Market News European open
EUROPEAN PRESS
UK PRESS: UniCredit has alerted investors in a client note that Britain
is at serious risk of a bond market and sterling debacle and faces even
more intractable budget woes than Greece, the Telegraph reports.
The Italian-German group, Europe's second largest bank, said Britain's
tax structure will make it hard to raise fresh revenue quickly enough to
restore confidence in UK public finances, the paper says.
UK PRESS: Pension payments to retired public servants in the UK could
balloon by 200 per cent to stg 79bn a year in the next 50 years,
according to a report by government spending watchdogs published today,
the Independent reports. The independent study by the National Audit
Office (NAO) will increase the pressure on politicians to rein in the
generous final salary schemes for public sector workers as they seek to
cut the deficit in the public finances after the general election, the
paper says.
UK PRESS: Gordon Brown and Nicolas Sarkozy will on Friday try to hammer
out a compromise deal over European Union reforms that the US and UK
believe could damage the hedge fund and private equity industries, the
FT reports. The British prime minister shares the concerns of Tim
Geithner, US treasury secretary, that a draft EU directive to introduce
tighter regulatory controls could impose new barriers to business, the
apper says.
UK PRESS: Housing affordability has remained at a seven-year high,
despite the cost of property rising during 2009, research has showed,
the Telegraph reports. Slight increases in average earnings, combined
with falling mortgage rates, helped to offset the price rises seen last
year, to leave housing affordability at its highest level since 2003,
according to property website Zoopla.co.uk, the paper says.
GREECE: Riot police fired teargas at stone-throwing demonstrators in
central Athens on Thursday as a peaceful march by workers staging a
24-hour strike to protest against the Socialist government's economic
austerity measures ended in disarray, the FT reports.
JAPAN
JAPAN: Japan's govt names a business executive, Yoshihisa Morimoto as a
candidate for the BOJ board, wires report, citing lawmakers.
ELSEWHERE
US PRESS: The housing market is facing swelling ranks of homeowners who
are seriously delinquent but have yet to lose their homes, and this is
threatening a new wave of foreclosures that could hit just as the real
estate market has begun to stabilize, the Washington Post reports. About
5 million to 7 million properties are potentially eligible for
foreclosure but have not yet been repossessed and put up for sale, the
paper says.
AUSTRALIA: The Reserve Bank of Australia has suggested the major banks
may be profiteering from their recent round of interest rate increases,
arguing moves on lending rates over the past two years have been
outpacing funding costs, The Sydney Morning Herald reports. The report
cites an RBA analysis of banks' interest rate movements and comes amid
signs that households are starting to feel the squeeze on mortgages
follow a string of rate rises since October. The RBA has said the major
banks were the worst offenders when it came to excess pricing, with
lending rates outpacing rises in funding costs by as much as 25 basis
points since the onset of the credit crisis, equal to billions of
dollars in additional revenue.
ASIA PRESS: Thai authorities have begun deploying 50,000 troops on the
streets of Bangkok ahead of rallies by anti-government protesters that
they fear could turn violent, Channel NewsAsia reports citing the deputy
prime minister. The demonstrations by the so-called "Red Shirts", who
support fugitive former premier Thaksin Shinawatra, begins today - two
weeks after the kingdom's top court confiscated $1.4 billion of the
tycoon's assets.
ASIA PRESS: Singapore's Ministry of Manpower expects the number of jobs
created this year to exceed that of 2009, in tandem with an economic
turnaround and improved hiring sentiment, Channel NewsAsia reports.
Manpower Minister Gan Kim Yong said while the labor market is expected
to remain stable this year, up-skilling the workforce to enhance
productivity growth levels would be a key priority. Singapore's labor
market stayed resilient despite falling external demand and
uncertainties in the economic outlook last year, the minister said in
the report.
CHINA
CHINA: Wires reporting comments from PBOC's Su Ning, saying the yuan
issue should not be politicized, adding that a rise in the yuan level
would not help reduce China's trade surplus. The Su Ning comments are in
responce to remarks from US Pres Obama, the reports say (Rtrs
CHINA YUAN: The People's Bank of China sets the dollar-yuan central
parity rate at Cny6.8262 today, compared with Cny6.8263 set for the
previous trading day.
OVERNIGHT COMMENTS
JAPAN: Comments from Japan FinMin Kan (Rtrs)
-- Govt, BOJ, basically have same goal for prices.
-- Wants BOJ to work towards achieving price goal.
JAPAN: Comments from Japan Fin Min.
-- Govt, BOJ need to fight deflation together
-- aware govt has intervention as tool.
SHIRAKAWA: Comments from BOJ head
-- Easy credit policy to have some impact on forex.
-- Quantitative easing has some impact on prices.
-- No clear link between shoert-term prices vs forex
-- BOJ watching its balance sheet when BUYING jgbS.
SHIRAKAWA: More comments from BOJ head
-- Not opposed to inflation targeting, but not linking mon pol to s-t
price moves.
OVERNIGHT DATA RELEASES
JAPAN: Data from METI
-- Revised Jan industrial output +2.7% on month vs prelim +2.5% m/m
-- Jan capacity utilisation +3.9% on month
NEW ZEALAND: Retail trade sales rose by 0.8% for January. The
median market forecast was for a rise of 0.5%. Core retail sales
(excluding auto related sales) rose 0.3%, while auto related sales were
up 2.1%.
