 US Q1 Preliminary GDP, Q1 GDP Price Index, Q1 Core PCE, Q1 Personal Consumption, March Chicago Fed Index, Initial Jobless Claims, Continuing Claims
10:30 DoE Natural Gas Inventories
11:00 US Treasury bill announcement, Kansas City Fed Index
13:00 US Treasury's 7-year note auction
Friday, May 27, 2011
Economic
08:30 US April Personal Income, April Personal Spending, April PCE Core
09:55 US May Final University of Michigan Confidence
10:00 US April Pending Home Sales
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.
(GR) The main option now to consider for Greece is for banks to commit to maintaining steady holdings of Greek bonds - financial press citing sources
- Any form of restructuring that would cause credit event is not an option; credit event would cuase paying out CDS
8:30:03 AM
*(US) INITIAL JOBLESS CLAIMS: 409K V 420KE; CONTINUING CLAIMS: 3.711M V 3.73ME
- Prior Initial Jobless Claims revised higher from 434K to 438K
- Prior Continuing Claims revised higher from 3.756M to 3.792M
8:55:57 AM
(US) Council of Economic Advisors' (CEA) Goolsbee: A simplified tax code would help growth; employment initiatives should focus on the creation of new companies
- Notes that a more simple corporate tax code could help broaden the base and bring down overall rates
- Claims that medicare focus should be on bringing down healthcare cost inflation,
- Sees economic growth as more important than the debt ceiling
10:00:06 AM
*(US) MAY PHILADELPHIA FED: 3.9 V 20.0E (lowest since Oct 2010)
- No revisions
Sub-Indices:
- Prices Paid: 48.3 v 57.1 prior
- New Orders: 5.4 v 18.8 prior (lowest since Oct 2010)
- Unfilled Orders: -7.8 v 14.9 prior
- Employment: 22.1 v 12.3 prior
- Inventories: -5.4 v 1.7 prior
11:02:46 AM
NY Fed: Purchased $1.92B in outright coupon purchase; dealers submitted $5.68B for consideration (bid to cover 2.96)
- Heaviest purchase was $659M in the 11/15/21 maturity
- Purchased maturities dated 08/15/2021 - 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.
08:30 US Initial Jobless Claims, Continuing Claims
10:00 US May Philadelphia Fed Survey, April Existing Home Sales, April Leading Indicators
10:30 DoE Natural Gas Inventories
11:00 US Treasury's note announcement
13:00 US Treasury's 10-year TIPS auction
Todays Headlines
7:00:03 AM
*(US) MBA MORTGAGE APPLICATIONS W/E MAY 13TH: 7.8% V 8.2% PRIOR
- Refi's: +13.2% v +9.0% prior.
- Avg Rate on 30y mortgage: 4.60% v 4.67% prior.
- Purchase Index: (Seasonally adj): -3.2% v +6.7% prior.
7:30:59 AM
(GE) German 2011 GDP growth seen at least 3% - German press
**Reminder: On May 17th the IMF stated it saw Germany 2011 GDP greater than +3% as a possibility
- On May 13th German govt advisor Franz commented in a TV interview that Germany 2011 GDP could reach 3% or higher
- On May 13th The EU raised Germany 2011 GDP growth view to +2.6% from +2.2% in its semi-annual economic forecasts
8:08:42 AM
(US) Fed's Bullard: Fed is in a good position to pause and wait for more data before moving - TV interview
- Pause pertains to fed funds rate, balance sheet and other measures
- rise in inflation is a concern but notes recent decline in inflation expectations as seen in TIPS market
- sees recent economic weakness as transitory
11:03:34 AM
NY Fed: Purchased $1.81B in outright coupon purchase; dealers submitted $6.09B for consideration (bid to cover 3.37)
- Heaviest purchase was $390M in the 02/15/40 maturity
- Purchased maturities dated 08/15/2028 - 05/15/2041
11:35:05 AM
US Trade Rep now claims that the appeal ruling from the WTO earlier today was a victory for the US; contrasted with European officials claims earlier
- US trade rep highlights that the ruling notes the aid to Airbus caused adverse impact on Boeing, including loss in sales and market share, and will ultimately provide Europe with 180 days to comply with ruling to remove its Airbus subsidies
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.
“A truly great book should be read in youth, again in maturity and once more in old age, as a fine building should be seen by morning light, at noon and by moonlight.”
