“To see what is right, and not to do it, is want of courage or of principle.”
Market Week Wrap-up
Corporate earnings were more mixed this week, with hit or miss corporate results replacing the strong positive tone that sent US equity markets higher last week. Earnings from the major oil firms were very strong and a mid-quarter guidance boost from FedEx helped early in the week, whereas earnings from US Steel and Boeing disappointed investors. There were a handful of key economic reports, but the focus was clearly on Friday's US advance second quarter GDP reading. Wednesday's June Durable Goods data shook confidence after the reading surprised to the downside, setting up risk aversion sentiment. The Q2 GDP data lagged expectations somewhat, while the big upwards revision of the final Q1 reading (to 3.7% from 2.7%) made the Q2 data look even more disappointing. The semi-annual benchmark revisions painted a bleaker picture of the Great Recession, showing that the US economy shrank 4.1% in the period from Q4 of 2007 to Q2 of 2009 (the prior figure was -3.7%). The revisions also showed household spending fell 1.2% in 2009, twice as much as previously projected, for the largest annual decline since 1942. Fed Governor Bullard added to the overall risk aversion theme. Bullard warned that the Fed's 'extended period' language carried "Japan-like risks" and that deflation was a real threat to the US economy. He prescribed more quantitative easing (QE) as the best way to avoid a deflation trap. For the week, the S&P500 lost 0.1%, the Nasdaq Composite dropped 0.6%, and the DJIA rose 0.4%.
- Most of the oil patch reported this week. Exxon and Chevron had similar results: profits beat expectations and revenues were below consensus. Both firms more than doubled their profits from year-ago levels, with earnings outperformance driven by higher prices and better margins from downstream operations. Conoco beat estimates and announced that it would sell its entire stake in Russia's Lukoil back to the company for approx $3.5B. Royal Dutch Shell's profit was in line with expectations, with results driven by higher production and cost cutting. Valero had better-than-expected results, while Hess missed revenue targets by nearly $1B. BP's quarterly results were predictably disastrous. BP officially replaced embattled CEO Tony Hayward with former TNK-BP chief Robert Dudley.
- On Monday FedEx increased its guidance for both the current quarter and the full year, primarily due to better-than-anticipated growth in express and ground volumes. Note that the company originally provided its Q1 outlook just six weeks ago with its Q4 report. Railroads Norfolk Southern and Canadian Pacific both beat expectations in the second quarter. Norfolk's CEO said he expects continued volume growth across most of the business, with the economic recovery choppy and uneven but clearly underway.
- Du Pont left consensus estimates in the dust in its Q2 report and raised its 2010 guidance considerably. On the conference call, Du Pont said global semiconductor consumption has already exceeded pre-recession levels. Corning came in ahead of earnings expectations and significantly increased its projected 2011 capex spending over 2010 levels. Executives said LCD sales in the US would be soft this year, whereas China sales are strong and growing. Korea's Samsung Electronics topped earnings expectations with record profits in Q2, beating out analyst expectations, improving its margins in the chip, LCD, and telecom space. Panel maker AU Optronics crushed profit estimates, thanks to higher unit prices. Broadcom had firm results. Symantec was also largely in line, although the online security firm's guidance for next quarter was quite soft, leading multiple analysts to cut their ratings.
- Steelmakers US Steel and AK Steel offered contrasting quarterly results. US Steel racked up a major loss, thanks to a big drop in the value of the euro. AK Steel had a strong quarter, with both top- and bottom-line results beating expectations.
- Boeing's quarterly results were disappointing: profits were a bit above the consensus, but fell sharply from year-ago levels, while revenue disappointed analysts. Boeing's CEO said he still expects a book to-bill-below one this year despite substantial order improvements. A selection of other major manufacturers have reported very strong quarterly results: engine maker Cummins and agricultural equipment name AGCO both beat expectations and hiked 2010 guidance. Like many of their peers, AGCO and Cummins cited strength in emerging markets as driving their strong results in the quarter. Auto parts manufacturers like Autoliv and BorgWarner reported their best quarterly results in years on the strong bounce back in auto sales. Ahead of monthly auto sales data next week, Ford said they expect y/y July sales up 3-4% for the industry.
- Earnings reports from MetLife are usually a staid affair. Not this quarter, as the insurance giant crushed consensus expectations, with profits and revenue at their highest levels in over two years. Insurance giants Aetna and Aflac largely met expectations. Aetna's CEO was cautious about the second half of 2010, warning that results would reflect investments needed to prepare for health care reform and regulatory changes. Visa had a positive quarter and offered a strong outlook for overall 2010 performance. However, Visa executives warned that the regulatory changes unveiled by Congress over the last several months would "modestly impact" the company's business in 2011.
- US Treasury yields spent the better part of the week retreating back toward the lowest levels seen this year. Friday's weaker than expected Q2 GDP figures pushed the benchmark 10-year back towards 2.9% while long bond rates have returned to 4%. The 2-year yield finished the week at another all time low of 0.55%. Corporations remain aggressive in their desire to take advantage of the historically low funding costs and it appears this month will go down as the busiest July on record for sales of junk-rated debt. Higher quality US corporations are borrowing at some of the lowest rates on record. This week alone McDonald's, Union Pacific, Kimberly-Clark and Alcoa were just a few of the names that came to market.
- The greenback sank lower this week against most of the major pairs, plagued by the new normal scenario and the sense of relief about the European banking sector (aided by tighter spreads on peripheral Euro Zone debt). Early on in the week, post-mortem analysis of the European stress tests results seemed to conclude that the European banking system was in a "stable and promising position," even if many US analysts dismissed the effort as something of a gimmick. Friday's US GDP report and the less than stellar US economic data released earlier in the week kept traders focused on the slow growth theme, while California Governor Arnold Schwarzenegger's declaration of a state fiscal emergency hardly helped. Moody's added momentum to dollar weakness as the firm again stressed that the US government needs to articulate a credible fiscal consolidation plan and criticized the US for having no plan to deal with rising debt levels.
- The euro finally pulled off a monthly gain against the dollar for the first time since last November, aided by better European data. Economic confidence on the Continent rose to its highest in more than two years, while German unemployment declined for a 13th straight month. The greenback tried numerous times to reverse the trend, especially with yet another round of chatter that the Swiss National Bank might be on top in the EUR/USD pair. At one point EUR/USD tested above 1.31 for fresh 11-week highs to probe its best level since May 4th. Technical factors also provided the euro with momentum against the dollar; dealers said EUR/USD needed to move back below the 1.2900 area to neutralize its bearish momentum. The dollar also failed to capitalize on spot gold's break below its 21-month uptrend line at $1,174/oz. Note that the spread between Spanish and German 10-year government debt inched back toward 130bps early in the week to test its narrowest level since early May.
- Cable continued to eke out fresh five-month highs and even tested above 1.5650 area. GBP/USD dipped to test 1.5500 after the BOE members began their testimony to the Treasury Select Committee. Governor King warned that not too much should be read into the UK's strong Q2 GDP data, prompting the initial downdraft in the pair. King added that the UK had a "considerable distance to travel" before a return to normal policy would be possible. Other BOE members painted a different picture - BoE member Sentence reiterating his hawkish sentiments - helping to stabilize the pound.
- USD/JPY tried numerous times to move back above the 88 handle this week. However, the yen continued to maintain a firm tone on risk aversion flows and tested below 86.00 in the wake of the GDP report on Friday. The usual chatter of Kampo dollar bids made the round. The key level in the pair remains the 85.00 where possible central bank action might lurk. Political pressure is mounting for the BOJ to take further measures against deflation even as deflation is easing. A DPJ party panel called for the BOJ to adopt an inflation target of about 2-3% with more quantitative easing. Meanwhile June CPI came in at -0.7% (y/y), the smallest contraction since April 2009. Despite more verbal intervention on Yen strength from the Finance Ministry, which warned about the impact of the rising Yen on the export industry, on Friday the USD/JPY hit its lowest point this year.
