Spain begins 2013 bond issuance on solid footing with 10-year yield falling back below 5%
Notes/Observations
China money supply and loans data come lower than expected. Trade surplus bigger than expected with both imports and exports coming in higher than market expectations
Focus on ECB press conference. Dealers noting that highly unlikely ease or any future possibility of an ease is mentioned
S&P: 2013 could be watershed year for Europe as it could start to overcome debt crisis
No use of the ECB marginal lending facility for first time since Aug 2011
UK 10-year Index-Linked Gilt yield at -0.97%, record low after Office of National Stats (ONS) presented its RPI recommendations
Spain begins 2013 bond issuance on solid footing; sells total €5.8B vs.
4-5B range with lower yields to boot
Italy 12-month Bill auction also respectable with yield at 3-year low
Spanish 10-year gov't yield moves below 5%; lowest level since March 2012
USDA on Friday is expected to estimate last year's drought-decimated corn crop at a six-year low
Economic Data
Indonesia Central Bank leaves Reference Rate unchanged at 5.75%; as expected
(FI) Finland Nov Industrial Production M/M: -0.5% v 0.6% prior; Y/Y: -1.9% v -0.3% prior
(FR) Bank of France Dec Business Sentiment: 91 v 91e
(FR) France Dec Consumer Price Index M/M: 0.3% v 0.3%e; Y/Y: 1.3% v 1.3%e; CPI Ex Tobacco Index: 125.02 v 125.12e
(FR) France Dec CPI EU Harmonized M/M: 0.4% v 0.4%e; Y/Y: 1.5% v 1.5%e
(FR) France Nov Industrial Production M/M: 0.5% v 0.1%e; Y/Y: -3.6% v -4.0%e
(FR) France Nov Manufacturing Production M/M: +0.2% v -0.2%e; Y/Y: -4.6% v -5.1%e
(DK) Denmark Dec CPI M/M: -0.3% v 0.0%e; Y/Y: 2.0% v 2.3%e
(DK) Denmark Dec CPI EU Harmonized M/M: -0.3% v +0.1%e; Y/Y: 1.9% v 2.3%e
ECB: €0.0M borrowed in overnight loan facility vs. €121.0M prior; €233.6B parked in deposit facility vs. €243.5B prior (Note: No use of the ECB marginal lending facility for first time since Aug 2011)
(SE) Sweden Dec CPI Headline Rate M/M: 0.3% v 0.1%e; Y/Y: -0.1% v -0.2%e; CPI Level: 314.61v 314.07e
(SE) Sweden Dec CPI Underlying Rate (CPIF) M/M: 0.3% v 0.1%e; Y/Y: 1.0% v 0.9%e
(SE) Sweden Nov Industrial Production M/M: -1.3%% v -0.5%e; Y/Y: -4.3% v -3.3%e
(SE) Sweden Nov Industrial Orders M/M: -5.2% v 0.0%e; Y/Y: -3.0% v -2.1% prior
(NL) Netherlands Dec CPI M/M: -0.1% v -0.4%e; Y/Y: 2.9% v 2.6%e
(NL) Netherlands Dec CPI EU Harmonized M/M: -0.1% v -0.5% prior; Y/Y: 3.4% v 3.0%e
(DE) German Nov plant, equipments orders Y/Y: -3.0%; Orders YTD: +5.0% y/y - VDMA
(NO) Norway Dec CPI M/M: 0.3% v 0.3%e; Y/Y: 1.4% v 1.4%e
(NO) Norway Dec CPI Underlying M/M: -0.1% v +0.2%e; Y/Y: 1.1% v 1.3%e
(NO) Norway Dec Producer Prices incl. Oil M/M: 0.0% v -0.4% prior; Y/Y: -0.2% v 0.0% prior
UN Food and Agricultural Organization (FAO) Dec Food Price Index: 209.0 v 210.9 prior (lowest reading since June 2012)
(GR) Greece Dec Consumer Price Index Y/Y: 0.8 v 1.0% prior; CPI EU Harmonized Y/Y: 0.3% v 0.3%e
(GR) Greece Oct Unemployment Rate: 26.8% v 26.2% prior (fresh record high)
Fixed Income
(ES) Spain Debt Agency (Tesoro) sold total €5.8B vs. €4.0-5.0B indicated range in 2015, 2018 and 2026 bonds
Sold €3.4B in new March 2.75% 2015 Bono bond; Avg Yield 2.476% v 3.282% prior; Bid-to-cover: 2.07x v 2.03x prior; Maximum Yield 2.58% v 3.391% prior; Tail 11.1bps v 10.9bps prior
Sold €1.95B in Jan 4.5% 2018 Bono Bond; Avg Yield 3.988% v 4.680% prior; Bid-to-cover: 2.59x v 1.57x prior; Maximum Yield 4.033% v 4.769% prior; Tail bps 4.5v 8.9bps prior
Sold €470M in 5.9% Jul 2026 Bono; Avg Yield 5.555% v 6.191% prior; Bid-to-cover: 2.9x v 2.08x prior; Max Yield: 5.569% v 6.218% prior; Tail 1.4bps
