March 11, 2010
RBNZ: The Reserve Bank of New Zealand Wednesday left the official cash rate unchanged at 2.50% Thursday, in line with expectations. The accompanying statement said that the New Zealand economy was expected to enjoy a "subdued" recovery in 2010 with inflation holding above 2% but within the RBNZ's 1%-3% range, and that the New Zealand dollar was expected to remain "high."
KOREA: South Korea's central bank has kept its benchmark interest rate unchanged at 2.00% for the 13th straight month, Yonhap News reports. The decision was widely expected.
EUROPEAN PRESS
UK PRESS: Workers at Toyota's two UK plants will have their pay frozen this year because of continuing doubts about the health of the European automotive market, the Telegraph reports.
UK PRESS: The proportion of people in the UK who plan to buy a property who are first-time buyers has dropped for the second consecutive quarter to 25.8pc, according to property website Rightmove, the Telegraph reports. The group warned that the figure was well down on the 40pc of housing transactions that would usually be carried out by people buying their first home in a healthy market, the paper says.
UK PRESS: The City watchdog has sounded alarm about the prospect of a meltdown in commercial property, the Independent reports. Announcing much tougher stress tests for banks, the Financial Services Authority raised concerns that they are not setting aside enough to cover losses on the sector, the paper says.
GREECE: Despite a "successful" performance on the international stage, Greek PM Papandreou faces deepening troubles at home, the FT says.
Todays 24-hour strike called by public and private sector trade unions to protest against the government's latest austerity package will shut down Athens international airport and bring the capital to a standstill for the second time in a week, the paper says. Papandreou also faces unrest in his governing Socialist party over pay cuts for public sector workers, the party's power base for the past 10 years, the FT adds.
GREECE: The high interest rates Greece must pay to borrow money are threatening the county's ambitions to cut its deficit, raising again the specter it may need external aid, the WSJ reports.
CHINA PRESS
CHINA PRESS: China's $300 billion sovereign wealth fund is increasingly interested in seeking opportunities in Hong Kong as it shifts its focus this year to investing in emerging markets, The South China Morning Post reports citing an executive. Wang Jianxi, the vice-president of China Investment Corp (CIC), said the company's investment strategy does not target a specific region or country. But with the portfolios divided between emerging and developed markets, Hong Kong is one place the company has been seeking investment opportunities. "We have been investing in Hong Kong and will continue to seek opportunity in line with our strategy," Wang was cited saying at the sidelines of the National People's Congress.
ELSEWHERE
US PRESS: Companies are aggressively borrowing in the debt markets once
againa sign of renewed confidence in the world economy following recent
fears that struggling European countries could have difficulty financing
their budget deficits, the WSJ reports.
AUSTRALIA: The latest jobless data won't pressure the RBA to raise the
cash rate again in April, economists say in a Sydney Morning Herald
report. But the data could mean borrowers are looking at an interest
rate of 4.5% to 5% by the end of calendar 2010, as more evidence emerges
Australia has shrugged off the global financial crisis mindset. "The
labor market is still extremely healthy, we just cant expect 50,000
jobs to be created every month," ICAP economist Adam Carr says in the
report. "When you look at the lending numbers yesterday, the softer
employment numbers in February, I think the RBA will hold off in April."
CHINA
CHINA DATA:
- FEB NEW LOANS CNY700.1 BLN VS CNY1.39 TRLN JAN
- END-FEB M2 +25.52% Y/Y VS +25.98% Y/Y END-JAN
- END-FEB M1 +34.99% Y/Y VS +38.96% Y/Y END-JAN
- END-FEB M0 +21.98% Y/Y VS -0.79% Y/Y END-JAN
- END-JAN OUTSTANDING CNY LOANS +27.2%; END-DEC +31.7%
- END-FEB OUTSTANDING CNY DEPOSITS +24.97%; END-JAN +27.3%
CHINA: The NBS released the following data for February:
Feb CPI 2.7% y/y vs +1.5% y/y Jan
Feb industrial output +12.8% y/y
Jan-Feb industrial output +20.7% y/y vs +3.8% y/y Jan-Feb 09
Jan-Feb urban fixed-asset investment +26.6% y/y vs +26.5% Jan-Feb 09
Feb PPI +5.4% y/y vs +4.3% y/y Jan
Jan-Feb CPI 2.1% y/y vs -0.3% y/y Jan-Feb 2009
Feb overall food prices +6.2% y/y vs +3.7% y/y Jan
Feb non-food price CPI +1.0% y/y vs +0.5% y/y Jan
Feb CPI +1.2% m/m vs +0.6% m/m Jan
Feb PPI +0.4% m/m
Jan-Feb PPI +4.9% y/y vs -3.9% y/y Jan-Feb 2009
Jan-Feb retail sales +17.9% y/y vs +15.2% Jan-Feb 2009
Feb retail sales +22.1% y/y
CHINA YUAN: The People's Bank of China sets the dollar-yuan central
parity rate at Cny6.8263 today, compared with Cny6.8264 set for the
previous trading day.