- In Australia, lower than expected inflation data further narrowed the already slim chance for an additional rate hike from the RBA. After reporting Q2 CPI data several tenths below forecast, futures markets and analysts closed the door on a rate hike in the short term, with some seeing the RBA on hold until 2011. Neighboring New Zealand tightened rates another quarter point this week, despite a more cautious outlook. The RBNZ noted the "outlook for economic growth has softened somewhat" and said it will likely moderate the rate of additional tightening.
Week of 8/2/2010 thru 8/6/2010
Monday, July 26, 2010
Economic
08:30 US June Chicago Fed Index
10:00 US June New Home Sales
10:30 US July Dallas Fed Manufacturing Index
Monday, August 02, 2010
Economic
10:00 US July ISM Manufacturing, June Construction Spending
15:00 US Treasury's quarterly financing estimates
Tuesday, August 03, 2010
Economic
08:30 US June Personal Income/Spending, PCE Core/Deflator
10:00 US August Pending Home Sales, June Factory Orders
16:30 API Crude Oil/Gasoline/Distillate Inventories
new Blackberry model, operating system. Trades Ex-dividend: ALV $0.30, RRD $0.26, UAM $2.00.
Wednesday, August 04, 2010
Economic
08:15 US July ADP Employment Change
09:00 US Treasury's quarterly financing announcement
10:00 US July ISM Non-Manufacturing
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, August 05, 2010
Economic
07:00 BoE rate decision
07:45 ECB rate decision
08:30 US Initial Jobless Claims, Continuing Claims
10:30 US Natural Gas Inventories
Friday, August 06, 2010
Economic
08:30 US July Unemployment Rate, Nonfarm Payrolls, Manufacturing Payrolls, Private Payrolls, Average Hourly Earnings
15:00 US June Consumer Credit
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Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 US Advance Q2 GDP, Q2 GDP Price Index, Q2 Personal Consumption, Q2 Core PCE
09:45 US July Chicago Purchasing Manager
09:55 US July Final University of Michigan Confidence
Today’s Headlines
7:45:00 AM
(BR) Brazil Central Bank (COPOM) Monetary Policy Meeting Minutes: Lowers inflation forecast for 2010 and 2011
- Inflation views remain above central bank target for 2010 and 2011
- Might need to adjust tightening pace based on inflation trend
- International scenario having disinflation effect on Brazil
- Outlook regarding domestic economic activity remains favorable.
8:30:09 AM
*(CA) CANADA JUN INDUSTRIAL PRODUCT PRICE M/M: -0.9% V +0.2%E; RAW MATERIALS PRICE INDEX M/M: -0.3% V +1.0%E
- Prior Industrial Product Price revised higher from 0.3% to 0.4%
- Prior Raw Materials Price Index MoM revised lower from -7.2% to -7.3%
8:45:15 AM
HCA reports Q2 net income $293M v $282M y/y; Rev $7.76B v $7.5B y/y
- Same facility equivalent admissions +1.6% y/y
- Same facility revenue per equivalent admission +2.2%
- Total surgeries -1.4%
9:00:32 AM
(CH) IMF publishes review on China, notes that economic recovery is well established in China
- China inflation likely to declineafter mid-part of 2010.
- Expects China inflation between 2% to 3% in coming years.
- China is rightly attempting to slow its credit growth.
- IMF staff still believes Yuan currency is substantially undervalued but closer to equilibrium then ever before
- China Government believes the Yuan currency is close to equilibrium
9:08:48 AM
(IT) S&P comments on Italy: Country consolidation program supportive of sovereign ratings
- The package focuses on a sharp reduction in spending by local and regional governments, alongside a public sector pay freeze, pay cuts for high earning public sector employees, and measures to reduce tax avoidance.
-Our forecasts assume full implementation of the government's fiscal consolidation program.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:30 Initial Jobless Claims, Continuing Claims
10:30 Natural Gas Inventories
13:00 US Treasury's $29B 7-year note auction
Today’s Headlines
7:40:42 AM
(GE) Preview: Germany Jul Preliminary Consumer Price Index expected at 8:00am ET (12:00 GMT)
**Consensus expectations:
- Consumer Price Index MoM: 0.3%e v 0.1% prior; YoY: 1.2%e v 0.9% prior
- CPI EU harmonized MoM: 0.2%e v 0.0% prior; YoY: 1.1%e v 0.8% prior
8:22:05 AM
(RU) Reportedly Russia sells RUB1.7B of 2012 OFZ at 5.82%
- Offered RUB25B in 2012 bonds in today's auction
***Insight: On 21st Jul - (RU) Russia Fin Min cancels RUB30B OFZ bond auction; failed to sell issuance
- Received more than RUB25B in bids.
8:30:06 AM
*(US) JUN DURABLE GOODS ORDERS: -1.0% V +1.0E%; DURABLES EX TRANSPORTATION: -0.6% V 0.4%E
- Prior Durable Goods Orders revised from -0.6% to -0.8% (Second revision)
- Prior Ex Transportation revised from 1.6% to 1.2% (Second revision)
9:00:23 AM
*ECB PUBLISHES NEW HAIRCUT SCHEDULE FOR LOWER RATED COLLATERAL; effective Jan 1st 2011
- Haircuts to be based upon maturity and liquidity catagory and quality
- Will NOT unduly reduce eligible collateral volume
- Extends 5% markdown to all theoretically-valued bank bonds
- Haircut to range 0.5% to 69.5%
10:17:42 AM
PIMCO's Bill Gross releases Aug Investment Outlook: Privates Eye
- New Normal that will likely impact growth and financial markets for years to come. Our New Normal, to repeat ad nauseam, is predicated upon deleveraging, reregulation and deglobalization, all of which promote slower economic growth and lower inflation in developed economies while substantially bypassing emerging market countries that have more favorable initial conditions
- The danger today, as opposed to prior deleveraging cycles, is that the deleveraging is being attempted into the headwinds of a structural demographic downwave as opposed to a decade of substantial population 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.
09:00 US May S&P/CS Home Price Index, S&P/CS Composite-20
08:30 US June Durable Goods
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's $37B 5-year note auction
14:00 Fed'sBeige Book
Today’s Headlines
9:39:59 AM
(US) SEC's Shapiro: Working to implement new financial regulations; new regulations should not force credit and derivatives companies to other countries
- Working with UK's Financial Services Authority (FSA) regarding hedge fund reporting.
- Expects to hold public hearings to discuss certain topics.
12:01:43 PM
Market Internals update at 12:00ET
- NYSE volume 460M shares, about 8% below its three-month average; decliners lead advancers by 1.2:1.
- NASDAQ volume 945M shares, about 4% above its three-month average; decliners lead advancers by 1.2:1.
- VIX index +3% to just above 23.00
12:30:35 PM
Preview: (US) Treasury's $38B 2-year note auction results due just after 13:00ET
- $38B is a $2B reduction from June auction
- Prior bid to cover ratio 3.45 with an average of 3.18 over the last 10 auctions
- Indirect bidders took 41.4% of competitive bids at last auction with 70% allotted at the high
- The 2-year when issued yield of 0.65% is roughly 2 basis points above the cash market
12:46:01 PM
(US) Coast Guard: Wellhead near coastal Louisiana marshlands is leaking oil; authorities are investigating leak, determining the scope of the leak
- Coast Guard notes that a tugboat hit the wellhead overnight. Reports from MSNBC news say that oil is gushing 20 feet into the air and that it was not immediately clear who is in charge of operating the well.
1:01:46 PM
*(US) TREASURY'S $38B 2-YEAR NOTE AUCTION DRAWS 0.665%; BID-TO-COVER RATIO: 3.33 V 3.45 PRIOR AND 3.18 AVG OVER LAST 10 AUCTIONS
- 88.09% allotted at the high
- indirect bidders take 32.82% of competitive bids, direct bidders take 13.49%, primary dealers take 53.69%.
- median bid 0.639%, low bid 0.57%
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 May S&P/CS Home Price Index, S&P/CS Composite-20
10:00 US July Consumer Confidence,
16:30 API Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's $38B 2-year note auction
Today’s Headlines
6:39:08 AM
(EU) Rebar and wire prices are stabilizing - Steel Business Business
- Current rebar prices are around €430-450/t, while mesh quality wire rod prices are said to be €420-450/t delivered. Drawing quality prices are around €470-480/t.
