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European Market Update: February 20

By Trade The NewsMarket OverviewFeb 20, 2013 06:34AM ET
European Market Update: February 20
By Trade The News   |  Feb 20, 2013 06:34AM ET
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BOE minutes more dovish than anticipated with Gov King in minority for the 4th time in his 10-year tenure


Japan Jan Trade deficit is biggest on record/

FDI continues to fall in China despite signs of economic recovery/

Moody's says China avoided hard landing; Sees 2013 GDP at upper end of 7.5-8.5% range.

Japan PM Abe: less need for the government and the private sector to jointly set up a fund to invest in foreign bonds.

Conservative front-runner Muto not named in the list of 4 finalists to replace outgoing BOJ Gov Shirakawa next month.

BOE minutes more dovish than expected; Vote on QE was 6-3; Gov King in the minority for only the fourth time in 10 years as BOE governor.

Spain said to Spain to impose caps on autonomous regions bond yields to a premium of 100bps.

EMU leaders said to be considering delaying France's 3% deficit target.

German 10-year Bund auction results seen weak, almost technically uncovered; yield at highest level since April 2012.

Economic Data

(DE) Germany Jan Final Consumer Price Index -0.5% v -0.5%e; Y/Y: 1.7% v 1.7%e

(DE) Germany Jan Final CPI EU Harmonized -0.7% v -0.7%e; Y/Y: 1.9% v 1.9%e

(DE) Germany Jan Producer Prices M/M; 0.8% v 0.3%e; Y/Y: 1.7% v 1.2%e

(JP) Japan Jan Convenience Store Sales Y/Y: -0.9% v -2.0% prior.

(DE) Germany Jan CPI Hesse M/M: -0.5% v 0.9% prior; Y/Y: 1.7 v 2.2% prior.

(TH) Thailand Central left the Benchmark Interest Rate unchanged at 2.75%; as expected.

(FR) France Feb Business Confidence: 90 v 87e; Production Outlook: -36 v -34e ; Own-Company Production Outlook: +4 v -14 prior

(FR) France Jan Consumer Price Index M/M: -0.5% v -0.2%e; Y/Y: 1.2% v 1.4%e; CPI Ex Tobacco Index: 124.36 v 124.6e

(FR) France Jan CPI EU Harmonized M/M: -0.6% v -0.3%e; Y/Y: 1.4% v 1.6%e ;

(DE) Germany Jan CPI Saxony M/M: -0.5% v +1.0% prior; Y/Y: 1.8% v 2.2% prior

(DK) Denmark Feb Consumer Confidence: -2.0 v -3.0e

(ZA) South Africa Jan CPI (all items) M/M: 0.3% v 0.6%e; Y/Y: 5.4% v 5.7%e

(EU) ECB: €5.8B borrowed in overnight loan facility vs. €3.5B prior; €164.5B parked in deposit facility vs. €143,5B prior

(SE) Sweden Q4 Total Number of Employees Y/Y: 1.1% v 0.9% prior

(IT) Italy Dec Industrial Orders M/M: -1.8% v -0.2%e; Y/Y: -15.3% v -9.5%e

(IT) Italy Dec Industrial Sales M/M: +0.8% v -0.2% prior; Y/Y: -6.3% v -5.4% prior

(MA) Malaysia Jan CPI Y/Y: 1.31.2%e

(UK) BOE voted 9-0 to leave interest rates unchanged at 0.50%

(UK) BOE voted 6-3 to maintain Asset Purchase Target unchanged at £375B; Gov King outvoted.

(UK) Jan Jobless Claims Change: -12.5K v -5.5Ke; Claimant Count Rate: 4.7% v 4.8%e; Employment Change 3M/3M: +154K v +117Ke

(UK) Dec Average Weekly Earnings 3M/Y: 1.4% v 1.4%e; Weekly Earnings exBonus 3M/Y: 1.3% v 1.3%e - (UK) Dec ILO Unemployment Rate: 7.8% v 7.7%e

(DE) Germany Jan CPI North Rhine Westphalia M/M: -0.5 v +0.9% prior; Y/Y: 1.7% v 2.1% prior.

