RANsquawk DAILY EUROPEAN OPENING NEWS – 18/04/12
ASIA
JGBs prices were marginally lower heading into the EU session, dealers noted of 10-yr and 20yr agency and utility bonds are selling briskly in the primary bond market. (RTRS)
BoJ's Nishimura has said the BoJ will pursue powerful easing while aiming to meet their 1% price inflation goal. Nishimura added that there are uncertainties over the Japanese economy but positive signs are seen. (Sources)
GLOBAL
IMF's Lagarde said the global economy is looking better than a few months ago, but is still fragile. (RTRS/Sources) Financial regulation is the key to world stability, and nations must implement coordinated banking reforms. Lagarde also confirmed that Norway, Denmark and Sweden have pledged over USD 26bln to the IMF.
Australian Treasurer Swan has said he backs increased resources for the IMF, but needs to see European commitment. (Sources)
US
T-notes finished in negative territory for the session, as talk of asset allocation out of bonds and into equities saw the benchmark 10y note remain at session lows. The increase in risk appetite came following a decent Spanish T-bill auction, stronger ZEW survey data and solid US corporate earnings, all of which saw the 10y note yield rise back above the 2.0% mark. At the pit close, t-notes settled at 131.30, down 9 ticks. Finally, the DJIA finished up 1.50% at 13115.54, the S&P 500 finished up 1.55% at 1390.78 and the Nasdaq 100 finished up 2.0% at 2723.58. T-notes were trading down 1+ ticks at 131.12 heading into the EU session, following positive corporate earnings overnight. Last price taken at 0640BST. (RANsquawk)
US Treasury's Brainard said the US recovery has improved, but the outlook is still fragile because of the EU crisis. (RTRS) Furthermore, the US does not intend to seek additional resources for the IMF since it still has substantial funds.
EU
Spanish PM Rajoy said Spain's austerity actions are sufficient and enough to avoid a bailout, with the Spanish government determined to undertake the necessary reforms to support growth. (RTRS) However, the debt market moves in recent days show the Euro-zone situation remains fragile according to the PM. In related news, the IMF sees Spain's 2012 public deficit at 6% of GDP against the country's 5.3% target, and a 2013 deficit 5.7% of GDP vs. the 3% target.
The Bank of Spain approved the Spanish banks' recapitalisation plans, with eleven Spanish banks to take part in five new merger or acquisition operations. (RTRS)The banks will see EUR 29.08 in extra provisions, capital needs of EUR 15.57bln, with a total additional capital of EUR 53.4bln.
According to a draft forecasting document Italy cuts its 2012 GDP forecast to -1.2% from -0.4% but raises the 2013 forecast to +0.5% from +0.3% (RTRS) The document added that Italy is to raise its 2012 deficit/GDP target to 123.4% from 119.5% and for 2013 raised to 121.6% from 116.1%.
ECB's Constancio said he believes Spain will achieve its deficit targets with agreed European institutions for both 2012 and 2013. (Sources/RTRS) Elsewhere, ECB's Costa said Euro-bonds are not an immediate solution to the debt crisis, and that Euro-area fundamentals are strong, but a 'slow' Euro crisis response did put a heavy burden on the ECB.
The Euroarea's debt crisis is reigniting and may cause more turmoil this year than in 2011, according to Lars Feld, a member of Chancellor Merkel's council of economic advisers. (Bild) Feld goes on to say that the ECB's efforts to stem the crisis are only having a short-term effect and the French Presidential election is causing uncertainty.
FX
London will step up its pursuit of the international CNY market today as the UK Chancellor Osborne launches a city initiative to drive the currency's use in the UK capital. (FT-More) The initiative springs from awareness that Hong Kong and Shanghai will also benefit substantially from the CNY's probable rise as an international currency. The initiative puts the total value of London's CNY deposits in 2011 at more than CNY 109bln.
Australian Westpac Leading Index (Feb) M/M 0.2% (Prev. 0.6%, Rev. 0.7%) (Sources)
Australian Treasurer Swan has said budget surplus plans will give the RBA plenty of room to cut rates in the future. (Sources)
New Zealand ANZ Consumer Confidence (Apr) M/M 3.4% (Prev. -2.7%) (Sources)
New Zealand ANZ Consumer Confidence Index (Apr) M/M 114.0 (Prev. 110.2)
COMMODITIES
WTI crude futures traded near its highest close in two weeks following the IMF in yesterday's session boosting growth outlook. At 0630BST WTI crude futures were trading up USD 0.26 at USD 104.46. (RANsquawk)
US API Crude Oil Inventories (Apr 13) W/W 3409K vs. Prev. 6584K
US API Gasoline Inventories (Apr 13) W/W -2602K vs. Prev. 1184K
US API Distillate Inventory (Apr 13) W/W -2429K vs. Prev. -476K
US API Cushing Crude OK Inventory (Apr 13) W/W 581K vs. Prev. 303K. (RTRS)
Citigroup raised thier 2012 gold price forecast to USD 1,718/oz from USD 1,709/oz but cut their 2013 forecast to USD 1,835/oz from USD 1,912/oz. (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.
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