08:30 Canada April Leading Indicators
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
14:00 FOMC minutes
Todays Headlines
5:37:11 AM
*(BE) BELGIUM DEBT AGENCY SELLS APPROX €2.41B VS. €2.0-2.5B INDICATED IN 3-MONTH AND 12-MONTH BILLS
- Sells €702M in 3-month Bills; Avg Yield 1.131% v 1.198% prior; Bid-to-cover:4.81 x v 3.38x prior
- Sells €1.712B in 12-month Bills; Avg Yield 1.672% v 1.669% prior; Bid-to-cover: 2.30x v 2.69x prior
6:18:12 AM
(GR) ECB's Nowotny: Does not believe Greece needs a 'soft restructuring'
- Situation in Greece is more serious than that or Portugal's
- The situation in Greece is being analyzed; must carry out privatizations
5:55:30 AM
(GR) EU's Juncker: There should be a soft restructuring of Greek debt
- Greece's debt level is unsustainable at current levels
- Greece will have to implement huge reforms to improve its growth potential and rapidly privatize many public entities
7:00:15 AM
*(SA) SOUTH AFRICA MAR RETAIL SALES M/M: 0.3% V 0.5%E; Y/Y: 5.1% V 5.7%E
- Prior MoM revised lower from -1.0% to -1.2%
- Prior YoY revised lower from 5.6% to 5.5%
8:30:02 AM
*(US) APR HOUSING STARTS: 523K V 569KE; BUILDING PERMITS: 551K V 590KE
- Prior Housing Starts revised higher from 549K to 585K
- Prior Building Permits revised lower from 585K to 574K (second revision)
11:03:38 AM
NY Fed: Purchased $6.41B in outright coupon purchase; dealers submitted $21.04B for consideration (bid to cover 3.28)
- Heaviest purchase was $4.74B in the 04/30/16 maturity
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 April Housing Starts, Building Permits
09:15 US April Industrial Production, Capacity Utilization
11:30 US Treasury's 4-week bill announcement
16:30 API Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
8:34:43 AM
(GR) EU/IMF inspectors see high risk of revenue shortfall from Greece; requesting additional larger cuts to spending - financial press citing govt sources
- IMF notes that it has been considering extending the repayment schedule for loan to Greece if necessary.
- Funding could be moved from stand-by lending facility, which usually has a three-year repayment schedule, to extended fund facility, which is for repayments up to 10 years.
8:10:13 AM
(GR) Greece has agreed to take stronger approach to spending and raising revenue, adopts 'more realistic' goals for economy - financial press citing EU and IMF executives
- Agrees to additional spending cuts and clearer revenue targets; talks are not yet over with more information on asset sales and fiscal plans still needed
- EU and IMF inspectors still see gaps in Greek plans and still need answers from Greece on fiscal plan, sell-offs to conclude visit
8:54:10 AM
(FR) France Debt Agency (AFT) sells approx €7.5B vs. €7.5B Indicated in 3-month, 4-month, 6-month and 12-month Bills
- Sells €3.007B in 3-month Bills; Avg Yield 1.008%
- Sells €2.005B in 4-month Bills; Avg Yield 1.068%
- Sells €1.002B in 6-month Bills; Avg Yield 1.174%
9:30:35 AM
(US) Treasury Sec Geithner reiterates that debt limit needs to be raised by August 2
- notes will access two federal retirement funds as part of special measures to deal with reaching debt ceiling
- Treasury affirms debt ceiling will be reached today, as expected (special measures expected to extend Treasury's abilities through to August 2)
10:02:22 AM
(GR) ECB's Bini Smaghi: Greece debt restructuring would create contagion in the euro zone and would not solve the sustainability issue
- An extension of Greek debt maturities could trigger a credit event.
- Greece needs more long-term financial aid.
- Debt restructuring would not be a positive for Europe.
10:06:10 AM
(US) PIMCO's Gross: Reiterates PIMCO's main fund is underweight US treasuries but not short, believes new normal of slow growth remains in place - CNBC interview
- A slower inflation environment would improve PIMCO's outlook on US Treasuries.
- Comments that a " QE3 " program will take the form of language rather than actual bond purchases
- Expects 10 year yield reaching 4% in a year's time
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.
- Market sentiment was unsettled this week as traders struggled to find a trend they could stick with. Early on, commodity and equity markets bounced off the levels seen late last week, only to retest last week's lows. Gold, silver and WTI crude closed out the week more or less at the price level they entered, putting a floor in the commodities unwind for the moment. Last Friday's unannounced EU meeting on Greek debt and another S&P sovereign downgrade sustained the better tone for the greenback and weakened the euro against most major pairs. April retail sales rang up their smallest increase in nine months (and ex gasoline April sales were nearly flat), while the weekly jobless claims numbers remained stubbornly high (although down from last week's big initial claims number). On the data front, the week ended on a positive note thanks to a relatively strong May University of Michigan Confidence reading and some better-than expected preliminary Q1 GDP figures in Europe, especially out of Germany. For the week, the DJIA fell 0.3%, the S&P500 slipped 0.2%, while the Nasdaq eked out a tiny gain.
