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Markets Look Ahead To European Rate Decisions On Thursday

Published 01/09/2013, 06:51 AM
Updated 01/01/2017, 02:20 AM
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Japanese officials continue to hound BOJ on steps to take

Notes/Observations

Alcoa CEO [AA]: China coming back, would not be surprised to see GDP growth above 8%

IMF's Lagarde: IMF to maintain US 2013 GDP forecast of +2.1%

Australia Nov Retail Sales data registered its first decline in 4 months

Fitch analyst: Would consider a sovereign downgrade of Japan without action on debt (Insight: Fitch current has Japan sovereign rating A+ with a negative outlook. It cut Japan's rating by two notches back on May 22nd 2012)

Japan Chief Cabinet Secy Suga: To select a new BOJ govt who also sees the need for bold policy easing

BoJ considering easing again in Jan, most likely via increase in asset purchases; considering 2% inflation target (Note: BOJ meets on Jan 21-22nd)

Portugal said not to be considering issuing bonds anytime soon

UK Nov Trade Deficit come in wider than expectations but improve from month ago levels

German 5-year BOBL yield climbs to highest level in 3-months at 0.53%

Economic Data
(FI) Finland Oct GDP Indicator: -0.7% v -1.6% prior

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

(HU) Hungary Nov Preliminary Trade Balance: €703.8M v €782.5Me

(CZ) Czech Dec CPI M/M: 0.1% v 0.1%e; Y/Y: 2.4% v 2.4%e

(DK) Denmark Nov Trade Balance ex-Shipping (DKK): 7.6B v 6.5Be; Current Account: 9.6B v 10.0Be

(CZ) Czech Dec Unemployment Rate: 9.4% v 9.4%e; Share of Unemployed between ages 15-64: 7.4% v 6.8% prior

(RO) Romania Q3 Final GDP Q/Q: -0.4% v -0.5% prelim; Y/Y: -0.5% v -0.6% prelim

(EU) ECB: €121M borrowed in overnight loan facility vs. €105M prior; €243.5B parked in deposit facility vs. €244.5B prior

(SE) Sweden Dec Budget Balance (SEK): -79.3BB v 8.2B prior

(NO) Norway Nov Retail Sales Volume M/M: 0.3% v 0.9%e; Y/Y: 2.4% v 3.8% prior

(IT) Italy Q3 YTD Deficit to GDP Ratio: 3.7% v 4.7% prior

(ZA) South Africa Dec Vehicle Sales: 1.8% v 7.3% prior

(UK) Nov Visible Trade Balance: -£9.2B v -£9.0Be; Total Trade Balance: -£3.5B v -£3.0Be; Trade Balance Non EU: -£4.5B v -£4.2Be

(ZA) South Africa Dec SACCI Business Confidence: 93.0 v 91.7 prior

(GR) Greece Nov Industrial Production: -2.7% v +3.5% prior

Fixed Income
(TR) Turkey sold $1.5B in Mar 2023 at 3.473% (lowest yield on record); bid-to-cover: over 2x

(EU) ECB allotted $60M in 7-Day USD Tender at fixed 0.66% vs. $980M prior

(SE) Sweden sold SEK3.5B vs. SEK3.5B indicated in 1.5% 2023 Bonds; Yield 1.8165% v 1.6158% prior; Bid-to-cover: 1.72x v 2.55x prior

(CH) Switzerland sold total CHF653.1M in 2015 and 2024 bonds

(DE) Germany sold €4.086B in new 0.50% Feb 2018 BOBL; Avg yield 0.53% v 0.41% prior (highest since Oct); Bid-to-cover: 1.8x v 1.9x prior

Equities
Indices: FTSE 100 -0.40% at 6,074, DAX +0.10% at 7,705, CAC-40 +0.20% at 3,712, IBEX-35 +0.60% at 8,507, FTSE MIB +1.1% at 17,145, SMI +0.50% at 7,103, S&P 500 Futures +0.10% at 1,453

European equity markets are broadly higher, although off of the session's best levels. The opening gains were partially attributed to Alcoa's quarterly results and the weakness in the yen. European banks are broadly higher. Outperformers in the sector include Commerzbank, Credit Agricole, Lloyds , SocGen and Unicredit. Underperformers include BNP, Credit Suisse and the larger Spanish banks.

Resource related firms are trading higher, tracking the gains in copper prices. In terms of the bond market, today has been another heavy day of corporate issuance. Peripheral companies which have come to the market include Bank of Ireland, CaixaBank, Gas Natural and Intesa.

Germany movers [Rheinmetall +4% (broker commentary), Air Berlin +3.5% (Dec traffic), ProsiebenSat +2.5% (broker commentary),CropEnergies +2% (9-month results), Deutsche Telekom +2% (T-Mobile USA may begin selling iPhone in 3-4 months), Rational +1.7% (broker commentary), SAP +1% (planning to restructure North American distribution operations), Software AG +0.50% (sold North American service operations); Solarworld -8% (follows recent gains),Patrizia -3% (broker commentary), Lanxess -2% (broker commentary), Allianz -1.3% (broker commentary)]

UK movers [Centamin Plc +13% (production update),Lloyds +3% (broker commentary),Galliford +1.5% (H1 guidance);First Group -5% (ex-dividend),Smiths News -4% (ex-dividend), Sainsbury -3% (Q3 sales update), Aviva -2% (broker commentary),Spirit Pub Company -1.8% (ex-dividend), British Land -0.50% (ex-dividend)]

France movers [SocGen +2% (broker commentary);CGG Veritas -4.5% (Q4 update)Carrefour -3% (concern about Q4 sales), Faurecia -1.5% (Peugeot denied that it planning to sell stake), Peugeot -1% (2012 sales volumes)]

Spain movers [Banco Popular +5% (outperforms European banking sector), Acciona +1% (said to be considering bid for €800M/year contract)]

Denmark movers [Bang Olufsen -12% (Q2 results)]

Dutch movers [Delta Lloyd +6% (Aviva sold shares)]

Belgium movers [Galapagos +3% (milestone payment from GSK)]

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