Notes/Observations
International banking sector wins more flexible Basel rules with full enforcement moved back to 2019 from 2015
Silvio Berlusconi reaches Italian election deal with Northern League; throws next month's general election wide open
Italy PM Monti will seek to be PM in next Govt, unlikely to accept a Fin Min position
IMF will not make any major revisions to next IMF world economic outlook in January
Syria President Assad: Govt still has not found a partner for talks in finding solution to the standoff
Fed members comments post FOMC minutes
Fed's Plosser: Unclear what the Fed will do when inflation reaches 2.5% and unemployment at 6.5%; there is a fear people may become too focused on the thresholds
Fed's Bullard: warns of the creeping politicization of central bank monetary policy
Economic Data
(FI) Finland Nov Preliminary Trade Balance: +210M v -238M prior
(TW) Taiwan Dec Total Trade Balance: $4.1B v $2.9Be; Total Exports Y/Y: 9.0% v 4.5%e; Total Imports Y/Y: 1.6% v 3.0%e
(UK) Dec Halifax House Prices M/M: 1.3% v 0.0%e; Y/Y: -0.3% v -0.6%e
(HU) Hungary Nov Producer Prices M/M: -0.7% v -0.4% prior; Y/Y: -2.9%e v +0.2% prior
(CZ) Czech Nov Industrial Output Y/Y: -3.9% v -1.3%e; Construction Output Y/Y: -2.7% v -4.3% prior
(CZ) Czech Nov Trade Balance (CZK): 35.5B v 24.0Be - (CH) Swiss Dec Foreign Currency Reserves (CHF): 427.2B v 423.0Be
(EU) ECB: 127M borrowed in overnight loan facility vs. 130M prior; 252.6B parked in deposit facility vs. 250.5B prior
(SE) Sweden Nov Service Production M/M: 1.8% v 0.4%e; Y/Y: +0.5% v -1.0%e
(HK) Hong Kong Dec Foreign Currency Reserves: $317.3B v $305.2B prior
(AT) Austria Dec Wholesale Price Index M/M: -0.7 v -1.0% prior; Y/Y: 2.7 v 2.8% prior
(UK) Dec New Car Registrations Y/Y: 5.3% v 11.3% prior
(NO) Norway Oct AKU Unemployment Rate: 3.2% v 3.0%e
(SG) Singapore Dec Foreign Reserves: $259.3B v $255.8B prior
(CZ) Czech Dec International Reserves: $44.8B v $44.2B prior
(IC) Iceland Dec Preliminary Trade Balance: 5.0B v 10.7B prior
(IS) Israel Dec Foreign Currency Balance: $75.9B v $75.7B prior
(EU) Euro Zone Jan Sentix Investor Confidence: -7.0 v -14.2e
(EU) Euro Zone Nov PPI M/M: -0.2% v -0.2%e; Y/Y: 2.1% v 2.4%e
(BR) Brazil Dec FGV Inflation IGP-DI: 0.7% v 0.7%e
Fixed Income
(NO) Norway sold NOK4.0B vs. NOK4.0B indicated in 12-month Bills; Yield 1.64%
(PL) Poland sold PLN3B vs. PLN2.0-3.0B indicated range in 4-month Bills; Yield 3.56%
(DE) Germany sold 3.515B in 6-month BuBills; Avg Yield -0.0091% v -0.0168% prior; Bid-to-cover: 2.11x v 2.5x prior
(NL) Netherlands Debt Agency (DSTA) sold total 3.9B vs. 3.0-5.0B indicated range in 3-month and 12-month Bills
Sold 2.83B vs. 2.0-3.0B indicated in 3-month bills; Yield: -0.014% v -0.041% prior
Sold 1.07B vs. 1.0-2.0B indicated in 12-month Bills; Yield +0.003% v 0.050% prior
Equities
Indices: FTSE 100 -0.30% at 6,072, DAX -0.50% at 7,740, CAC-40 -0.60% at 3,707, IBEX-35 +0.20% at 8,448, FTSE MIB flat at 16,962, SMI flat at 7,059, S&P 500 Futures -0.10% at 1,456
European equity markets are currently mixed ahead of events this week which include Fed commentary, US earnings, peripheral government bond issuance, Chinese data and rate decisions out of the ECB and BoE. European banks are mostly higher as officials agreed to ease the Base III global liquidity rules. However, Spanish banks have lagged led by Bankia (-11%). Resources related firms are mostly lower, tracking the declines in copper and oil prices.
European banks broadly higher as Basel regulators ease rules related to liquidity ratios. Outperformers include Commerzbank, Credit Agricole, Deutsche Bank, Intesa and Unicredit.
Germany movers [Infineon -3% (broker downgrade), RWE -1.5% (broker downgrade), Merck KgaA -1.2% (broker downgrade), Volkswagen -1% (preferred shares downgrade), E.ON -1% (broker downgrade), Air Berlin -0.50% (new CEO); German solar and windpower firms rise amid speculation related to the government's clean energy proposals, Epigenomics +6% (completed regulatory submissions related to proColontest)Daimler +1% (speculation Chinese investors could be interested in stake)]
UK movers [Rolls Royce -1.8% (concerns related to bribery probe in China), Shell and BP lower by ~1% (lower oil prices); Vernalis +4% (milestone payment), EasyJet +1.5% (Dec traffic, lower oil prices),Bumi Plc +2% (trading update),Barclays +3% (easing of Base III liquidity guidelines)]
France movers [Banks broadly higher on eased Basel III liquidity rules, Peugeot +6%, Faurecia +7% (speculation that Peugeot may lower stake)]
Italy movers [Banca Monte Paschi +10% (CEO comments, possible short covering)]
Switzerland movers [Addex +6% (data presentation), Roche +0.50% (no longer seeking to bid for Illumina)]
Dutch movers [Wereldhave +3% (sold US property assets), Imtech +1.5 % (confirmed 2012 forecast)]