Barchart Morning Call
Overnight Developments
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.
- Global stocks this morning are mixed with the Euro Stoxx 50 up +0.10% and Mar S&Ps up +5.90 points. Treasuries weakened as the euro and commodities rose amid speculation private investors will accept terms of a Greek bond exchange needed for it to receive a second bailout package. Greece's six largest banks said they plan to accept the offer, according to the Greek Finance Ministry, while Societe Generale SA, France's second-biggest bank, Assicurazioni Generali SpA and UniCredit SpA joined other lenders saying they will participate in Greece's debt swap. The Greek government, which set a 75% participation rate as a threshold for proceeding with the transaction, said it will use collective action clauses to force holders of Greek-law bonds to accept the swap if it receives sufficient consent from investors. Another bullish factor for stocks and the euro is the decline in dollar finding costs for European banks after the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, declined to 65.5 bp below the euro interbank offered rate, a 7-month low. Limiting gains in European stocks was the unexpected decline in Jan German factory orders which fell -2.7% m/m, weaker than expectations of a +0.6% m/m increase.
- Asian stocks today closed lower with Japan down -0.64%, China -0.69%, Australia -1.45%, South Korea -0.95%, India -0.16%. Most Asian stock markets finished lower as financial stocks weakened on concern Greece's debt-swap deal were threatened by reluctant bond holders. Chinese stocks also fell after Commerce Minister Chen Deming said exports rose about 7% over the first two months of this year, which suggests that Feb China exports, to be released on Mar 10, will be less than the +32% y/y gain expected. Australian stocks tumbled and the Australian dollar slid to a 6-week low against the dollar after Q4 Australia GDP expanded +0.4% q/q, weaker than expectations of +0.8% q/q.
- March S&Ps this morning are trading up +5.90 points. The U.S. stock market Tuesday tumbled and settled lower for a third day on global growth concerns along with concern that Greece may not be able to finalize a voluntary debt-swap deal by Thursday's deadline: Dow Jones -1.57%, S&P 500 -1.54%, Nasdaq Composite -1.36%. The S&P 500 posted a 3-week low, the Dow slumped to a 1-month low while the Nasdaq slipped to a 1-week low. Bearish factors Tuesday included (1) global growth concerns after Q4 Euro-Zone GDP remained unrevised at -0.3% q/q and +0.7% y/y, (2) concern that Greece will struggle to complete a debt-swap by Thursday's deadline as only 20% of the private creditors have agreed to the voluntary debt swap, below the 75% participation rate the Greek government has set as a threshold for proceeding with the transaction, and (3) weakness in mining companies and raw material and energy producers as strength in the dollar along with demand concerns fueled a decline in the prices of most commodities.
- Bullish factors included (1) positive comments from EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, who said the Euro-Zone economy will likely be "turning the tide in the coming months," and (2) reduced liquidity concerns in Europe after the Euribor-OIS spread, a measure of European banks' reluctance to lend to one another that's measured as the difference between the borrowing benchmark and overnight indexed swaps, narrowed to a 7-month low of 59 bp.
- Netflix (NFLX) rose 1.8% in European trading after CEO Hastings said the company is considering partnerships with cable operators to offer its service as part of their premium lineup.
- June 10-year T-notes this morning are down -4 ticks. T-note prices Tuesday traded in positive territory the entire day and settled higher as a slump in global equities spurred safe-haven demand for Treasuries along with concern that Greece may not be able to persuade creditors to agree to a debt-swap plan: TYM2 +17.5, FVM2 +8.0, EDU2 -0.5. Bullish factors Tuesday included (1) increased safe-haven demand for Treasuries after the S&P 500 slumped to a 3-week low, (2) a flight-to-quality into Treasuries on concern Greece will struggle to complete a debt-swap by Thursday's deadline, and (3) the Fed's purchase of $4.027 billion of Treasuries as part of its Operation Twist program to replace $400 billion of short-term debt in its portfolio with longer-term Treasuries in an effort to keep borrowing costs low. Bearish factors included (1) reduced safe-haven demand for Treasuries as liquidity concerns diminished in Europe after the Euribor-OIS spread, a measure of European banks' reluctance to lend to one another that's measured as the difference between the borrowing benchmark and overnight indexed swaps, narrowed to a 7-month low of 59 bp, and (2) reduced safe-haven demand for Treasuries after the EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, said the Euro-Zone economy will likely be "turning the tide in the coming months" as the ECB's actions have prevented a credit crunch, and "significant steps" by Italy and Spain have improved confidence and reduced tensions on government bond markets.