- Italian prices are said to be €10-20/t higher than Spanish and Greek levels due to higher scrap and energy costs.
- Next month, prices will remain unchanged from current levels, but market participants hope that prices will rise in September.
7:31:43 AM
(IN) India Central Bank (RBI) Survey: Monetary unwinding should continue until inflation expectations are anchored
- Risk of generalized inflation emerging inside the country
- Food price inflation might ease later this year
- Survey shows FY11 GDP growth might hit 8.4%; avg inflation at 8.6%
8:17:30 AM
(UK) UK Business Secretary Cable: There are serious constraints facing banks
- Cannot let constraints hinder the economic recovery.
- Might tax bank profits if excess bonuses are paid out.
- Says there is no tension within the coalition government.
9:31:24 AM
ECB: To drain €60.5B at 7-day Term Deposit tender operation on Jul 27th v €60.3B prior
- Purchased €176M in Govt Bonds in latest week
- ECB also calls for bids in main 7-day refi operation at fixed 1.0%
10:10:03 AM
(IS) Preview: Israel Central Bank Interest Rate Decision expected at 10:30am ET
- Consensus expectation is the leave the Base Rate unchanged at 1.50%..
- There is a minority view (around 33%) looking for a 25bps rate hike to 1.75%
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.
“Regret for the things we did can be tempered by time; it is regret for the things we did not do that is inconsolable.”
Market Week Wrap-up
- Select corporate earnings and some firm economic data out of Europe sent equity markets higher this week. Excellent results from Morgan Stanley, Caterpillar, UPS, Apple, Ford and others stoked risk appetite, aided by Germany's excellent July IFO reading and the UK's strong Q2 GDP reading. Commodities rose with risk appetite as both crude and copper rose to two month highs (note that gold keeps heading lower). Fed Chairman Bernanke's Congressional testimony on Wednesday tripped up investors as they latched onto his description of the economic environment as "unusually uncertain." Focus shifted increasingly to the EU's bank stress tests as the week wore on. The initial results released on Friday seemed to be even more favorable than some of the rosier forecasts, with only seven institutions in the "fail" column, with most analysts forecasting 10 or more would fail. Official test parameters confirmed that the test were limited to trading book losses rather than all bonds held to maturity, prompting dismissive commentary from certain analysts. For the week, the S&P500 gained 3.5%, the DJIA rose 3.2% and the Nasdaq Composite added 4.2%.
- Around one third of the firms making up the DJIA reported results this week, providing a close look at the commanding heights of the US economy. Verizon and Johnson & Johnson both missed revenue expectations, and J&J also trimmed its full-year guidance. Consumer-oriented names McDonalds and AmEx managed to exceed expectations slightly, although at the latter US card services revenue was down notably from last year. Shares of McDonalds fell on Friday as investors had hoped for better comps. Coca Cola and IBM merely met expectations. Both firms pointed to business in emerging markets as real bright spots: IBM's revenues from the BRIC countries were up an impressive 22% y/y, while Coca Cola's said it is seeing very strong growth in emerging markets.
- Better quarterly results were seen at Dow components UPS, Caterpillar, 3M and AT&T, with outperformance seen on both top- and bottom lines and full-year guidance adjusted higher. UPS's average daily volume was a bit soft, and the CEO warned that the company is not counting on a significant uptick in the economy in the second half of the year. Executives from 3M echoed this sentiment, and also warned that the period of "easy y/y" comparisons is now over and that it will be more difficult to show improvement in key metrics moving forward. Caterpillar crushed earnings estimates and boosted its 2010 outlook considerably. AT&T reported one of its lowest postpaid churn numbers ever, although it wireless adds were a bit soft.
- Goldman Sachs and Morgan Stanley were the last of the big banks to report June quarter results. Goldman's Q2 bottom line was a fraction of its Q1 result, thanks to the $550M SEC settlement and a $600M hit from the UK bank payroll tax. The firm's fixed income trading revenue fell sharply, after driving the bank's rebound from the crisis over the last year, while investment banking revenue declined as well. Morgan Stanley bucked the trend seen among the other big banks with a huge earnings win and higher revenue from equity trading (fixed income trading was flat). The bank's Smith Barney brokerage unit was another big profit generator, with income up sharply from last year. Regional and super regional banks US Bancorp, Wells Fargo, Fifth Third and SunTrust had an excellent quarter, showing strong improvements in credit quality.
- Tech antagonists Apple and Microsoft both reported very strong quarterly results, significantly exceeding consensus estimates for both profit and revenue. Apple's iPhone shipments were up 6% y/y, and on the conference call Apple's CFO reiterated that the company still can't meet demand for the iPhone 4. Yahoo's results were a bit ahead of expectations, as the firm indicated that its search revenues are stabilizing. Amazon shocked markets by missing EPS expectations (revenue was in line), citing higher operating expenses due to higher infrastructure costs. Texas Instruments' quarterly results were up sharply y/y, although they merely met expectations.
- In other earnings, Ford crushed expectations, beating top- and bottom-line expectations by healthy margins. CEO Mullaly said the company continues to take market share in the US, and said Ford's 2011 results would be "even better" than 2010. Quarterly results from pharma names Abbott, Boston Scientific and Gilead held few surprises, with results more or less meeting expectations. Friday afternoon, Genzyme shares rose 20% as reports emerged that Sanofi was exploring an offer for the biotech firm.
- US Treasury prices remained very resilient this week in the face of improving risk appetite. Rates ticked up modestly at the end of the week, spurred by some encouraging US and European economic data as well as profit taking ahead of next week's $104B in coupon supply. Early on, both the September long bond and the 10-year note future each made fresh all-time highs despite strong equity performance, although for the week US Treasury yields drifted higher. Friday morning, US yields retreated several basis points upon the leak apparently lax European stress test parameters, but by the close of pit trading the 30-year yield had reclaimed 4% and the 10-year had finished just shy of 3%.
- Private sector debt was relatively robust as corporations continued to take advantage of lower rates. The return of real estate-backed offerings was particularly encouraging. Reports surfaced that JP Morgan and Goldman Sachs were about to launch two CMBS offerings totaling $1.4B, providing hope that some big banks are starting to get off the sidelines with toxic assets. Banco Santander's UK unit sold £3.5B in triple-A rated RMBS roughly 156 basis points above Libor. Even the FDIC said it intends to sell a small residential mortgage bond backed by loans from 17 failed banks. The news wasn't all encouraging as the major ratings agencies all requested that their ratings not be used in documentation for new bonds in the wake of FinReg passage. Ford Motor admitted it decided not is issue new debt in light of the credit ratings agencies position regarding FinReg. This development, which some speculated could significanty curtail activity especially in the asset backed markets, didn't stop General Motors from acquiring AmeriCredit in a $3.5B deal. ACF is a consumer finance company that specializes in the purchasing, securitization, and servicing of automobile loans.
- It was a choppy week in FX trading, with no unified theme driving trading. With a variety of issues facing markets - earnings flows, EU stress tests, economic growth and more sovereign issues - key currency pairs whipped back and forth with news flow. As traders returned to their desks on Monday there was some risk aversion overhang stemming from last week's soft US economic data. European issues were certainly in the spotlight this week in the lead up to Friday's release of the European bank stress tests. Sovereign issues grabbed the spotlight after the breakdown in talks between Hungary and the IMF over the central European nation's "precautionary" aid deal and Moody's downgraded Ireland's sovereign ratings (though traders saw the move as housekeeping, bringing the firm into line with S&P and Fitch). Meanwhile, unimpressive peripheral debt auctions out of Spain, Greece and Ireland failed to inspire confidence.
- Europe got some relief from economic data out this week. Germany's Bundesbank commented that the German economy likely expanded significantly in Q2. Other data released in Europe seemed to confirm this sentiment: Germany's IFO registered its highest m/m rise since German unification and the UK advanced Q2 GDP blew out expectations with its first positive y/y reading in eight quarters. The major European PMI data exceeded expectations as did UK retail sales data. The continued advance in 3-month Euribor rates provided a headwind for the USD against the European pairs.
