DE Markit Services PMI

Location: Germany

Date: 04/04/2013

Time: 8:53 - 9:53

Strength: 2/3

Previous: 54.7 / Consensus: 51.6

Notes: The Services PMI released by Markit Economics interviews German executives on the status of sales, employment, and their outlook. Because the performance of the German service sector is extremely consistent over time, services does not impact final GDP figures as much as the more volatile figure on the manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction.

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The 6am Cut

6am Cut London Posted 2013-04-04 05:49:30 by Kate Mackenzie Asian stocks were lower amid apprehension about a Bank of Japan policy meeting that ends today, and following the US ADP private sector payroll survey missing expectations for March. The Nikkei fell 1.7%, the Kospi was down 1.5% and the MSCI Asia Pacific was 1% lower. (Bloomberg) Bundesbank launches probe into Deutsche Bank claims: Investigators from Germany's central bank are scheduled to fly to New York next week as part of an inquiry into allegations that misvaluing credit derivatives allowed Deutsche to hide up to $12bn in losses, helping it avoid a government bailout. Three informants told US regulators the bank avoided recording mark-to-market losses on leveraged super senior trades in 2007-2009.(Financial Times) All eyes will be on the new BoJ governor Haruhiko Kuroda as he wraps up his first monetary policy board meeting today. Expectations are extremely high and at a minimum, markets expect an acceleration of the pace and scale of the bank's asset purchases. (Financial Times) Dovish Fed member hints at summer slowing of QE3: "John Williams, president of the San Francisco Fed, led the push for more asset purchases in the summer of 2012 and his willingness to consider slowing the rate of buying suggests the central bank is nearing its goal. "Assuming my economic forecast holds true, I expect we will meet the test for substantial improvement in the outlook for the labour market by this summer," he said in a speech in Los Angeles on Wednesday." (Financial Times) BoE expected to hold today: Most economists surveyed by Reuters don't expect the Bank of England to add to its bond buying programme at today's MPC meeting, despite a tweak to the central bank's mandate two weeks ago. (Reuters) "Goldman Sachs and JPMorgan Chase are reaping the rewards as rivals suffer a decline in investment banking and capital markets activity, according to Goldman president Gary Cohn." (Financial Times) Mega offshore data dump: Secret records totalling 2.5m files, with information on 120,000 offshore companies and trusts registered in the British Virgin Islands as well as Singapore, Hong Kong and the Cook Islands. (International Consortium for Investigative Journalism)(The Guardian) RBS shareholders group sues for up to 4bn: The RBoS Shareholders Action Group has issued proceedings against RBS, Fred Goodwin, Tom McKillop, Johnny Cameron and Guy Whittaker, in the chancery division of Britain's High Court to recover billions of pounds lost on the value of their shares in the run up to the bank's 2008 taxpayer rescue. RBS and its law firm Herbert Smith declined to comment. None of the four directors could immediately be reached for comment. It is the second lawsuit filed against the bank in two weeks. (Reuters) COMMENT AND CURIOS: - Corporate bond trading goes electronic, slowly. (Financial Times) - China's export data doesn't add up. (Wall Street Journal) - Ezra Klein: Washington could, actually, decide to break up the big banks. (Bloomberg) - China, graveyard for shipbuilders. (Bloomberg) - A shotgun as downpayment on a car? Blame the Fed... (Reuters) - Obama cuts own salary in solidary with government employees. (Reuters) OVERNIGHT MARKETS: DOWN Asian markets Nikkei 225 down -193.84 (-1.57%) at 12,168 Topix down -2.54 (-0.25%) at 1,008 Hang Seng down -30.33 (-0.14%) at 22,337 US markets S&P 500 down -16.56 (-1.05%) at 1,554 DJIA down -111.66 (-0.76%) at 14,550 Nasdaq down -36.26 (-1.11%) at 3,219 European markets Eurofirst 300 down -10.49 (-0.87%) at 1,193 FTSE100 down -70.38 (-1.08%) at 6,420 CAC 40 down -50.41 (-1.32%) at 3,755 Dax down -69.12 (-0.87%) at 7,875 Currencies €/$ 1.28 (1.28) $/¥ 92.89 (92.93) £/$ 1.51 (1.51) Commodities ($) Brent Crude (ICE) up +0.37 at 107.48 Light Crude (Nymex) up +0.07 at 94.52 100 Oz Gold (Comex) down -8.50 at 1,544 Copper (Comex) down -2.50 at 330.05 10-year government bond yields (%) US 1.81% UK 1.75% Germany 1.27% CDS (closing levels) Markit iTraxx SovX Western Europe -0.94bps at 103.38bp Markit iTraxx Europe -0.05bps at 120.73bp Markit iTraxx Xover +5.11bps at 475.15bp Markit CDX IG +1.46bps at 89.25bp Sources: FT, Bloomberg, Markit
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EMU Consumer Price Index (YoY)

