26 Nov 2012 – “ Sailing ” (Rod Stewart, 1975)
Hard
pressed to find anything remotely exciting today. Equities losing a little
shine, but understandable given last week’s 5% rush (and 14% tightening in
Credit). Bonds stuck in range. Fiscal Cliff hailing back (in yet rather timid
manner, though). Waiting on Greek rescue revelations. Yawn!
"Sailing" (Bunds 1,41% -3; Spain
5,6% unch; Stoxx 2542 -0,4%; EUR 1,296 unch)
---
Not much going on over the weekend. US equities closed up a further 0.3% after Europe went home in yet another shortened session, in
order to go shopping. Divergent views of whether Black Friday was good or not,
but obviously, if BF itself was a little below expectations, it’s because the
whole thing has morphed into an extended Black Weekend and weekend numbers look like
plenty of shopping got done.
Fiscal Cliff potentially back into the
limelight with some US politico recognition that not much had been done so far
(since the, then well-timed, Boehner intervention Friday, 10 days ago, which
turned around markets).
Asian session muted with the Nikkei only
gaining 0.25% today (…). Rest mixed. China still on the heavier side,
though. Looks like future annual growth targets might be taken down to +7.5%.
Greek pre-session #3 pre-huddles looking to
get things done by tonight. Or not… Catalan separatist vote strong, however
only on a combined basis, with Mas losing some support. Might just be unruly,
after all.
Spanish mortgages still plunging (-35.3%
after -33.2% in mortgage-capital loaned). Italian Oct Retail Sales slightly
disappointing at +4.3% MoM / +3.3% YoY (fcst +4.6% / +3.6% after -1.3% /
+3.1%). German Consumer Confidence less upbeat than last week’s IFO numbers at
5.9 (fcst 6.2 after 6.3 rev. 6.1).
Slightest Risk Off-start of the week, but
just so. Bunds picking up some colour (alongside USTs in Asia),
down 2 bp to 1.42% (1.67%) with the other EGBs sluggishly following. Equities a
wee bit lower with first Credit quotes out by a tick or two. Italy and Spain a tick wider. EUR 1.297. Not
much to write home about…
Getting a little more ROff with markets slowly drifting lower with equities off a
quarter, Credit ticking a little wider, as did Periphery bonds. No specific
trigger. Given last week’s performance, not a huge surprise per se.
We had the last auction out of Belgium for
2012 with the targeted EUR 3.2bn sold with EUR 655m 3.500% Jun 2017 at 0.935%
(COB 0.98% and last 1.08% end of Oct), EUR 759m 4.000% Mar 2019 at 1.374% (COB
1.435%), EUR 926m 3.000% Sep 2019 at 1.582% (COB 1.640%) and finally EUR 855m
4.250% Sep 2022 at 2.22% (COB 2.290% and last 2.42% end of Oct). Nice prices,
well overbid compared to the Friday close. All bonds done on historical auction
lows (and near last week’s all-time lows).
EUR 3bn 12m bills out of Germany at
-0.0085% (last -0.0095%), as well as the weekly French 3, 6 and 12m bills for
nearly EUR 6.8bn at -0.02%, -0.01% and +0.019% (all about unchanged) to round
up today’s supply.
We’ll have up to EUR 3bn Dutch 3 YRS
tomorrow (COB 0.135%), next to EUR 4bn Spanish 3 & 6m bills (last 1.415%
and 2.023% one month ago).
Italy announced this week’s funding
programme with EUR 3.5bn 2 YRS Zeroes tomorrow (last 2.397% in Oct), next to
EUR 1bn in ILBs, EUR 7.5bn 6m bills on Wednesday (last 1.347% one month ago)
and bonds (details not yet announced) on Thursday. Tomorrow’s CTZ should
normally print at their tightest levels in over two year (CTZ jumped from 1.77%
to 2.31% in Oct 2010, hitting their 7.81% post-EUR introduction high one year
later in Nov 2011. 3 LTROs and 1 OMT later...).
EUR 3bn additional German 5 YRS on Wed.
Midday on mid-morning levels. EGBs a tick
firmer for choice, but just so. Periphery a tick wider. Not much happening.
