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RANsquawk DAILY EUROPEAN OPENING NEWS – 22/02/12
ASIA
JGBs fell overnight (-11ticks at 142.47, at 0628GMT) as several regional banks, as well as large nationwide banks sold paper to lock in profits. (RTRS/RANsquawk)
HSBC China Manufacturing PMI (Feb) M/M 49.7 (Prev. 48.8) (Sources)
An IMF representative has said China is likely to keep property curbs despite opposition from local governments. However, the representative added that a severe European downturn could prompt Beijing to lift property curbs. (Sources)
US
T-notes settled in negative territory for yesterday following the first CBOT floor session post US President's Day, this came after Monday night's agreement on the second Greek bailout package which boosted risk appetite. The 2y note auction was pretty flat, with the yield stopping on the WI and steady demand from domestic and foreign bidders, touted short-covering was seen into the close. At the pit close, t-notes settled at 130.20+, down 9 ticks. Finally the DJIA finished up 0.12% at 12965.69; the SPX finished up 0.07% at 1362.22; the NDX finished down 0.11% at 2948.57. T-notes edged lower overnight (-4ticks at 130.160, at 0633GMT) as market participants remained hopeful that Greek debt saga will soon come to an end. (RANsquawk)
The Fed discount minutes said that ten out of twelve regional directors sought to keep the Fed discount rate unchanged at 0.75%, with the Kansas City Fed voting for a discount rate increase to 1%, and the Boston Fed voting for a discount rate cut to 0.5%. They also noted that Fed regional bank directors had said the economy had improved somewhat, and the Fed's board expressed 'no sentiment' for changing discount. (Sources)
Yesterday's USD 35bln 2y note auction drew a yield of 0.310% vs. Exp. 0.308%, and the WI stopped at 0.310%, the b/c was 3.54 vs. avg. 3.73 (prev. 3.76), indirect bidding was 35.8% vs. avg. 34.54% (prev. 32.76%) and the allotted at high was 79.09%. (RTRS)
EU
According to the Greek CAC bill, bond holders will be given at least 10 days to decide on new bond terms following the public invitation, and the majority required to change bond terms is set at 2/3 of represented bond holders. Furthermore, half of bond holders must be represented to change the bond terms. (Sources)
The Greek government have been given nine days to complete reforms or forfeit the EUR 130bln bailout. (FT-More) These conditions include the sacking of underperforming tax collectors, liberalisation of the country's closed professions and readying at least two large state-controlled companies for sale by June. The short timetable possibly reflects the collapse of trust between the Greeks and their creditors.
The BoE deputy-governor Bean has said that the Greek agreement on a second bailout may not be sufficient to end the debt crisis, adding that countries in the Euroarea periphery must reduce debt and increase competitiveness. (Sources) Bean added that there still remains a possibility that events could unfold in a disorderly and damaging fashion at some stage in the future.
Portugal is under pressure on its bailout terms from opposition, business and trade union leaders. (FT-More) Leaders are urging the government to renegotiate the terms on which it received its EUR 78bln bailout last year in order to alleviate the impact of painful austerity measures on the economy.
French CPI (Jan) M/M -0.4% vs. Exp. -0.2% (Prev. 0.4%)
French CPI (Jan) Y/Y 2.3% vs. Exp. 2.5% (Prev. 2.5%) (Sources)
FX
Australian Wage Cost Index (Q4) Q/Q 1.0% vs. Exp. 0.8% (Prev. 0.7%)
Australian Wage Cost Index (Q4) Y/Y 3.6% vs. Exp. 3.4% (Prev. 3.6%) (Sources)
Australian Foreign Minister Rudd has resigned, citing lack of confidence from ministers, adding that he cannot continue to serve without the support of the PM. (Sources)
According to an ex-RBA member the Australian central bank was right to hold the key interest rate this month. The ex-central banker added that European concerns are weighing upon the Australian rates. (Sources)
GEOPOLITICAL
The White House said there was still time and space for diplomacy to work and for Iranian behaviour to change with regards to the current nuclear issue, and that Israel and the US share the same objective, which is to prevent Iran from acquiring a nuclear weapon. (Sources)
The IAEA have said Iran denied them access to its Parchin military site during their visit, adding that it had failed to agree with Tehran on how to move forward to settling unresolved issues concerning its nuclear programme. (Sources)
COMMODITIES
WTI crude futures were little changed overnight (-USD 0.10 at USD 106.17, at 0630GMT) even in spite of reports that Iran denied request from the IAEA to visit one of its bases. (RANsquawk/Sources)
China, India and Japan are planning cuts of at least 10% in Iranian crude imports as tightening US sanctions make it difficult for the top Asian buyers to keep doing business with the country. These countries together buy around 45% of Iran's crude exports. (RTRS)
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
