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Global Financial Calendar
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- Global stocks are mixed with the European Euro Stoxx 50 up +0.12% and Sep S&Ps down -2.20 points. Most commodities and Treasuries are higher before Greek lawmakers vote on budget cuts tomorrow needed to prevent default. Germany's Die Welt newspaper cited ECB Executive Board member Stark as saying the international community may not finance Greece further after July if its austerity plan isn't implemented. The euro rallied early against the dollar after France proposed a target of rolling over 70% of Greece's debt, but the euro shed its gains and turned lower when Fitch Ratings said a "voluntary rollover" of Greek bonds, as they mature, into bonds with similar terms would "very likely" be viewed by Fitch as a sovereign default. The British pound sank to a 4-3/4 month low against the dollar after Q1 UK GDP was revised lower to +1.6% annualized from +1.8% annualized and after BOE policy maker Posen said the UK economy is at "little risk of inflation." Posen also dismissed as "nonsense" the BIS call on Monday that central banks need to start raising rates to control inflation. European stocks received a boost after the unexpected increase in Jul German GfK consumer confidence which rose by +0.1 to 5.7, stronger than expectations of -0.2 to 5.3. German price pressures also abated after the May German import price index fell -0.6% m/m and rose +8.1% y/y, weaker than expectations of -0.3% m/m and +8.6% y/y, with the +8.1% y/y gain the slowest annual increase in 13 months.
- The Asian stock markets today closed mixed with Japan up +0.74%, Hong Kong +0.09%, China +0.17%, Taiwan -0.25%, Australia +0.28%, Singapore +0.08%, South Korea -0.38%, India +0.43%. Japanese retailers led the Nikkei 225 Stock Index higher after May Japan retail sales rose +2.4% m/m, double expectations of a +1.2% m/m increase. Reduced European debt concerns also lifted Japanese exporters as Nintendo, which gets 33% of its sales from Europe, closed up 2.9%. Asian technology stocks also rallied on optimism for increased demand after the survey by International Data said spending on information technology and governments in the US will grow by 5.6% in 2011, about double the estimated increase for GDP.
- September S&Ps this morning are trading down -2.20 points. The US stock market yesterday moved higher on speculation Greek lawmakers will pass austerity measures this week to avoid default along with strength in bank stocks and technology stocks: Dow Jones +0.91%, S&P 500 +0.92%, Nasdaq Composite +1.33%. The Nasdaq posted a 2-week high. Bullish factors included (1) carry-over support from a rally in European stocks on optimism the Greek government will pass austerity measures required for it to receive additional bailout funds to avert a default, (2) a rally in bank stocks after the Basel Committee on Banking Supervision said banks deemed too big to fail must hold as much as 2.5% in additional capital as part of efforts to prevent another financial crisis, which is less than feared and was supportive to bank stocks on speculation they can resume normal dividend payments sooner than expected, and (3) strength in technology stocks after a survey by International Data said spending on information technology by companies and governments in the US will grow by 5.6% in 2011.
- Bearish factors for stocks included (1) the weaker-than-expected May personal spending which failed to post an increase for the first time in the last 11 months (unchanged m/m versus expectations of +0.1% m/m), (2) the weaker-than-expected May personal income (+0.3% m/m versus expectations of +0.4% m/m), (3) increased inflation concerns after the May core PCE deflator rose more than expected and posted its biggest monthly increase in 19 months (+0.3% m/m and +1.2% y/y versus expectations of +0.2% m/m and +1.1% y/y), and (4) the warning from the BIS that global central banks need to start raising interest rates to control inflation and may have to act faster than in the past.
- Nike (NKE) rose 4.8% in pre-market trading after the company late yesterday reported Q4 profit of $1.24 a share, stronger than analysts' estimates of $1.17.
- Garmin Ltd. (GRMN) fell 1.5% in European trading after European competitor TomTom NV cut its full-year profit and sales forecasts as US demand declined faster than anticipated.
- September 10-year T-notes this morning are up +2.5 ticks. T-note prices yesterday erased early gains and finished lower on supply pressures and on reduced safe-haven demand on speculation Greek lawmakers will pass austerity measures required to receive additional bailout funds: TYU11 -10.5, FVU11 -8.7, EDZ11 +0.5. The 10-year T-note yield fell to a 6-3/4 month low of 2.840% but moved higher late and finished the day at 2.924%. Bearish factors included (1) reduced safe-haven demand for Treasuries on optimism that Greece's parliament will approve austerity measures to help it avert a default, (2) increased inflation concerns after the May core PCE deflator rose more than expected and posted its biggest monthly increase in 19 months (+0.3% m/m and +1.2% y/y versus expectations of +0.2% m/m and +1.1% y/y), (3) weak demand for the Treasury's $35 billion auction of 2-year T-notes that had a 3.08 bid-to-cover ratio, well below the 12-auction average of 3.39, and (4) supply pressures ahead of the Treasury's $35 billion auction of 5-year T-notes on Tue. Bullish factors included (1) the weaker-than-expected May personal spending which failed to post an increase for the first time in the last 11 months (unchanged m/m versus expectations of +0.1% m/m), and (2) the weaker-than-expected May personal income (+0.3% m/m versus expectations of +0.4% m/m), and (3) the Fed's purchase of $4,578 billion of Treasuries as part of its QE2 asset purchase program.