- In deal news, Microsoft announced its largest acquisition ever this week, snapping up leading VoIP firm Skype for $8.5B in cash from an investor group led by Silver Lake Partners. The price tag includes debt, and some market watchers called it too generous. Microsoft's shares fell on the deal as analysts questioned how Skype would help the software giant's product lineup. Hertz upped the stakes for Dollar Thrifty offering $72/share in cash and stock which is more than a 20% premium to the Avis bid. AIG and the US Treasury said that they would sell nearly $9B in AIG stock in an upcoming offering, less than half of what was being contemplated earlier this year, as the government and the deal runners wrangled over the pricing of the offering.
- The biggest dog of the Dow, Cisco Systems, howled again on Wednesday. Cisco's Q3 profit was solid, revenue met expectations and CEO Chambers "acknowledged Cisco's challenges." But the firm tripped on its guidance for Q4, which significantly lagged the Street. In addition executives warned that the company's old 12-17% long term revenue growth target is "clearly off the table." Shares of DJIA component Disney fell after the firm reported quarterly profits below targets and a rare revenue miss. The firm blamed poor results from its film division and the unfavorable impact due a shift in the timing of the Easter holiday for the disappointing results. Retail giant Macys crushed profit expectations, doubled its dividend and hiked its 2011 guidance. NVIDIA beat expectations handily in its Q1 report and offered strong guidance for Q2. Shares of NVDA declined, however, after analyst commentary focused on the poor outlook for the firm's margins given strong pricing pressure and declining demand for dedicated graphics chips.
- US Treasury markets spent the better part of the week consolidating recent gains. $72B in fresh coupon supply ended with a disappointing 30-year bond auction on Thursday. Nevertheless yields were only a few basis points higher on the week and remain within reach of fresh multi-month lows. The benchmark 10-year yield is holding below 3.2%. The data continues to do little to alter expectations, and following Friday's CPI figures TIPS breakevens came in a few basis points.
- While last week's slide in EUR/USD hinged on disappointed interest rate expectations and the commodities unwind, this week the Greek tragedy was back on stage. There have been weeks of dialogue among European officials about possible fixes for Greece's debt problem given the nation's faltering austerity plans and worsening economic outlook, but things came to a head last Friday at a surprise meeting in Luxembourg to discuss possible debt restructuring. The situation intensified on Monday after S&P downgraded Greece's sovereign rating two more notches to B in light of proposed debt extensions and possible burden sharing with euro zone creditors. The market homed in on S&P comments suggesting an increased risk Greece might restructure its commercial obligations, with principal reductions of 50% or more needed to restore the country's debt burden to a sustainable level. EUR/USD had managed to move back above the 1.44 handle last Friday, but the 1.4450 former uptrend line proved too formable a barrier to overcome. FX traders said the euro price action features "a lot of stale longs" and the pair ducked below last week's low of 1.4150 to test 1.41.
- The ongoing Greek debt problem will be the main topic of next week's Ecofin meeting on Monday and Tuesday. Various press reports out this week have indicated that policy makers will debate whether to provide Greece with additional funds or to extend loan maturities to help the government meet its budget reduction goals. The lack of concrete action so far has sparked fears of contagion spreading to Spain. The gravity of the situation was illustrated by comments from German government advisor Bofinger, who said the euro zone required a comprehensive solution now or it might not remain intact in a year's time. Speculation has it that a new Greek bailout agreement could be announced as early as June despite repeated denials from Greek, European, and IMF officials.
- The USD found further support mid-week from the continuing decline in commodity prices. The greenback benefited as prior risk trades were de-leveraged on account of margin calls, and the USD Index rose to fresh three-week high. Even a round of Q1 preliminary European GDP numbers that generally exceeded expectations could not keep the dollar down, although they did sustain the overall belief that the ECB will raise interest rates again later this year. A strategic and economic dialogue in Washington DC between the US and China sought to hammer out differences between the two nations' views on economic policies. Treasury Secretary Geithner reiterated calls for China's growth model to increase focus on creating a more market-based domestic demand engine. In the end, US and China officials agreed to disagree on the pace of CNY currency appreciation.
- In other FX news, the yen benefited from a rising tide of risk aversion as commodity market weakness spilled into equities. USD/JPY struggled to hold above the 81 handle all week while EUR/JPY probed below the 115 level. Softer Swiss CPI data helped to weaken the Swiss Franc, with the USD/CHF finally finding enough momentum to break above the 0.88 level. EUR/CHF recovered from near all-time low around 1.24 to test above 1.26 on a technical bounce and also reflected some relief that the Greek debt situation would addressed next week.