Location: European Monetary Union

Date: 03/04/2013

Time: 10:00 - 11:00

Strength: 2/3

Previous: 1.8% / Consensus: 1.7%

Notes: The Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Euro Zone. Generally, a high reading anticipates a hawkish attitude which will be positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

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UK PMI Construction

Location: United Kingdom

Date: 03/04/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: 46.8 / Consensus: 47.3

Notes: The PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics shows business conditions in the UK construction sector. It is worth noting that the construction sector does not influence, either positively or negatively, the GDP as much as the Manufacturing sector does A result that values above 50 signals appreciates (or is bullish for ) the GBP, whereas a result that values below 50 is seen as negative (or bearish).

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The 6am Cut

6am Cut London Posted 2013-04-03 05:47:24 by Kate Mackenzie Asian shares were mixed, with Japanese shares rising sharply as the BoJ's board began a two-day meeting, while resources stocks and Australian banks fell. The Nikkei rose 2.1% and the Topix 1.5% while the Hang Seng fell 0.3%. The MSCI Asia Pacific Index was less than 0.1% lower. "The men who ran HBOS in the lead-up to its collapse face castigation on Thursday in a damning parliamentary report that reveals that the total cost of bailing out the bank rose to close to £30bn, according to people familiar with the report... According to people familiar with the parliamentary investigation, Lord Stevenson, chairman of the bank from its creation up to 2008, Sir James Crosby who was chief executive up to early 2007, and Andy Hornby, CEO for the following two years, are set to be the main focus of the report's criticism. (Financial Times) RBS has lined up former Abbey National finance director Nathan Bostock as its finance chief, succeeding Bruce van Saun. The selection of the was triggered by van Saun's prospective move to head Citizens, the RBS's US subsidiary. The two appointments could be announced within a matter of weeks, according to people briefed on the plan, although it may not take effect until later in the year and could yet be amended. At Citizens van Saun would replace Ellen Alemany, who is expected to retire. (Financial Times) Multiple EU data watchdogs take action against Google: "The move by data-protection authorities from Britain, Germany, France, Italy, Spain, and the Netherlands is the first co-ordinated and formal procedure by EU states against a single company on privacy, underscoring European frustration with Google." (Financial Times) Vitol expands into grain trading: The independent commodities house is making the expansion with the hire of a team from Viterra, the Toronto-based grain trading company recently acquired by Glencore. (Financial Times) COMMENT AND CURIOS: - Martin Wolf: China faces a risky shift to lower growth model. (Financial Times) - Lex in Depth: Will Rosneft become a supermajor? (Financial Times) - The SEC gives companies permission to tweet their earnings. (Financial Times) - Apple's China apology a 'rite of passage' for foreign companies. (Bloomberg) - Greylock Capital on why Argentina's behaviour must not be allowed. (FT Beyondbrics) - Stockton and San Bernardino: A tale of two bankruptcies. (Reuters) OVERNIGHT MARKETS: MIXED Asian markets Nikkei 225 up +257.14 (+2.14%) at 12,261 Topix up +14.53 (+1.47%) at 1,006 Hang Seng down -58.00 (-0.26%) at 22,310 US markets S&P 500 up +8.08 (+0.52%) at 1,570 DJIA up +89.16 (+0.61%) at 14,662 Nasdaq up +15.69 (+0.48%) at 3,255 European markets Eurofirst 300 up +14.87 (+1.25%) at 1,204 FTSE100 up +78.92 (+1.23%) at 6,491 CAC 40 up +73.95 (+1.98%) at 3,805 Dax up +148.56 (+1.91%) at 7,944 Currencies €/$ 1.28 (1.28) $/¥ 93.48 (93.42) £/$ 1.51 (1.51) Commodities ($) Brent Crude (ICE) down -0.37 at 110.32 Light Crude (Nymex) down -0.50 at 96.69 100 Oz Gold (Comex) down -8.30 at 1,567 Copper (Comex) unchanged 0.00 at 337.20 10-year government bond yields (%) US 1.86% UK 1.79% Germany 1.30% CDS (closing levels) Markit iTraxx SovX Western Europe -0.9bps at 104.32bp Markit iTraxx Europe -4.81bps at 120.78bp Markit iTraxx Xover -15.56bps at 470.04bp Markit CDX IG -2.22bps at 87.79bp Sources: FT, Bloomberg, Markit
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DE Harmonised Index of Consumer Prices (MoM)

