Barchart Morning Call
Thu, 10 May 2012 07:00:00 -0500
Overnight Developments- E-mini S&Ps are trading slightly higher this morning by 0.75 points. The
dollar index is little changed. Commodity prices are mixed this morning with
crude oil down 46 cents and gold down $3.30 but with copper and grains trading
higher. There was some pessimism this morning about the Chinese April trade
report, which showed weaker-than-expected exports and imports. European stocks
are trading moderately lower with the Euro Stoxx 50 down 0.39%. The markets are
waiting for the next round of Greek talks on forming a government. The Radical
Left Syriza party was unable to form a coalition yesterday. Socialist Pasok
leader Venizelos later today will try to form a coalition once he is formally
given the mandate by Greek president Papoulias. If Mr. Venizelos cannot form a
government, then the Greek president will have one last try at brokering a
coalition before calling for new elections in June. On the brighter side, the
European Financial Stability Fund (EFSF) yesterday announced the release of 5.2
billion euros of bailout payments that will be sufficient to carry Greece
through June, illustrating that Eurozone officials are giving Greece some time
to try to work through its political troubles. French March industrial
production fell -0.9% m/mm, which was weaker than the consensus of -0.6% m/m,
although Feb was revised higher to +0.9% from +0.3%. Italy's March industrial
production rose by +0.5% m/m, which was stronger than the consensus of -0.2% m/m
and reversed part of the -0.7% m/m decline seen in Feb. The Bank of England
after its 2-day meeting announced this morning that it left its base rate
unchanged at 0.50%, which was in line with market expectations. The BOE also
left its asset purchase target unchanged at 325 billion pounds, which meant that
the BOE effectively ended its quantitative easing program for the time being.
That was in line with market expectations given that UK inflation is high. Asian
stock markets today closed mixed: Japan -0.39%, Hong Kong -0.51%, China -0.01%,
Taiwan +0.11%, Australia +0.48%, Singapore +0.09%, South Korea -0.35%, India
-0.36%. China's April trade surplus rose to $18.42 billion, which was larger
than the consensus of $9.9 billion. April exports grew by +4.9% y/y, which was
weaker than the market consensus of +8.5% y/y and down from +8.9% y/y in March.
Import growth fell to +0.3% y/y from March's 5.3% y/y and was substantially
weaker than the market consensus of +10.9% y/y. The weakness in exports
indicated lackluster global demand. The weakness in imports was partially due to
lower commodity prices but was also due to weak domestic demand. Japan's April
eco watcher's outlook index rose to 50.9 from 49.7 in March, but the current
index fell to 50.9 from 51.8 in March. The Australian dollar rallied 0.5% today
after the Australian unemployment rate unexpectedly dropped to a 1-year low.
- June E-mini S&Ps this morning are trading slightly higher by +0.75
points. The market is shaking off some bad news from Cisco and the Chinese trade
report and is waiting for political developments from Greece. Cisco Systems is
down 8.7% in European trading this morning after an earnings miss on the
reluctance of business clients to spend money on technology upgrades. US stocks
on Wednesday closed moderately lower: S&P 500 -0.67%, Dow Jones -0.75%,
Nasdaq 100 -0.32%. The U.S. stock market fell once again on the Greek political
uncertainty combined with the 0.5% sell-off in the Euro Stoxx 50 on Wednesday.
However, the U.S. stock market was able to rebound upward when the European
Financial Stability Facility confirmed that it will release 5.2 billion euros in
bailout payments to Greece, ensuring that Greece has enough cash to make it
through June. That indicated that Eurozone officials are giving the Greeks some
time to sort out their political troubles and are not planning to immediately
drop the hammer. The U.S. stock market on Wednesday was also undercut by Spanish
banking troubles, which prompted an 18 bp rise in the 5-year Spanish credit
default swap price (the cost of insuring against a sovereign default) to a
record high of 516 bp.
- June 10-year T-notes this morning are unchanged with few fresh developments
overnight. The Treasury today concludes its $72 billion coupon package with the
sale of $16 billion in 30-year T-bonds. T-note prices on Wednesday closed little
changed: TYM2 -0.5, FVM2 +0.25. T-note prices on Wednesday saw continued support
from Greek-related safe-haven buying, but were undercut by a lackluster 10-year
T-note auction. The 10-year auction had a bid cover ratio of 2.90 that was below
the 12-auction average of 3.10. Indirect bidders took 38.7% of the auction,
below the 12-auction average of 43.0%. The dollar index this morning is trading
slightly higher by +0.03 points with EUR/USD up $0.0015 and USD/JPY up 0.05 yen.