- April economic data out of China offered further hints of the normalization sought by Beijing policymakers even as progress on inflation remained somewhat elusive. China's trade surplus of $11.4B v $3.2Be was head fake, given the severe drop off in the imports component to 21.8% v 28.9%e. Key commodity imports like iron ore, copper, and crude oil all registered multi-month lows, foreshadowing the slowdown in China's industrial production to a four-month low 13.4% y/y released later in the week. Consumer inflation remained a thorn at 5.3% however, prompting yet another Reserve Requirement Ratio (RRR) rate hike by the PBoC - its 5th in as many months over 2011, taking the RRR to an all time high 21%.
- The overall slide in commodity markets and evidence of a slowdown in China growth was reflected in the second consecutive losing week for the Aussie dollar. Profit-taking was further driven by the disappointing Aussie April jobs report that showed a net job loss of 22K, the biggest labor contraction since 2009, also exacerbated by an 8-month low participation rate. AUD/USD continued its freefall from the 29-year high of $1.10 down to $1.0520 on Friday, its lowest level in nearly a month.
Week of 5/16/2011 thru 5/20/2011
Monday, May 16, 2011
Economic
08:30 US May Empire Manufacturing, Canada March Manufacturing Shipments
09:00 US March Net TIC Flows
10:00 US May NAHB Housing Index
11:30 US Treasury's 3- and 6-month bill auction
Tuesday, May 17, 2011
Economic
08:30 US April Housing Starts, Building Permits
09:15 US April Industrial Production, Capacity Utilization
11:30 US Treasury's 4-week bill announcement
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, May 18, 2011
Economic
08:30 Canada April Leading Indicators
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, May 19, 2011
Economic
08:30 US Initial Jobless Claims, Continuing Claims
10:00 US May Philadelphia Fed Survey, April Existing Home Sales, April Leading Indicators
10:30 DoE Natural Gas Inventories
11:00 US Treasury's note announcement
13:00 US Treasury's 10-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.
8:30 April CPI
9:55 University of Michigan Confidence
Todays Headlines
8:34:43 AM
(GR) EU/IMF inspectors see high risk of revenue shortfall from Greece; requesting additional larger cuts to spending - financial press citing govt sources
- IMF notes that it has been considering extending the repayment schedule for loan to Greece if necessary.
- Funding could be moved from stand-by lending facility, which usually has a three-year repayment schedule, to extended fund facility, which is for repayments up to 10 years.
8:59:53 AM
(SA) South Africa Central Bank's (SARB) Marcus: inflation outlook has deteriorated further; inflation will drop to target level in Q2 2012
- Elevated price risks could feed through to general inflation. Food price pressures likely to continue.
- CPI seen peaking at 6.3% in Q1 2012 and falling back towards target in Q2 of that year.
- Domestic economy is recovering but seen at moderate pace.
- Seeing productivity declines.
8:30:03 AM
*(US) APR ADVANCE RETAIL SALES: 0.5% V 0.6%E; RETAIL SALES LESS AUTOS: 0.6% V 0.6%E
- Retail Sales Ex Auto & Gas: 0.2% v 0.5%e
- Prior Advanced Retail sales revised higher from 0.4% to 0.9%
- Prior Ex Auto revised higher from 0.8% to 1.2%
- Prior Ex Auto and Gas revised higher from 0.6% to 0.7%
8:30:23 AM
(US) Fed's Plosser: Continued economic recovery will soon require rate increases; worried by the volitility seen in inflation expectations
- The April unemployment rate was a disappointment, but job market continues to improve.
- Expects an unemployment rate of around 8.5% by the end of 2011, 7.5% by end of 2012.
- Expects oil prices to level off; even with the commodity sell off, commodity prices are still quite high.
9:45:08 AM
(US) Fed's Plosser: Any exit from accomodation will not happen on a continuous basis, will include pauses; would not be surprised if the Fed takes action on rates before the end of 2011
- Fed is actively discussing plans for policy exit, including varying ideas.
- Unsure how balance sheet reductions will impact markets, the goal is to shrink the balance sheet so the Fed can operate in a corridor with the Fed funds rate as target.
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.
8:30 Initial Jobless claims, continuing claims, April PPI, April Retail sales
10:00 March Business Inventories
10:30 DoE Natural Gas Inventories
13:00 US Treasury's 30 year bond auction
Todays Headlines
6:36:11 AM
OPEC May Monthly Report: Sees 2011 global demand growth forecast steady at +1.40M v +1.39M prior; expects balance in supply and demand to stabilize oil prices
- Global oil supply levels are healthy despite conflict in Libya.
- Too early to say whether high oil prices are reducing demand.
- Recent decline in prices is in line with market fundamentals.
