Barchart Morning Call
Overnight
Developments
- Sep E-mini S&Ps are trading mildly lower by -0.39% on lower European stocks, Japan's disappointing May machine orders report, and Chinese Premier Wen Jiabao's comment that the Chinese economy is still facing "relatively large" downward pressure. Commodity prices are trading mostly higher this morning with an average gain of +1.05%. Oil prices are up +0.64%, gold prices are up +0.42%, copper prices are up +0.51%, and agricultural prices are trading higher. The dollar index this morning is down -0.21% while EUR/USD is up +0.06%. Sep T-notes are up 6.5 ticks.
- The Euro Stoxx 50 index is trading -0.30% on today's rise in the Spanish bond yield above 7.00% and concern about global economic growth. Asian stocks today closed lower on the fall-out from last Friday's weaker-than-expected U.S. June payroll report of +80,000: Japan -1.37%, Hong Kong -1.88%, China -2.29%, Taiwan -0.80%, Australia -0.95%, Singapore -1.66%, South Korea -1.36%, India -0.74%, Turkey -0.27%.
- The Spanish 10-year bond yield this morning is up 17 bp at 7.08%, rising above the 7.00% level ahead of today's Eurozone finance ministers meeting. Finance ministers have a busy agenda that includes detailing bailout plans for Spain's banks and for Cyprus, how to implement pan-European bank supervision before year-end, and detailing plans that would allow the ESM bailout facility to buy sovereign bonds in the secondary market.
- China's June CPI fell to a 2-1/2 year low of +2.2% y/y, which was weaker than market expectations of +2.3% y/y and down sharply from May's report of +3.0% y/y. China's June PPI fell -2.1% y/y from -1.4% y/y in April and was weaker than market expectations of -2.0% y/y. The CPI and PPI reports put more pressure on the Chinese government to adopt additional growth measures. Chinese Premier Wen Jiabao said that pressure on the Chinese economy is still "relatively large" and that the government will fine-tune its growth measures. China's Q2 GDP, to be released this Friday, will ease to +7.7% y/y from +8.1% y/y in Q1, according to the market consensus.
- The Japan May machine orders report of -14.8% m/m and +1.0% y/y was substantially weaker than market expectations of -2.6% m/m and +7.0% y/y and was a turnaround after April's report of +5.7% m/m and +6.6% y/y. Meanwhile, Japan's May adjusted current account surplus narrowed slightly to 282.2 billion yen from 288.6 billion yen in April and was smaller than market expectations of 401 billion yen.
- Germany's May current account surplus narrowed to 9.0 billion euros from
11.2 billion euros and was smaller than market expectations of 10.1 billion and
April's report of a revised 11.0 billion euros. However, Germany's May trade
surplus rose to 15.3 billion euros from a revised 14.5 billion euros in April
and was larger than market expectations of 14.0 billion euros. May exports rose
by +3.9% m/m, which was better than expectations of +0.2% m/m and April's report
of -1.7%.
Market Comments- Sep E-mini S&Ps are trading -5.25 points (-0.39%) on this morning's lower trade in European stocks (-0.30%) and on general concern about slower global economic growth with Japanese May machine orders falling -14.8% m/m and Chinese Premier Wen Jiabao's comment that the Chinese economy is still facing "relatively large" downward pressure. The US stock market on Friday closed with fairly sharp losses: S&P 500 -0.94%, Dow Jones -0.96%, Nasdaq 100 -1.33%. Bearish factors included (1) the weaker-than-expected U.S. June payroll report of +80,000 (versus expectations of +90,000), and (2) the continued rise in Spanish yields on disappointment that the ECB at its meeting last Thursday did not announce a bond purchase program.
- Sep 10-year T-notes this morning are trading +6.5 ticks on the lower trade in Sep E-mini S&Ps and European and Asian stocks. T-note prices on Friday closed moderately higher: TYU2 +13, FVU2 +5.25. T-note prices on Friday rallied on the weaker-than-expected U.S. payroll report and on revived concerns about the European debt crisis.
