March 10, 2010
EUROPEAN PRESS
UK PRESS: Gordon Brown will settle on March 24 as the day for the Budget
- the last in the current Parliament - as the campaign accelerates towards a May 6 showdown, the Times says.
UK PRESS: Britain is facing a second credit crunch as banks shrink their loan books to avoid a funding crisis, a leading analyst has warned, the Telegraph reports. Jonathan Pierce, from Credit Suisse, believes UK banks will have to reduce the size of their balance sheets by as much as stg 530bn over the next three to four years to meet new regulations, the paper says.
UK PRESS: New York state is to examine the amount of taxes paid by Wall Street bankers as it tries to narrow its ballooning $9.2bn budget deficit in an attempt to fend off financial collapse, the Telegraph reports. The state is considering a raft of drastic measures similar to those enacted by California to stay afloat. The measures, such as enforced, unpaid holidays for state workers and issuing IOU's, are being discussed alongside targeting the state's most lucrative asset: New York's financial centre, the paper says.
UK PRESS: US regulators have told banks not to increase dividends or buy back shares until political and economic uncertainty surrounding the industry dissipates, in a move that will delay by months the return of capital to shareholders, the FT reports.
UK PRESS: Npower has become the fourth of the "big six" energy suppliers to cut its gas prices, ratcheting up the pressure on Scottish Power and EDF to announce similar plans before the new tariffs come in at the end of this month, the Independent reports. Around 2 million Npower customers will benefit from the 7 per cent cut in its standard tariff from 26 March, equivalent to stg 50 per year, the paper says.
UK PRESS: Germany and France are stepping up the pressure for urgent action by the European Union to regulate speculation in sovereign debt markets, in the wake of the Greek debt crisis, the FT reports.
UK PRESS: UK Business Secretary Lord Mandelson has tried to head off a transatlantic trade war by expressing concern at Washingtons handling of a $35 billion Pentagon procurement project that could spark European retaliation, the Times reports. At the centre of the row are allegations made by EADS that the Pentagon has skewed the terms of a competitive tender to favour Boeing, the paper says.
EUROPEAN PRESS: The measures announced last Friday by Greece to restore soundness to its fiscal affairs are promising for the country's outlook and should be seen that way by observers, European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said in an interview.
Paramo told Spanish business daily Expansion that the measures "improve the prospects of the Greek economy and its future" and "are convincing for the ECB, for the IMF and for the European Commission."
G20: Leaders of the G20 group of countries will consider a European initiative to crack down on speculative activity in derivatives trading, George Papandreou, Greek prime minister, said in Washington on Tuesday, the FT reports.
JAPAN
BOJ: Bank of Japan policy board member Miyako Suda urged the government and private sector to push for structural reform -- reining in growing public debt and adjusting to changing global markets -- in order to take the economy onto a sustained growth under price stability. In an opening speech at a panel discussion, Suda also repeated the BOJ's official line that the central bank will continue to support the economy and flight deflation by maintaining the very accommodative financial environment "persistently" while upside and downside risks are largely balanced now.
CHINA PRESS
CHINA PRESS: Chinese banks may have extended only around CNY700 billion in new loans in February, the China Securities Journal reported Wednesday, though lending activity activity may have been crimped by the New Year holiday which dominated the month. The People's Bank of China is expected to publish last month's new loan data this week.
ELSEWHERE
US PRESS: Key members of the Senate banking committee are coalescing around legislation that would strip the Fed of much of its regulatory authority but would leave the central bank with oversight of the nation's largest banks, according to aides familiar with the ongoing negotiations, the Washington Post reports.
CHINA
CHINA DATA: Chinese exports surged 45.7% y/y in February while imports rose 44.7%, the General Administration of Customs reported. But exports fell on a seasonally adjusted-monthly basis for a second straight month, reinforcing suggestions from the senior leadership that the global economy is still in too fragile a state to allow the yuan to resume its appreciation against the U.S. dollar. The $94.52 billion in exports and
$86.91 billion imports resulted in a trade surplus for the month of only
$7.61 billion, the smallest since last May's $7.7 billion.
CHINA: Interest rate adjustments are among the monetary policy tools that the Chinese central bank will use this year to control credit growth, a senior People's Bank of China official said. Guo Qingping, an assistant governor with the central bank, told reporters on the sidelines of the National People's Congress here that the PBOC is seeking to maintain "balanced" monthly loan growth and overly concentrated lending this year, and that a range of monetary policy tools will be used to achieve this.