- Sees demand for OPEC crude 2M bpd greater in Q3 than Q2.
6:45:59 AM
(EU) ECB's Stark: The euro will ensure economic stability in Europe; IMF's Special Drawing Rights (SDR) is not a cure-for-all for global monetary system
- Fiscal stimulus measures increasingly being felt
- Large scale implementation of SDRs might interfere with implementation of global monetary policy
- Countries that accumulate large currency reserves need to reform their domestic growth engine
- More flexible emerging market currencies fundamental
7:00:03 AM
*(US) MBA MORTGAGE APPLICATIONS W/E MAY 6TH: 8.2% V 4.0% PRIOR
- Refi's: +9.0% v +6.0% prior.
- Avg Rate on 30y mortgage: 4.67% v 4.76% prior.
- Purchase Index: (Seasonally adj): +6.7% v +0.3% prior.
8:10:07 AM
*(PD) POLAND CENTRAL BANK RAISES BASE RATE BY 25BPS TO 4.25%; NOT EXPECTED
- PCB was expected to leave the Base Rate unchanged at 4.00%
**Insight: This is the third rate hike of 25bps in the current Polish Central Bank tightening cycle for a cumulative total of 75bps
10:00:28 AM
(PD) Poland Central Bank Gov Belka: Expects CPI to remain high as PLN currency has not offset commodity price rise - Press conference
- Decision to raise rates was not unanimous; increased rate could boost the Zloty
- Interest rate hike to limit risk of inflation staying above the medium term target
- March acceleration was not limited to food or energy
11:03:47 AM
NY Fed: Purchased $7.68B in outright coupon purchase; dealers submitted $21.4B for consideration (bid to cover 2.79)
- Heaviest purchase was $2.92B in the 04/30/18 maturity
- Purchased maturities dated 11/15/2016 - 04/30/2018
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.
8:30 March Trade Balance
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's 10 year note auction
14:00 Monthly Budget statement
Todays Headlines
6:57:18 AM
*(EU) ECB DRAINS €76.0B VS. €76.0B TARGETED IN 7-DAY TERM-DEPOSIT TENDER:
- Weighted Avg 1.09% vs.1.16% prior
- Rec'd 72 bids vs. 58 prior
7:30:03 AM
(US) Apr NFIB Small Business Optimism: 91.2 v 91.8e
- No revisions
Comments:
- Small business a sign of anemic economic recovery
- Suggests that bulk of hiring done by larger firms; No reason for small business to be optimistic on the future
- April employment index: 2%, flat
- 12% of owners reported higher selling prices v 9% m/m
8:30:01 AM
*(US) APR IMPORT PRICE INDEX M/M: 2.2% V 1.8%E; Y/Y: 11.1% V 10.4%E
- Prior MoM revised lower from 2.7% to 2.6%
- Prior YoY revised higher from 9.7% to 9.9%
11:03:09 AM
NY Fed: Purchased $6.68B in outright coupon purchase; dealers submitted $25.66B for consideration (bid to cover 3.84)
- Heaviest purchase was $3.72B in the 04/30/16 maturity
- Purchased maturities dated 05/15/2015 - 10/31/2016
12:34:35 PM
(US) US officials: China talks agree on process to ensure China govt uses legal software; China agrees to allow some for financial firms to operate in China
- Financial system reform discussions went well.
- have agreed on framework for export financing.
- China will allow foreign firms to sell auto insurance and mutual funds in China.
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.
8:30 April Import Price index
10:00 IBD/TIPP Economic optimism, Mar Wholesale Inventories
13:00 US Treasury's 3 year note auction
16:30 API Crude Oil/Gasoline/Distillate Inventories
Todays Headlines
8:00:36 AM
ECB Trichet: Reiterates that commodity rise risks second round effects; ECB will anchor expectations
- Saudi Arabia ready to appropriately supply oil markets
- Global economic recovery confirmed; little risk of double-dip recession
8:49:24 AM
(EU) German Govt Advisor Bofinger (Wisemen): Euro zone requires a comprehensive solution at this time or might not remain intact in a year's time
-- Need to change the approach for the Euro zone periphery countries; consider stimulus measures for Greece in addition to austerity
9:15:55 AM
(US) Treasury's Geithner: Reiterates calls for China's growth model to be more focused on creating a more market-based domestic demand engine - US- China econ talks
- Global economic recovery continues but still faces significant challanges
- US still recovering from economic crisis and needs long-term reforms to force it to live within its means
- Reiterates talks are continuing with China with regards to exchange rate flexibility; global economic outlook is gradually changing
10:00:47 AM
(US) NY Fed issues Q1 household debt and credit report: New foreclosures and new bankruptcies declined in Q1, -17.74% and -13.3% respectively
- non housing related debt declined slightly
- Aggregate credit card limits up 1% q/q; first rise since Q3 2008
- Delinquent balances -15% y/y
10:07:58 AM
(PO) S&P: Portugal and Greece remain fiscally challenged, recovery in the EMU is strong, in exports in particular
- Claims it is highly improbable that Greece would drop out of the Eurozone
- There are concerns about whether Spain can meet its fiscal goals, Outlook depends on labor market and current account
- Ireland's rating unlikely to be changed for the next two years, unlikely rating will move to Junk status
11:37:09 AM
(GR) Fitch may be planning to downgrade Greece rating 4 or 5 notches to as far as B- from BB+ -Germany press citing sources
- Reminder: in March Fitch commented that Greece's sovereign ratings could fall sharply unless the country can regain market access
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.
