EU members scrambled yesterday to avoid the debt crisis in Greece from destabilising the currency union, threatening credit-rating agencies with possible retaliation following the decision by Moody’s to lower Portugal’s debt to junk status. With the downgrade came a warning that Portugal similar to Greece may require a second bailout pushing European equities lower yesterday and bond spreads higher. The interest on Portuguese debt rose 220 basis points to 16.7% with equivalent Spanish and Irish debt rising 130 and 250 basis points respectively. Thi
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The release of a positive figure from the UK economy brought some light relief to the recent pounding Sterling has received. Services PMI, the statistic that measures the activity level of purchasing managers came in at 53.9- ahead of expectations of 53.5. The pound rose half a cent against the Euro and USD, but the question is will this rally be short-lived or has the Pound finally turned the corner?
The data was the first positive figure for the UK in quite a while; something that should lead to some optimism for Sterling.
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After an illness related absence from the office yesterday, I return to find little if anything changed since last week. The exception of course is that we have the Greek package all sorted (for now) and we await Bank of England and European Central Bank decisions, having sat through the Reserve Bank of Australia keeping rates unchanged overnight. The day holds little in store data wise and I remain reticent to get involved in this market.
I remain short of EURGBP holding a core position and jobbing around as we bounce in what so far is roughly a 50 point range, waiting for a break of 0.8980.
***Economic Data***
– (IR) Ireland Jun NCB Services PMI: 52.4 v 50.5 prior
– (SP) Spain Jun Services PMI: 50.2 v 50.9 prior
– (SW) Sweden Central Bank (Riksbank) raised interest rates by 25bps to 2.00%; As expected and maintained the current Repo rate path
– (IT) Italy Jun PMI Services: 47.4 v 49.6e; lowest reading since Aug 2009
– (FR) France Jun Final PMI Services: 56.1 v 56.7e
– (GE) Germany Jun Final PMI Services: 56.7 v 58.3e
– (EU) Euro Zone Jun Final PMI Services: 53.7 v 54.2e v 54.2 prelim; PMI Composite: 53.6e v 53.6 prior
– (TT) Taiwan Jun CPI Y/Y: 1.9% v 1.8%e v 1.7% prior; WPI Y/Y: 3.9% v 3.6%e
– (TT) Taiwan Jun Foreign Exchange Reserves: $400.3B v $398.6B prior
– (UK) Jun PMI Services: 53.9 v 53.5e
– (EU) Euro Zone Retail Sales M/M: -1.1% v -1.0%e; Y/Y: -1.9% v -0.6%e
– (SA) South Africa Jun SACCI Business Confidence: 86.8 v 85.8 prior
Fixed income:
– (DE) Denmark sold total DKK6.36 in 2014 and 2016 Bonds
– (AS) Austria Debt Agency (AFFA) sold total €1.50B vs €1.65B indicated in 2013 and 2022 Bonds
– Sold €800M in 3.80% 2013 RAGB; Avg Yield 1.792% v 4.047 % prior; Bid-to-cover: 2.28x v 2.43x prior
– Sold €700M in 3.65% 2022 RAGB; Avg Yield 3.528% v 3.477% prior; Bid-to-cover: 2.22x v 1.99x prior
– (SA) South Africa sold total ZAR2.1B vs . ZAR2.1B Full post…
European Union officials decided extra financial support for Greece will come from both official and private investors, with the later being a voluntary rollover of existing Greek debt in accordance with the ‘Vienna Initiative’ of 2009. A resolution was struck after the ruling by Germany to ease its demands for private sector input in a debt restructuring and brought some temporary respite to markets on Friday.