CHINA YUAN: The People's Bank of China sets the dollar-yuan central parity rate at Cny6.8264 today, compared with Cny6.8265 set for the previous trading day.
OVERNIGHT DATA RELEASES
JAPAN DATA: From the Cabinet Office:
- JAN CORE MACHINERY ORDERS -1.1% Y/Y VS DEC -1.5%
- JAN CORE MACHINERY ORDERS -3.7% M/M VS DEC +20.1%
- JAPAN UPGRADES VIEW: MACHINE ORDERS DOWNTREND NEARING END
JAPAN DATA: From the BOJ:
- FEB CORP GOODS PRICES -1.5% Y/Y VS JAN -2.1%
- CGPI POSTS 14TH STRAIGHT Y/Y DROP
- FEB CGPI +0.1% M/M VS JAN +0.3%
AUSTRALIA: The Westpac/Melbourne Institute consumer sentiment index increased by 0.2% in March to 117.3 from 117.0 in February, suggesting consumers have taken in stride February's fourth 25-basis-point rise in benchmark interest rates, the data compilers said. Westpac chief economist Bill Evans said, "This is a solid result given the backdrop of a fourth official rate rise. However the previous rate hike cycle and the March sentiment reading suggests mortgage rates have not reached the point where increases have a major impact on confidence."
AUSTRALIA: From the ABS:
- Jan housing finance -7.9% m/m vs revised -5.1% in Dec
- Forecast was for Jan housing finance to rise 2.0% m/m
NEW ZEALAND: The terms of trade rose 5.7% in the December quarter.
That was the largest quarterly increase since March 1976 and follows six consecutive quarterly declines. The median market forecast was for an increase of 2.5%. The main driver was a 8.2 percent increase in capital
goods imports.
US DATA: ABC News Consumer Comfort Indices showed a triple repeat,
-49 for the overall index in the March 7 wk, the same as the previous week. The National Economy index came in at -84, that for the fifth week in a row. The Personal Finances index was -12, also unchanged. The buying climate index was -50, slightly improved from the previous three weeks' -52. See the history table on the MNI main wire.
OTHER NEWS
GREECE: The U.S. Tsy's readout from the Greek prime minister's meeting Tuesday with Geithner: The Prime Minister outlined the steps his government is taking to restore growth to their economy and address their fiscal challenges. They discussed continued efforts by Europe and the United States together to move forward on financial reform efforts globally, including increased oversight over derivatives markets.
RNBZ: Economists are unanimous in predicting that the Reserve Bank of New Zealand will leave its official cash rate (OCR) unchanged at 2.5% after its monetary policy meeting on Thursday (announcement at 9 am New Zealand time, 3:00 pm EST Wednesday). For more info, see Market News International mainwire story at 7:12 am EST.
INDUSTRY NEWS: RBS's U.S. global banking and markets unit increased staff levels by 4% last year and plans to continue hiring, in an illustration of how insulated its transatlantic business has been from a departure of employees in the U.K, the WSJ reports.
KOREA: South Korea's economy is expected to consolidate its recovery despite downside risks at home and abroad, Yonhap News reports citing the finance minister. During a crisis management meeting held earlier in the day, Finance Minister Yoon Jeung-hyun also said that the government will step up efforts to improve the overall business environment this year as part of efforts to bolster investment and job creation, the report says.
AUSTRALIA: The economy continues to face a favorable with inflation remaining within target, but flexibility in both macroeconomic policy and the economy will be key to offset any risks ahead, said Philip Lowe, an assistant governor at the Reserve Bank of Australia. "We will need to keep a strong focus on improving the supply side of the economy so that demand can grow solidly without putting upward pressure on inflation," Lowe said in a speech today. Lowe also repeated the central bank's positive outlook for the economy, but identified the three most pressing challenges as the need to expand the supply side, tackle the housing shortage and keep inflation low.
FX MARKET
FOREX: The dollar was little changed against the majors Weds, although trending higher against the pound. Dollar-yen was last at Y90.01 compared with Y89.96 late in the U.S. session overnight, after a Y89.83 to Y90.07 range. Euro-dollar was at $1.3597 versus $1.3590 overnight in the U.S. The pair traded between $1.3586 and $1.3612 this morning. The pair gave up the $1.3600 mark in quiet morning trading in Asia today as sell orders from $1.3620/25 weighed down the euro-zone currency and with sterling weakness also adding to the pressure. Cable was last at $1.4965, at the low end of its $1.4955 to $1.5015 range so far. Sterling remains pressured on concerns over the UK fiscal position, the looming election and renewed fears over the banking system.
