17 Dec 2012 – “Jingle
Bell Rock ” (Billy Idol, 2006)
Utterly boring Friday Monday session,
worsened by year-end inactivity… Won’t get any better going forward, probably.
Fiscal Cliff a cliff-hanger (I know, cheap)… Spain on the heavier side with
contingent funding holes still popping up here and there.
"Jingle Bell Rock" (Bunds 1,37%
+2; Spain 5,41% +4; Stoxx 2628 unch; EUR 1,317 +30)
---
Friday saw again a slightly negative close
in the US,
as Fiscal Cliff issues remained on the calendar and Apple re-tested recent lows to
close pretty much on them.
Needless to say how saddening that Newtown disaster is, given the kids’ age and the pre-holiday timing. Still, all our
thoughts are with them. And the US
should grow up to reality and realize that the constitutional right to fire a
musket, which takes 5 minutes to reload, is not applicable nowadays anymore.
Wake up!
Japanese landslide elections giving the
LDP-led coalition a two-third majority should at least enable the government to
be taken by its promises of 3% growth and 2% inflation; although a simple crawl
out of recession in the coming months might just be more realistic at this
stage.
Monday Asian session mostly red, though,
with the exception of Japan up a short 1% and China half a percent. US futures up
a quarter on Boehner hints of higher taxes (,but again against spending cuts).
At least, talks drag on.
No major European data releases for the day
(nor US
ones, really) and nothing to start with at all. Merkel in the FT on how to go
forward for Europe. The subject of German demographics,
which is certainly one of the drivers of the actual German stance, as its
future productivity will certainly be impacted by this fundamental issue, is a key one to understand German worries about social costs.
So shoot for light Risk On start into the
week with Bunds 1 and UST 2 softer at 1.36% and 1.72%, likewise for OBLs. Other
EGBs as well 1bp softer with the Periphery 3 tighter for Italy at 4.57% and 1 tighter for Spain at 5.36%,
but symbolically back to 400 to Bunds.
Equities up a couple of ticks, just so
slightly in positive territory.
Commodities mixed (WTI slightly up, Brent
down, Gold slipping to 1689, Copper slightly up) with the EUR now past the
1.315 mark at 1.316, having trade out to 1.319 in
Asia.
Sit back, relax.
EZ Oct trade surplus down to EUR 7.9bn sa
(EUR 10.2bn sa) from rev. EUR 11bn sa with exports down 1.4% for a second month
(after -1.3% in Sep) and imports up 0.6%.
French weekly bill sales with EUR 3.4bn 3m
at -0.015%, 1.2bn 6m at -0.006% and EUR 1.7bn 12m at +0.005% (after -0.026%,
-0.015% and -0.012%). Will have EUR 3.5bn Spanish 3 and 6m tomorrow (last 1.25%
and 1.67%) next to EUR 1bn Greek 3m (last 4.20%) and that’s it for the week.
Unless postponed or cancelled, we’ll just
have another round next week with Italian bills on Wednesday and bonds on
Thursday. That would close 2012.
New Issues yet again on hold and probably
so until January.
Equities drifting lower by late morning
with Apple getting pushed below $500 in European trading seen as one reason.
Midday levels flashing equities down 0.2%,
although Credit tighter by 1% and especially Financials tighter by 2%.
Bunds closed at 1,37% (+2), OBLs at 0,35%
(+2) and BKOs -0,030% (+1,3). UST at 1,72% (+2) COB.
EGBs pretty static at morning levels,
although now split in the Periphery with Italy
4 tighter in 10s and Spain
as much wider. Southern 2 YRS close to closing levels, though.
Spanish 2s 2,84% (+1), 10s 5,41% (+4). 2-10
YRS spread 257bp (+3).
Italian 2s 1,85% (-2), 10s 4,56% (-4). 2-10
YRS spread 271bp (-2).
EUR on 1.315 with Commodities a little
softer than in the morning, but close to home, too.
Greek bonds unchanged with 2023s at 45.0
(12.84%) and 2042s at 34.0 (10.90%).
In a word: Yawn!
Sole US figure to kick off the afternoon
with Empire Manufacturing a HUGE miss at -8.1 (fcst -1 after -5.22), in total
contradiction to last week’s PMI rebound to 54.2 (fcst 51.8 after 52.4). New
Orders and shipments dropping.
Eventually Apple did not tank at US cash
open and everyone was happy again with US indices opening up a healthy +0.4%,
but with no follow-up on the European side outside moving to unchanged.
Had Apple hit the bottom of the cart at 501
at the time of writing, before rebounding a little…
Draghi before the EU Parliament, but with nothing crisp. Pushing for fiscal union.
SMP profits go to the NCBs, which then are free to do whatever they like with
those… (…including sending them back to
Greece…).
And that’s it, folks… Will probably not get
more exciting in the coming days.
Equities closing unchanged to the tick, US
ones firmer. Credit firmer (1.7% for the Main, over 3% in Financials). EGBs
wobbly, swaps stable and agency paper (swap-driven) about unchanged, too.
Spain on the heavier side, but with no more
obvious reason than having been the best performing (non-bailed-out) EGBs last
week, while it keeps uncovering contingent funding holes (toll-roads, now, next
to the electricity tariff deficits)…
Bunds closed at 1,37% (+2), OBLs at 0,36%
(+3) and BKOs -0,010% (+3,3). UST at 1,73% (+3) COB.
