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All Eyes On The FOMC Decision Whether To Tweak The Twist

Published 06/20/2012, 07:31 AM
Updated 01/01/2017, 02:20 AM

BOE Minutes Show Close Call To Increase QEEconomic Data

(EU) ECB: €5.8B borrowed in overnight loan facility vs. €4.4B prior; €764.5B parked in deposit facility vs. €763.6B prior

(DE) Germany May Producer Prices M/M: -0.3% v -0.2%e; Y/Y: 2.1% v 2.2%e

(DK) Denmark Jun Consumer Confidence: -2.6 v -1.8e

(JP) Japan May Convenience Store Sales Y/Y: 1.7% v 6.1% prior

(SE) Sweden Jun Consumer Confidence:3.1 v 4.0e; Manufacturing Confidence: -4 v -2e; Economic Tendency Survey: 98.7 v 99.7e

(NL) Netherlands Jun Consumer Confidence: -40 v -38 prior

(TW) Taiwan May Export Orders Y/Y: -3.0% v -3.7%e

(IT) Italy Apr Industrial Orders M/M: -1.9% v -2.0%e; Y/Y: -12.3% v -8.6%e

(IT) Italy Apr Industrial Sales M/M: -0.5% v 0.0% prior; Y/Y: -4.1% v -3.1% prior

(ZA) South Africa May CPI (all items) M/M: 0.1% v 0.4%e; Y/Y: 5.7% v 5.9%e

(UK) May Jobless Claims Change: +8.1K v -4.0Ke; Claimant Count Rate: 4.9% v 4.9%e

(UK) Apr Average Weekly Earnings 3M/Y: 1.4% v 0.8%e; Weekly Earnings exBonus 3M/Y: 1.8% v 1.8%e

(UK) Apr ILO Unemployment Rate: 8.2% v 8.2%e; Employment Change 3M/3M: +166K v +135Ke

(UK) The BOE minutes: Voted 5 to 4 to maintain Asset Purchase Target unchanged at £325B (prior was 8-1)

(UK) The BOE minutes: Voted 9 to ) (unanimous) to leave interest rate unchanged at 0.50%

(CH) Swiss Jun Credit Suisse ZEW Expectations Survey : -43.4 v -4.0 prior

(IT) Italy Apr Current Account: -€1.1B v -€2.4B prior

(ES) Spain Apr Trade Balance: -3.4B v -€3.3B prior

Fixed Income

(IN) India sold total INR140B vs. INR140B indicated in 3-month and 6-month Bills

(RU) Russia sold RUB21.7B vs. RUB39.0B indicated in OFZ Bonds; Yield 8.45% vs. Guidance 8.35-8.45%

(EU) ECB allotted $1.6B in 7-day USD Liquidity Operation at fixed 0.66% vs. $2.5B prior

(EU) ECB allotted $9.9B in 3-month USD Liquidity Operation at fixed 0.67% vs. $10.3B prior

(SE) Sweden sold total SEK10B vs. SEK10B indicated in 3-month and 6-month Bills

(DE) Germany sold €4.005B in Jun 2014 Schatz; Avg Yield 0.10% v 0.07% prior; Bid-to-cover: 1.9x v 1.7x prior

Notes/Observations

BOE has a split 5-4 vote on QE with Gov King in the minority

Japan May trade deficit was the third highest on record

Greece set to cement a three party coalition between New Democracy, Pasok and Democratic Left

Equities

FTSE 100 +0.20% at 5596, DAX +0.20% at 6375, CAC-40 -0.10% at 3114, IBEX-35 +1.1% at 6768, FTSE MIB +1.6% at 13,657, SMI -0.50% at 6004, S&P 500 Futrues +0.10% at 1351.25

With all eyes on the later today US Fed decision, European bourses had a mixed open. As of the time of writing most European banks and resource-related shares are trading higher. Indices in Spain and Italy have outperformed, amid the move lower in peripheral bond yields. In terms of the Italian and Spanish bond markets, an article from yesterday's UK Telegraph said that funds from the ESM and EFSF may be used to buy peripheral government debt (did not cite any sources). A similar story was run by the UK's Guardian, but this report was later denied by German officials. During today's session ECB official Weidmann reiterated that Bundesbank's critical view of government bond purchases is known.

Shares of Aer Lingus [AERL.UK] have gained over 20%, as the company received a €694M bid from Ryanair [RYA.UK]. Kesa Electricals [KESA.UK] is lower by over 5% after reporting a y/y decline in its adjusted profits, citing difficult trading conditions in Europe. Today's strength in shares of ITV [ITV.UK] has been attributed to renewed takeover speculation. In Sweden retailer H&M [HMB.SE] has advanced by more than 2%, as the company's Q2 results beat analyst expectations. European consumer products names including Nestle [NESN.CH], Unilever [UNA.NL] and Beiersdorf [BEI.DE] are trading lower after Procter & Gamble warned on its Q4 outlook.

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