- EUR/USD was aided by steady interest from Middle Eastern names and option barrier attractions at 1.30, and in the end rising risk appetite proved too much of a force to resist. The pair basically stayed within last week's range but did briefly move above the 1.3025 level for fresh two-month highs. The pair had some difficult moving back above the 1.30 threshold later in the week with chatter that the SNB might be was "on top" in the pair. The euro was a bit skewed negatively ahead of the formal release of the stress tests, with investors questioning the methodology of the tests
.
- GBP/USD moved back to retest its July highs but first had to fight off disappointing UK public finance data. The middle of the week saw some extreme volatility in the GBP currency as GBP/USD fell precipitously from 1.5300 to below 1.5200 in the course of a minute and then back above the 1.53 handle. Dealers attributed the sharp price movement to a fat finger trade at a Dutch bank. Reportedly the trader sought to sell £3M in a trade and instead hit 3 yards. Strong data help the GBP to regain a foothold above 1.54 by Friday.
- The commodity-related currencies were strong, with AUD/USD ralling above the 0.89 handle, and USD/CAD able to shake off the poor Canadian retail data to test below 1.04. The Bank of Canada continued its tightening campaign as it raised its key rate by another 25bps to 0.75%. The CAD was near its weekly lows after the BOC reiterated that further rate moves to be "weighed carefully" and added that it saw both total and Core CPI near its 2.0% target through 2012. However, risk appetite (aided by China growth optimism) late in the week helped the pair to retest below 1.04 late in the week.
- In USD/JPY the greenback approached fresh seven-month lows mid-week to trade at 86.30 before stabilizing. The yen saw its share of commentary by the BOJ that the yen strength was being driven by European sovereign concerns and US economic outlook. Deputy Governor Yamaguchi noted that a firm JPY currency could affect the county's exports but added he did not consider policy based on specific currency levels. Dealers noted that the 85.00 level continued to be a potential pivot point in the pair to see if the BOJ would show some teeth.
- Risk aversion was seen early in the week in Asia after the China Securities Journal reported China export growth may slow to 16.3% in the second half of the year from 35% in H1. The report attributed the weakness to the EU debt crisis dampening overseas demand and forecasted import growth would slow to 19.3% thanks to a leveling out of commodity price. To that point, a WSJ report late in the week pointed to a range of commodity prices falling since the announcement of China's efforts to curb the property bubble: aluminum prices fell 18%, copper fell 13%, lead 19%, nickel 27% and steel 15%. The report also cited several analysts in Asian banks who warned that demand for building materials will "get worse before getting better."
Week of 7/26/2010 thru 7/30/2010
Monday, July 26, 2010
Economic
08:30 US June Chicago Fed Index
10:00 US June New Home Sales
10:30 US July Dallas Fed Manufacturing Index
Tuesday, July 27, 2010
Economic
09:00 US May S&P/CS Home Price Index, S&P/CS Composite-20
10:00 US July Consumer Confidence,
16:30 API Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's $38B 2-year note auction
Wednesday, July 28, 2010
Economic
08:30 US June Durable Goods
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's $37B 5-year note auction
14:00 Fed'sBeige Book
Thursday, July 29, 2010
Economic
08:30 Initial Jobless Claims, Continuing Claims
10:30 Natural Gas Inventories
13:00 US Treasury's $29B 7-year note auction
Friday, July 30, 2010
Economic
08:30 US Advance Q2 GDP, Q2 GDP Price Index, Q2 Personal Consumption, Q2 Core PCE
09:45 US July Chicago Purchasing Manager
09:55 US July Final University of Michigan Confidence
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Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
(SA) South Africa Central Bank Gov Marcus: Inflation remains favorable
- Iinflation expected to remain within the 3-6 percent target for the forecast period
- Risk to the inflation outlook as being evenly balanced and views the current monetary policy stance as "appropriate."
- Food prices likely to remain contained for a period of time
- Global inflationary does not pose risk to domestic inlfation view
10:14:03 AM
US Fed's Bernanke: It is important to offset any extension of the Bush tax cuts; Congress must show a commitment to fiscal consolidation
- Situation in Europe is improving with confidence coming back
- A switch to the Gold standard would not be practical
- Reminder: Congressman in recent weeks have voiced various opinions on the extension of Bush tax cuts, with some claiming the middle class cut is unaffordable, while others claiming it is necessary
10:00:02 AM
*(US) JUNE EXISTING HOME SALES: 5.37M V 5.1ME (-5.1% M/M)
- Median existing home price $183.7K v $174.6K (revised from $179.6K) in May (+2.3% m/m); vs $181K (+1%) y/y
- Total Months Supply: months 8.9 v 8.3 months in May (highest since Aug 2009)
- Distressed sales: 32% v 31% in May
- Condo sales: -1.5% m/m at 670K ; +20.5% y/y
10:30:21 AM
(CA) Bank of Canada (BOC) monetary report: Lowers Q2 GDP growth forecast to 3.0% from 3.8% prior; cuts Q3 and Q4 view too
- Lowers Q3 GDP growth view to 2.8% from 3.5 %; Q4 growth cut to 3.2 % from 3.5% prior
- Sees avg GDP growth of 3% through mid-2011.
- Effects of European debt crisis has been modest but risks could intensify; European debt crisis could cut Canada GDP by 0.3% in 2011.
10:40:00 AM
(US) Fed's Dudley: Chances of a douple dip recession is low due to current stimulative monetary policy
- Affirms Q3 growth to be less than 1H, moderate growth is less than what the Fed would prefer
- There is regional growth in private sector jobs; but jobs growth is sluggish overall (as indicated by June payrolls)
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:00 Brazil June Unemployment
08:30 US Initial Jobless Claims, Continuing Claims, Canada May Retail Sales
10:00 US June Existing Home Sales, June Leading Indicators
10:30 US Natural Gas Inventories
11:00 US Treasury note announcement
Today’s Headlines
7:51:42 AM
(US) Four Seasons CEO: Seeing business improve throughout the first half of 2010, RevPar +14% y/y - CNBC
- expecting to see a slowdown in supply growth moving foward
7:52:58 AM
(EU) German Fin Min Schaeuble: stress tests and budget cuts will raise confidence
- Confirms French comments that an accord between France and Germany will strengthen stability pact.
- Need additional work for EU bank tax, advancements made with regards to financial transaction tax.
8:55:47 AM
(EU) ECB's Makuch: No reason to speculate on interest rate increases until next year
- Data does not hint at economic stagnation or double dip in the Euro region.
- No purpose to extend gov't bond buying program to other assets.
10:30:05 AM
*DOE CRUDE: +360K V -1ME; GASOLINE: +1.1M V +1ME; DISTILLATE: +3.9M V +1.6ME; UTILIZATION: 91.5% V 90.2%E
- Distillate demand -170K bpd to 3.36M bpd
- Gasoline demand +355K bpd at 9.44M bpd
10:31:15 AM
Market Internals update at 10:30ET
- NYSE volume 220M shares, about 22% below its three-month average; advancers lead decliners by 1.2:1.
- NASDAQ volume 475M shares, about 11% below its three-month average; decliners lead advancers by 1.1:1.
- VIX index +2.5% to just above 24.00
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.
04:30 BoE minutes
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
6:41:53 AM
(HU) Hungary PM Orban: Govt will stick to targets agreed to, deficit cannot be higher than 3.8% of GDP this year
- To decide on their own ways to reach budget goal.
- Will adhere to international agreements.
9:00:01 AM
*(CA) BANK OF CANADA (BOC) RAISES INTEREST RATES BY 25BPS TO 0.75%; AS EXPECTED
- Reiterates that further rate moves to be weighed carefullly
- Amends GDP forecasts; Sees 2010 growth at 3.5% v 3.7% prior; 2011 GDP at 2.9% v 3.1% prior; Sees 2012 GDP at 2.2% v 1.9% prior
- Sees slightly weaker global growth
- European risk has been reduced and sustainable growth outlook is better
10:29:01 AM
(EU) Fitch comments on upcoming European bank stress tests
- Fitch Ratings believes that capital will be made available by governments where the stress tests in respect of 91 European banking groups indicate shortfalls and banks are unable to raise capital in the public markets. This may be via existing national bank recapitalization schemes, or directly.