OTHER MARKETS
US STOCKS CLOSE: Dow and Nasdaq ended the Tuesday session with modest gains, the Dow adding about 12 points to end the day at 10,565 while Nasdaq added 8 points to close at 2341, modestly off a new 2010 high set intra-day at 2353.
US STOCKS: Globex traded US index futures are narrowly mixed in Asia, although ranges are tight and volumes are modest. The S&P Mar contract was last down 1.1 points at 1139.4, with the Nasdaq Mar contract higher by just 0.75 points at 1902.0. The Dow Mar contract was trading lower by just 6 points at 10556.
TSYS: Treasuries are unchanged to very modestly lower in Asian trade Weds, with the long-end of the curve outperforming a shade, albeit in very light volumes. The yield on the 2Y was last at 0.87%, with the 5Y at 2.33%, the 10Y at 3.69% and the Bond at 4.67%.
AUSSIE BONDS: Aussie govvies are trading mixed again Weds, with the curve continuing to flatten. The yield on the 2Y was last 5 bps higher at 4.78%, with the 10Y yield lower by 2 bps at 5.520%. This left the curve flatter by 7 bps at 74 bps.
JGBS: Japanese govt bonds continue to push higher in afternoon trade Weds, with the lead JGB contract hitting a 3-month high at 140.33.
Morning saw cash prices edge higher, but traders said real money accounts seem unprepared to push prices higher ahead of the 5Y auction due Thursday. The yield on the 10Y was last at 1.295%, with the 5Y at 0.4625%.
JAPAN STOCKS: As noted, Japan's benchmark stock indices ended the morning session modestly lower. The benchmark Nikkei 225 was down 8.60 points, or 0.08%, to stand at 10559.05. The broader-based TOPIX was down
1.62 points, or 0.18%, to stand at 922.76. Volume in the Nikkei constituents totalled 502.6 mln shares, with 87 issues trading higher,
144 lower, and 24 unchanged.
CHINA STOCKS: Shanghai Composite Index ends morning down -0.54% at
3,052.54
HONG KONG STOCKS: Hang Seng Index ends morning up 0.04% at 21,215.50
OIL: Crude futures are modestly higher in Asian hours Weds. The front-month Nymex WTI contract was last higher by 11 cents at $81.60, having traded an $81.05 to $81.63 range.
COMING UP TODAY( times GMT/ET)
0700/0200 Germany Feb final HICP
0700/0200 Germany Jan trade balance
0745/0245 France Jan industrial output
0800/0300 Spain Jan retail sales
0800/0300 Spain 4Q labour cost survey
0900/0400 Italy Jan industrial output
0930/0430 UK Jan Manufacturing Output
0930/0430 UK Jan Industrial Production
1200/0700 US 05-Mar MBA Mortgage Application Index
1330/0830 ECB Governing Council member Axel Weber speech at
Financial Services Ireland Annual Lunch, in Dublin
1400/0900 French Prime Minister Francois Fillon speech on EU role for
economic growth at Humboldt University, in Berlin
- Germany E6.0 bln 1.00% Mar 2012 Schatz Re-opening
- Germany E1.0 bln 1.75% Apr 2020 BUNDei Top-up
- Portugal E750 mln 3.85% Apr 2021 OT Tap
1500/1000 UK Dec-Feb NIESR GDP Estimate
1500/1000 US Jan-10 Wholesale Inventories
1500/1000 US Jan-10 BLS State Unemployment
1530/1030 US 05-Mar EIA Crude Oil Stocks
1600/1100 Greek Prime Minister George Papandreou press conference at
conclusion of three-day state visit, in Washington.
1630/1130 German Chancellor Angela Merkel and French PM Francois
Fillon joint press conference after meeting, in Berlin
1730/1230 ECB Governing Council member Axel Weber speech at
the Institute for International and European
Affairs, in Dublin
1800/1300 ECB President Jean-Claude Trichet addresses "The Language of
Money" and the "Euro Exhibition," in Frankfurt
1800/1300 US Treasury auctions $21 bln 9Y-11mo (reopening)
1900/1400 Treasury Secretary Tim Geithner testifies before House
Appropriations Financial Services Subcommittee on FY2011
Treasury budget.
1900/1400 US Feb-10 Treasury Statement