Economic Data
(EU) ECB: €1.8B borrowed in overnight loan facility v €2.8B prior; €503.4B parked in deposit facility vs. €511.4B prior
(RU) Russia Jan Official Reserve Assets: $505.4B v $505.0Be
(ZA) South Africa Jan Net Reserves: $49.1B v $48.9Be; Gross Reserves: $51.5B v $49.9Be
(FI) Finland Nov GDP Indicator: 1.3% v 0.5%e
(FI) Finland Dec Preliminary Trade Balance: -€475M v -€335M prior
(FR) France Dec Trade Balance: -€5.0B v -€5.4Be
(CH) Swiss Jan Foreign Currency Reserves (CHF): 227.2B v 254.3B prior
(CZ) Czech Dec Trade Balance (CZK): 10.5B v 5.5Be
(DK) Denmark Dec Industrial Production M/M: 5.6% v 0.3%e; Industrial Orders M/M: 19.4% v -2.5% prior
(HU) Hungary Dec Preliminary Industrial Production M/M: -7.4% v 3.5% prior; Y/Y: 6.7% v 9.3%e
(TW) Taiwan Jan Total Trade Balance: $0.4B v $2.3Be; Total Exports Y/Y: 16.8% v -17.0%e; Total Imports Y/Y: -11.9% v -16.7%e
(HK) Hong Kong Jan Foreign Currency Reserves: $292.8B v $285.4B prior
(AT) Austria Jan Wholesale Price Index M/M: +1.4% v -0.6% prior; Y/Y: +1.8%v 3.4% prior
(NL) Netherlands Dec Industrial Production M/M: 1.4%v 0.0%e; Y/Y: +1.4 v -0.9%e; Industrial Sales Y/Y: No est v 6.7% prior
(SE) Sweden Jan Budget Balance (SEK): -14.6BB v -90.8B prior
(SI) Singapore Jan Foreign Reserves: $245.5B v $237.7B prior
(NO) Norway Dec Industrial Production M/M: -2.2% v +0.9% prior; Y/Y: -4.9% v -1.2% prior
(NO) Norway Dec Manufacturing Production M/M: -0.3% v 0.1%e; Y/Y: 0.6% v 0.0%e
(ZA) South Africa Q4 Unemployment Rate: 23.9%% v 24.8%e
(IS) Israel Jan Foreign Currency Balance: $77.1B v $74.9B prior
Fixed Income:
(ZA) South Africa sold total ZAR2.1B vs. ZAR2.1B indicated in 2017, 2026 and 2041 bonds
(DK) Denmark sold total DKK8.11B in 2021 and 2039 Bonds
(GR) Greece Debt Agency (PDMA) sold €812M vs. €625M indicated in 26-week Bills; Avg Yield 4.86% v 4.90% prior; Bid-to-cover: 2.72x v 2.80x prior
(EU) ECB allotted €109.5B in 7-Day Main Refinancing Tender vs. €110Be at fixed 1.0%
(HU) Hungary Debt Agency (AKK) sold HUF55B vs. HUF40B Targeted in 3-Month Bills; Avg Yield 7.32% v 7.41% prior; Bid-to-cover: 2.69x v x 2.73x
(UK) DMO sold £4.0B in 1.75% 2017 Gilts; Avg Yield 1.121% v 1.102% prior; Bid-to-cover: 1.82x v 2.02x prior; Tail 0.4bps v 0.4bps prior
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Notes/Observations
Australia's RBA unexpectedly left its Key Rate unchanged
Japan's MOF data confirms stealth intervention (1st since March 2004)
IMF warns that China GDP could be cut in half if European crisis escalates
China banks cuts exposure to Europe
China could post a January deficit due to effects from the week long Lunar New Year holiday (Current expectations is surplus of $9.1B)
Equities:
FTSE 100 -0.30% at 5876, DAX -0.50% at 6728, CAC-40 -0.40% at 3390, IBEX-35 -0.80% at 8761, FTSE MIB flat at 16,391, SMI -0.20% at 6134
European shares declined during the session among stalling Greece talks and mixed corporate earnings. The Greek government is struggling to progress on planned austerity measures which has triggered concerns over a contagion in the Eurozone. Fitch noted that Eurozone crisis is likely to be prolonged as a consequence while Citigroup analysts forecast chances of Greece exit from the EMU at 50% within 18 months vs prior forecast of 25-30%.
In corporate earnings, UBS[UBSN.CH] slipped after announcing very disappointing figures. Profit fell over 76% due to losses in the investment banking unit. Revenues in capital markets were also lower across the board. UBS noted that traditional improvements in first quarter activity levels and trading volumes may fail to materialize fully, thus essentially giving a profit warning for Q1. Earnings follow the same trend of Deutsche Bank which also disappointed investors last week. BP [BP.UK] also slipped after missing analysts estimates even though the dividend increase was a positive development. Earnings had however increased thanks to higher crude prices. In M&A news, Glencore agreed to merge with Xstrata [XTA.UK] which would value Xstrata at approx £38.3B. However, two of its top five investors, Standard Life and Schroders, said they would vote against the merger as it undervalues the shares of Xstrata.
Speakers:
EU's Juncker commented that Greece could not be forced from the euro and added that if there was an exit, then other states would have to invest 'unimaginable' sums
EU's Kroes: EU would not get into trouble if Greece was forced to exit EMU
China State Administration of Foreign Exchange (SAFE) commented that while foreign exchange inflows have slowed there had not been large outflows seen.
Spain Econ Min de Guidos commented in an address to parliament that the Spanish economy was slowing down significantly but reforms should help growth in H2 of the year
Greece PM Papademos to meet with party leaders regarding decision on fiscal rules today at 16:00 local time (15:00 GMT). To meet with PASOKs George Papandreou, New Democracys Antonis Samaras and the leader of Popular Orthodox Rally (LAOS), Giorgos Karatzaferis. The Greece PM to send new loan terms to party leaders ahead of meetings
Greek debt swap might include State companies according to the local press
China's PBoC: Reiterated it would continue to adopt a 'prudent' monetary policy and guide loans to certain sectors such as agriculture. To move forward with asset securitization and ensure available credit for first time home buyers
BoE member Salmon commented that he recommended not to weaken reforms to speed implementation. Policy makers should not cave in to the temptation to speed up financial sector reform by watering down tough new rules for banks and financial markets. The BOE was opposed to broadening the definition of capital proposed under international accords known as Basel III that were aimed at making banks better able to absorb losses
China might increase its domestic fuel prices as of Feb 8th with diesel and gasoline prices seen rising by CNY300/ton
Iran parliament said it was prepared to ban oil exports to some EU countries
Currencies:
Overall price action remained locked with recent ranges as market participants await concrete debt agreement out of Greece. Overall the Euro downside of late has been limited despite Greek debt concern but the 1.3220 January high is providing stiff resistance. The AUD remained underpinned around the 1.08 handle during the session aided by the unchanged RBA rate decision earlier today.