- The dollar index this morning is trading mildly lower by -0.17 points (-0.21%). EUR/USD is slightly higher by +0.0007 points (+0.06%) and USD/JPY is down -0.12 points (-0.15%). The dollar index on Friday closed with fairly sharp gains: Dollar index +0.564 (+0.68%), EUR/USD -0.0101 (-0.82%), USD/JPY -0.26 (-0.33%). The dollar index on Friday rallied to a new 1-month high and EUR/USD fell to a new 2-year low. The dollar index rallied on the weak U.S. payroll report and safe-haven demand with the revival of the European debt crisis. The Spanish 10-year bond yield last Friday rose by another 18 bp to close the week up 62 bp at 6.91%. The Spanish industrial production report of -6.1% y/y was better than expectations of -8.1% y/y but nevertheless underscored the downward spiral in the Spanish economy. The markets ignored the fact that the German May industrial production report of +1.6% m/m and unchanged m/m was substantially stronger than market expectations of +0.2% m/m and -1.2% y/y.
- Aug WTI crude oil prices this morning are up +0.54 (+0.64%) and Aug gasoline is up +0.0181 (+0.67%) on the Norwegian oil worker strike. There was no progress over the weekend in negotiations between unions and employers and Statoil appears set to go through with its threat for lockout at midnight tonight, which would shut down most of Norway's oil output. However, the Norwegian government may yet intervene and prevent that lockout and order Norwegian oil workers back to work. Crude oil and gasoline prices on Friday closed sharply lower: CLQ2 -2.77 (-3.18%), RBQ2 -0.0488 (-1.77%). Bearish factors centered on the weaker-than-expected U.S. payroll report and revived concerns about the European debt crisis. There was also some hope that the Norwegian oil workers strike might soon be settled after the Norwegian government ordered the unions and employers to return to the bargaining table. The Norwegian government could order an end to the strike and the resumption of production. However, employers may go ahead with their current plan to lockout all union workers as of midnight on July 9 and completely shut down Norwegian oil production versus the current shut-down of about 15% of Norwegian oil production.
- For the complete subscription version of this daily report (plus a 13-page
big-picture weekly report), along with the earliest possible delivery in the
morning, please visit http://www.barchart.com/register/crbfms_usmc.php
Today's U.S. Earnings Reports Earnings reports (ranked by market cap): AA-Alcoa (Consensus $0.06), PSMT-Pricesmart (0.59), WDFC-WD-40 (0.61).
Global Financial Calendar
Barchart.com provides Financial Quotes, Charts and Technical Analysis for Stock and Commodity Traders.Monday 7/9/12 United States 0100 ET Fed's Evans speaks in Thailand. 1100 ET USDA weekly grain export inspections. 1130 ET Weekly 3-mo and 6-mo T-bill auctions. 1155 ET Fed's Williams speaks in Idaho. 1500 ET May consumer credit expected +$8.5 bln, Apr +$6.515 bln. 1600 ET USDA Crop Progress Japan 0030 ET Japan June bankruptcies, May +7.2% y/y. 0100 ET Japan June eco watchers survey current index expected 47.5, May 47.2. June eco watchers survey outlook index, May 48.1. 1950 ET Japan June M2 expected +2.1% y/y, May +2.1% y/y. June M3 expected +1.9% y/y, May +1.9% y/y. Germany 0200 ET German May current account expected 10.2 bln euros, Apr 11.2 bln euros. May trade balance expected 14.1 bln euros, Apr 14.4 bln euros. German May exports expected +0.2% y/y, May -1.7% y/y. May imports expected +0.8% y/y, Apr -4.9% y/y. Euro-Zone 0430 ET Eurozone Jul Sentix investor confidence expected -25.8, June -28.9. United Kingdom 1901 ET UK Jun BRC sales like-for-like, May +1.3% y/y. 1901 ET UK Jun RICS house price balance, May -16%. CHI 2200 ET China June trade balance expected $24.0 bln, May 18.7 bln. June exports expected +10.6% y/y, May +15.3% y/y. June imports expected +11.0%, May +12.7% y/y.
No comments:
Post a Comment