CHINA: Forex dealers highlighting a wire report of China tightening
rules on land sales for property development as a factor driving risk
aversion this morning. The report says land bidders in China will be
required to pay 20% deposit and land buyers need to pay 50% in one
month.
OVERNIGHT COMMENTS
JAPAN: Comments from Cabinet Office:
- GDP SHOWS RISK OF DOUBLE-DIP RECESSION LOWER NOW
- SUSTAINABLE ECO RECOVERY MAY BE EMERGING
- BUT CANNOT YET SAY ECON ON MODERATE RECOVERY TRACK
NEW ZEALAND: RBNZ governor Bollard cited by wires saying the NZ dollar's
level is not of any concern, and that it's still "a US dollar
story." Says RBNZ can afford to wait-and-see before raising rates and
they probably will not need to raise as high as in the prevous cycle,
the reports say
M&A/CORP
UK PRESS/M&A: Shares in inter-dealer broker Tullett Prebon jumped almost
26 per cent as the firm said that it was in the sights of a predator,
the Times reports. City talk suggested that the most likely bidder would
be an exchange keen to add a bond-broking operation to its equities
interests, the paper says. However, the Times notes that there had been
whispers that the putative bidder was a bank such as Macquarie or Bank
of China.
OVERNIGHT DATA RELEASES
JAPAN DATA: From the Cabinet Office:
- Q4 REAL GDP REVISED TO +0.9% Q/Q FROM PRELIM +1.1%
- Q4 ANNUALIZED REAL GDP REVISED TO +3.8% FROM +4.6%
- Q4 CAPEX REVISED TO +0.9% FROM PRELIM +1.0% Q/Q
- Q4 REVISED DOMESTIC DEMAND CONTRIBUTION +0.4 PT VS +0.6
- Q4 PRIVATE CONSUMPTION REVISED TO +0.7% FROM +0.7%
- Q4 REVISED NET EXPORT CONTRIBUTION +0.5 PT VS +0.5 PT
- Q4 PRIVATE INVENTORY CONTRIBUTION -0.1 PT VS +0.1 PT
JAPAN: Capital flows for the week ended March 6, according to data
from the Ministry of Finance:
Japanese investors:
-- Bought net Y119.5 bln in foreign equities
-- Bought net Y677.3 bln in foreign bonds
-- Sold net Y30.8 bln in foreign money market instruments
-- Resulting in a net purchase of Y765.9 bln.
Foreign investors:
-- Bought net Y261.5 bln in Japanese equities
-- Bought net Y461.9 bln in Japanese bonds
-- Sold net Y210.4 bln in Japanese money market instruments
-- Resulting in a net purchase of Y513.0 bln.
AUSTRALIA: From the ABS:
- Feb unemployment rate 5.3% vs revised 5.2% in Jan
- Market forecast was for 5.3% in Feb
- Feb employment up 400 at 10.971 mln
US DATA: RealtyTrac's February 2010 Foreclosure Market Report shows
foreclosure filings were reported on 308,524 U.S. properties during the
month, a decrease of 2 percent from the previous month but still 6
percent above the level reported in February 2009. The report also shows
one in every 418 U.S. housing units received a foreclosure filing in
February.
OTHER NEWS
S&P/US: Standard & Poor's Thursday gave a vote of confidence in the U.S.
dollar, saying it believes the dollar will continue to be the key
international currency, a position that it will retain "so long as
inflation is moderate and stable, financial markets are sound and
relatively unfettered, and U.S. government spending is efficient and
sustainable." Full story on MNI mainwire
FX MARKET
FOREX: The dollar was mixed in Asia Thursday, losing ground against the
yen but firmer on the euro. Dollar-yen opened near Y90.56, but by the
time China's data were published, had sank to around Y90.30. The pair
then dipped further to Y90.20 in late morning trade, before settling
arousn Y90.35. Euro-dollar was trading at $1.3637 just before midday
here, at the lower end of a fairly narrow $1.3629 to $1.3660 Asian
range. Sterling remained pressured below $1.50, but off the lows seen at
$1.4950.
OTHER MARKETS
EUROPEAN STOCKS: Major European bourses are initially seen lower
Thursday. Spreadbetters Cantor Index are calling the FTSE down 16, the
DAX down 24, the CAC down 20 and the Eurostoxx 50 down 15.
