RANsquawk DAILY EUROPEAN OPENING NEWS – 04/07/12
Asia
JGBs prices were mostly see lower ahead of the ECB meeting tomorrow, where the ECB are expected to cut rates by 25BPS. 10-yr JGBs were last seen down 5 ticks at 143.77. Last price taken at 0615BST. (RANsquawk)
Chinese HSBC Services PMI (Jun) M/M 52.3 (Prev. 54.7) (Newswires) - 10-month low.
Chinese banking profits are facing significant challenges from the economic slowdown and growth in profits is likely to drop significantly this year, according to a report by the China Banking Association. (Financial News) Despite the falls in profits, the China Banking Association does sees a moderate expansion in bank lending this year. (Xinhua)
China needs to attach great importance to rebounding house prices amid rising property trading volumes and an increase in property-sale prices, according to the Communist Party's propaganda paper. (People's Daily) The paper argues that China should not relax their property controls as the task of ensuring long-term stability has not yet been achieved.
US
US treasuries trended lower through the truncated pit-session yesterday amid expected thinner volume. In early trade there were some real money buyers in the belly of the US curve, however these flows faded quickly after the pit open. The surprisingly strong US factory orders, allied with upward revisions to the durable goods numbers pressured t-notes which continued to slip to the downside due to strength seen in equities. The expectation of European policy easing on Thursday led to some tactical positioning, given the US holiday tomorrow. At the early pit close t-notes settled at 133.20+, down 12 ticks. Finally, the DJIA finished at 12943.82, up 0.56%; the SPX finished at 1374.02, up 0.62%; and the NDX finished at 2645.84, up 0.79%. T-notes were seen trading up 1+ ticks at 133.22 heading into the EU open, following a relatively quiet and range bound overnight session. Last price taken at 0630BST. (RANsquawk)
Europe
The deal on Spanish bank aid may be delayed until July 20th, as the delay will allow more time for negotiations, according to sources. However, the first tranche of EU money would be sent to Spain's bank restructuring FROB on time for the state-rescued banks Bankia, CatalunyaCaixa, NovaGalicia, and Banco de Valencia to keep running their day-to-day operations normally. (Newswires)
Spain's regional governments owe EUR 3bln to healthcare suppliers across the first half of this year. (Cinco Dias)
S&P said some relief could be in sight for Eurozone sovereigns following the agreements at the EU summit. The decisions made reflect policymakers' growing recognition that the current crisis is exclusively a budgetary crisis of excessive public debt, but the agreements reached at the summit have no immediate implications for Eurozone sovereign ratings. (Newswires)
Greek PM Samaras is due to meet troika officials in Athens on Thursday, when he will attempt to convince them that Greece can move ahead quickly with the sale of state assets and downsizing of the public sector in return for more favorable bailout terms. (eKathimerini)
FX
Australian Retail Sales (May) M/M 0.5% vs. Exp. 0.2% (Prev. -0.2%, Rev. 0.1%) (Newswires)
Indecisive price action observed in USD/JPY overnight having seen the pair bounce of the initial 79.59 lows during Asian hours. To the upside offers touted pre-80.00, with large stops seen above the level. (RANsquawk)
Geopolitical
Syria's al-Assad has said he regrets that his country's forces downed the Turkish jet but warned Turkey against using the incident to incite conflict with Damascus. (WSJ)
According to a European diplomat, technical talks with Iran were useful and the Iranian and EU nuclear deputies are set to meet next, with no planned date as yet. (Newswires)
Commodities
WTI crude futures were seen trading down USD 0.47 at USD 87.19 heading into the European session, following weaker Chinese HSBC Services PMI overnight. Last price taken at 0630BST. (RANsquawk)
US API Crude Oil Inventories (Jun 29) W/W -3033K vs. Prev. 507K (Newswires)
US API Gasoline Inventories (Jun 29) W/W -1397K vs. Prev. 373K
US API Distillate Inventory (Jun 29) W/W -1149K vs. Prev. -1021K
US API Cushing Crude OK Inventory (Jun 29) W/W 247K vs. Prev. -682K.
You can now follow real-time news headlines on the move with the new RANsquawk app available to download for free on the Apple App store or at http://mob.ransquawk.com for Blackberry and Android users.