"Faith is taking the first step, even when you don't see the whole staircase.”
Market Week Wrap-Up
The week opened on a euphoric note following the stunning announcement that after nearly a decade, Osama Bin Laden was finally tracked down and killed inside Pakistan. For the markets though, the elation was short lived. A confluence of softer April economic data convinced investors around the globe to begin deleveraging risk aggressively, and as the week wore on momentum accelerated. Nowhere was that more evident than in the commodity markets, which were also forced to digest rapidly escalating margin requirements. The recent meteoric rise in oil, gold, and especially silver prices came to an abrupt end. July silver lost more than 30% of its value in just a few sessions, the price of gold slid 7%, moving back below $1500, and crude oil plunged 16% through $100. The US Dollar rebounded as buyers emerged emboldened by the reversal in commodity markets and by the carry trade unwinding. The euro, in particular, suffered from what were ultimately unwarranted policy tightening expectations ahead of the ECB press conference. In leaving rates unchanged and by omitting the word "vigilance", Trichet disappointed speculators that were betting the ECB was on the verge of commencing a tightening cycle. US treasury yields continued to move to fresh multi-month lows and stock markets declined globally. Friday's US April payrolls report initially provided some stabilization after the data afforded a much needed shot of confidence. The largest rise in private payrolls since February of 2006 overshadowed an uptick in the unemployment rate back to 9%. Equity indices surged on the open, commodity prices found a floor and snapped back abruptly, but on the one year anniversary of the "Flash Crash" prices briefly swung all the way back into the red before rallying into the NYSE close. For the week, The DJIA lost 1.3%, the Nasdaq dropped 1.6%, and the S&P500 fell 1.7%.
Deal making continued in equity markets though the pace slowed this week. Applied Materials offered $63/share in cash for Varian Semiconductor in a deal valued at just under $5B. Warner Music Group finally confirmed a sale to Access Industries valuing the entire company at $3.3B. Finally, ConAgra Foods confirmed an $86/share cash offer for Ralcorp but unsurprisingly it was officially rejected by RAH's board. Press reports later speculated an offer closer to $100/share would be required to seal any deal.
Several signs continue to suggest consumers are holding up well in the face of higher food and gasoline prices including April same store sales and Q1 earnings reports. Among retailers, major chains reported an 8.9% y/y gain in April, led by strong sales at discounters and apparel stores. As expected the results were goosed by the late Easter holiday but even when combined with March, retailers posted a 5% increase. March consumer credit data registered the seventh consecutive month with and increase and was up on a sequential basis too. The week saw another wide variety of corporations report quarterly results that topped analyst expectations. Mastercard made another new multi-year high after its solid report. Priceline.com shares declined from all time highs despite very strong results and increased guidance.
US Treasury prices benefited throughout the week from softer economic data and risk averse trading flows. The 10 and 30-year yield each made new lows on the year. At one point the benchmark 10-year yield was more than 8 basis points below that of the German Bund, reaching its largest discount in two years. US inflation expectations have also come in despite the April jobs report. The 5-year TIPS breakeven declined roughly 20 basis points on the week to 270. For the most part, Fed speak fell on the dovish side this week, helping hold bids in the fed fund futures market. Prices now suggest the FOMC is unlikely to raise rates until the middle of next summer.
A European Commission press conference on the Portugal bailout package provided additional details and confirmed that it will total €78B. The IMF will provide €26B with the EU footing the remaining €52B. The IMF set the rate on the Portugal aid at 3.25% for first 3 years, then 4.25% thereafter. The EU also stated the EFSF interest rates for Portugal would be above the IMF rate. The perception that Portugal's aid terms are more generous than those received by Ireland or Greece did little to appease tempers or curb speculation in Europe. Irish PM Kenny reiterated his call for a lower interest rate on Ireland's EU/IMF bailout package while affirming Ireland's low corporate tax rate remains non-negotiable. Press speculation suggesting German officials are pushing for a Greek debt restructuring never really went away, and culminated in a Friday report from Der Spiegel which suggested Greece is considering leaving the EMU altogether. Various officials were quick to deny the report calling a break up unthinkable, but regardless Greek debt yields hit fresh all time highs and the Euro dipped below a key 2011 uptrend line of 1.44 (which also put renewed pressure on dollar denominated commodities). The EUR/USD fished the week lower by more than 3%.
