| Daily Forex Fundamentals | Written by Trade The News | Jan 13 09 11:01 GMT | | |
| Global recession concerns continue to provide the background for trading themes ECONOMIC DATA (CH) China Dec M2 Money Supply: 17.8% v 15.0%e; M1 Money Supply Y/Y: 9.1% v 6.8% prior. M0 Money Supply: 12.7% v 9.0% prior (GE) German Dec Wholesale Price Index M/M: -3.0% v -3.3% prior; Y/Y: -3.3% v -0.8% prior (FR) French Nov Central Govt Balance: -€66.6B v -€60.7B prior (SW) Swedish Dec CPI - Headline Rate M/M: -1.3% v -0.9%ev; Y/Y: 0.9% v 1.4%e (NV) Dutch Nov Industrial Production M/M: -3.0% v -0.3%e; Y/Y: -6.2% v -3.8%e; Industrial Sales Y/Y: -13.5% v 0.5% prior (UK) Nov Visible Trade Balance: -£8.33B v -£7.5Be ; Trade Balance Non EU: -£5.3B v-£4.2Be; Total Trade Balance: -£4.5B v -£3.7Be SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUMEquities: Tesco [TSCO.UK] Reported 7-week UK Like-for-like sales ex petrol +2.5% v +2.5%e, Total group sales 11.6% v 11.5%e. Co reported the smallest rise in Christmas sales at UK stores open at least a year since the early 1990s || Pernod Richard [RI.FR] Provided H1 update and reaffirmed its FY earnings target. It noted that H1 sales are in line with expectations. Itsees H1 organic growth from recurring operations 8%. It guided FY08-09 double digit growth in recurring net. The company did cite difficulties in South Korea, Spain region but that emerging markets were enjoying strong growth. The company's Holiday sales were positive overall || Premier Foods [PFD.UK] Provided trading statement with FY08 sales up 9%. It guided FY08 Pretax £185-190M versus £184.3 expected. RHM and Campbell*s synergies continue to develop in line with plan. It noted that it received firm £8M offer for Le Pain Croustillant unit and was in talks to sell Martine Specialities but no firm offer received. Its net debt at end 2008 was £1.78M || Taylor Wimpey [TW.UK] Provided interim trading statement: FY08 UK completions 13.4K verus 20.7K units y/y. It expected further writedowns due to market conditions || || George Fisher [FI.N.SZ] AgieCharmilles unit to cut 340 jobs ( about 2.4% of workforce).Half the job cuts will be in Switzerland, citing a slump in demand || Sika [SIK.SZ] Reported 2008 net sales at CHF4.60B versus estimates of CHF4.68B || Hypo Real Estate [HRX.GE] (GE) Soffin govt stabilzation fund extends €30B framework guarantee until April 30 || Arseus [RCUS.BE] Reported Q4 €103.5M a touch higher then estimates of €102.7M. It FY08 revenue came in at €354.5M, up 16.5% y/y. || Peugeot [UG.FR] Reported 2008 auto sales 2.95M, which was down 8.7% y/y. Sales declined in both China and Western Europe, but increased in Russia. || Galliford [GFRD.UK] Reportedly place staff on 4-day work week to save cash and avoid additional job cuts. || Elan [ELN] Announced strategic review with alternatives including a minority investment, an alliance, a merger or sale || Aegon [AGN.NV] Announced Jan Nooitgedagt to Succeed Jos Streppel as CFO, effective April 22, 2009 || Game Group [GMG.UK] Reported 6-week like-for-like sales +5.4% y/y, Total sales +16.6% y/y. it guided FY08 pre-tax £122M v 118.5Me || Northern Foods [NFDS.UK] Reported Q3 Total sales 0.5%%, YTD sales +3.5% y/y || Autonomy [AU.UK] Awarded multi-million dollar contract with major global bank, financial terms not disclosed. || April Group [APR.FR] Provides interim statement: expects results slightly below expectations || Thales [HO.FR] sold its Thales Information System to Aurekius, terms not disclosed || Maersk [MAERSKB.DE] CEO remained confident of full-year results but commented that he did notsee shipping recovery before 2010 || Eads [EAD.FR] CEO commented that FY08 revenue above €42B v €41.3Be. Gallois commented that 2009 A380 deliveries could be below the planned 21 target Speakers: ECB's Trichet commented that the Euro currency has helped to stabilize Europe during financial market crisis. He reiterated the view that Central Banks and Governments have acted promptly during financial crisis. He again stressed that now is not the time to be complacent and EU members must implement and honor the stability pact. Lastly he stated that the current economic challenges are pressing and new challenges