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JGBs prices were mostly see lower ahead of the ECB meeting tomorrow, where the ECB are expected to cut rates by 25BPS. 10-yr JGBs were last seen down 5 ticks at 143.77. Last price taken at 0615BST. (RANsquawk)
Chinese HSBC Services PMI (Jun) M/M 52.3 (Prev. 54.7) (Newswires) - 10-month low.
Chinese banking profits are facing significant challenges from the economic slowdown and growth in profits is likely to drop significantly this year, according to a report by the China Banking Association. (Financial News) Despite the falls in profits, the China Banking Association does sees a moderate expansion in bank lending this year. (Xinhua)
China needs to attach great importance to rebounding house prices amid rising property trading volumes and an increase in property-sale prices, according to the Communist Party's propaganda paper. (People's Daily) The paper argues that China should not relax their property controls as the task of ensuring long-term stability has not yet been achieved.
US
US treasuries trended lower through the truncated pit-session yesterday amid expected thinner volume. In early trade there were some real money buyers in the belly of the US curve, however these flows faded quickly after the pit open. The surprisingly strong US factory orders, allied with upward revisions to the durable goods numbers pressured t-notes which continued to slip to the downside due to strength seen in equities. The expectation of European policy easing on Thursday led to some tactical positioning, given the US holiday tomorrow. At the early pit close t-notes settled at 133.20+, down 12 ticks. Finally, the DJIA finished at 12943.82, up 0.56%; the SPX finished at 1374.02, up 0.62%; and the NDX finished at 2645.84, up 0.79%. T-notes were seen trading up 1+ ticks at 133.22 heading into the EU open, following a relatively quiet and range bound overnight session. Last price taken at 0630BST. (RANsquawk)
Europe
The deal on Spanish bank aid may be delayed until July 20th, as the delay will allow more time for negotiations, according to sources. However, the first tranche of EU money would be sent to Spain's bank restructuring FROB on time for the state-rescued banks Bankia, CatalunyaCaixa, NovaGalicia, and Banco de Valencia to keep running their day-to-day operations normally. (Newswires)
Spain's regional governments owe EUR 3bln to healthcare suppliers across the first half of this year. (Cinco Dias)
S&P said some relief could be in sight for Eurozone sovereigns following the agreements at the EU summit. The decisions made reflect policymakers' growing recognition that the current crisis is exclusively a budgetary crisis of excessive public debt, but the agreements reached at the summit have no immediate implications for Eurozone sovereign ratings. (Newswires)
Greek PM Samaras is due to meet troika officials in Athens on Thursday, when he will attempt to convince them that Greece can move ahead quickly with the sale of state assets and downsizing of the public sector in return for more favorable bailout terms. (eKathimerini)
FX
Australian Retail Sales (May) M/M 0.5% vs. Exp. 0.2% (Prev. -0.2%, Rev. 0.1%) (Newswires)
Indecisive price action observed in USD/JPY overnight having seen the pair bounce of the initial 79.59 lows during Asian hours. To the upside offers touted pre-80.00, with large stops seen above the level. (RANsquawk)
Geopolitical
Syria's al-Assad has said he regrets that his country's forces downed the Turkish jet but warned Turkey against using the incident to incite conflict with Damascus. (WSJ)
According to a European diplomat, technical talks with Iran were useful and the Iranian and EU nuclear deputies are set to meet next, with no planned date as yet. (Newswires)
Commodities
WTI crude futures were seen trading down USD 0.47 at USD 87.19 heading into the European session, following weaker Chinese HSBC Services PMI overnight. Last price taken at 0630BST. (RANsquawk)
US API Crude Oil Inventories (Jun 29) W/W -3033K vs. Prev. 507K (Newswires)
US API Gasoline Inventories (Jun 29) W/W -1397K vs. Prev. 373K
US API Distillate Inventory (Jun 29) W/W -1149K vs. Prev. -1021K
US API Cushing Crude OK Inventory (Jun 29) W/W 247K vs. Prev. -682K.
You can now follow real-time news headlines on the move with the new RANsquawk app available to download for free on the Apple App store or at http://mob.ransquawk.com for Blackberry and Android users.
View All Market Commentary
*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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