Slightly weakish start of the week. Fri US close uneven flattish and Asian Mon close slightly positive to kick off the week. European equities down 0.5%, but credit still pushing for tighter prints. Commodities a touch softer. Bunds bouncing off Friday’s high, taking most European sovereigns along the ride at more or less unchanged spreads. Unable to break back through 2% during the morning session.
Chinese property prices remain under pressure with the worst performance in a year, both good (for the government looking to curb excesses there) and bad news, economy-wise. Otherwise, not much in terms of weekend news or official buzz. Had Lagarde stating that things looked better than before, but still striking a cautious note (with oil prices single out, debt and EM slowing growth). That official cautious note has been quite general over the last couple of days, belying the relief sentiment of the markets.
Italian Jan orders and sales well below consensus, a reminder of the above mentioned. Likewise, GIIPS Jan construction output (Italy -10.9, Portugal -11.9, Spain
Apple dividend / buy-backs probably the most noticeable news on the screens. Nothing left to buy (except themselves) in the tech world? Had traded new all-time high of $600 (from crossing the $500-mark mid Feb last Thursday and the $400-mark for good just ahead of Xmas, having firs tested that level in Summer 2011). First quotes up $10 (+1.6%).
Initial value of Greece Greece
Some new issues activity, courtesy of the EFSF (EUR 1.5bn 20 YRS MS +115. Books closed over EUR 4.5bn), Veolia Environnement (EUR 750 15 YRS MS +190), ABB (EUR 1.25bn 5 YRS MS +57), as well as unrated German construction company Hochtief (EUR 500m 5 YRS MS +390s). It’s EFSF longest issue to date after its EUR 3bn 10-year deal in Nov last year.
ECB deposits up another EUR 30bn+ to EUR 759bn from EUR 728bn.
VIX closed Fri at 14.7, up from its late afternoon lows of 13.7, but still at the lowest level since June 2007. 14.7 at European close.
Oil rebounding to 107.6 / 125.5 from 106.0 / 124.7 (from European COB) for WTI and Brent. Gold as well firmer at 1668 (from 1654). CRB up 0.3%.
Baltic Dry inching higher to 879 again (from 874). Still rising, albeit the pace of the recovery is slowing down.
10 YRS yields: Germany 2.05% (unch), Swaps 2.44% (-1 bp), Finland 2.44% (-2 bp), Luxemburg 2.45% (-2 bp), Netherlands 2.53% (-2 bp), Austria 2.95% (-1 bp), France 2.99% (-2 bp), EFSF 3.22% (-4 bp), Belgium 3.25% (-5 bp), Italy 4.82% (-3 bp), Spain
Spreads: Swaps +36 (-2), Finland +39 (-2), Luxembourg +40 (-2), Netherlands +48 (-2), Austria +90 (-1), France +94 (-2), EFSF +117 (-2), Belgium +120 (-5), Italy +278 (-2), Spain
Bunds did flirt back with the 2% area in the morning, but didn’t manage to get traction. Still soft UST were off no help during the afternoon session. Sovereign spreads steady.
Credit extremely outperforming on Financials (-7 bp) and Main (-5 bp). Might be due to index rolls (new series starting tomorrow).
By and large: Not much… Look out over the town / Think about all of the strange things circulating round.
It ain’t easy - after all to find the next dice to roll..
Tomorrow: No sovereign supply, but EUR 2bn EFSF bills. German Producer Prices (f+3.2% YoY fcst). US Feb Housing starts (700k fcst, after 699k) and Building permits (686k fcst, after 676k)
Rest of week:
German 2 YRS and 10 YRS linkers on Wed.
EZ PMI and Indu order Thu. Germany
US housing data throughout the week. Jobless and leading indicators Thu. Japan nothing until mid week. Chinese PMI on Thu.
Click link on title or below for today’s musical support:
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