Barchart Morning Call
Overnight
Developments
Global Financial Calendar
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- E-mini S&Ps are down -8.00 points (-0.59%) this morning on JPMorgan's $2
billion trading loss and weaker-than-expected Chinese retail sales and
industrial production data. Commodity prices are trading lower across the board.
The dollar is mildly higher by +0.13 points (+0.16%) on increased safe-haven
demand. JPMorgan after Thursday's close publicly disclosed that it had a $2
billion trading loss on a synthetic credit securities position. JPMorgan's stock
is down about 6% in European pre-market trading. European stocks are trading
lower with the Euro Stoxx 50 down -0.73%, also undercut by the JPMorgan news,
the Chinese economic data, and the fifth day of Greek attempts to form a
government. The European Commission today released updated forecasts that the
Eurozone economy in 2012 will decline by -0.3%, which was unchanged from its
forecast in February. The Commission is forecasting a return to positive growth
in 2013 with GDP growth of +1%. The Commission is forecasting GDP growth for
this year of -4.7% for Greece, -1.8% for Spain, -1.4% for Italy, and -3.3% for
Portugal. Italy today successfully sold 10 billion euros of Treasury bills,
meeting its target and not running into any problems. Spanish Prime Minister
Rajoy later today is expected to announce details of a new bank cleanup plan.
The markets today are awaiting talks by Socialist Pasok Leader Venizelos with
New Democracy leader Samaras to see if Pasok, New Democracy and Democratic Left
can form a coalition government. Mr. Venizelos had positive talks yesterday with
Democratic Left leader Kouvelis. Those three parties together easily have a
working majority in Parliament that can create a government that intends to
affirm the basic tenets of the bailout requirements and keep Greece in the
Eurozone. China released several economic reports overnight. China's April CPI
eased to +3.4% y/y from +3.6% y/y, which was in line with the market consensus.
April industrial eased to +11.0% y/y from +11.6% y/y in March and was weaker
than the market consensus of +11.7% y/y. April retail sales eased to +14.1% y/y
from +15.2% in March and was weaker than market expectations of +15.1%. Asian
stock markets today closed lower across the board: Japan -0.63%, Hong Kong
-1.30%, China -0.76%, Taiwan -1.10%, Australia -0.24%, Singapore -0.70%, South
Korea -1.51%, India -0.77%.
- June E-mini S&Ps this morning are trading -8.00 points (-0.59%) on the
JPMorgan trading loss, weaker-than-expected Chinese economic data, and the
ongoing Greek political turmoil. JPMorgan's stock is down about 6% due to the
trading loss news and other large U.S. bank stocks are trading lower in European
trading. US stocks on Thursday closed mixed: S&P 500 +0.25%, Dow Jones
+0.16%, Nasdaq 100 -0.19%. The stock market found some support on a favorable
unemployment claims report (initial claims fell 1,000 and continuing claims fell
61,000 to a new 3-3/4 year low) and on reports of some progress in Greece on
forming a government.
- June 10-year T-notes this morning are trading +8 ticks on the lower trade in
stocks and the news of JPMorgan's $2 billion trading loss. T-note prices on
Thursday closed lower: TYM2 -4.5, FVM2 -1.5. Bearish factors included overhang
from Thursday's 30-year bond auction and slightly reduced safe-haven demand with
stocks stabilizing and with some reports of progress in Greece on forming a
government. The dollar index this morning is trading mildly higher by +0.17
points. EUR/USD and USD/JPY are both virtually unchanged. The dollar index on
Wednesday closed slightly higher: Dollar Index +0.14, EUR/USD +0.0007, USD/JPY
+0.29. The dollar index on Thursday saw some continued support from the Greek
situation and from the dollar-positive U.S. unemployment claims report.
Yesterday's U.S. March trade deficit report was mildly bearish for the dollar
since it expanded to -$51.8 billion, wider than the consensus of -$50.0 billion
and substantially wider than Feb?s revised -$45.4 billion. The Bank of England
yesterday ended its quantitative easing program, which was supportive for
sterling. The BOE left its base rate unchanged at 0.50% as expected. June crude
oil prices this morning are down $1.17 and gasoline is down 2.83 cents on
general commodity market weakness tied to risk-off hedge fund dumping on the
news of JPMorgan's loss. Crude oil and gasoline prices on Thursday closed mixed:
CLM12 +0.27, RBM2 -0.0211. Crude oil on Thursday saw some short-covering after
recent sharp losses. Oil prices were able to shake off the bearish news that
Chinese April crude oil imports dropped to a 4-month low and OPEC's report that
it is producing 8.3% more crude oil than it believes is necessary. The
International Energy Agency today is scheduled to release its monthly report on
the global petroleum market. Crude oil continues to labor under Wednesday's DOE
report showing a new 21-1/2 year high in U.S. crude oil inventories.
Global Financial Calendar
| Friday 5/11/12 | |
|---|---|
| United States | |
| 0830 ET | Apr PPI expected unchanged m/m and +2.1% y/y, Mar unchanged m/m and +2.8% y/y. Apr PPI ex food & energy expected +0.2% m/m and +2.8% y/y, Mar +0.3% m/m and +2.9% y/y. |
| 0915 ET | Dallas Fed President Richard Fisher speaks on Too-Big-To-Fail in Fort Worth, TX. |
| 0955 ET | Preliminary May University of Michigan U.S. consumer confidence expected -0.4 to 76.0, Apr +0.2 to 76.4. |
| Germany | |
| 0200 ET | German April final CPI expected unrevised at +0.1% m/m and +2.0% y/y. German final EU harmonized CPI expected unrevised at +0.2% m/m and +2.2% y/y. |
| United Kingdom | |
| 0430 ET | UK Apr PPI input (nsa) expected -0.9% m/m and +2.1% y/y, Mar +1.9% m/m and +5.8% y/y. UK Apr PPI output (nsa) expected +0.4% m/m and +2.9% y/y, Mar +0.6% m/m and +3.6% y/y. Apr PPI output core expected +0.2% m/m and +1.9% y/y, Mar +0.1% m/m and +2.5% y/y. |
| Euro-Zone | |
| 0500 ET | European Commission releases economic growth forecasts. |
| CHI | |
| 0130 ET | China Apr industrial production expected +12.1% y/y, Mar +11.9% y/y. |
| 0130 ET | China Apr fixed asset investment (ex-rural) expected +20.4% y/y, Mar +20.9% y/y. |
| 0130 ET | China Apr retail sales expected +15.1% y/y, Mar +15.2% y/y. |
