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Global Financial Calendar
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- Global stocks are mostly higher with the European Euro Stoxx 50 up +0.26% and June S&Ps up +2.90 points. The dollar is lower and most commodities are higher, which has led to gains in stocks led by basic-resource companies. The British pound fell against the dollar after minutes from the BOE meeting earlier this month showed policy makers voted 6-3 to keep interest rates on hold as the majority warned that tightening policy now could dampen consumer spending. The pound was also undercut after Apr UK unemployment claims unexpectedly rose +12,400 to 1.47 million, the fastest pace since Jan 2010. Mar Euro-Zone construction output fell for a second month as it slipped -0.3% m/m and -4.9% y/y. ECB officials ruled out ideas of a "soft" restructuring of Greek debt by European finance ministers after ECB Council member Bini Smaghi said there is no difference between a "hard" or "soft" restructuring and fellow ECB member Stark said that any restructuring would undermine the collateral Greek banks use to gain loans from the ECB and "this holds true for all kinds of restructuring." The ECB has bought 76 billion euros ($108 billion) of bonds of fiscally stressed countries in the past year and may suffer along with private investors in any restructuring and is also concerned that allowing Greece to renege on some of its obligations would create similar expectations for other indebted Euro-Zone nations.
- The Asian stock markets today closed mostly higher with Japan up +0.99%, Hong Kong +0.48%, China +0.75%, Taiwan +0.68%, Australia +0.21%, Singapore +0.15%, South Korea +1.66%, India -0.28%. Asian stocks were boosted on improved company earnings results and increased M&A activity. Austar United jumped 6.1% on speculation Foxtel is in advanced talks over a potential takeover and Mizhuo Financial gained 3.2% after the Nikkei newspaper reported it plans to merge its retail and corporate banks. Australian bank stocks declined after Moody's Investors Service downgraded the long-term, senior unsecured debt ratings of the country's four major banks on concern their reliance on wholesale debt markets makes them vulnerable to swings in investor confidence.
- June S&Ps this morning are trading up +2.90 points. The US stock market yesterday closed mixed after Hewlett-Packard cut its sales forecast and Apr US housing starts unexpectedly fell, which dampened economic optimism: Dow Jones -0.55%, S&P 500 -0.04%, Nasdaq Composite +0.03%. The Dow fell to a 3-1/2 week low and the S&P 500 and the Nasdaq slid to 4-week lows. Bearish factors included (1) weakness in technology stocks after Hewlett-Packard, the biggest personal-computer maker, slumped when it lowered its sales forecast and its CEO told top executives to brace for "another tough quarter," (2) the slide in homebuilders after the unexpected decline in Apr US housing starts and building permits (housing starts -10.6% to 523,000 versus expectations of +3.5% to 568,000 and building permits -4.0% to 551,000 versus expectations of +0.9% to 590,000), (3) the unexpected stalling in Apr industrial production (unchanged versus expectations of +0.4%), and (4) the unexpected decline in Apr capacity utilization (-0.1 to 76.9% versus expectations of +0.2 to 77.6%).
- Bullish factors for stocks included (1) reduced European sovereign-debt concerns after credit-default swaps to insure European government debt fell to a 5-week low, (2) a late-day rally in financial stocks after JPMorgan Chase CEO Dimon said that banks are increasing lending, and (3) the decline in the 10-year T-note yield to a 5-1/4 month low of 3.096%.
- Dell (DELL) gained 5.8% in pre-market trading after the company late yesterday reported Q1 income of 49 cents a share, better than analysts' estimates of 43 cents and said it was able to withstand a slump in consumer demand by increased emphasis on business customers as it bolstered its expansion into corporate data centers.
- June 10-year T-notes this morning are up +3 ticks. T-note prices yesterday rallied to a 5-1/4 month high after Apr US housing starts unexpectedly fell and industrial output stalled: TYM11 +6, FVM11 +3.5, EDU11 unchanged. The yield on the 10-year T-note fell to a 5-1/4 month low of 3.096%. Bullish factors included (1) the unexpected decline in Apr US housing starts and building permits (housing starts -10.6% to 523,000 versus expectations of +3.5% to 568,000 and building permits -4.0% to 551,000 versus expectations of +0.9% to 590,000), (2) the unexpected stalling in Apr industrial production (unchanged versus expectations of +0.4%), (3) the unexpected decline in Apr capacity utilization (-0.1 to 76.9% versus expectations of +0.2 to 77.6%), and (4) the action by the Fed to purchase $6.41 billion in Treasuries as part of its QE2 asset-purchase program. Bearish factors included (1) carry-over weakness from a drop in Gilts after Apr UK CPI climbed +4.5% y/y, stronger than expectations of +4.1% y/y and the fastest pace of increase in 2-1/2 years, and (2) reduced safe-haven demand for Treasuries after credit-default swaps to insure European government debt fell to a 5-week low on speculation that European leaders were making headway in solving the region?s sovereign-debt crisis.