- The dollar index this morning is stronger with the dollar/yen -0.05 yen and the euro/dollar -0.34 cents. The dollar index yesterday fell back from a 1-month high and closed lower after the euro strengthened on speculation Greek lawmakers this week will pass austerity measures required to allow the nation to receive additional bailout funds: Dollar Index -0.273, USDJPY +0.400, EURUSD +0.01090. Bearish factors included (1) optimism that Greece's parliament will approve austerity measures to help it avert a default, (2) strength in the euro which rebounded from a 1-week low against the dollar and closed higher after comments from Chinese Premier Jiabao who said China will keep investing in Europe's sovereign bond market saying "China has actually increased the purchase of government bonds of some European countries, and we haven't cut back on our euro holdings," (3) hawkish comments from ECB Council member Stark who said "we are not ready to leave the interest-rate increase from April to stand by itself," and (4) reduced safe-haven demand for the dollar as the stock market rallied. Bullish factors included (1) weakness in the British pound which fell to a 4-3/4 month low against the dollar after Jun British home prices fell for a second month and fueled concern the UK economic recovery is stalling, and (2) the slide in the yen to a 1-week low against the dollar on concern the European debt crisis will worsen and crimp European demand for Japanese goods.
- Aug crude oil prices this morning are trading up +52 cents a barrel and Aug gasoline is +2.46 cents per gallon. Crude oil and gasoline prices yesterday finished mixed as concern that the economic expansion in the US is slowing was offset by a weaker dollar: CLQ11 -$0.55, RBQ11 +2.85. Aug crude and Aug gasoline both posted 4-month lows but Aug gasoline recovered its losses and finished higher. Bearish factors included (1) heightened concern the US economy is slowing after May personal spending unexpectedly stagnated, and (2) comments from the executive director of the IEA who said "if necessary" we'll continue to release additional crude from strategic reserves. Bullish factors included (1) the weaker dollar, which encourages investment demand in commodities, and (2) the statement from Barclays Plc that the IEA plan to release crude stockpiles to reduce prices may backfire as it may prompt Saudi Arabia to cut its crude production.
Global Financial Calendar
| Tuesday 6/28/11 | |
|---|---|
| United States | |
| 0745 ET | ICSC (Int?l Council of Shopping Centers) weekly retailer sales. |
| 0855 ET | Redbook weekly retailer sales. |
| 0900 ET | Apr S&P/CaseShiller composite-20 home price index expected -0.2% m/m and -4.0% y/y, Mar -0.2% m/m and 3.6% y/y. |
| 1000 ET | Jun U.S. consumer confidence expected +0.2 to 61.0, May -5.2 to 60.8. |
| 1000 ET | Jun Richmond Fed manufacturing index expected +3 to -3, May -16 to -6. |
| 1130 ET | Weekly 4-week and monthly 1-year T-bill auctions. |
| 1200 ET | Dallas Fed President Richard Fisher speaks to the Round Rock Chamber of Commerce. |
| 1300 ET | Treasury auctions $35 billion 5-year T-notes. |
| Germany | |
| 0200 ET | Jul German GfK consumer confidence survey expected -0.2 to 5.3, Jun -0.2 to 5.5. |
| 0200 ET | May German import price index expected -0.3% m/m and +8.6% y/y, Apr +0.3% m/m and +9.4% y/y. |
| n/a | Jun German CPI (EU harmonized) expected +0.1% m/m and +2.5% y/y, May -0.2% m/m and +2.4% y/y. |
| United Kingdom | |
| 0430 ET | Revised Q1 UK total business investment, previous -7.1% q/q and -3.2% y/y. |
| 0430 ET | Revised Q1 UK GDP, previous +0.5% q/q and +1.8% y/y. |
| Euro-Zone | |
| 0700 ET | ECB President Jean-Claude Trichet, ECB Council member Nout Wellink and BOK Governor Choongsoo Kim speak at a joint press conference in Amsterdam following the Seminar of Central Banks in the East-Asia Pacific Region and the Euro-Zone. |
| 1445 ET | ECB President Jean-Claude Trichet speaks at a conference in Brussels titled ?The State of the European Union.? |
| France | |
| 1200 ET | May French net change of jobseekers, Apr -10,900. May total jobseekers, Apr 2,669,100. |
| Japan | |
| 1950 ET | May Japan industrial production expected +5.5% m/m and -6.3% y/y, Apr +1.6% m/m and -13.6% y/y. |
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