- More of a concern for Fitch is that conditions in European funding markets remain difficult for some banks.
10:00:49 AM
(US) Fed's Tarullo: Larger financial institutions require more capitalization,must increase risk weight of traded instruments
- Notes that European measures designed to regulate compensation could eventually encourage firms to avoid the regulations; feels there should be a minium capital requirement for all financial institutions worldwide
- Common equity ratio is the best metric to use to determine whether a firm can deal with losses
- Federal Reserve has agreed to bring down the level fo credit protection provided in the TALF program
10:14:02 AM
(US) Fox's Gasparino: Pay Czar Feinberg to announce plans for clawbacks on some Financial companies as early as this upcoming Friday
- Reminder: On 6/4 Gasparino noted that in the next few weeks, Pay Czar Feinberg may be looking to pursue clawbacks from some financial firms for 2008 compensation
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 June Housing Starts, June Building Permits
09:00 BoC Rate Decision
16:30 API Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
6:00:31 AM
*(GE) GERMAN BUNDESBANK JULY MONTHLY REPORT: EMU IMBALANCES PUT SIGNIFICANT STRESS ON MONETARY POLICY
- Imbalances in the peripheral eurozone economies are a source of danger for whole currency zone
- EMU recovery remains intact
- EMU fiscal consolidation allows for low ECB rates
- Warns against international restrictions of capital flows
- German economy likely expanded significantly in Q2 with a strong growth of GDP
6:45:44 AM
USD 3-month Libor at 0.518% v 0.521% prior
- Overnight USD: 0.264% v 0.269% prior
- Overnight GBP: 550% v 0.550% prior
- Overnight EUR: 0.461% v 0.434% prior
- 3M GBP: 0.736% v 0.735% prior
- 3M EUR: 0.808% v 0.794% prior
- 3M JPY: 0.244% v 0.244% prior
8:00:19 AM
*(PD) POLAND JUN SOLD INDUSTRIAL OUTPUT M/M: 7.0% V 5.0%E; Y/Y: 14.5% V 12.4%E
- Prior MoM revised higher from 1.6% to 2.0%
- Prior YoY revised lower from 14.0% to 13.5%
8:00:20 AM
*(PD) POLAND JUN PRODUCER PRICES M/M: 0.8% V 0.9%E; Y/Y: 1.9% V 1.7%E
- Prior MoM revised higher from 1.6% to 2.0%
- Prior YoY revised higher from 1.5% to 1.9%
10:00:02 AM
*(US) JULY NAHB HOUSING MARKET INDEX: 14 V 16E; lowest since April 2009
- Prior revised lower from 17 to 16
- NAHB Chairman: We continue to see a lull in home buying activity following the expiration of the federal home buyers tax credit program as many of the sales that would have occurred this summer were likely pulled forward to meet the program's deadline.
-Builders are reporting continuing hesitancy regarding home purchases due to uncertainty in the overall economy and job markets.
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.
“Success is not the result of spontaneous combustion. You must set yourself on fire.”
Market Week Wrap-up
- The June quarter earnings season kicked off this week as strong quarterly results from Alcoa, CSX and Intel helped boost US equity indices and sharpen risk appetite. Earnings-driven optimism didn't last long however, and soft quarterly results from JP Morgan, Citigroup and Bank of America, among other, dragged down market sentiment. Key economic data only deepened fears about the trajectory of the economic recovery. The New York and Philadelphia regional manufacturing reports were very weak and the preliminary July University of Michigan Confidence survey declined from June levels and missed expectations. The June wholesale price index fell for a third consecutive month, further stoking fears that deflation has arrived. The minutes from the June FOMC meeting showed that the Fed cut its 2010-13 economic forecast. Two long-running corporate dramas reached critical points in the week: BP has successfully capped its leaking Macondo well in the Gulf of Mexico (temporarily, in order to test pressure levels in the well, although the cap may be left in place), and Goldman Sachs reached a $550M deal with the SEC to settle the Abacus CDO fraud case. In Washington, the Senate passed the final version of the FinReg bill, which is due to be signed by President Obama shortly. In the end, these positive developments couldn't overcome the negative data and profit taking on last week's rebound; for the week, the S&P500 fell 1.2%, the DJIA lost 1% and the Nasdaq Composite dropped 0.8%.
- Second quarter reports from JP Morgan, Citigroup, and Bank of America disappointed investors, with the results notably weaker than the first quarter reports from all three banks. In April, top-line results from the banks roundly beat expectations. This week, revenue from all three missed expectations. JP Morgan's investment banking revenue, which was a major revenue driver in Q1, declined by 25% from last quarter's total. Analysts looked closely at Citi and BoA's earnings quality and determined that a significant portions of earnings at both came from one-time items related to asset sales and upwards adjustments to certain assets under mark-to-market rules. Provisions for credit losses fell further at all three institutions, although BoA saw another uptick in its allowance for loan and lease losses. Comments from executives made it clear that it remains too early to clearly say what impact the FinReg bill will have on the large banks. BoA's CEO told CNBC that consumers continue to spend more, although this increase is slowing somewhat. Citi's CFO noted that all companies that offer credit cards in the US are struggling with the recently-passed Card Act as well as the overall credit environment.
- Alcoa and CSX offered relatively strong quarterly results, aiding risk appetite early on in the week. Alcoa's Q2 results were firmly in line with expectations, and it raised its guidance for global aluminum consumption to +12% y/y, up from +10% prior. CSX's results were well ahead of expectations, and management said they expect the economic recovery will continue in the second half of the year. General Electric's revenues missed expectations, hurt by a disappointment on the industrial side rather than on the financial segment. The firm noted that higher income and lower losses at GE Capital were particularly encouraging. Executives forecasted single-digit order growth in the second half of 2010, which would represent the first growth in orders since the beginning of 2008.
- Leading chip manufacturers Intel and AMD both crushed earnings expectations in their Q2 reports. Intel's CEO said strong demand from corporate customers helped the company achieve its best quarter in its 42-year history, and said the outlook for the rest of the year remains robust. Shares of Google fell after the search giant missed earnings expectations by a hair and said that its paid clicks total fell on a sequential basis. The company's European business was a source of weakness, thanks to declines in the euro; around one-third of its revenue comes out of Europe.
- Treasury prices began the week under pressure as better sentiment on the equity side fueled profit taking. The US benchmark 10-year yield topped out at 3.12% on Tuesday. As the week progressed, sentiment that a strong second quarter earnings season would buoy investors' desire to take on risk gave way to growing concerns about an economic slowdown and the possibility of deflation. By Friday, the US 10-year note Sept future made a new lifetime contract high above 123 while the two-year yield repeatedly made new all-time lows. Even with what can be best described as mediocre showings in the 10- and 30-year re-openings mid-week, bond prices were still moderately higher on the week. The 10-year yield has drifted back into the low 2.9% area while the long bond is below 3.95%.
- Sentiment in FX trading this week continued to shift away from sovereign risk and toward the implications of a slower US economy. The dollar's price action indicates that traders are counting on the likelihood of a longer delay in the Fed's tightening cycle. The euro repeatedly shrugged off potential risk aversion catalysts and benefitted from the disappointing US economic data. The dollar was further hampered by interest rate differentials as US two-year yields hit fresh all-time lows compounded by the further rise in short-dated euro interest rates.
- The EUR/USD pair held above the pivotal 1.2480 level despite Slovak government objections to the rescue package for Greece (the package later passed) and a two-notch sovereign downgrade of Portugal by Moody's (the last of the three majors to cut Portugal's debt). Instead, dealers accentuated the positive, noting that Moody's raised Portugal's outlook to stable. The euro also dodged softer German ZEW data, gaining enough technical momentum to test the 1.30 handle on Friday, nearly 11 handles higher than its June 4th lows of 1.1870). Greece tested the market's attitude toward short-term borrowings in its first auction since the EU/IMF bailout in May. Spreads on European peripheral debt narrowed following the successful 26-week auction. Much hope was generated by an average yield of 4.65% on the Greek debt sold, below the pivotal 5.0% level being charged by the EU/IMF. Spain's 15-year auction was well received, with an average yield of 5.11%, even after the maturity was trading at 5.21% prior to the auction. Spreads on peripheral debt narrowed even further late in the week, with the Spanish/German 10-year yield fell to its narrowest level since June 1, when it tested below 170bps.