FX MARKET
FOREX: The greenback was narrowly mixed in Asian trade Friday, as the
major pairs mark time ahead of the weekend. Dollar-yen was last trading
at Y90.60, as the pair was stuck in a narrow Y90.48 to Y90.74 trading
range. Traders note the pair saw light volumes, with offers from
exporters seen at Y91.00 capping the upside. Euro-dollar was last
trading at $1.3798 - the upper end of the range - helped by light demand
ahead of the European open. Cable is sitting in the middle of the
session's range at $1.5065, although holding above the $1.50 level.
OTHER MARKETS
EUROPEAN STOCKS: Major European bourses are initially seen trading
higher Friday. Spreadbetters Cantor Index are calling the FTSE higher by
15 points, the DAX higher by 23 points, the CAC higher by 10 points and
the Eurostoxx 50 higher by 7.
US STOCK CLOSE: The Dow Jones Industrial Average closed up 45 pts at
10611.84, at the day's high and up from an earlier low of 10507.17.
The Dow Industrials remains far from its 2010 high of 10729.89. The
Nasdaq Composite closed up 10 pts at 2368.46, also at the day's high
(new 2010 peak) and up from an earlier low of 2347.53. Finally, the
S&P 500 closed at 1150.24 - just shy of its 2010 high of 1050.50, posted
January 11, and up from an earlier low of 1139.06.
US STOCKS: Globex traded US index futures are trading very modestly
lower in Asian trade Friday. The S&P Jun contract - now front-month -
was last 0.7 points lower at 1145.2, with the June Nasdaq lower by 1
points at 1921.50. The Dow June contract was 7 points lower at 10541.
TSYS: Treasuries are trading narrowly mixed in Asian trade Friday, with
the market stuck in narrow ranges amid light volumes. Real money
accounts are largely sidelined, with little to push prices from the
unchanged levels. The yield on the 2Y was last at 0.94%, with the 5Y at
2.42%, the 10Y at 3.73% and the Bond at 4.67%.
AUSSIE BONDS: Aussie govvies are trading lower again Friday, extending
weakness seen Thursday, The yield on the 2Y was last 1 bps higher at
4.885%, with the 10Y yield 1.5 bps higher at 5.680%. This left the
2/10-yr spread little changed at 79.5 bps.
JAPAN STOCKS: Into the last half hour of trade, and the Nikkei sitting
just shy of the session best levels, up 95 points at 10760.
JAPAN STOCKS: Japan's benchmark stock indices ended the morning session
higher, although shy of the best levels. The Nikkei 225 was higher by
43.52 points, or 0.41%, to stand at 10708.47. The broader-based TOPIX
was 2.09 points higher at 932.47. Volume in the Nikkei constituents
totalled a hefty 1.385 bln shares, with 132 issues trading higher, 79
lower and 14 unchanged.
JGBS: Japanese govt bonds ended the morning session lower across the
board, hampered by the lower UST's overnight and higher stocks. This
triggered profit-taking from Japanese real money accounts, The yield on
the benchmark 10Y was last 2 bps higher on the day at 1.335%, with the
5Y higher by 1 bps at 0.51% and the 20Y higher by 1.5 bps at 2.145%. The
lead JGB contract was 30 sen lower at 138.85.
HONG KONG STOCKS: Hang Seng Index ends morning down 0.08% at 21,211.36
CHINA STOCKS: Shanghai Composite Index ends morning -0.03% at 3,050.37
OIL: Crude future are trading modestly higher in Asian trade Friday,
although tied to narrow ranges. The front-month Nymex WTI contract was
last 8 cents higher at $82.19, having traded in a $82.11 to $82.38
range.
COMING UP TODAY( times GMT/ET)
0700/0200 Germany Feb wholesale prices
0730/0230 France Jan BoF retail survey
0745/0245 France Jan current account balance
0800/0300 Spain Feb final HICP
0900/0400 IEA monthly oil market report
1000/0500 EMU Jan industrial production
1015/0515 ECB Governing Council member Axel Weber in panel
discussion, in Bonn
1100/0600 BOE Spencer Dale speaks at University of Cambridge
- Italy E2.5-3.5 bln 3.00% Apr 2015 BTP 5th tranche
- Italy E1.0-1.5 bln 5.00% Sept 2040 BTP 6th tranche
1100/0700 Canada Feb-10 Employment
1200/0700 Brazil Jan-10 IBGE industrial employ manhrs wages
1330/0830 US Feb-10 Retail & Food Sales
1415/0915 USTR Ron Kirk gives keynote address at American
Apparel and Footwear Association annual summit
in Washington.
1455/0955 US Mar-10 Consumer Sentiment (UM) (p)
1500/1000 Bundesbank Vice-President Franz-Christoph Zeitler
speech, in Tutzing am Starnberger See, Germany
1500/1000 US Jan-10 Business Inventories
1500/1000 Mexico Jan-10 Industrial, Manufacturing prod
1700/1200 Treasury Secretary Tim Geithner speaks before
the U.S. Export-Import Bank annual conference
in Washington.
2045/1545 ECB President Jean-Claude Trichet speech to
Economic Summit of Stanford Institute of Economic
Policy Research, in Stanford, Ca.