(DE) Germany Jan CPI Brandenburg M/M: -0.6 v +1.0% prior; Y/Y: 1.4% v 1.9% prior.

(DE) Germany Jan CPI North Baden Wuerttemberg M/M: -0.6 v +1.0% prior; Y/Y: 1.3% v 1.9% prior.

(CH) Swiss Feb Credit Suisse ZEW Expectations Survey: +10.0 v -6.9 prior.

(MA) Malaysia Q4 GDP Y/Y: 6.4% v 5.5%e

(MA) Malaysia Q4 Current Account: $22.8B v $9.5B prior.

Fixed Income:

(SE) Sweden to sell 5-year USD-denominated bond; guidance seen flat to mid-swaps.

(SK) Slovakia Debt Agency (ARDAL) 10-year Euro-denominated bond guidance seen at +125bps over mid-swaps.

(ES) Spain to sell 5-year USD-denominated bond; guidance seen +300bps over mid-swaps (implies a yield near 4.02%)

(IN) India sold total INR100B vs. INR100B in 3-month and 12-month Bills.

(SE) Sweden sold SEK3.5B vs. SEK3.5B indicated in 1.5% 2023 Bonds; Yield 2.2102% v 1.9089% prior; bid-to-cover: 1.91x v 2.86x prior.

(EU) ECB allotted $0M (nil) in 7-Day USD Liquidity Tender at fixed 0.65% vs. $1.0B prior.

(DE) Germany sold €4.04B in 1.5% 2023 Bunds; Avg Yield 1.66% v 1.56% prior; Bid-to-cover: 1.2x v 1.7x prior.

(PT)) Portugal Debt Agency (IGCP) sold total €1.5B vs. €1.5B indicated in 3-month and 12-month Bills.

Sold €345M in 3-month Bills; Avg Yield: 0.737% v 0.667% prior; Bid-to-cover: 2.4x v 3.8x prior.

Sold €1.155B in 12-month Bills; Avg Yield 1.277% v 1.609% prior; Bid-to-cover: 2.3x v 2.3x prior.



Indices: FTSE 100 +0.25% at 6,396, DAX +0.20% at 7,765, CAC-40 -0.20% at 3,728, IBEX-35 -0.40% at 8,190, FTSE MIB -0.40% at 16,605, SMI +0.50% at 7,619, S&P 500 Futures flat at 1,529

European equity markets are currently mixed. The DAX, FTSE 100 and SMI have outperformed. The French CAC-40 has underperformed, as traders assess earnings reports from companies including Credit Agricole, Lafarge and France Telecom. European banks are mixed. Credit Agricole has outperformed the sector, following the release of its quarterly results. Barclays has been weighed down by analyst commentary. Resource-related firms are trading mixed, in line with what has been seen with commodities prices.

UK movers [Rexam +3.5% (FY profits and sales rose y/y); RSA -12% (cut dividend),BHP -2% (management change), Barclays -1% (broker commentary)]

France movers [Lafarge +6% (Q4 results above ests),Credit Agricole +2% (adj Q4 results above ests) ; Havas -3.5 (cautious commentary for 2013), Television Francaise -2.5% (downgraded after FY results),Accor -2% (swung to loss in FY12)]

Germany movers [SMA Solar +3.5% (broker commentary), Kabel Deutscheland +3% (Q3 results above ests), Axel Springer +1.9% (broker commentary),MTU Aero Engines +1.8% (broker commentary),Hochtief +1.5% (Australian unit mulling asset sales) ; Lufthansa -5% (suspended dividend), Dialog Semiconductor -1.5% (FY margins declined)]

Italy movers [Telecom Italia Media +5% (ongoing M&A speculation)]

The Netherlands movers [KPN -5.5% (rights offering), DSM -4% (Q4 results below ests), Akzo Nobel -4% (Q4 results below ests)]

Belgium movers [Ageas +4% (Q4 results above ests, raised dividend)]
European Market Update: February 20

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European Market Update: February 20

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