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Day Traders looking for more volume ahead of Housing Starts and Ben Bernanke
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world***
European shares were still trading in negative territory ahead of US housing
starts due out in NY morning. Automakers were pressuring the market as China’s
association of automakers expect vehicle delivers to grow only 5% from 8%
prior.
BHP exec: China iron ore growth is flattening out
RBA: Appropriate for interest rates to stay at current levels
UK CPI a bit above expectations but YoY at lowest level since Nov 2010
IMF Chief Lagarde commented that the global situation was not as dire as it was
three months ago but vulnerabilities still needed to be addressed. Financial
reforms were necessary to avoid growth threat. On rebalancing theme she noted
that China’s shift to consumption can be gradual while encouraging FDI should
be key priority for India
ECB member Nowotny commented in an online chat that he saw a multi-speed Europe
to 2014 period. He added that one must carefully observe the fx loan
development in Hungary
reiterated that Portugal was not the same as Greece and is in better shape
Netherlands Bureau for Economic Policy Analysis (CPB) amended its forecasts for
the second time this month citing the current economic climate to continue into
H2. The ECB LTRO operation had not solved the underlying issue of the weak
European financial sector. Dutch economy would perform moderately in 2012-15
period due to high unemployment, low consumption and declining housing prices.
Downside risks include, budget cuts, worsening of the EU debt crisis and bank
deleveraging. It cautioned that the size of the Dutch economy would not exceed
Q1 2008 level until the 2014 period
India Central Bank Dep Gov Gokarn commented that internationalization of INR
currency was not a strategic goal and the RBI was not actively planning
strategic currency diversification. The RBI favored a gradual opening of the
capital account. A sharp decline in commodity prices might create room for both
fiscal and monetary policy but it was too early to decide on policy based upon
the new CPI indicator. Oil price was one of many factors in determining RBI
inflation policy
China PBoC researcher Ji Min stated that China should purchase additional EFSF
bonds. He noted that such bonds have stable returns and purchasing the debt
could improve trade ties with Europe.. Lastly he noted that European banks were
trading at attractive valuations
China should maintain its prudent monetary policy stance and not loosen its monetary
policy even if the economy slowed. He expected GDP to avg 7% for next 5-years
and believed that a China hard landing was impossible. Lastly he expected the
CNY currency (yuan) to become fully convertible by 2020
China Central Bank (PBoC) Q2 survey found less dissatisfaction with price
levels. Approx 63% of households thought consumer products were too high vs.
69% prior Q1 survey. The survey also showed that 14.1% of respondents wished to
buy an apartment over the next three months, the lowest level since 1999
Czech Central Bank Hampl commented that the central bank should keep its loose
monetary conditions as inflation was not a reason to hike rates. He stressed
that the Czech economy lacked the characteristics of demand-pull inflation
view to to $3.0B from $3.5B prior citing the oil price rise since December.
Europe’s initial focus was on China. First after BHP exec China iron ore growth
was flattening out. Then dealer chatter surfaced of ‘unrest and demonstrations’
in Beijing coupled into that various blogs noted of ‘unusual troop movements’
and numerous army vehicles around Beijing. The situation was explained that the
extra police activity was due an expected visit from a high level dignitary
from North Korea. Nonetheless the USD opened the European session on a firmer
footing
The JPY maintained a soft tone in the session. The EUR/JPY cross trade above
110.70; highest level since the Oct 31st BOJ solo FX intervention
The GBP saw an initial bounce after its CPI data a bit above expectations but
the YoY reading were at their lowest level since Nov 2010. The EUR/GBP cross
moved lower to test 0.8320 area. GBP/USD was relatively steady at 1.5855 area.
Papers:
Former ECB’s Bini-Smaghi warned Ireland against changing the terms of the Anglo
bailout. The Irish press reported that Bini-Smaghi thought that Ireland would
be ‘shooting itself in the foot’ if it changed the terms of the bailout in a
way that is not ‘consistent’ with the rescue program.
The Netherlands Bureau for Economic Policy Analysis (CPB) amended its recent
deficit-to-GDP forecasts, notably lowering the 2012 deficit-to-GDP figure to
4.6% from the prior 4.5%. It sees the current economic climate to continue into
the second half, with the economy to perform moderately in 2012-15 period due
to high unemployment, low consumption and declining housing prices
Ahead of the UK budget announcement, the FT reported that economists expect the
OBR to slightly raise its 2012 forecast for growth of 0.7% to approx 0.8%, and
will not predict a technical recession of two consecutive quarters of negative
growth. Treasury officials indicated some relief that the forecasts are
drifting in line with private sector forecasts, and thus expect no surprises in
the data which will negatively affect the bond markets.
Accountants warned the Chancellor of the Exchequer Osborne that plans to cut
the 50p tax could cost the treasury billions, as top earners may delay income
until the rate is reduced. They also suggest that instead of deferring the
measure, the Chancellor should immediately reduce the top rate to 45p or risk
losing tax revenues, incurring higher borrowing costs and compounding the 50p
tax fiasco.
morning traders are getting back to their desks after last week’s Quadruple
Witching, and we begin our day today with 830am Housing Starts as the major
news of the morning. We can see that Tim
Geithner is speaking at 1000am EST today and Ben Bernanke is speaking later today @ 1245pm EST
so keep an eye on volume dropping ahead of this speech.
8:00 (EU) ECB to drain €218.0B in 7-Day Term Deposits to offset Govt Bond
Purchases (SMP)
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8:30 (US) Feb Housing Starts: 700Ke v 699K prior; Building Permits: 686Ke v
682K prior (revised from 676K)
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8:55 (US) Redbook Retail Sales
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9:15 (EU) EU’s Barroso with Swiss Fin Min Widmer-Schlumpf
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10:00 (EU) China’s Ambassador to EU speaks at Brussels Think Tank
– 10:00 (US) US Tsy Sec
Geithner
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10:00 (EU) ECB member Praet
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10:00 (EU) ECB member Weldmann
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10:00 (BE) Belgium Mar Consumer Confidence: No est v -20 prior
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10:00 (EU) ECB Forex Reserves w/e Mar 16th: No est v €249.7B prior
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10:30 (IT) Italy PM Monti meets for labor talks
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10:45 (EU) EU President Van Rompuy with Swiss Fin Min Widmer-Schlumpf
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10:45 (UK) BOE to buy £1.5B in 2027-2060 Gilts in reverse auction
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11:00 (US) Fed to purchase $1.75-2.25B in Notes
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11:00 (EU) EU’s Ashton
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11:00 (MX) Mexico weekly international reserves
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11:30 (US) Treasury to sell 4-Week Bills
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12:00 (PT) Portugal Fin Min Gaspar in Washington DC
– 12:45 (US) Fed’
Chairman Bernanke gives lecture at George Washington University
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14:00 (UK) BOE member Dale
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16:00 (CA) Quebec Fin Min Bachand gives 2012-12 budget
– 16:30 (US) Weekly API
Energy Inventories
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17:30 (US) Fed’s Kocherlakota speaks in St. Louis, Missouri
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(US) Republican Illinois Primary
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(UK) Queen Elizabeth Addresses Parliament for Diamond Jubilee
–
(EU) EBA, Consultation on Supervisory Reporting Standards
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