European Market Update

Daily Forex Fundamentals | Written by Trade The News | Oct 30 09 10:17 GMT |

China's PBoC sees 2009 GDP exceeding the 8.0% target ECONOMIC DATA (GE) German Sept Real Wholesale M/M: -1.7%, Y/Y: -9.8% (GE) German Retail Sales M/M: -0.5% v 1.0%e; Y/Y: -3.9% v -2.2%e (UK) Nationwide Oct House Prices M/M: 0.4% v 0.6%e; Y/Y: 2.0% v 1.8%e; First annual increase in 19 months since Mar 2008 (FR) French Producer Prices M/M: -0.3% v -0.3%e; Y/Y: -8.1% v -8.1%e (HU) Hungarian Sept Producer Prices M/M: 0.1% v -0.5% prior; Y/Y: 3.4% v 3.7%e (HU) Hungarian Aug Final Trade Balance: €254.3M v €229.4M prior (CZ) Czech Sept Prelim Industrial Output: -11.9% v -12.8%e (SP) Spain Aug current account: -€3.2B v -€2B prior (IT) Italian Sept PPI M/M: -0.3% v -0.3%e; Y/Y: -7.9% v -7.9%e SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM In equities: European markets looked set to ignore the sharp US (and to a lesser extent Asian) equity rally on the back of weak tech earnings out of Alcatel Lucent [ALU.FR]. Equities flirted with the unchanged before trending lower through the 4:00EST hour. Indian equity markets added further negative sentiment following misses from [BHARTI.IN], [SAIL.IN] and [RIL.IN] in yesterday's session. Downside sentiment was shook off, led by out performance on the FTSE100 into 5:00EST. Earnings and commentary out of WPP [WPP.UK] regarding the ad market sent shares higher. Financials recovered from earlier losses with Lloyds [LLOY.UK] receiving two broker upgrades. Pharma earnings continued to beat with Sanofi-Aventis [SAN.FR] trading higher. Earnings out of Renault [RNO.FR], and Luxotica [LUX.IT] after the close yesterday, provided further equity lightness. Following a furious weak of earnings releases, equity markets have continued to trade on higher volume on the last trading day of October. *Reminder: US/Canadian clocks will move forward on Sunday morning, returning the difference between NYC and London to -5hrs, NYC to Frankfurt -6hrs In individual earnings: Alcatel Lucent [ALU.FR] Reports Q3 Net €182M v loss €93Me, Rev €3.7B v €3.9Be; Reiterates FY09 operating guidance. || Sanofi [SAN.FR] Reports Q3 Net Profit €2.3B v €2.2Be, Rev €7.4B v €7.5Be, raises full year earnings target by 11%. || Erste Bank [EBS.AS] Reports Q3 Net €228M v €172Me, Net interest income €1.4B v 1.3B q/q; States that CEE crisis not over, worst may be behind group. || WPP [WPP.UK] Reports Q3 Rev £2.0B v £2.0Be. || Renault [RNO.FR] Reports Q3 Rev €8.1B v €9.1B y/y; Q3 global unit sales +0.8% y/y. || Belgacom [BELG.BE] Reports Q3 Net €217M v €203Me, Rev €1.5B v €1.5Be; 9-month Rev +1% y/y. || Rio Tinto [RIO.UK] Provides investor statement: Guides FY09 and FY10 CAPEX at $10B. || Speakers: China's central bank (PBoC) commented that the Chinese economy would continue its positive direction and forecasted that the FY09 GDP to exceed the 8% target. PBoC reiterated that it must manage inflationary expectations. Q3 Seas Adj Annualized GDO +8.7% q/q and that Q4 GDP would continue to rebound. It noted that inflation expectations were strengthening and that CPI was expected to bottom out and rebound by year-end. PPI bottomed in Q3. Loans increased by CNY1.3T in Q3, to further guide bank lending, demand for loans remains strong. Must curb overcapacity in some industries ||BoJ Semiannual Economic Outlook Report: Forecasts FY11 Core Consumer Prices to decline 0.4% for third consecutive year of decline; downside risks to Japan economy remain. Japan GDP seen +1.2% in year to March 2010 vs July forecast of 1.0% In Currencies: The dollar saw its initial gains against the European currencies fade as the NY morning approached. The USD firmed ahead of the European equity open after German Sept retail sales unexpectedly declined. However, comments from the Chinese central bank that 2009 GDP growth would exceed the 8.0% official target aided the appetite for risk in the session as thin trading conditions due to month reigned supreme. The EUR/USD tested 1.4800 before drifting back to the mid 1.48 area. The BOJ kept rates steady as expected, but was staking steps to reduce its quantitative easing measures. Dealers noting that such exits from special measure could be 'contagious'. USD/JPY was lower by 50 pips from its Asian open just below the 91 handle. EUR/JPY lower by a big figure just below 135.00 The GBP was relatively steady against other European pairs after Nationwide house prices registered their annual rise since March 2008. In Energy\commodities: Chinese press noted that China could increase fuel prices in the first week of Nov with retail fuel prices potentially rising by CNY300 ($44) per ton, diesel by CNY0.25/liter and gasoline by CNY0.22/liter. || NOTES data will surely raise the odds for firmer Fed signals of an exit from prevailing ultra-loose policy settings BoJ unch, eyes exit from credit mkts. Sounds contagious. Looking Ahead: 6:30 (SZ) Swiss KOF Leading Indicator: 1.16e v 0.85 prior 8:00 (SA) South Africa Sept Trade Balance (ZAR): -1.0Be v -2.0B prior 8:30 (US) Sept Personal Income: 0.0%e v 0.2% prior, Personal Spending: -0.5%e v 1.3% prior 8:30 (US) Sept PCE Core M/M:0.2%e v 0.1% prior, Y/Y: 1.3%e v 1.3% prior, PCE Deflator Y/Y: -0.5%e v -0.5% prior 8:30 (US) Q3 Employment Cost Index: 0.4%e v 0.4% prior 8:30 (CA) Canadian Aug GDP M/M: 0.1%e v 0.0% prior 9:45 (US) Oct Chicago PM: 49.0e v 46.1 prior 10:00 (US) Oct Final U of Michigan: 70.0e v 69.4 prior 10:00 (US) Oct NAPM Milwaukee: 57.0e v 58.0 prior 10:00 (BE) Belgian Q3 Prelim GDP Q/Q: No estimates v -0.3%e prior, Y/Y: No estimates v -3.7% prior Trade The News Staff Trade The News, Inc. 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. 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