RANsquawk DAILY EUROPEAN OPENING NEWS – 10/05/12
ASIA
Chinese Trade Balance (USD) (Apr) M/M 18.43bln vs. Exp. 9.90bln (Prev. 5.35bln)
Chinese Exports (Apr) M/M 4.9% vs. Exp. 8.5% (Prev. 8.9%)
Chinese Imports (Apr) M/M 0.3% vs. Exp. 10.9% (Prev. 5.3%) (Sources)
10 year JGBs were seen down 14 ticks at 143.15 heading into the European session, following some relief that Greece are to get their tranche payment from the Troika. Last price taken at 0642BST. (RANsquawk)
Japanese Current Account Total (JPY) (Mar) M/M 1589.4bln vs. Exp. 1431.3bln (Prev. 117.8bln)
Japanese Current Account Balance (Mar) Y/Y -8.6% vs. Exp. -17.1% (Prev. -30.7%)
The drop in the 2011 full year current account surplus was the largest since 1985, and is the smallest surplus since 1996. (Sources)
Japanese Eco Watchers Survey: Current (Mar) M/M 50.9 (Prev. 51.8)
Japanese Eco Watchers Survey: Outlook (Mar) M/M 50.9 (Prev. 49.7) (Sources)
BoJ's Shirai has said there is still a need to watch the global financial markets, including FX, as uncertainty remains. On recent easing, Shirai has said the BoJ actions were appropriate to show the bank's unshakeable commitment to monetary policy and was important to ensure positive developments in the economy. Shirai expects a return to a moderate growth path in the first half of this year. (Sources)
US
T-notes finished flat in a volatile session yesterday, having seen some risk-averse flows on the possibility Greece would not receive the next tranche of its bailout. These fears were later allayed, and a below-par 10y note auction, which saw the weakest buy-side demand since November, saw 10y futures weaken into the close. At the pit close, t-notes settled at 132.29+, flat. Finally, the DJIA finished at 12835.06, down 0.75%; the SPX finished at 1345.58, down 0.67%; and the NDX finished at 2621.35, down 0.32%. T-notes were trading broadly flat at 132.28+ heading into the European session, following a relatively quiet overnight trading session. Last price taken at 0630BST. (RANsquawk)
The results of USD 24bln 10y note auction gave a yield 1.855% vs. exp. 1.853%; where the WI stopped at 1.860% (lowest yield on record); B/C 2.90 vs. avg. 3.24 (prev. 3.08); the indirects were 38.7% vs. avg. 43.21% (prev. 38.57%); and allotted at high at 20.18%. (Sources)
EU
The EFSF confirmed the release of EUR 5.2bln for Greece, with EUR 4.2bln to be disbursed today and the remaining EUR 1bln not needed before June. (Sources)
The head of the German CSU party, Markus Ferber, has demanded that debt-relief payments to Greece be halted immediately. (Die Welt) He said Greece must have stable conditions for the continuation for budget discipline before obtaining further aid.
Eurozone governments are expected to give Spain more leeway to meet its budget deficit target next year according to sources, and austerity will still be the guiding principle of European fiscal policies. (WSJ)
IMF is mulling using EU cash first if more Eurozone loans are needed, and IMF may scale back proportion of Eurozone loan programs according to sources. The sources added that the IMF board is likely to be reluctant to lend money to Spain and Italy. (WSJ)
The Bank of Spain announced that Bankia has requested a partial takeover, stating that BFA has asked for EUR 4.5bln, or 45% of the company, in loans to convert into capital. (Sources) The Bank of Spain said that the new BFA-Bankia management must announce its clean-up plans as soon as possible, demanding the co.'s asset disposal plan. The conversion of Bankia does require EU and Spanish clearance, and the Spanish government said the Bankia measure implies state control, not state intervention. The Frob, the Spanish bank bailout fund, will hold the stake.
The Greek SYRIZA leader said he failed to form a government and will return the mandate to the President. (Sources) This will now be passed onto the PASOK leader Venizelos who will have until May 16th to form a government.
Nouriel Roubini said eventually Spain could exit the Euro and 2-3 Eurozone members will exit the block over a few years. (CNBC)
ECB's Nowotny said that there is 'no intention' to change the ECB's key rate in the near future and the ECB is watchful on inflation but does not see an imminent danger. (Sources)
The German Bundesbank has signalled that it would accept higher inflation within Germany in an effort to rebalance the Eurozone, boosting the competitiveness of countries worst hit by the European crisis. (FT-More) The Bundesbank have argued that a German rate of inflation above the Eurozone average could be part of a natural adjustment process as crisis-hit economies try to pull themselves out of recession.
FX
New Zealand Business NZ PMI (Apr) M/M 48.0 (Prev. 54.5, Rev. 53.8) (Sources)
Australian Employment Change (Apr) M/M 15.5K vs. Exp. -5.0K (Prev. 44.0K, 37.6K)
Australian Unemployment Rate (Apr) M/M 4.9% vs. Exp. 5.3% (Prev. 5.2%) (Sources)
GEOPOLITICAL
Iran may be cleaning their suspected nuclear site, according to reports. (LA Times)
COMMODITIES
WTI crude futures were seen down USD 0.07 at USD 96.75 falling for the seventh consecutive session, its longest run of declines in more than 2 years. Last price taken at 0635BST. (RANsquawk)
China's April crude oil imports stood at 22.26mln tons, according to customs figures, up 9.3% from a year earlier. (Sources)
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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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