Barchart Morning Call
Overnight Developments
Global Financial Calendar
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- Global stock and commodity prices are mixed with June E-mini S&Ps up +8.00 points and the Euro Stoxx 50 up +0.53%. European and U.S. stocks rose while Treasuries fell and most commodities gained after Spain and France met their maximum targets in debt sales. Spain sold 2.54 billion euros of 2-year and 10-year debt, meeting the 2.5 billion euro maximum target while France sold 8 billion euros of 2-year, 3-year and 5-year debt, and right on the maximum target. Another positive for stocks was the bi-annual report released from the 4 German economic institutes that said Germany is experiencing an economic upswing which will help drive down unemployment and narrow the budget deficit even as the European debt crisis continues to pose the biggest obstacle to growth. The institutes raised their 2012 German GDP estimate to +0.9% annualized from an earlier projection of +0.8% annualized. The British pound accelerated up to a 5-month high against the dollar on carry-over strength from yesterday's rally after the minutes of the Apr 4-5 BOE policy meeting fueled speculation the BOE will pause its stimulus program when it meets again next month.
- Asian stocks today closed mostly lower with Japan down -0.82%, China -0.15%, Australia +0.32%, South Korea -0.24%, India +0.54%. Most Asian stock markets closed lower as exporters fell on concern the European debt crisis is spreading to Spain. The Japanese yen fell to a 1-week low against the dollar after BOJ Governor Shirakawa said the Japanese economy "stagnated" and that he's "committed" to continue monetary easing. Japanese stocks closed lower despite the +5.9% y/y increase in Mar Japan exports, better than expectations of +0.2% y/y and the strongest pace in 13 months. Chinese stocks also settled lower despite a report from the Xinhua News Agency that fueled expectations of additional easing by the central bank when it said the PBOC pledged to ensure adequate availability of cash in the financial system by using tools including reductions in the reserve-requirement ratio.
- June E-mini S&Ps this morning are trading up +8.00 points after Spanish and French bond sales met their maximumm targets and reduced European debt concerns. The U.S. stock market on Wednesday retreated as technology stocks slumped over disappointing earnings results from IBM and Intel while concern rose that the European debt crisis may worsen after Spain's non-performing loans as a proportion of total lending jumped to an 18-year high in Feb: Dow Jones -0.63%, S&P 500 -0.41%, Nasdaq Composite -0.37%. Limiting losses in stocks was speculation that China may implement additional easing measures to promote growth after Mar China home prices fell in a record 37 of 70 cities tracked by the government along with comments from Treasury Secretary Geithner who said the U.S. economy in gradually getting stronger and that the U.S. is "much further along" on its recovery.
- Ebay (EBAY) jumped 8.4% in European trading after the company reported late yesterday Q1 revenue of $3.28 billion with profit of 55 cents a share, stronger than analysts' estimates for revenue of $3.2 billion and profit of 53 cents.
- June 10-year T-notes this morning are down -2.5 ticks. T-note prices Wednesday settled higher on increased safe-haven demand as the potential rose over contagion of the European debt crisis to Spain after Feb Spain non-performing loans as a proportion of total lending climbed to an 18-year high: TYM2 +4.5, FVM2 +1.7. Additional safe-haven demand for Treasuries was seen after Italy said it will delay implementing its deficit-cutting initiatives when the government lowered its 2012 GDP forecast to contraction of -1.2% y/y from a Dec projection of -0.5% y/y. Limiting gains in T-note prices were comments from Treasury Secretary Geithner who said the U.S. economy in gradually getting stronger and that the U.S. is "much further along" on its recovery.
- The dollar index this morning is slightly higher with USD/JPY +0.45 yen and EUR/USD -0.09 cents. The dollar index Wednesday settled higher after the yen fell to 1-week low against the dollar when BOJ Deputy Governor Nishimura said the BOJ is ready to implement additional easing along with weakness in the euro on concern Europe's debt crisis may worsen: Dollar Index +0.062, USD/JPY +0.411, EUR/USD -0.00039. The dollar saw increased safe-haven demand after data from the Bank of Spain showed Feb Spain non-performing loans as a proportion of total lending jumped to 8.16%, up from 7.91% in Jan and the highest level in 18 years, along with the action by Italy to delay implementing its deficit-cutting initiatives after the government lowered its 2012 GDP forecast to contraction of -1.2% y/y from a Dec projection of -0.5% y/y. A bearish factor for the dollar was the rally in the British pound to a 2-week high against the dollar after Mar U.K. jobless claims fell less than expected and after the minutes of the Apr 4-5 BOE policy meeting showed that policy maker Posen ended his push for further stimulus.
- May crude oil prices this morning are trading up +29 cents a barrel and May gasoline is +0.91 of a cent per gallon. Crude oil and gasoline prices on Wednesday tumbled and finished lower after weekly DOE crude inventories rose twice as much as forecast to a 10-1/2 month high and as gasoline slumped to a 1-1/2 month low on speculation a shuttered ConocoPhillips refinery in Pennsylvania that was to be closed may be bought by Delta Airlines and kept open: CLK12 -1.53, RBK2 -3.13. Other bearish factors included the stronger dollar and concern the European debt crisis may worsen after Bullish factors included an easing of European sovereign-debt concerns after Spain's non-performing loans as a proportion of total lending jumped to an 18-year high. Bullish factors included the larger-than-expected -3.67 million bbl draw in weekly DOE gasoline supplies to a 4-1/2 month low of 214 million bbl and the unexpected -2.91 million bbl decline in weekly distillate inventories to 129 million bbl, the lowest in 3-1/3 years.
Global Financial Calendar
| Thursday 4/19/12 | |
|---|---|
| United States | |
| 0830 ET | Weekly initial unemployment claims expected -10,000 to 370,000, previous +13,000 to 380,000. Weekly continuing claims expected +49,000 to 3.300 million, previous -98,000 to 3,251 million. |
| 1000 ET | Mar existing home sales expected +0.7% to 4.62 million, Feb -0.9% to 4.59 million. |
| 1000 ET | Mar leading indicators expected +0.2%, Feb +0.7%. |
| 1000 ET | Apr Philadelphia Fed manufacturing index expected -0.5 to 12.0, Mar +2.3 to 12.5. |
| 1100 ET | Treasury announces amounts of 2-year T-notes (previous $35 billion), 5-year T-notes (previous $35 billion) and 7-year T-notes (previous $29 billion) to be auctioned Apr 24-26. |
| 1300 ET | Treasury auctions 5-year TIPS. |
| 1630 ET | Weekly money supply report and Fed balance sheet. |
| Germany | |
| 0500 ET | German economic institutes that advise the government release their bi-annual economic outlook. |
| Euro-Zone | |
| 1000 ET | Apr Euro-Zone consumer confidence expected +0.1 to -19.0, Mar +1.2 to -19.1. |
| n/a | ECB Governing Council meets in Frankfurt. |
| Japan | |
| 1950 ET | Feb Japan tertiary industry index expected +0.7% m/m, Jan -1.7% m/m. |
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