Better German IFO Survey and Spain Bill auction results buoys risk appetite in session
Economic Data
(TH) Thailand Nov Customs Trade Balance: -$1.4B v -$746Me; Exports Y/Y: -12.4% v -9.0%e; Imports Y/Y: -2.4% v -1.6%e
(GE) Germany Jan GfK Consumer Confidence Survey: 5.6 v 5.5e
(GE) Germany Nov Producer Prices M/M: 0.1% v 0.1%e; Y/Y: 5.2% v 5.2%e
(FI) Finland Nov Unemployment Rate: 6.2% v 7.0% prior
(JP) Japan Nov Convenience Store Sales Y/Y: 7.5% v 14.1% prior
(SA) South Africa Oct Leading Indicator: 131.4 v 130.9 prior
(SZ) Swiss Nov Trade Balance (CHF) 3.0B v 2.0Be; Real Exports M/M: -6.8% v +0.9% prior; Real Imports M/M: -7.7% v 1.4% prior
(TT) Taiwan Nov Export Orders Y/Y: 2.4% v 2.8%e
(RU) Russia Nov Real Retail Sales M/M: -0.8% v -0.5%e; Y/Y: 8.6% v 8.3%e
(RU) Russia Nov Unemployment Rate: 6.3% v 6.5%e
(AS) Austria Oct Producer Price Index M/M: -0.1% v +0.5% prior; Y/Y: 3.4% v 3.5% prior
(GR) Greece Oct Current Account: -€1.5B v -€1.1B prior
(HK) Hong Kong Nov CPI - Composite Index Y/Y: 5.7% v 5.6%e
(NV) Netherlands Dec Consumer Confidence: -37 v -34e
(SW) Sweden Central Bank (Riksbank) cuts Repo Rate by 25bps to 1.75%; As Expected
(GE) Germany Dec IFO Business Climate: 107.2 v 106.0e; Current Assessment: 116.7 v 116.0e; Expectations Survey: 98.4 v 97.0e
(IT) Italy Oct Industrial Orders M/M: -1.6% v -1.3%e; Y/Y: -4.8% v -1.2%e
(IT) Italy Oct Industrial Sales M/M: +0.1% v -5.5% prior; Y/Y: 1.1% v 1.9% prior
Fixed income:
(SP) Spain Debt Agency (Tesoro) sold total €5.64B vs. €3.5-4.5B indicated range in 3-Month and 6-Month Bills
Sold €3.72B in 3-month Bills; Avg Yield 1.735% v 5.111% prior; Bid-to-cover: 2.9x v 2.9x prior; Max Yield 1.880% v 5.220% prior
Sold €1.92B in 6-month Bills; Avg Yield 2.435% v 5.227% prior; Bid-to-cover: 4.1x v 4.9x prior; Max Yield 2.530% v 5.328% prior
(EU) ECB allots €141.9B in 1-Day Liquidity providing tender
(GR) Greece Debt Agency (PDMA) sold €1.3B vs. €1.0B indicated in 13-week Bills; avg yield 4.68% v 4.63% prior; Bid-to-cover: 2.91x v 2.94x prior
(EU) ECB allots €169.0B vs. €250Be in 7-Day Main Refinancing Tender at fixed 1.00%
(HU) Hungary Debt Agency (AKK) sold HUF30B in 3-Month Bills; avg yield 7.03% v 7.03% prior
(UK) DMO sold £750M 4.25% 2027 Conventional Gilt mini-tender; Avg Yield 2.637% v 4.00% prior; Bid-to-cover: 2.81x v 1.85x prior
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Notes/Observations
Euro-Zone Fin Ministers agree to commit €150B in loans to IMF
AT&T drops bid for T-Mobile Deal
Sacyr creditors willing to extend up to three years the pending €4.9B of debt due this week
German IFO Survey beats expectations and rises for a second month
Spain Debt Agency sells more than targeted in Bill auction at substantially lower yields
Equities:
FTSE 100 -0.24% at 5352, DAX +0.70% at 5709, CAC 40 +0.80% at 2997, IBEX 35 +1% at 8337, FTSE MIB +1.1% at 14,713, SMI -0.25% at 5752
European shares rose for the second straight session as the shock over Kim Jong-Il's death waned over the Asian and European session. Stronger than expected German IFO data and bullish comments from the IFO's economists helped sustain the rally in the markets. Healthcare stocks were pressured by Astra Zeneca [AZN.UK] which announced an impairment charge related to trouble with its drug pipeline. Its antidepressant, developed in a collaboration with Targacept, failed to meet its primary endpoint in a second Phase III study. On the other hand, its cancer drug Olaparib will not progress into Phase III development. Company will take a $381.5M in pre-tax impairment charges. However, Astra Zeneca reaffirmed its full year targets.