Spanish 2s at 2,86% (+3), 10s at 5,41%
(+4). 2-10 YRS spread 255bp (+1).
Italian 2s at 1,84% (-3), 10s at 4,56%
(-4). 2-10 YRS spread 272bp (-1).
Greek 2023s unchanged at 45.0 (12.84%) and
2042s +25 at 34.25 (10.84% -6bp).
Portuguese 10s unchanged, right at 7%.
EUR still riding high(er). Commodities
mixed. Oil split (+/-1%). Gold static.
Take-away: Utterly boring Friday Monday
session, worsened by year end inactivity… Won’t get any better going forward,
probably. Fiscal Cliff a cliff-hanger (I know, cheap)… Spain on the heavier
side with contingent funding holes still popping up here and there.
Outlook: Same. Sideways upwards, subject to
Fiscal Cliff discussions. Looks pretty stuck. Not much data until Wednesday’s
IFO and US Construction numbers… Just the saaaaaaaaaaaame – until Santa comes.
USD 35bn 2 YRS UST tonight, USD 35bn 5 YRS
tomorrow and USD 29bn 7 YRS on Thursday on the supply side. Europe done by
tomorrow’s bills sales.
European 50 & 100d averages: EStoxx
2529/2500, DAX 7310/7210, CAC 3484/3466, MIB 15592/15399, IBEX 7826/7677.
US 50, 100 & 200d averages: INDU
13119/13174/13004, S&P 1415/1415/1387, NASDAQ 2994/3028/2989 with AAPL at
586/619/601.
EUR: 50d 1.293, 100d 1.279 & 200d 1.278.
Fibo retracement (of May 2011 1.494 to Jul 2012 1.204 down-leg) at 1.273& 1.315, then 1.349 (50%).
Closing
levels:
10 YRS Yields: Germany 1,37% (+2);
Luxembourg 1,42% (unch); Netherlands 1,58% (+3); Finland 1,60% (+3); EU 1,61%
(unch); Swaps 1,62% (unch), Austria 1,76% (+3); EIB 1,77% (unch); EFSF 1,88%
(+1); France 2,01% (+3); Belgium 2,14% (+3); Italy 4,56% (-4); Spain 5,41%
(+4).
10 YRS Spreads: Luxembourg 5bp (-2);
Netherlands 21bp (+1); Finland 23bp (+1); EU 24bp (-2); Swaps 25bp (-2);
Austria 39bp (+1); EIB 40bp (-2); EFSF 51bp (-1); France 64bp (+1); Belgium
77bp (+1); Italy 319bp (-6); Spain 404bp (+2).
EUR swap curve 2-5 YRS 44bp (-1,0); 5-10
YRS 81bp (-1,0) 10-30 YRS 67bp (+1,0).
2 YRS German BKOs closed -0,010% (+3,3) and
5 YRS OBLs 0,36% (+3).
Main -2 to 114 (-1,7% tighter); Financials
-5 to 147 (-3,3% tighter); Cross -1 to 462 Stoxx Futures at 2628 / unchanged to
the tick (from 2628) with S&P minis at 1419 (+0,6% from 1411, at European
close).
VIX index at 16,9 after 16,7 yesterday same
time.
Oil 87,5/108,1 (WTI/Brent) from 86,6/109,1
(+1,0%/-0,9%). Gold at 1696 after 1696 (unchanged). Copper at 365 from 366
(-0,3%). CRB at EU COB 295,0 from 293,0 (+0,7%).
Baltic
Dry purge on-going and starting a fourth week of consolidation, down 2.3% again,
at 766 after 784.
The latest dip from the post-Summer high of
1109
in Oct had been halted at 916,
before that we slipped from 1162 in
July to 661 mid-September. Upcoming
Chinese New Year (10 Feb 2013)…
EUR 1,317 from 1,314
Greek 2023s unchanged at 45.0 (12.84%) and
2042s +25 at 34.25 (10.84% -6bp).
All levels COB 17:30 CET
Fast-forward
Macro and Events:
Preciously few things…
Dragging into Year End, unless next Friday
proves the Mayan right.
US housing back into focus next week. Big
Friday US data dump.
Empty government supply after Spanish and
Greek bills tomorrow.
EC: Wed 19 Construction; Thu 20 Cons
Confidence
GE: Wed 19 IFO fcst 102.3 after 101.4; Thu
20 PPI; Fr 21 Cons Confidence
FR: Fri 21 BIZ Confidence
Italy:
Wed 19 Industrial Orders and Sales; Thu 20 Retail Sales; Fri 21 Consumer Conf
Spain:
Thu 20 Housing Permits, Fri 21 PPI
US: Tue 18 NAHB Housing; Wed 19 Housing
Starts fcst 873k after 894k, Permits fcst 870k after 868k; Thu 20 Existing
Homes Sales fcst 4.85m after 4.79m;Claims and yet another Q3 GDP revision; Big
Friday with Chicago FED, Pers Income & Spending, Durable Goods;, Michigan
Conf.
Click
link under title or below for today’s musical support:
Definitively
the right time to dig and unearth Xmas rock songs… As cheesy as some may be…
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