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Daily US Opening News And Market Re-Cap: January 11

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From RanSquawk

  • Breaking news: German chancellor Merkel says if solidarity is necessary we are ready to react immediately, Merkel says Germany willing to pay more capital into ESM at the start in order to give message to the markets** (RTRS)
  • Fitch’s Riley comments that the ECB must do more to prevent a cataclysmic Euro collapse, causing major FX pairs to reach session lows and markets to move into negative territory.
  • Solid demand seen in German Bobl auction this morning.

Market Re-Cap
 
Heading into the North American open, European equity futures are trading lower, with comments from Fitch’s Riley, who suggested that the ECB must do more to prevent cataclysmic EURO collapse, causing the most recent bout of risk averse sentiment. As a result, major FX pairs are trading lower, with EUR/USD testing 1.2700, while GBP/USD fell through 1.5400 level. Looking elsewhere, apart from being buoyed by Fitch comments, German Bunds benefited from a well received German Bobl auction. Of note, European bond yield spreads are predominantly tighter for the time being, with analysts noting buying of Spanish and Italian paper by domestic and real money account names.
 
Finally, there is little in terms of macro-economic data and instead the attention will be on the publication of various EU related economic outlooks and the US Treasury is set to sell USD 21bln in 10-y notes.
 
US Headlines
 
Mitt Romney wins New Hampshire primary by a comfortable margin, putting him in the forerunning position for Republican leadership.
 
US MBA Mortgage Applications (Jan 6) W/W 4.5% vs. Prev. 4.1%.
 
Asian Headlines
 
BoJ may say that the country’s economy is likely to contract for the year through March 31st.
BoJ Governor Shirakawa said there are limits to what monetary policy can achieve and governments must implement “necessary” reforms to aid the global economy.
 
PBOC spokesman has said that China will act slowly in hiking interest rates over concerns on capital inflows, adding that the CPI rise may stay at around 4% in 2012. PBOC Adviser has said one or two more years are needed for curbs to stay to stabilize housing markets before the government manages to introduce long-term policy.
 
China trims Q3 trade surplus to USD53.4bln vs. Exp. USD 57.8bln, doubles capital surplus to USD 66.2bln vs. Exp. 33.9bln and the Ministry of Commerce also targets 10% growth for the value of total imports and exports.
 
EU and UK Headlines
 
European markets this morning have been reacting to comments from Fitch’s Riley, who stated that the ECB must do more in order to prevent a “cataclysmic” Euro collapse. Markets reflected risk averse sentiment and fell across the board as well as the EUR falling to session lows. Off the back of these comments the Bund is trading in positive territory, with a successful German Bobl auction providing support to prices.
 
Comments from the German Banking Association earlier in the session highlighted its anti-financial transaction tax stance, commenting that it could reduce Banking earnings in the country by 5-10%. They also asserted that German Banks are well on track for Basel III regulations.
 
For notable European economic releases today, Eurostat have announced that the Euro-area economy grew by 0.1% in Q3 of 2011.
 
EQUITIES
 
Off the back of fresh concerns on the future of the Euro following Fitch’s comments earlier today, European markets are trading down with added pressure from a negative first estimate of German GDP growth in Q4 of 2011.
 
Top performing sectors in BE500: Industrials (-0.22%), Health Care (-0.24%), Financials (-0.32%)
Worst performing sectors in BE500: Oil & Gas (-2.32%), Utilities (-1.20%), Consumer Goods (-1.15%)

FX
 
FX markets have been reacting strongly to Fitch’s comments earlier, with the major pairs, expressing risk averse sentiment, trading at session lows with EURUSD testing the 1.2700 mark. As a result of this, the USD index is seen up 0.33% which, in turn has weighed upon commodity linked currencies.

COMMODITIES
 
Heading into the US session WTI is trading off European highs in minor negative territory around the USD102 mark, with focus still on Iranian sanctions and Nigerian strikes.
 
Oil & Gas News:
 
•   According to a source Saudi Arabia’s oil output of close to 10mln bpd is close to its maximum that the country can produce for a sustained period of time.
•   Iran cuts February official crude prices to Asia, Europe, in line with declines in benchmark Saudi Arabian prices.
 
Geopolitical News:
 
•   The Danish Foreign Minister has said he expects the EU to strengthen sanctions against Iran expressing a preference for non-military intervention. He concluded that there are alternative oil supplies for certain EU states.
•   India may not seek waiver under fresh round of US sanctions against Iranian oil imports.
•   US Treasury Secretary Geithner appealed for Chinese cooperation on nuclear non-proliferation today as he sought Chinese help on the white houses efforts to toughen sanction on Iran.
•   North Korea will likely order a third nuclear test or another missile launch later this year to boost the military image of the new leader Kin Jong-un according to a South Korea think tank report.
•   Nigerian strikes continue for a third straight day with the Nigerian oil workers’ union saying it will decide on Wednesday whether to shut down oil output exports over the fuel subsidy dispute.
 
Corporate News:
 
•   Enbridge has said it is investigating a report of a natural gas leak in its West Cameron Block 275 in the Gulf of Mexico. However the company did say that they do not anticipate any potential business disruption to be material.
•   Exxon Mobil’s 149,500/bpd Torrance, California, refinery was normalising operations overnight after power outages caused the shutdown of some units according to the company.
•   Odfjell beats Seadrill to win a contract worth USD1.2bln to build a project for BP’s Quadrant 204 project.
 
 
 
 
•   US API Crude Oil Inventories (Jan 6) W/W 397K vs. Prev. -4429K
•   API Gasoline Inventory (Jan 6) W/W 1892K vs. Prev. 3382K
•   API Distillate Inventory (Jan 6) W/W 846K vs. Prev. 5245K
•   API Cushing Crude OK Inventory (Jan 6) W/W -173K vs. Prev. 200K
US DOE Inventory Data Estimates:
•   DOE Crude Oil Inventories (Jan 6) W/W Exp.: 1000K, Low Estimate: -2750K, High Estimate: 3000K, Prev.: 2209K
•   DOE Gasoline Inventories (Jan 6) W/W Exp.: 2250K, Low Estimate: 0K, High Estimate: 3800K, Prev.: 2479K
•   DOE Distillate Inventory (Jan 6) W/W Exp.: 2250K, Low Estimate: 500K, High Estimate: 4500K, Prev.: 3224K
•   DOE Cushing Crude Inventory (Jan 6) W/W Exp.: N/A, Low Estimate: N/A, High Estimate: N/A, Prev.: -613K
•   DOE Refinery Utilisation (Jan 6) W/W Exp.: 0.50%, Low Estimate: -0.50%, High Estimate: 1.00%, Prev.: 0.80%

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