Coming into the week EUR/USD was basically locked within a 150 pip range between 1.4750 and 1.4900, but finally managed to hit a fresh 16-month high above 1.4935 ahead of the ECB's rate decision. A think tank report speculating the ECB was favoring an earlier move to again raise interest rates served Euro bulls heading into the decision. That sentiment also helped drive the German 2-year/10-year spread below 140 basis points, to its flattest reading since January 2009. Trichet changed the spectrum on the market's interpretation of the European rate scenario after he reiterated that the ECB would monitor all upside inflation risks 'very closely.' The market took more notice of what he did not say. Trichet omitted any reference to "strong vigilance" in opening section of post-meeting statement. The move threw a wrench into plans for speculations to buy on what was supposed to be a tightening signal. As Friday's CFTC commitment of traders data revealed, going into the ECB decision speculators raised their net long EUR exposure by almost 50% to 99.5K contracts.
The GBP currency continued to struggle after a rash of disappointing data reduced expectations of BoE policy tightening. The April UK Manufacturing PMI data registered its lowest reading in seven months sending GBP/USD slumping over 60 pips to test 1.6480. A key hourly pivot point of 1.6430 level finally gave way ahead of the US payroll report on Friday.
The USD/JPY traded below the ¥80 handle to reach new 7-week lows. There were various spats of verbal intervention but by Thursday the USD/JPY had entered another phase of carry trade unwinding as risk aversion sentiment sent commodity-related currencies lower. The USD/JPY tested below the 80 handle for the first time since the March 18th coordinated currency intervention. The JPY moved away from its strongest levels after Trichet stated that the ECB was always in close contact with BOJ on currency issues and remained prepared to support Japan if needed.
Commentary surrounding the Reserve Bank of Australia's 4.75% rate hold on Tuesday was a mixed bag, deferring to further economic data to shape expectations on future policy. The RBA reiterated that its stance is "mildly restrictive," but also added that expectations for longer term inflation were likely "to increase somewhat if economic conditions evolve as expected." Later in the week, the RBA Quarterly Policy statement further obfuscated central bank bias by warning that additional monetary policy tightening will likely be required at some point, while also cutting its current half GDP expectations and raising its H1 2011 - H1 2012 CPI estimates. AUD/USD, which pared its recent run-up to $1.10 all the way to $1.0530 amid the Thursday commodity crunch, rallied back above $1.07 on Friday following the RBA quarterly update.
In China, April Manufacturing PMI came in more than a point below the 54.0 expectation - a further reminder of the retarding impact of the economic rebalancing and monetary policy tightening of recent months. The disappointing PMI added to the overall risk aversion putting pressure on mainland indices, with the Shanghai Composite falling below 2,850, its lowest level since February. Expectations of continued PBoC tightening could resurface later next week following China's April CPI data, expected to remain a few tenths above the informal 5% policy-adjustment threshold.
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.
8:30 April non farm payrolls, Unemployment rate, Private payrolls, Hourly Earnings
15:00 Mar Consumer Credit
Todays Headlines
7:45:16 AM
*(EU) ECB LEAVES THE MAIN REFI RATE UNCHANGED AT 1.25%; AS EXPECTED
- Deposit Facility and Margin lending remain unchanged at 0.50% and 2.00% respectively
***Reminder: ECB press conference to begin shortly after 8:30am ET (12:30 GMT)
8:29:48 AM
(EU) ECB Trichet: Reiterates that the ECB will monitor all upside inflation risks 'very closely; Monetary policy remains accommodative - Prepared remarks
- Underlying momentum of economic activity in Euro-area positive but uncertainty elevated
- Economic growth risks might come from further energy price rises; Downside risks also from financial markets might spill over
8:30:20 AM
*(US) Q1 PRELIMINARY NONFARM PRODUCTIVITY: 1.6% V 1.1E%; UNIT LABOR COSTS: 1.0% V 0.8%E
- Prior Nonfarm Productivity: revised higher from 2.6% to 2.9%
- Prior Unit Labor Costs revised lower from -0.6% to -1.0%
8:30:03 AM
*(US) INITIAL JOBLESS CLAIMS: 474K V 410KE; CONTINUING CLAIMS: 3.733M V 3.65ME
- Prior Initial Jobless Claims revised higher from 429K to 431K
- Prior Continuing Claims revised higher from 3.641M to 3.659M
8:47:25 AM
(EU) ECB Trichet: Reiterates view that the ECB does not pre-commit; FX Rate is a part of the central bank's analysis - Q&A
- Reiterates His acknowledgement of US Tsy Sec Geithner, Fed's Bernanke support of a strong USD
- Watching EONIA moves carefully; Volatility of Eonia has been significantly reduced
- ECB has a solid anchoring of inflation expectations
9:23:13 AM
(US) Fed's Bernanke: Does not comment on economic outlook, monetary policy
- Reiterates that regulators are focusing on a wide range of issues of financial reisk across system, financial firms.