- Sterling was aided by hawkish remarks from BoE member Sentence, who insisted that interest rates need to gradually rise. GBP/USD posted fresh two-month highs above 1.5450 after Sentence's remarks. Better UK employment claims data provided an additional incentive for the pound to probe higher. The yen was initially softer after the ruling DPJ party lost control of the upper house in last weekend's elections, which could thwart efforts to curb public debt and engineer sustainable economic growth. USD/JPY consolidated in the upper part of the 88 handle for most of the week. However, yen the rose to its strongest level this year against the dollar on the soft US economic data. USD/JPY was testing below 86.35 by the end of the week.
- The Bank of Japan's rate decision saw policymakers raise 2010 GDP forecast to 2.6% from 1.8% in a move signaled by the press and also tracking a similar upgrade by the Cabinet office last month. The BOJ also lowered FY11/12 GDP to 1.9% from 2.0%, but raised median FY10/11 Core CPI target to -0.4% from -0.5%. In accompanying commentary, the BOJ added that business sentiment and corporate profits are improving as the economy shows signs of recovery. Notably, the BOJ removed reference to policy measures supporting improvement of private consumption.
- Economic data out of China reinforced the sense that the stimulus-fueled economic boom is slowing and further clouded the timing for China exiting accommodation. China reported Q2 GDP at 10.3% - the lowest level since Q3 of 2009 - while industrial production was a four-month low 13.7% and June CPI was shy of 3.3% estimate at 2.9%. Risk-related assets saw a brief rally following the release of data as markets perceived a "soft landing" scenario, allowing a more protracted exit. However, the National Bureau of Statistics attributed the GDP decline to a low base-year effect as well as already implemented policy steps. Subsequently, China Premier Wen echoed those comments, pledging to maintain policy continuity with cryptic reference to "appropriately" loose monetary policy.
Week of 7/19/2010 thru 7/23/2010
Monday, July 19, 2010
Economic
10:00 US July NAHB Housing Index
11:00 Canada April Budget Balance
Tuesday, July 20, 2010
Economic
08:30 US June Housing Starts, June Building Permits
09:00 BoC Rate Decision
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, July 21, 2010
Economic
08:30 BoE minutes
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
Thursday, July 22, 2010
Economic
08:00 Brazil June Unemployment
08:30 US Initial Jobless Claims, Continuing Claims, Canada May Retail Sales
10:00 US June Existing Home Sales, June Leading Indicators
10:30 US Natural Gas Inventories
11:00 US Treasury note announcement
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 May CPI, CPI Ex Food & Energy, CPI Core Index SA
09:00 US May Long-Term TIC Flows
09:55 US July Prelim University of Michigan Confidence
10:00 Mexico Rate Decision
Today’s Headlines
6:00:28 AM
(US) Fed's Yellen: Unemployment is painfully high, job creation is the main focus of monetary policy at the moment - prepared Senate testimony
- Fed policy must ensure that the recovery accelerates.
- Fed to withdraw accommodation carefully when the time comes.
- Need to do more to mitigate risks from the financial system.
5:30:03 AM
*(US) INITIAL JOBLESS CLAIMS: 429K V 445KE; CONTINUING CLAIMS: 4.681M V 4.444ME (lowest initial jobless claims since August 2008)
- Prior initial claims revised higher from 454K to 458K
- Prior continuing claims higher from 4.413M to 4.434M
- 4-week average for claims at 455K v 466K
6:26:19 AM
(IT) Bank of Italy Quarterly Economic Bulletin: Forecasts 2010 GDP growth at 1.0% (update)
- Forecasts 2010 CPI 1.5% and at 1.9% in 2011
- Expects economic slowdown in H2 2010
- May lending at largest five Italian banks were lower y/y
6:45:22 AM
(RU) Preview: Russia Jun Industrial Production and Producer Price data expected at 10:00am ET (14:00 GMT)
**Consensus expectations:
- Jun Industrial Production MoM: 1.8%e v 1.2% prior; YoY: 11.7%e v 12.6% prior
- Jun Producer Prices MoM: 1.5%e v 2.7% prior; YoY: 18.4%e v 19.1% prior
6:56:44 AM
(US) US Senator Dodd (D-CT): Senate may not vote on the nominations for the Federal Reseve until September, still possible for commitee to vote before August recess
- Reminder: on 6/11 Fed's Vice Chair Kohn confirmed would delay departure from Fed until successor was selected, but would stay until Sept 1 at the latest
- Note: Current nominees for vacancies are Janet Yellen to US Fed Reserve Vice Chair; Peter Diamond, Sarah Rasking to Fed Board
7:00:03 AM
*(US) JULY PHILADELPHIA FED INDEX: 5.1 V 10.0E (lowest since Aug 2009)
**Sub-Indices:
- Prices Paid: 13.1 v 10.0 prior
- New Orders: -4.3 v 9.0 prior
- Employment: 4.0 v -1.5 prior
- Inventories: 4.5 v 5.1 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.
08:30 US July Empire Manufacturing, June PPI, June Core PPI, Initial Jobless Claims, Continuing Claims, Canada May Manufacturing Sales, Chile June Copper Exports
09:15 US June Industrial Production, June Capacity Utilization
10:00 US July Philadelphia Fed
10:30 Natural Gas Inventories
15:00 Argentina June Industrial Production
Today’s Headlines
2:16:30 AM
*(IT) ITALY DEBT AGENCY (TESORO) BOND AUCTION RESULTS: SELLS TOTAL €6.8B IN THREE TRANCHES V €7.5BE
- Sells €3.3B in 3.0% Jun 2015; avg yield 2.85% v 2.91% prior; Bid-to-cover: 1.41x v 1.27x prior
- Sells €1.76B in 4.75% Aug 2023; avg yield 4.43% v 5.10% prior; Bid-to-cover:1.50 x v 1.47x prior
- Sells €1.73B in 5.0% Sept 2040; avg yield 5.08% v 4.84% prior; Bid-to-cover: 1.35x v 1.58x prior
2:30:14 AM
*(SA) SOUTH AFRICA MAY RETAIL SALES CONSTANT M/M: 1.3% V -0.2% PRIOR; Y/Y: 4.6% V 3.7%E
- Prior MoM revised lower from -0.2% to -0.3%%
- Prior YoY revised lower from 3.2% to 2.9%
3:17:08 AM
(SP) Spain PM Zapatero: Austerity measures could impact growth in the second half of 2010 and in 2011; reiterates commitment to deficit target
- Recent economic data indicate Q2 growth.
- Housing markets are beginning to normalize.
- Unemployment remains top concern for the government
- 2010 y/y economic growth to be slightly negative.
- Financial system continues to remain strong.
5:39:22 AM
(US) US Fed's Hoenig: Every trend line in the economy is showing improvement, with exception of housing - CNBC
- Housing is stabilizing; will take time to recover as it was so distorted
- Comments that the Fed has already done a great deal for the economy (Note: on 7/13 Hoenig commented that additional purchases of assets would have limited effect in certain industries and create problems down the road (on 7/6 noted that the Fed should dispose of assets as quickly as possible)
5:30:02 AM
*(US) JUN IMPORT PRICE INDEX M/M: -1.3% V -0.4%E; Y/Y: 4.5% V 5.3%E
- Prior MoM revised higher from -0.6% to -0.5%
- Prior YoY revised higher from 8.6% to 8.7%
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 June Import Price Index, June Advance Retail Sales
10:00 US May Wholesale Inventories
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's $13B 30-yr auction
14:00 FOMC Minutes
15:00 Argentina June CPI, Wholesale Price Index
17:00 Colombia May Trade Balance
Today’s Headlines
5:37:07 AM
(UK) BOE Sentance reiterates view of gradual increase in interest rates
- Policymakers should start raising interest rates because economic conditions were improving but any tightening should occur only gradually; recovery will continue in the absence of large shocks.