The dollar index is in a holding pattern, awaiting Greek developments and this
morning's U.S. unemployment claims and U.S. trade reports. The dollar index on
Wednesday continued to rally: Dollar Index +0.315, EUR/USD -0.0076, USD/JPY
-.02. The dollar index on Wednesday saw some technical buying with a new 3-week
high, while EUR/USD saw selling with the new 3-1/2 month low. The dollar gained
support from the ongoing Greek political drama combined with banking problems in
Spain and a new record high in Spanish 5-year credit default swap prices. There
was some positive European economic news with German March exports rising +0.9%
m/m versus expectations for a decline of -0.5% m/m. June crude oil prices this
morning are down 46 cents and gasoline is down 2.01 cents. Oil prices were
undercut by last night's Chinese trade report showed that Chinese April crude
oil imports dropped to a 4-month low. Crude oil and gasoline prices on Wednesday
closed mixed: CLM12 -0.20, RBM2 +0.0297. Crude oil prices were hurt by technical
weakness, a bearish DOE report for crude oil, and the continued Greek troubles.
However, gasoline rallied on an unexpected decline in DOE gasoline inventories
and a fire at Sunoco's refinery in Philadelphia. The weekly DOE report was
bearish for crude oil and bullish for products. Crude oil inventories rose by
3.652 million barrels (+1.0%) to a new 21-1/2 year high of 379.516 million
barrels. That is 7.2% above the 5-year seasonal average, the highest such level
since last June. Meanwhile, gasoline inventories fell by 2.6 million barrels (vs
expectations of +250,000 barrels) and are now 1.0% below the 5-year seasonal
average, the tightest level since last May. Distillate inventories fell sharply
by 3.25 million barrels (versus expectations of +750,000 barrels). Distillate
inventories are now 9.8% below the 5-year seasonal average, the tightest level
in 9 years.
Global Financial Calendar
| Thursday 5/10/12 | |
|---|---|
| United States | |
| 0830 ET | Weekly initial unemployment claims expected +3,000 to 368,000, previous -27,000 to 365,000. Weekly continuing claims expected -1,000 to 3.275 million, previous -53,000 to 3.276 million. |
| 0830 ET | Mar U.S. trade deficit expected -$50.0 billion, Feb -$46.0 billion. |
| 0830 ET | Apr import price index expected -0.2% m/m and +0.8% y/y, Mar +1.3% m/m and +3.4% y/y. |
| 0830 ET | Monthly USDA crop production and WASDE reports. |
| 0830 ET | USDA weekly exports. |
| 0930 ET | Fed Chairman Ben Bernanke delivers the keynote address at the Chicago Fed’s annual conference on bank structure and competition, titled “Bank Capital: How Much is Enough?” |
| 1030 ET | DOE natural gas storage. |
| 1100 ET | Treasury announces amount of 10-year TIPS to be auctioned May 17 (previous $13 billion). |
| 1320 ET | Minneapolis Fed President Narayana Kocherlakota speaks on monetary policy in Minneapolis. |
| 1300 ET | Treasury auctions $16 billion in 30-year T-bonds. |
| 1400 ET | Apr monthly budget statement expected +$30.0 billion, Mar -$198.158 billion. |
| 1630 ET | Weekly money supply report and Fed balance sheet. |
| Euro-Zone | |
| 0400 ET | ECB publishes May monthly report. |
| United Kingdom | |
| 0430 ET | UK Mar industrial production expected -0.3% m/m and -2.6% y/y, Feb +0.4% m/m and -2.3% y/y. Mar manufacturing production expected +0.5% m/m and -1.3% y/y, Feb -1.0% m/m and -1.4% y/y. |
| 0700 ET | Bank of England announces monetary policy 2-day meeting outcome, no change expected in 0.50% base rate or 325 billion pound asset purchase target. |
| 1000 ET | NIESR UK Apr GDP estimate, previous +0.1%. |
| 1902 ET | UK Apr nationwide consumer confidence, Mar 53. |
| Japan | |
| 0030 ET | Japan Apr bankruptcies, Mar -1.9%. |
| 0100 ET | Japan Apr Eco Watchers survey current index, Mar 51.8. Apr outlook index, Mar 49.7. |
| 1950 ET | Japan Apr M2 expected +2.9% y/y, Mar +3.0%. Apr M3 expected +2.5% y/y, Mar +2.6% y/y. |
| CHI | |
| 2130 ET | China Apr CPI expected +3.4% y/y, Mar +3.6% y/y. Apr PPI expected -0.5% y/y, Mar -0.3% y/y. |
| CHI | |
| n/a | China Apr M0 expected +10.7% y/y, Mar +10.0% y/y. M1 expected +4.5% y/y, Mar +4.4% y/y. M2 expected +13.3% y/y, Mar +13.4%. Apr new yuan loans expected 780 billion yuan, Mar 1010 billion yuan. Release date from May 10-15. |
No comments:
Post a Comment