- Need to avoid credit restricting rules.
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.
8:30 Q1 Non farm productivity, Unit labor costs; Initial Jobless Claims, Continuing claims
10:30 DoE Natural Gas Inventories
Todays Headlines
8:06:08 AM
(US) Fed's Rosengren: No evidence inflation is pushing up wages, expects core and overall inflation over the medium term to move to 2%
- Current recovery is undesirably slow, price pressures are temporary
- Calls recent higher prices in food and energy as related to supply shocks
- Fed should be promoting faster growth
8:15:02 AM
*(US) APR ADP EMPLOYMENT CHANGE: 179K V 198KE (5-month low)
- Prior revised higher from +201K to +207K
- Employment growth at this pace is consistent with only modest declines in the unemployment rate
8:58:52 AM
HSBC Global Trade Confidence Index for H1: 114 v 116 prior (H2 2010)
- According to traders, CNY could become the third most used trade settlement currency in 2011, overtaking the GBP for the first time. USD is the leader, followed by Euro, CNY, GBP and JPY.
- Developed and other emerging markets are targetting more trade with Greater China.
-According to survey, respondents expect Central and Eastern Europe and Greater China to be the most promising regions to expand trade.
9:00:20 AM
(US) Treasury to sell $32B 3-year and $24B 10-year notes and $16B 30-year bonds
- Official comments that the Treasury could issue cash management bills; confident the Debt Ceiling will be raised, but have contingency plans in place
- Affirms expectation for debt ceiling to be reached on May 16
11:02:23 AM
NY Fed: Purchased $1.5B in TIPS securities; dealers submitted $6.3B for consideration (bid to cover 4.21)
- Heaviest purchase $264M in the 01/15/25 maturity
- Purchased maturities dated 04/15/2013 - 02/15/2041
11:21:18 AM
SEC Seeks Public Comment on Short Sale Disclosure
- The Securities and Exchange Commission today published on its website a request for public comment on the feasibility, benefits, and costs of two short selling disclosure regimes as a part of a study mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
12:10:54 PM
Market Internals update at 12:00ET
- NYSE volume 415M shares, about 8% above its three-month average; decliners lead advancers by 3.2:1.
- NASDAQ volume 985M shares, about 13% above its three-month average; decliners lead advancers by 3.1:1.
- VIX index +5% at just over 17.00
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.
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
Todays Headlines
8:30:13 AM
(US) Fed's Hoenig: Need to limit commercial banks to their traditional role; Fed's policy is pushing up land prices and encourages use of more leverage
- Narrowing the scope of commercial banks will create a more safer system.
- Impossible to rid of the largest banks.
- Reminder: Kansas City Fed's Hoenig is no longer an FOMC voting member; plans to retire Oct 1
9:23:08 AM
*(UK) UK APR BRC SALES RETAIL SALES Y/Y: 2.5% V 2.4% PRIOR
- Food price inflation M/M: 4.7% vs. 4.0% prior
- Non-food prices M/M: 1.2% v 1.5% prior
10:06:36 AM
(US) Fed's officials debating exit stategy fiercely - CNBC's Liesman citing sources
- Sources say at the April FOMC meeting, the staff presented various exit scenarios and sequences, but no decision was made on exit sequencing at the meeting.
- Liesman comments that there is no longer a consensus to start exit with raising rates (vs last year when it appeared the FOMC seemed to agree that a rate hike would come first).
11:06:00 AM
NY Fed: Purchased $7.67B in outright coupon purchase; dealers submitted $19.96B for consideration (bid to cover 2.6)
- Heaviest purchase was $6.03B in the 04/30/18 maturity (longest dated)
- Purchased maturities dated 11/15/2016 - 04/30/2018
11:12:37 AM
(NZ) Fonterra Global Dairy Trade auction: Milk product prices -0.1% from prior auction on Apr 19th (+0.1% prior)
- Average winning auction price $4,367 /metric ton v $4,293 /metric ton prior
- Whole milk powder -1.7% v +0.8% prior
- Anhydrous milk fat -4.6% v -0.8% 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.
