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Markets Wait To See If ECB Draghi Adds To Views On Resolving EU Crisis

By Trade The NewsStock MarketsJul 26, 2012 07:04AM ET
www.investing.com/analysis/markets-wait-to-see-if-ecb-draghi-adds-to-views-on-resolving-eu-crisis-131007
Markets Wait To See If ECB Draghi Adds To Views On Resolving EU Crisis
By Trade The News   |  Jul 26, 2012 07:04AM ET
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Economic Data
(DE) Germany August GfK Consumer Confidence Survey: 5.9 v 5.8e

(DE) Germany June Import Price Index M/M: -1.5% v -0.9%e; Y/Y: 1.3% v 1.9%e

(SE) Sweden July Consumer Confidence: 5.6 v 2.5e; Manufacturing Confidence: -2 v -5e; Economic Tendency Survey: 96.1 v 98.0e

(SE) Sweden June Household Lending Y/Y: 4.5% v 4.5%e

(SE) Sweden June PPI M/M: 0.2% v 0.2%e; Y/Y: 0.4% v 0.4%e

(SE) Sweden June Trade Balance (SEK): 9.3B v 9.3Be

(SE) Sweden June Unemployment Rate: 8.8% v 8.9%e

(EU) Euro Zone June M3 Money Supply Y/Y: 3.2% v 2.9%e; M3 Three-month Avg: 3.0% v 2.7%e

(IT) Italy May Retail Sales M/M: -0.2% v -0.3%e; Y/Y: -2.0% v -4.7%e

(PL) Poland June Retail Sales M/M: 0.2% v 2.5%e; Y/Y: 6.4% v 9.0%e

(PL) Poland June Unemployment Rate: 12.4% v 12.2%e

(PH) Philippines Central Bank cut Overnight Borrowing Rate by 25bps to 3.75%, not expected (Note: was expected to be unchanged)

(IT) Italy June Hourly Wages M/M: 0.2% v 0.1%e; Y/Y: 1.5% v 1.4%e

(ZA) South Africa June PPI M/M: 3.3%e v 0.5% prior; Y/Y: 5.9%e v 6.6% prior

Fixed Income
(IT) Italy Debt Agency (Tesoro) sold €2.5B vs. €1.5-2.5B indicated range in May Zero Coupon 2014 CTZ Bond; Avg Yield 4.860% v 4.712% prior; Bid-to-cover: 1.78x v 1.65x prior

(HU) Hungary Debt Agency (AKK) sold total HUF45B in 2015, 2017 and 2022 Bonds

Notes/Observations
New Zealand keeps interest rates steady (as expected)

Concerns grow over UK's AAA sovereign rating after the very poor GDP numbers

Egan-Jones cuts Italy's sovereign rating again to CCC+ from B+

Moody's followed up its sovereign rating cut on Germany with a similar move to 17 German banking organizations

ECB's Nowotny reignited the debate over a banking license for ESM

Equities
FTSE 100 -0.20% at 5485, DAX -0.90% at 6350, CAC-40 -0.20% at 3076, IBEX-35 -0.50% at 5978, FTSE MIB -0.10% at 12,494, SMI +0.50% at 6209, S&P 500 Futures -0.40% at 1330

Following the mixed open, European equity indices are trading broadly lower. The DAX has led the declines, amid the release of corporate earnings by various Germany companies, including Siemens [SIE.DE] and Volkswagen [VOW3.DE]. European banks are mixed with Spanish banks outperforming, as Spain's government bond yields have thus far traded in a steady manner.

Underperformers in the banking sector include Deutsche Bank [DBK.DE], Intesa [ISP.IT], Lloyds [LLOY.UK], RBS [RBS.UK] and Unicredit [UCGIT]. Resource related companies are mostly lower, amid the weakness in commodity prices. Additionally, disappointing earnings from Shell have weighed on energy companies. Companies seen reporting results during the US morning include Boston Scientific, CME, International Paper, Moody's, McGraw-Hill, MMM, Potash and Exxon Mobil.

In Germany large industrial names, Siemens [SIE.DE], BASF [BAS.DE] and Volkswagen are all trading lower after reporting quarterly results. Puma [PUM.DE] is higher by over 4%, following the release of its quarterly figures. Man SE [MAN.DE] has declined by more than 5% after the company reported a weaker than expected H1 net profit. In the UK, Lloyds [LLOY.UK] has lost over 1% as the company reported y/y declines for its H1 profits and revenues. Royal Dutch Shell [RDSA.UK] is lower by over 3%, as the company reported weaker than expected net profits for Q2, while BG Group is lower by ~1% (issued Q2 results). Centrica [CNA.UK] is trading up by over 1% after the release of its H1 results and the announcement that the company would increase its dividend.

Industrial name Rolls Royce [RR.UK] is higher by over 4%, as the company issued H1 results and raised its dividend. Shares of ITV [ITV.UK] have advanced by over 5%, following the release of H1 results. In other UK movers, AstraZeneca [AZN.UK] has lost over 1% (issued Q2 results and reaffirmed FY outlook) and British Sky [BSY.UK] is slightly higher (reported FY11/12 results). In France, Alcatel-Lucent is lower by more than 7%, following the release of its Q2 results. Cap Gemini's [CAP.FR] shares have advanced by over 4%, as the company announced H1 results and a €100M stock buyback. In other movers in France, Sanofi [SAN.FR] has gained ~1% (issued Q2 results, reaffirmed outlook), France Telecom is up by about 2% (reported H1 results) and Casino [CO.FR] has traded higher by more than 2.5% (issued H1 results, reaffirmed FY targets).

Swiss pharmaceutical firm Roche [ROG.CH] has traded flat following the release of its H1 results. Specialty chemicals firm Clariant [CLN.CH] has lost over 3%, as the company reported a y/y decline in its EBITDA margin. Syngenta [SYNN.CH] is higher by over 1.5% after reporting better than expected H1 sales. Shares of ABB [ABBN.CH] have gained over 3%, following the release of Q2 results. In the Netherlands, Unilever [UNA.NL] has gained over 5% following the release of its H1 results. Large Spanish banking name Santander [SAN.ES] is higher by over 1%, as the company reported better than expected H1 revenues, despite the rise seen for bad loans.
Markets Wait To See If ECB Draghi Adds To Views On Resolving EU Crisis
 

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Markets Wait To See If ECB Draghi Adds To Views On Resolving EU Crisis

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