(IT) Italy Debt Agency (Tesoro) sold €9.5B vs. €8.5B indicated in 12-month Bills; Avg yield 0.864% (lowest since Jan 2010) v 1.456% prior; Bid-to-cover: 1.79x v 1.94x prior
(HU) Hungary Debt Agency (AKK) sold total HUF70,5B vs. HUF47B indicated in 2016, 2018 and 2023 Bonds
Equities
FTSE 100 +0.10% at 6,107, DAX +0.30% at 7,739, CAC-40 -0.10% at 3,713, IBEX-35 +0.20% at 8,619, FTSE MIB +0.70% at 17,442, SMI flat at 7,150, S&P 500 Futures +0.30% at 1,460
European equity markets are broadly higher, following the release of better than expected Chinese trade data and bond auction results out of Spain. Today's gains have so far been led by the Italian FTSE MIB, while the FTSE 100 is trading below the more than 4-year highs seen on Wednesday's session. European banks are mixed. Outperformers include Commerzbank, Credit Agricole, Deutsche Bank, Intesa, RBS and SocGen. Laggards include Barclays, BBVA, BNP and UBS. Resources related firms are mostly higher, supported by Chinese trade data. Looking ahead, markets are expected to focus on rate decisions out of the ECB and the Bank of England (BoE).
UK movers [Sig +7% (FY12 guidance), TT Electronics +7% (trading update), Bunzl +3.5% (acquisition),Tesco +2% (sales update), Lonmin +2% (broker commentary), Pace +2% (FY sales guidance), Hays +2% (Q2 update); Marks & Spencer -4.5% (Q3 sales)]
France movers [ArcelorMittal +2.3% (priced capital raise), EADS +1% (broker commentary); GDF Suez -1.4% (broker commentary),France Telecom -1% (comments related to 2013 mobile rates)]
Spain movers [Bankia +5% (outperforms banking sector), Fomento +4% (speculated related to CEO change); Caixabank -4% (underperforms banking sector)]
Switzerland movers [Swatch -2% (FY sales), Sika +1% (FY sales)]
Italy movers [Finmeccanica +3.5% (asset sale speculation)]
Dutch movers [Philips +3.5% (broker commentary), Delta Lloyd +2.5% (broker commentary)]
Notes/Observations
China money supply and loans data come lower than expected. Trade surplus bigger than expected with both imports and exports coming in higher than market expectations
Focus on ECB press conference. Dealers noting that highly unlikely ease or any future possibility of an ease is mentioned
S&P: 2013 could be watershed year for Europe as it could start to overcome debt crisis
No use of the ECB marginal lending facility for first time since Aug 2011
UK 10-year Index-Linked Gilt yield at -0.97%, record low after Office of National Stats (ONS) presented its RPI recommendations
Spain begins 2013 bond issuance on solid footing; sells total €5.8B vs.
4-5B range with lower yields to boot
Italy 12-month Bill auction also respectable with yield at 3-year low
Spanish 10-year gov't yield moves below 5%; lowest level since March 2012
USDA on Friday is expected to estimate last year's drought-decimated corn crop at a six-year low
Economic Data
Indonesia Central Bank leaves Reference Rate unchanged at 5.75%; as expected
(FI) Finland Nov Industrial Production M/M: -0.5% v 0.6% prior; Y/Y: -1.9% v -0.3% prior
(FR) Bank of France Dec Business Sentiment: 91 v 91e
(FR) France Dec Consumer Price Index M/M: 0.3% v 0.3%e; Y/Y: 1.3% v 1.3%e; CPI Ex Tobacco Index: 125.02 v 125.12e
(FR) France Dec CPI EU Harmonized M/M: 0.4% v 0.4%e; Y/Y: 1.5% v 1.5%e
(FR) France Nov Industrial Production M/M: 0.5% v 0.1%e; Y/Y: -3.6% v -4.0%e
(FR) France Nov Manufacturing Production M/M: +0.2% v -0.2%e; Y/Y: -4.6% v -5.1%e
(DK) Denmark Dec CPI M/M: -0.3% v 0.0%e; Y/Y: 2.0% v 2.3%e
(DK) Denmark Dec CPI EU Harmonized M/M: -0.3% v +0.1%e; Y/Y: 1.9% v 2.3%e
ECB: €0.0M borrowed in overnight loan facility vs. €121.0M prior; €233.6B parked in deposit facility vs. €243.5B prior (Note: No use of the ECB marginal lending facility for first time since Aug 2011)