- The dollar index this morning is lower with the dollar/yen -0.27 yen and the euro/dollar +0.06 cents. The dollar index yesterday finished slightly lower on weak US economic data and after European sovereign debt concerns eased: Dollar Index -0.071, USDJPY +0.625, EURUSD +0.00809. Bearish factors included (1) weaker-than-expected US economic data on Apr US housing starts and industrial production, which indicates economic weakness and is dollar negative, (2) reduced European debt concerns after credit-default swaps to insure European government debt fell to a 5-week low, and (3) euro supportive comments from ECB Executive Board member Tumpel-Gugerell who said interest rates should be consistent with economic activity, which suggests she sees room for further monetary tightening. Bullish factors included (1) weakness in the yen which fell to a 2-1/2 week low against the dollar after BOJ Governor Shirakawa said the Japanese economy is in a "very severe" state, which fueled speculation that monetary policy may be eased further, and (2) the weaker-than-expected May German ZEW economic sentiment which fell to its lowest level in 6 months and is euro negative.
- June crude oil prices this morning are trading up +$1.27 a barrel and June gasoline is +3.08 cents per gallon. Crude oil and gasoline prices yesterday closed lower for a second day after weaker-than-expected economic data stoked demand concerns while the opening of the Morganza floodway reduced concerns about flooding to refineries along the Mississippi River: CLM11 -$0.46, RBM11 -1.18. Jun crude slipped to a 1-1/2 week low and Jun gasoline fell to a 2-month low. Bearish factors included (1) the weaker-than-expected US economic data on Apr US housing starts and industrial production, which indicates the economy and fuel demand may slow, (2) reduced concerns that refineries along the Mississippi River delta will be forced to close after flood gates on the Morganza floodway in Louisiana were opened to reduce pressure on the flooded Mississippi River system, and (3) the outlook for increased supplies when the DOE releases its weekly inventory figures on Wed. Expectations for Wednesday's weekly DOE inventory report are for crude oil supplies to advance +1.7 million bbl, gasoline stockpiles to rise +1.0 million bbl, distillate inventories to increase +500,000 bbl and the refinery utilization rate to rise +0.4 to 82.1% of capacity.
Global Financial Calendar
| Wednesday 5/18/11 | |
|---|---|
| United States | |
| 0700 ET | Weekly MBA mortgage applications, last market index +8.2% with purchase mortgage sub-index +6.7% and refinancing sub-index +9.0%. |
| 1400 ET | Minutes of the Apr 26-27 FOMC meeting. |
| 1900 ET | St. Louis Fed President James Bullard speaks to the Money Marketeers group in New York. |
| United Kingdom | |
| 0430 ET | BOE release minutes of the May 5 monetary policy meeting. |
| 0430 ET | Apr UK jobless claims change expected unchanged, Mar +700. Apr claimant count rate expected 4.5%, Mar 4.5%. |
| 0430 ET | Mar UK avg weekly earnings expected +2.0% 3-mo/year-over-year, Feb +2.0% 3-mo/year-over-year. |
| 0430 ET | Mar UK avg weekly earnings ex bonus expected +2.2% 3-mo/year-over-year, Feb +2.2% 3-mo/year-over-year. |
| 0430 ET | Mar UK ILO unemployment rate expected 7.8% (3-months), Apr 7.8% (3-months). |
| Euro-Zone | |
| 0300 ET | ECB Executive Board member Juergen Stark speaks in Athens at a conference titled ?In the aftermath of t he Global Crisis: and now what?? |
| 0300 ET | ECB Executive Board member Lorenzo Bini Smaghi speaks at a conference in Milan on ?Global Perspectives and Imbalances.? |
| 0300 ET | EU Economic and Monetary Commissioner Olli Rehn, IMF Director Dominique Strauss-Kahn and German Finance Minister Wolfgang Schaeuble speak at the European Commission conference in Brussels. |
| 0500 ET | Mar Euro-Zone construction output, Feb -0.7% m/m and +3.5% y/y. |
| Canada | |
| 0830 ET | Apr Canada leading indicators expected +0.5% m/m, Mar +0.8% m/m. |
| 0830 ET | Mar Canada wholesale sales expected +1.5% m/m, Feb -0.6% m/m. |
| Japan | |
| 1950 ET | Q1 Japan GDP expected -0.5% q/q and -2.0% annualized, Q4 -0.3% q/q and -1.3% y/y. Q1 GDP deflator expected -1.9% y/y, Q4 -1.6% y/y. |
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