- Ongoing market jitters should not be dominant influence on BOE policy; FX fluctuations driven by changes in perception.
- Favored avoiding destabilizing confidence through a 'sudden lurch' in policy; policy has hurt the pound sterling and pushed up inflation.
5:30:11 AM
*(CA) CANADA MAY INTL MERCHANDISE TRADE: -C$500M V C$0.0E (FLAT)
- Prior revised Lower from +C$200M to -C$300M
Components
- Exports C$34.5B v C$32.8B prior; first MoM increase since Feb
- Imports: C$35.0B v C$33.1B prior
- Trade Balance with US: C$3.6B v C$3.5 prior
- Trade Balance non-US: -C$4.1B v -C$3.8B
6:44:23 AM
(US) Govt asks courts to set aside stay on original deep water drilling moratorium
- Hornbeck (the originator of the case) giving two weeks to respond to govt request.
- REMINDER: yesterday the Interior Dept announced a new, more refined drilling ban to replace the original moratorium
7:45:49 AM
(US) US Appeals court reportedly affirms FAA policy for dealing with airport congestion pricing
- FAA policy permits airport operators to charge higher fees at peak congestion times. The court has rejected industry claims that the pricing has been arbitrary.
7:47:12 AM
(US) Fed's Rosengren: Deflation is a bigger risk than inflation; more Fed asset purchases are an option - WSJ
***Reminder: Back on 05/05 Rosengren said he agreed with those expecting disinflation in the near term.
** Reminder: Fed's Fisher commented that inflation was not a concern that H2 GDP growth may be less than H1; on 7/12 commented that Fed was not currently evaluating further easing steps and would require a very adverse shock to the economy before such consideration
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
08:00 Brazil May Retail Sales
08:30 US May Trade Balance
10:00 US July IBD/TIPP Economic Optimism
13:00 US Treasury's $21B 10-yr auction
14:00 US June Budget Statement
16:30 API Crude Oil/Gasoline/Distillate Inventories
Today’s Headlines
7:43:53 AM
(US) Fed's Lacker: Not expecting housing to dramatically worsen; not currently evaluating further easing steps and would require a very adverse shock to the economy before such consideration
- Notes that it appears as though some market players have overreacted to some poor economic data
- Impacts to the US economic outlook from a European debt issuance would be slight
- Comfortable with current interest rates; fiscal sustainability would be positive for the economic recovery
- Inflation expectations are stable, there is a low risk for deflation
8:01:41 AM
(UK) BOE's Posen: There is no guarantee of a UK recovery; will be a drag from eurozone
- Sees a chance the UK could fall back into a slump.
- Says recent exports data has been disappointing.
- UK budget deficit will drop to 5% of GDP, and could be even lower.
8:14:47 AM
(US) FHFA issues mortgage-related subpoenas as it seeks to recover potentially billions in Fannie and Freddie losses - WSJ
- FHFA is seeking to determine whether issuers of private mortgage bonds are liable for losses at the GSEs.
- FHFA issued 64 subpoenas to "various entities," asking for documents on the mortgage securities.
8:20:14 AM
(UK) S&P affirms UK 's AAA rating; outlook Negative
- Cites "strong framework for fiscal consolidation in its June 2010 budget. "
- Standard & Poor's medium-term economic forecasts for the U.K. are less optimistic than the assumptions underlying the budget. We therefore believe there is still a material risk that the U.K.'s net general government debt burden may approach a level incompatible with the 'AAA' rating.
8:25:33 AM
(AR) Fitch raises Argentina rating to B from RD; outlook Stable
- Fitch also upgraded the long-term local currency IDR to 'B' from 'B-'. The Outlook on the Local Currency IDR is also Stable
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.
“It is impossible to go through life without trust: That is to be imprisoned in the worst cell of all, oneself.”
rules
Market Week Wrap-up
- Risk appetite has made a respectable comeback during the short post-Fourth of July holiday week. With volumes down sharply and the calendar light of economic data and corporate earnings, investors bid up stocks after two weeks of steady declines. On Tuesday Spain had a strong showing in a sale of 10-year bonds, further calming fears about the European debt situation. The US June ISM non-manufacturing data missed expectations and fell from May levels reinforcing concerns about future economic growth. In a particularly troubling sign, the ISM employment sub index slipped below the key 50 level, indicating contraction in services employment for the first time since the April ISM report. The stock rally got under way in earnest on Wednesday after an influential Goldman Sachs economist said that the weak US payrolls data and other negative US economic data mean the Fed will likely be forced to offer more liquidity to markets (so-called QE2) and the ICSC weekly chain store data rose at the highest rate since 2006. The weekly jobless claims declined a bit on Thursday, further supporting investor sentiment. News and rumors concerning the European bank stress tests were in the background all week, ahead of the expected release of the results scheduled for July 21st. A German banking source noted that stress tests on European banks would include a double digit haircut on European peripheral sovereign debt, but no haircut on German sovereign debt. Commentators expect that many of the tested banks will need to raise capital. Gold pivoted around the $1,200 handle and the August contract closed out the week around $1,209. Sellers had the upper hand in the bond pits late in the week pushing the 10-year yield back above 3%. For the week, the S&P500 gained 5.4%, the DJIA rose 5.3% and the Nasdaq Composite added 5%.
- The seeds of resurgent risk appetite were sown early in the week in Asia. The FT reported the State Council in China may discontinue bank holding company status for China's $200B sovereign wealth fund, paving its way to invest in US markets. Floated by the influential China Vice Premier Wang Qishan, the proposal was said to target equity, bond and real estate deals in the US. Also helping risk-on matters related to China, on Thursday the US Treasury finally released its semi-annual currency report to Congress, which had been delayed since April ahead of the bilateral talks between the US and Chinese presidents. The Treasury was sufficiently impressed by the recent widening of the yuan band to once again refrain from labeling China as a currency manipulator. The Treasury did note the yuan is still undervalued, reiterating US continues to monitor the pace of China currency reform. To that end, PBoC continued to nudge the yuan higher, moving the mid-point to 6.7753 by Friday - its best level for the week.
- The IMF raised its global growth forecast for 2010. The IMF projects the world economy will grow by 4.6%, revising its 4.2% forecast from April due to "stronger activity" during the first half of the year. However, the stronger forecast is mostly built on expectations of better growth among emerging nations, especially the BRIC countries. The IMF did raise its US GDP outlook to 3.3% from 3.1% and stated that the US economic recovery has been stronger than expected, although it also warned of the risk of a "double-dip" in the US housing market. The IMF warned that negative spillover from Europe to other countries and regions could be substantial and affirmed that European debt problems have setback the global recovery.
- In other equity news, discount name Family Dollar offered Q3 results that were firmly in line with expectations, while the firm's outlook for next quarter was somewhat soft. Samsung Electronics offered a strong view of its Q2 results, forecasting nearly double the earnings seen in the same period last year. State Street offered a strong forecast for its Q2 results, thanks to one-time items. Sirius XM disclosed a big turnaround in net subscribers in its Q2. Tractor Supply Company offered very strong Q2 guidance and increased its FY10 outlook.
- The June same-store sales numbers did little of offer hope the consumer is close to taking over lead in securing continue economic growth. With a few exceptions, the June sales data provided cause for concern, with y/y comparisons showing that many retailers were not seeing much growth off the depressed year-ago levels. The poor June same-store sales caps a quarter of generally tepid comps among retailers, boding ill for June quarter retail earnings. Sales at mall chains Hot Topic and American Eagle, shoe retailer Buckle and apparel names Stein Mart and Wet Seal all racked up consecutive comp declines. Gap's numbers were flat, missing expectations for 3.5% growth. Competitors Costco, BJs and Target all missed expectations. Apparel names The Limited, Zumiez, Nordstrom and Abercrombie & Fitch were the standouts, beating expectations by a few percent and also showing stronger growth over May levels, although analysts pointed out that these successes came mainly from steep discounting.