The statement today that additional financial aid and a second bailout package will not happen until early next month has disappointed markets and as result we’ve seen cautious trading to start the week. The r
***Economic Data***
– (CH) CHINA JUN PMI MANUFACTURING: 50.9 V 51.5E (Lowest level since Feb 2009; 28th consecutive month of expansion)
– (JP) JAPAN Q2 TANKAN LARGE MANUFACTURERS INDEX: -9 V -7E (lowest level since Q1 2010); OUTLOOK: 2 V 2E; NON-MANUFACTURING: -5 V -4E (lowest since Q1 of 2010); OUTLOOK: -2 V 0E; LARGE ALL INDUSTRIAL CAPEX: 4.2% V 2.4%E
– (JP) JAPAN MAY JOBLESS RATE: 4.5% V 4.8%E (lowest since Feb 2009); JOB-TO-APPLICANT RATIO: 0.61 V 0.60E
– (CH) CHINA JUN HSBC MANUFACTURING PMI: 50.1 V 51.6 PRIOR; lowest reading in 11 months
– (AU) AUSTRALIA MAY HIA NEW HOME SALES M/M: -0.2% V 0.2% PRIOR (5-month low)
– (JP) JAPAN MAY NATIONAL CPI Y/Y: 0.3% V 0.2%E; CORE Y/Y: 0.6% V 0.5%E; JUN TOKYO CPI Y/Y: -0.2% V -0.1%E; TOKYO CORE CPI Y/Y: 0.1% V 0.2%E (3rd consecutive month of positive data)
– (JP) JAPAN MAY OVERALL HOUSEHOLD SPENDING Y/Y: -1.9% V -1.7%E (3-month high)
– (AU) AUSTRALIA JUN AIG PERFORMANCE OF MANUFACTURING INDEX: 52.9 V 47.7 PRIOR (first expansion in 4 months; 11-month high)
– (KS) SOUTH KOREA JUN CONSUMER PRICE INDEX (CPI) M/M: 0.2% V 0.2%E; Y/Y: 4.4% V 4.3%E; CORE CPI Y/Y: 3.7% V 3.5% PRIOR (highest since 2009)
– (TT) TAIWAN JUN HSBC TAIWAN MANUFACTURING PMI: 49.9 V 54.9 PRIOR (1st contraction in 8 months)
– (KS) SOUTH KOREA JUN HSBC MANUFACTURING PMI: 51.1 V 51.2 PRIOR
– (KS) SOUTH KOREA JUN TRADE BALANCE: $3.3B V $2.8BE
– (TH) THAILAND JUN CPI Y/Y: 4.1% V 4.2%E; CORE Y/Y: 2.6% V 2.7%E
– (RU) RUSSIA JUNE HSBC PMI MANUFACTURING M/M: 50.6 V 50.7 PRIOR; lowest reading since Mar 2010
– (ID) INDONESIA MAY TOTAL TRADE BALANCE: $3.5B V $2.3BE
– (ID) INDONESIA JUN INFLATION NSA M/M: 0.6% V 0.4%E; Y/Y: 5.5% V 5.4%E; CORE INFLATION Y/Y: 4.6% V 4.7%E
– (CO) Colombia Q1 Current account y/y: -$1.98B v $1.27B
***Markets Snapshot (as of 04:30GMT)***
– Nikkei225 +0.5%
– S&P/ASX -0.3%
– Kospi +1.4%
– Taiex +1.0%
– Shanghai Composite +0.4%
– Hang Seng +1.5%
– Straits Times Index +0.6%
– S&P Futures -0.1% at 1,314
– Spot Gold +0.1% at $1,500/oz
– Aug Crude -0.8% at $94.68
– Sept Copper -0.7% at $4.25
***Overview/Top Headlines***
– Trading today was positive with only Australia trading down 0.5% after China data showed a confirmed slowdown. Full post…
Part 1 – The Sky is Falling! The housing market is a topic many can relate to with many enjoying fruitful returns and/or savage losses. But where are we today and more important where are we heading?
In the coming period I will write several articles on this topic. Many analysts remain negative about US housing, and for good reason however, I see light at the end tunnel and hopefully it is not that infamous train coming to tear me up. Whilst being somewhat controversial I hope this, and subsequent pieces, will encourage you to draw some conclusions. Housing Attachment Housing is an emotional topic because it has had so many repercussions on the global economy. It re
EUR/USD Open 1.4422 High 1.4554 Low 1.4395 Close 1.4419 On Tuesday the Euro/Dollar struggling, decreasing with 160 pips. The European currency depreciated from 1.4554 to 1.4395 yesterday, not matching the positive Interbank sentiment projection at nearly +7%, closing the day at 1.4419. This morning the European currency corrected insignificantly, with movements within yesterday’s range for now. On the 1 hour chart the upward channel was broken downwards, while on the 3 hour chart trading remains within wide range. Break above the nearest resistance and yesterday’s top at 1.4554 may trigger further strengthening of the Euro. Full post…
Here’s a look at how the Australian Economy has Changed Since May