Bunds 1,42% (-2), OBLs at 0,43% (unch) and
BKOs -0,005% (-0,2). UST 1,67% (-2).
Spanish 2s at 2,98% (+2), 10s at 5,62% (+2).
2-10 YRS spread 264bp (unch). Italian 2s at 1,85% (+3), 10s at 4,76% (+1). 2-10
YRS spread 291bp (-1).
Equities down 0.5%, Credit 3 ticks wider
(+2.%).
EUR 1.297. Commodities flat from Friday’s
close.
Waiting for the US view of things and input
with no early figures to kick-start the week.
Getting a little more pressure with US
accounts coming in after lunch, but with the softness concentrated mainly on
equities.
US cash open in line with futures, slightly
below the level of European COB, thus stabilizing European equities there,
although UST are on the firmer side at 1.65 (-4).
Not much on Greece outside that OSI is
supposedly rejected by all but one EUR member (...)(Hey, worth a try, no?). Question is how bespoke and on what
conditions will this latest round of brinkmanship be?
Bank of England getting maple-leaved and squidded (…).
Bit of end of day wariness with the Dow
nowhere near the 13-handle. European stocks about back on Thursday evening
levels (except Germany), basically in sync with the US. Credit correcting last
week’s excesses, 3% wider across the curve. Crossover back above 500.
EGBs holding ok, but not looking overly
eager either. Hard Core 3 tighter, Soft 2 tighter. Periphery flat. Belgium
still 13 over France. Greek bonds about unchanged.
Bunds closed at 1,41% (-3), OBLs at 0,42%
(-1) and BKOs -0,005% (-0,2). UST at 1,64% (-5) COB.
Spanish 2s at 2,98% (+2), 10s at 5,60%
(unch). 2-10 YRS spread 262bp (-2). Italian 2s at 1,81% (-1), 10s at 4,75%
(unch). 2-10 YRS spread 294bp (+2).
EUR barely moving, tightest of range.
Commodities yawn!
10 YRS Bunds still sluggishly trading on
the lower end of their range (1.13% - 2.07% between retracements at 1.35%,
where they remained stuck for a week a fortnight ago, and then 1.49% and 1.60%.
Take-away: Hard pressed to find anything
remotely exciting today. Equities losing a little shine, but understandable
given last week’s 5% rush (and 14% tightening in Credit). Bonds stuck in range.
Fiscal Cliff hailing back (in yet rather timid manner, though). Waiting on
Greek rescue revelations. Yawn!
Outlook: The Italian zeroes should
normally print at the tightest levels in over two year (CTZ jumped from 1.77%
to 2.31% in Oct 2010, hitting their 7.81% post-EUR introduction high one year
later in Nov 2011). Spanish bills shouldn’t rattle the market. EGBs caught in
range. Dropping shoes Risk on the short –term solely out of Greece or on the US Fiscal Cliff.
Macro numbers mainly in the US
with Durable Goods (Could rise on Sandy), Housing
(Case-Shiller and House Prices) and Consumer Confidence. Need
to see whether housing will really turn around the economy.
Otherwise, as mentioned on Friday: All is
good, unless, that is, if not… (paste any given possible worry or fundamental
flaw) resurfaces…
European 50 & 100d averages: EStoxx
2510/2447, DAX 7274/7069, CAC 3448/3404, MIB 15594/15048, IBEX 7843/7462.
US 50, 100 & 200d averages: INDU
13253/13131/12993, S&P 1426/1407/1383, NASDAQ 3041/3017/2985 with AAPL
100/200d at 626/598.
EUR: 50d 1.291, 100d 1.267 & 200d
1.280. Fibo retracement (of May 2011 1.494 & Jul 2012 1.204 down-leg) at
1.273& 1.315, then 1.349 (50%).Jul 2012 to Sep rebound levels: 1.231 –
1.247 – 1.261 – 1.274 – 1.291 -1.317 .