US STOCKS: Globex traded US index futures are trading modestly lower in
Asia Thursday. The front-month S&P Mar contract was last trading lower
by 4.4 points at 1141.3, with the Nasdaq Mar contract down 5.5 points at
1913.25. Dow futures are also in the red, down 32 points at 10533.
US STOCKS CLOSE: Dow and Nasdaq scored modest gains on the day, though
Dow had been higher earlier in the session before an afternoon
downdraft. Blue chips added almost 3 points to end the day at 10,567
after seeing a session high at 10,602, while Nasdaq added 18 points or
0.78% to end at 2359 after notching a new 2010 high at 2361.66.
TSYS: Treasuries are little chnaged in Asian trade Thursday, tied to
tight ranges ahead of tonight's Bond auction. The yield on the 2Y was
last at 0.90%, with the 5Y at 2.38%, the 10Y at 3.72% and the Bond at
4.69%.
AUSSIE BONDS: Aussie govvies are tradeing lower Thursday. The yield on
the 2Y was last at 4.865%, higher by 9 bps, with the yield on the 10Y
higher by 11.5 bps at 5.655%. This left the 2/10-yr spread 2.5 bps
steeper on the day at 79 bps.
JGB AUCTION: A price competitive auction for Y2.4 trillion of the 0.5%
coupon 5-year #88 Japanese Government Bonds by the Ministry of Finance
produced a lowest accepted price of 100.06 to yield 0.487%, the MOF said
Thursday. The bid/cover ratio was 3.08 (3.64) times.
Lowest price: 100.06
Yield at lowest price: 0.487%
Weighted average price: 100.07
Yield at average price: 0.485%
Total bids received: Y6.7801 tln
Bids accepted: Y2.2009 tln
Bids accepted at lowest price: 56.5103%
Bid-to-cover ratio: 3.08 (3.64)
Tail 0.01 (0.01)
JGBS: Japanese government bond prices were nearly flat this morning,
after seesawing in a tight range amid sluggish trading before the
release of 5-year JGB auction results.
--Benchmark 10-year yield was flat at 1.300%
--2-year bonds untraded
--5-year yield was 0.5 bps lower at 0.465%
--20-year yield was flat at 2.125%
--30-year bonds untraded
JAPAN STOCKS: As noted, Japan's benchmark stock indices ended the
morning session higher, aiming to snap a two-day losing streak. The
Nikkei 225 was higher by 94.24 points, or 0.89%, to stand at 10658.16.
The broader-based TOPIX was 7.69 points, or 0.83%, higher at 930.1..
Volume in the Nikkei constituents totalled 588.4 mln shares, with 181
issues trading higher, 33 lower and 11 unchanged.
CHINA STOCKS: Shanghai Composite Index ends morning down 0.64% at
3,029.39
HONG KONG STOCKS: Hang Seng Index ends morning down 0.35% at 21,134.22
OIL: Crude futures are trading lower in Asian trade Thursday. The
front-month Nymex WTI contract was last 52 cents lower at $81.57, having
traded an $81.51 to $82.09 range.
COMING UP TODAY( times GMT/ET)
0700/0200 Germany 4Q labor costs
0745/0245 France Jan central govt deficit
0745/0245 France 4Q final payrolls
0800/0300 ECB Governing Council member Yves Mersch presents
Luxembourg central bank bulletin, in Luxembourg
0900/0400 ECB to publish Monthly Bulletin
0930/0430 German Export and Wholesale Association (BGA)
releases new export forecasts, in Berlin
0930/0430 UK Feb BoE/GfK NOP Inflation Attitudes Survey
- UK Stg900 mln 1.25% Nov 2032 IL Gilt Tap
1200/0700 Brazil Jan-10 IBGE retail sales ex-auto SA
1200/0700 Brazil 4Q-09 GDP q/q SA (base 2000)
1230/0830 Canada 4Q-09 Capacity utilization
1230/0830 Canada Jan-10 Intl merchandise trade
1300/0800 SNB announces interest rate decision
1330/0830 German Chancellor Angela Merkel and Dutch PM Jan
Peter Balkenende joint press conference, in The Hague
1330/0830 US Jan-10 Intl Trade Balance
1330/0830 US 06-Mar Jobless Claims
1500/1000 US 4Q-09 Services
1530/1030 US 05-Mar EIA Natural Gas Stocks
1800/1300 US Treasury auctions $13 bln 29Y-11mo (reopening)
1900/1400 NY Fed's Dudley speaks, in London
2130/1630 US 01-Mar Money Supply (M2)