- US Treasury markets saw some selling pressure late in the week as traders positioned ahead of $69B in coupon auctions scheduled for next week. Investor risk appetite enjoyed some resurgence throughout the first week of the third quarter as evident by higher stock prices and a surging euro, leaving bond markets ripe for some profit taking. The US benchmark 10-year yield has climbed back above 3% while long bond regained 4%. The spread between the 2 and 10-year widened off of last week's 1-year low and is back above 240 basis points.
- Corporate bond markets saw increased activity as firms looked to tap investors' increased willingness to take on risk. A plethora of offerings across a fairly broad cross section of sectors offered some hope that corporate activity is set to pick up heading into the second half. Some of the more notable sales included $3B in Time Warner notes, €1.5B HSBC benchmark bonds, €1.75B UBS 5-year bonds, €750M Continental AG 5-year bonds, $300M Kroger 30-year bonds, and $600M in Fidelity National Information Services 2017 paper.
- The rebound in equity markets worldwide set the tone for currency trading. The Bank of Korea and Malaysia added to the trend of Asian central banks raising interest rates (India and Taiwan have raised rates recently) and helped cement confidence that Europe's debt crisis would not derail global economic recovery. Australia's RBI did not raise rates again, although FX traders focused on analyst commentary that weak US June payrolls and other soft economic data from last week would likely force other G7 central banks to maintain low interest rates far longer than previously expected. The greenback weakened slowly, pushing out to two-month lows against the European pairs, especially after the IMF's annual review of US economy. Among the points mentioned above, the IMF also noted that the greenback was "moderately overvalued" in the medium term and could decline further over the next five years.
- There were no surprises in either the BoE or ECB rate decisions. Both central banks maintained interest rates at current levels, while the ECB press conference was a dull affair as Trichet reiterated that rates were appropriate and liquidity would be adjusted as required. EUR/USD eventually moved above the post payroll highs of 1.2610 to probe an alleged 1.27 Far East option barrier aided by the full sterilization of European government bond purchases via the ECB 1-week deposit operation and a poor showing in the employment component of the US ISM non-manufacturing mid-week. The 1.27 neighborhood corresponds with the former late 2009 channel point (violated in May, corresponds to the current 72-day moving average).
- The EUR/CHF cross was steady at 1.3320 late in the week. Dealer chatter noting that 1.3000 might be the new "line in the sand" for potential Swiss National Bank intervention. The SNB's June currency reserves report confirmed speculation that the central bank has paused for the moment in its campaign to weaken the franc, although the weaker Swiss CPI data prompted speculation that the SNB might be back in the intervention business. The FT reported that SNB might post as much as CHF10B in paper losses from intervention when the bank reports its Q2 statement next month.
- China continues to diversify its reserves. Dealers pointed out that China's purchases of Japanese t-bills in May were nearly five times the amount it bought in all of 2005, which was the biggest year for Chinese purchases of Japanese bonds in the 2005-09 period. Commentators speculated that this could be the beginning of a trend to diversify into the yen, and away from the euro and the dollar. USD/JPY was unable to find momentum to test above the pivotal 88.00 level early in the week but managed to push above this key historical level and end the week around the mid 88 handle.
- The Bank of Korea surprised the markets with a rate tightening on Friday (most analysts expected the BOK to stay on hold), boosting its seven-day repo rate 25bps to 2.25%, following a 16-month hold. The decision was augured by some of the bank's recent commentary: back in June, the BOK noted consumer price index pressure was on the rise, forcing greater focus on price stability. Speaking after the decision, BOK Governor Kim said monetary policy is "still accommodative," Q2 growth would outperform Q1 by at least 1%, and inflation could rise above 3% next year. Hawkish comments potentially open the door to further tightening, even though BOK noted it would try to avoid surprising the markets.
- The Reserve Bank of Australia effectively extinguished slight expectations of retreat on rates. Leaving its cash rate at 4.50%, the RBA said CPI increases are likely to be "a little above 3%" in near term - the upper mark of its target band - amid further increase in business investment and wage growth. The rosy RBA outlook was buttressed by other notable data points from Australia during the week, namely the trade and employment figures. May terms of trade saw a A$1.6B surplus, the highest since March of 2009, while jobless rate fell to 5.1% and job growth was a 5-month high 46K. In the wake of strong data and hawkish RBA, fixed-income market probabilities of an RBA move shifted from a slight chance of a cut to a 20% chance of a 25bp hike at the central bank's August meeting.
Week of 7/12/2010 thru 7/16/2010
Monday, July 12, 2010
Economic
10:00 Mexico May Trade Balance, Industrial Production
10:30 BoC Senior Loan Officer Survey
13:00 US Treasury's $35B 3-yr auction
Tuesday, July 13, 2010
Economic
08:00 Brazil May Retail Sales
08:30 US May Trade Balance
10:00 US July IBD/TIPP Economic Optimism
13:00 US Treasury's $21B 10-yr auction
14:00 US June Budget Statement
16:30 API Crude Oil/Gasoline/Distillate Inventories
Wednesday, July 14, 2010
Economic
08:30 US June Import Price Index, June Advance Retail Sales
10:00 US May Wholesale Inventories
10:30 DoE Crude Oil/Gasoline/Distillate Inventories
13:00 US Treasury's $13B 30-yr auction
14:00 FOMC Minutes
15:00 Argentina June CPI, Wholesale Price Index
17:00 Colombia May Trade Balance
Thursday, July 15, 2010
Economic
08:30 US July Empire Manufacturing, June PPI, June Core PPI, Initial Jobless Claims, Continuing Claims, Canada
May Manufacturing Sales, Chile June Copper Exports
09:15 US June Industrial Production, June Capacity Utilization
10:00 US July Philadelphia Fed
10:30 Natural Gas Inventories
15:00 Argentina June Industrial Production
Friday, July 16, 2010
Economic
08:30 US May CPI, CPI Ex Food & Energy, CPI Core Index SA
09:00 US May Long-Term TIC Flows
09:55 US July Prelim University of Michigan Confidence
10:00 Mexico Rate Decision
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Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
07:00 Canada June Employment Change, June Unemployment Rate
08:15 Canada June Housing Starts
10:00 US May Wholesale Inventories
Today’s Headlines
3:00:15 AM
*(MA) MALAYSIA CENTRAL BANK INTEREST RAISES OVERNIGHT RATE BY 25BPS TO 2.75%
- Analysts were evenly split between rate being left unchanged at 2.50% and a 25bps rate hike to 2.75%
- Comments:
- Increased risk that global growth momentum could moderate.
- Prices likely to rise at a gradual pace in coming months, moderate inflation seen in 2011.
- Monetary policy stance continues to remain accommodative and supportive to growth.
- New OPR level appropriate.
4:00:33 AM
*(SA) SOUTH AFRICA MAY MANUFACTURING PRODUCTION M/M: 0.3% V 0.1%E; Y/Y: 7.9% V 8.3%E
- Prior MoM revised lower from -1.0% to -1.4%
- Prior YoY revised lower from 8.7% to 8.6%
5:59:43 AM
(EU) ECB's Trichet: EONIA rise in not a monetary policy signal; No intention of changing policy stance
- It would be a mistake to interpret market moves as a monetary signal.
- ECB has intention to sterilize gov't bond purchases; He noted that the last term deposit operation met its €59B target).
- For the time being the return to unlimited liquidity seems appropriate for three-month operations.
- Does not believe it is 'opportune' to have an orderly sovereign default procedure.
- Euro Stabilizarion Fund should be used flexibly.
5:30:01 AM
*(US) INITIAL JOBLESS CLAIMS: 454K V 460KE; CONTINUING CLAIMS: 4.413M V 4.600ME
- Prior initial claims revised higher from 472K to 475K
- Prior continuing claims higher from 4.616M to 4.637M
5:50:17 AM
ECB's Trichet: Expiration of 12-month LTRO operation on July 1st was replaced by other measures; market reaction to end of 12-month program was not surprising - Q&A
- Not surprised market rates rise as liquidity is withdrawn; To continue to monitor bond purchase program very carefully.
- On sovereign debt crisis, can say that the secondary market is functioning a bit better, but that its too early to draw conclusions.
- Stress tests of banks are an "old story," started in Dec 2009, but EU council asked in June for publication; ECB believes the stress test publication will build confidence.
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.