(SE) Sweden Dec CPI Headline Rate M/M: 0.3% v 0.1%e; Y/Y: -0.1% v -0.2%e; CPI Level: 314.61v 314.07e
(SE) Sweden Dec CPI Underlying Rate (CPIF) M/M: 0.3% v 0.1%e; Y/Y: 1.0% v 0.9%e
(SE) Sweden Nov Industrial Production M/M: -1.3%% v -0.5%e; Y/Y: -4.3% v -3.3%e
(SE) Sweden Nov Industrial Orders M/M: -5.2% v 0.0%e; Y/Y: -3.0% v -2.1% prior
(NL) Netherlands Dec CPI M/M: -0.1% v -0.4%e; Y/Y: 2.9% v 2.6%e
(NL) Netherlands Dec CPI EU Harmonized M/M: -0.1% v -0.5% prior; Y/Y: 3.4% v 3.0%e
(DE) German Nov plant, equipments orders Y/Y: -3.0%; Orders YTD: +5.0% y/y - VDMA
(NO) Norway Dec CPI M/M: 0.3% v 0.3%e; Y/Y: 1.4% v 1.4%e
(NO) Norway Dec CPI Underlying M/M: -0.1% v +0.2%e; Y/Y: 1.1% v 1.3%e
(NO) Norway Dec Producer Prices incl. Oil M/M: 0.0% v -0.4% prior; Y/Y: -0.2% v 0.0% prior
UN Food and Agricultural Organization (FAO) Dec Food Price Index: 209.0 v 210.9 prior (lowest reading since June 2012)
(GR) Greece Dec Consumer Price Index Y/Y: 0.8 v 1.0% prior; CPI EU Harmonized Y/Y: 0.3% v 0.3%e
(GR) Greece Oct Unemployment Rate: 26.8% v 26.2% prior (fresh record high)
Fixed Income
(ES) Spain Debt Agency (Tesoro) sold total €5.8B vs. €4.0-5.0B indicated range in 2015, 2018 and 2026 bonds
Sold €3.4B in new March 2.75% 2015 Bono bond; Avg Yield 2.476% v 3.282% prior; Bid-to-cover: 2.07x v 2.03x prior; Maximum Yield 2.58% v 3.391% prior; Tail 11.1bps v 10.9bps prior
Sold €1.95B in Jan 4.5% 2018 Bono Bond; Avg Yield 3.988% v 4.680% prior; Bid-to-cover: 2.59x v 1.57x prior; Maximum Yield 4.033% v 4.769% prior; Tail bps 4.5v 8.9bps prior
Sold €470M in 5.9% Jul 2026 Bono; Avg Yield 5.555% v 6.191% prior; Bid-to-cover: 2.9x v 2.08x prior; Max Yield: 5.569% v 6.218% prior; Tail 1.4bps
(IT) Italy Debt Agency (Tesoro) sold €9.5B vs. €8.5B indicated in 12-month Bills; Avg yield 0.864% (lowest since Jan 2010) v 1.456% prior; Bid-to-cover: 1.79x v 1.94x prior
(HU) Hungary Debt Agency (AKK) sold total HUF70,5B vs. HUF47B indicated in 2016, 2018 and 2023 Bonds
Equities
FTSE 100 +0.10% at 6,107, DAX +0.30% at 7,739, CAC-40 -0.10% at 3,713, IBEX-35 +0.20% at 8,619, FTSE MIB +0.70% at 17,442, SMI flat at 7,150, S&P 500 Futures +0.30% at 1,460
European equity markets are broadly higher, following the release of better than expected Chinese trade data and bond auction results out of Spain. Today's gains have so far been led by the Italian FTSE MIB, while the FTSE 100 is trading below the more than 4-year highs seen on Wednesday's session. European banks are mixed. Outperformers include Commerzbank, Credit Agricole, Deutsche Bank, Intesa, RBS and SocGen. Laggards include Barclays, BBVA, BNP and UBS. Resources related firms are mostly higher, supported by Chinese trade data. Looking ahead, markets are expected to focus on rate decisions out of the ECB and the Bank of England (BoE).
UK movers [Sig +7% (FY12 guidance), TT Electronics +7% (trading update), Bunzl +3.5% (acquisition),Tesco +2% (sales update), Lonmin +2% (broker commentary), Pace +2% (FY sales guidance), Hays +2% (Q2 update); Marks & Spencer -4.5% (Q3 sales)]
France movers [ArcelorMittal +2.3% (priced capital raise), EADS +1% (broker commentary); GDF Suez -1.4% (broker commentary),France Telecom -1% (comments related to 2013 mobile rates)]
Spain movers [Bankia +5% (outperforms banking sector), Fomento +4% (speculated related to CEO change); Caixabank -4% (underperforms banking sector)]
Switzerland movers [Swatch -2% (FY sales), Sika +1% (FY sales)]
Italy movers [Finmeccanica +3.5% (asset sale speculation)]
Dutch movers [Philips +3.5% (broker commentary), Delta Lloyd +2.5% (broker commentary)]