- The dollar index this morning is weaker with the dollar/yen -0.14 yen and the euro/dollar +0.22 cents. The dollar index Tuesday rallied to a 2-1/2 week high on increased safe-haven demand as the stock market slumped along with weakness in EUR/USD on concern Greece will struggle to complete a debt-swap by Thursday's deadline in order to receive a 130 billion-euro bailout: Dollar Index +0.540, USD/JPY -0.663, EUR/USD -0.01042. Bullish factors included (1) the fall in EUR/USD to a 2-1/2 week low on concern Greece will struggle to complete a debt-swap by Thursday's deadline as only 20% of the private creditors have agreed to the voluntary debt swap, below the 75% participation rate the Greek government has set as a threshold for proceeding with the transaction, (2) increased safe-haven demand for the dollar after the S&P 500 fell to a 3-week low, and (3) the increase in the ECB's balance sheet to a record 3.02 trillion euros, which increases inflation risks. Bearish factors included (1) euro positive comments from EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, who said the Euro-Zone economy will likely be "turning the tide in the coming months" as the ECB's actions have prevented a credit crunch, and "significant steps" by Italy and Spain have improved confidence and reduced tensions on government bond markets, and (2) reduced dollar funding costs for European banks after the 3-month cross-currency basis swap, the rate banks pay to convert euro interest payments into dollars, fell to 67 bp below the euro interbank offered rate, a 7-month low.
- Apr crude oil prices this morning are up +62 cents a barrel and Apr gasoline is +2.81 cents per gallon. Crude oil and gasoline prices Tuesday settled lower as the dollar rallied and after the EU offered to restart negotiations with Iran over its nuclear program: CLJ12 -$2.02, RBJ -2.81. Apr crude posted a 2-week low. Bearish factors included (1) the rally in the dollar index to a 2-1/2 week high, which discourages investment demand in commodities, (2) reduced geopolitical concerns after EU foreign policy chief Ashton said she urged Iran's nuclear envoy to meet her to seek an accord on its nuclear program, and (3) the slide in the S&P 500 to a 3-week low, which erodes confidence in the economic outlook and energy demand. Bullish factors included (1) optimistic comments from the EU Commissioner for Economic and Monetary Affairs, Ollie Rehn, who said the Euro-Zone economy will likely be "turning the tide in the coming months," which would be positive for energy demand and consumption and (2) the outlook for Wednesday's weekly DOE inventory report to show that gasoline supplies fell for a third week as refiners shut plants for maintenance. Expectations for Wednesday's weekly DOE inventory report are for crude oil supplies to increase +1.5 million bbl, gasoline stockpiles to fall -1.75 million bbl, distillate inventories to decline -1.65 million bbl and the refinery utilization rate to remain unchanged at 83.6% of capacity.
Global Financial Calendar
| Wednesday 3/7/12 | |
|---|---|
| United States | |
| 0700 ET | Weekly MBA mortgage applications, previous -0.3% with purchase mortgage sub-index+8.2% and refinancing sub-index -2.2%. |
| 0815 ET | Feb ADP employment change expected +215,000, Jan +170,000. |
| 0830 ET | Revised Q4 non-farm productivity expected +0.8%, previous +0.7%. Revised Q4 unit labor costs expected no change at +1.2%. |
| 1500 ET | Jan consumer credit expected +$10.8 billion, Dec +$19.308 billion. |
| Japan | |
| 0000 ET | Jan Japan coincident index CI expected 93.4, Dec 93.6. Jan leading index CI expected 95.0, Dec 94.0. |
| 1850 ET | Revised Q4 Japan GDP expected -0.2% q/q and -0.6% y/y, previous -0.6% q/q and -2.3% y/y. |
| 2330 ET | Feb Japan bankruptcies, Jan-5.4% y/y. |
| Germany | |
| 0600 ET | Jan German factory orders expected +0.6% m/m and -1.7% y/y, Dec +1.7% m/m and unchanged y/y. |
| Canada | |
| 0830 ET | Jan Canada building permits expected -3.0% m/m, Dec +11.1% m/m. |
No comments:
Post a Comment