will likely arise || EU's Juncker noted that 2009 would be a difficult period for the Eurozone economy. However, he reiterated that the Euro currency has acted as an 'anchor of stability'. Govts must continue to cooperate to tackle the financial market and economic crisis. Euro currency has protected region from worst of financial crisis but reiterated the need for elimination of global imbalances || EU's Almunia commented that the financial market crisis was a test for the Euro zone and its currency and that the ECB had taken the necessary steps during the market crisis. ECB had prevented huge economic collapse In Currencies: The Risk aversion theme continued into the European session as both USD and JPY firmed against the major pairs. S&P warnings on several sovereign rating prompting the latest move this week (Spain on Monday and New Zealand on Tuesday). The largest drop in Chinese exports since April 1999 continues to pose a 'demand destruction theme for energy and metals. The falling commodities are weighing on the CAD, AUD and Kiwi related pairs. USD/CAD holding above the 1..2 handle for the bulk of the European morning. Dealers are focusing on the upcoming ECB rate decision. Growing speculation that the ECB coul cut as much as 100bps to 1.50%, but consensus expectations see for a 50 bps to 2.00% Euro-Zone coupon payments and redemptions continued to play a role in the Euro price action. EUR/USD tested one-month lows of 1.3225 before recovering above the 1.33 level. The EUR/JPY pair tested a three month support line seen at the 117.70 level and GBP/JPY briefly dipped below the 130 handle. Safe-haven flows into the CHF were also a bit more pronounced today as EUR/CHF shifted down to probe the lower 1.48 area. Fixed income: UK DMO noted that it remained confident that that market can cope with the supply. It noted that GEMMs saw ongoing structural demand for long-dated gilts and they supported the use of mini tender. GEMMs had a general preference for larger auction sizes and preferred fewer larger sales over more frequent, smaller sales || UK DMO sold £3.0B in 4.5% 2019 Gilts with a bid-to-cover of 2.38 times. In Energy: Gazprom [GAZP.RU] Resumed gas shipments to Europe via Ukraine. Ukraine's Naftogaz confirmed that Russian gas was flowing towards Europe via Ukrainian pipelines || Tullow Oil [TLW.UK] and Heritage Oil [HOIL.UK] Announced major discovery in The Giraffe-1 Exploration well in Uganda || Total [FP.FR] Commented that it would maintain its long term production outlook. It did note that it would need oil at $80/bbl for Canadian Sands ops and $60/bbl for its Angolan offshore operations. It sought to lower costs of Canadian operations during pricing downturn. It expecte global outlook to stabilize at 95M bbl/day around 2020 || NYMEX Feb crude futures recovered from sessions lows ahead of the NY morning. Feb contract was hovering around the $37/barrel level after approaching $36 during the European session. NOTES Global recession concerns continue to provide the background for trading themes. Equity markets maintaining a heavy tone over the growing recession fears complemented by fear that hedge funds seem prepared to unfreeze or build cash positions ahead of their redemptions. Confidence waning on the New Zealand front after its business survey plunged to -64 compared to a -19 prior reading. S&P revised NZ foreign currency outlook to negative citing the declining current account situation there. Dealers looking towards the plethora of Fed speakers on plate the plate today with a preannounce topics covering both the economic outlook and financial conditions perhaps building a ground work for a new theme. Euro continues its soft tone. ECB's Trichet applauded the currency's decade of existence but noted but key tests could lie ahead. ECB interest rate decision on Thursday with 50bps cut consensus at this time, but calls for a more aggressive cut possible. Looking Ahead: 8:30 (CA) Canadian Nov International Merchandise Trade: 3.0B expected v 3.8B prior Trade The News Staff Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing. | |
Tuesday, January 13, 2009
European Market Update
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