Quite some traffic in New Issues after last
week slightly lacklustre activity (given the general ROn spirit), especially in corporates, with BASF for EUR 1bn 10 YRS
at MS +40, BMW EUR 750m Jun 2018s at MS +53, Belgian utility EANDIS for EUR
500m 10 YRS at MS +115 and even non-IG FIAT with a EUR 400m increase of an
outstanding Oct 2016, priced at 7.40% (ca. MS +670). Coventry BS with EUR 500m
senior 5 YRS at MS +145. BBVA in Spanish covered bonds for a chunky EUR 2bn 5
YRS at MS +260 (some 90 through
Spain). Muencher Hypo EUR 500m 2 YRS at MS -20, a
pricing reminiscent of past years of glory and credit folly. Land Niedersachsen
for a EUR 150m increase of an outstanding Sep 2019 at MS +4.
Closing
levels:
10 YRS Yields: Germany 1,41% (-3);
Luxembourg 1,54% (-1); Netherlands 1,66% (-3); Finland 1,66% (-3); Swaps 1,72%
(-2); EU 1,76% (-2), Austria 1,82% (-2); EIB 1,93% (-1); EFSF 2,05% (-2);
France 2,14% (-2); Belgium 2,27% (-2); Italy 4,75% (unch); Spain 5,60% (unch).
10 YRS Spreads: Luxembourg 13bp (+2);
Netherlands 25bp (unch); Finland 25bp (unch); Swaps 31bp (+1); EU 35bp (+1);
Austria 41bp (+1); EIB 52bp (+2); EFSF 64bp (+1); France 73bp (+1); Belgium
86bp (+1); Italy 334bp (+3); Spain 419bp (+3).
EUR swap curve 2-5 YRS 47bp (-1,0); 5-10 YRS
83bp (unch) 10-30 YRS 62bp (+1,0).
2 YRS German BKOs closed -0,005% (-0,2) and
5 YRS OBLs 0,42% (-1).
Main +4 to 125 (3,3% wider); Financials +5
to 166 (3,1% wider); Cross +15 to 511 (3,0% wider).
Stoxx Futures at 2542 / -0,4% (from 2552)
with S&P minis at 1397 (-0,4% from 1402, at European close).
VIX index at 15,8 after 15,1 yesterday same
time.
Oil 87,4/110,4 (WTI/Brent) from 88,2/111,0
(-0,9%/-0,5%). Gold +1 at 1749. Copper +1 at 353. CRB at EU COB +1 at 299.
BDIY, still on the rise, but running out of
steam, up 4 ticks to 1094. Target 1162-high seen in July, post-Chinese New Year
slide.
EUR 1,296 from 1,296
Greek guesstimate:
Greek bonds initial unchanged, then a little softer with 2023s a 16.375% and 13.50% unchanged for 2042s. Off last week’s tightest levels (about 16% and
13.25%), but still faring quite well.
All levels COB 17:30 CET
Fast-forward
Macro and Events:
European end of month data drought.
Busy data Tuesday in the US. Need to see
whether housing will really turn around the economy.
Govie supply: Tue EUR 3bn Dutch 3 YRS,
Spanish 6m bills, Italian 2 YRS zeroes. Wed EUR 3bn OBLs in Germany &
Italian bills. Thu Italian bonds.
US Tue $35bn 2 YRS, Wed $35bn 5 YRS and Thu
$29bn 7 YRS
EC: Tue OECD outlook; Wed M3; Thu Biz
Climate and Consumer Conf; Fri CPI
GE: Wed CPI fcst 2% after 2.1%; Thu
Unemployment; Fri Retail Sales
FR: Tue Consumer Conf fcst 83 after 84; Wed
Unemployment; Fri PPI and Consumer Spending
Italy: Tue Wages; Thu Biz Conf; Fri
Unemployment, CPI & PPI
Spain: Tue Budget Balance; Wed Retail Sales
fcst -10.7% after -10.9%; Thu Housing Permits; Fri CPI
US: Durable Goods fcst -0.8% after +9.8%,
Case Schiller, House Px +0.4%after +0.7% MoM & Consumer Confidence fcst +73
after 72.2; Wed New Home Sales & Beige Book; Thu Q3 GDP 2nd
revision, Claims, Pending Home Sales; Fri Personal Income & Spending, NAPM
and Chicago PM.
Click
link under title or below for today’s musical support:
I
am flying, I am flying,
Like
a bird 'cross the sky.
Boring
day. Boring song. Although a nice one… The guitar player spicing up things is Paul Warren, a session
and studio veteran.
No comments:
Post a Comment