Location: Germany

Date: 02/04/2013

Time: 13:00 - 14:00

Strength: 2/3

Previous: 0.8% / Consensus: 0.3%

Notes: HICP is an index of consumer prices calculated and published by Destatis, the Statistical Office of the European Union, on the basis of a statistical methodology that has been harmonised across all EU member states. HICP is a measure of prices used by Governing Council of EU to define and assess price stability in the euro area as a whole in quantitative terms.

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DE Consumer Price Index (MoM)

Location: Germany

Date: 02/04/2013

Time: 13:00 - 14:00

Strength: 2/3

Previous: 0.6% / Consensus: 0.4%

Notes: The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes i

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DE Consumer Price Index (YoY)

Location: Germany

Date: 02/04/2013

Time: 13:00 - 14:00

Strength: 3/3

Previous: 1.5% / Consensus: 1.5%

Notes: The Germany consumer price index released by the Statistiches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes i

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DE Harmonised Index of Consumer Prices (YoY)

Location: Germany

Date: 02/04/2013

Time: 13:00 - 14:00

Strength: 3/3

Previous: 1.8% / Consensus: 1.6%

Notes: HICP is an index of consumer prices calculated and published by Destatis, the Statistical Office of the European Union, on the basis of a statistical methodology that has been harmonised across all EU member states. HICP is a measure of prices used by Governing Council of EU to define and assess price stability in the euro area as a whole in quantitative terms.

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UK Mortgage Approvals

Location: United Kingdom

Date: 02/04/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: 54.719K / Consensus: 53.700K

Notes: The Mortgage Approvals released by the Bank of England presents the number of various Mortgage Approvals. It is considered as a leading indicator of the U.K. Housing Market. A Mortgage growth represents a healthy housing market that stimulates the overall U.K. economy. Generally, a high reading is seen as positive ( or bullish ) for the GBP, while a low reading is seen as negative (or bearish )

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UK Net Lending to Individuals (MoM)

Location: United Kingdom

Date: 02/04/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: �0.6B / Consensus: �0.9B

Notes: UK Net Lending to Individuals released by the Bank of England is a monthly measure of growth rates, amounts outstanding and changes in total lending to individuals, divided into lending secured on dwellings and consumer credit. It shows a picture of whether or not consumers are willing to spend money. A high reading is positive for the GBP, while a low reading is negative.

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UK Consumer Credit

Location: United Kingdom

Date: 02/04/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: �0.4B / Consensus: �0.4B

Notes: The Consumer Credit released by the Bank of England is an amount of money that individuals borrowed in the previous month. It shows if consumers can afford large expenses, which can fuel economic growth. However, a high figure may also indicate that the economy is overheating, as consumers borrow in order to live beyond their means. A high reading is seen as positive for the GBP, whereas a low reading is seen as negative.

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UK Markit Manufacturing PMI

Location: United Kingdom

Date: 02/04/2013

Time: 9:28 - 10:28

Strength: 2/3

Previous: 47.9 / Consensus: 48.5

Notes: The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.

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DE Markit Manufacturing PMI

Location: Germany

Date: 02/04/2013

Time: 8:53 - 9:53

Strength: 2/3

Previous: 50.3 / Consensus: 48.9

Notes: The Manufacturing Purchasing Managers Index (PMI) released by Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in Germany. Normally, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.

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The 6am Cut

6am Cut London Posted 2013-04-02 05:49:52 by Kate Mackenzie Japanese stocks led Asian markets lower as the yen rose to a one-month high against the dollar after an unexpected slowdown in US manufacturing, and the yen continued to rise ahead of a much-anticipated BoJ board meeting on Thursday. (Financial Times) Slight easing of Cyprus bailout terms: A draft copy of the loan agreement by the eurozone and the IMF seen by the WSJ gives Cyprus until 2017 -- one year longer than previously negotiated -- to reach a 4% primary budget surplus. "Putting public finances on a sustainable path is of overriding importance in order to stabilize the economy and to restore the confidence of companies, citizens and foreign investors in the longer-term economic prospects of Cyprus," the draft agreement says. (Wall Street Journal) The post-FSA era begins for UK finance sector: Today the Prudential Regulation Authority, an arm of the BoE, will begin supervising 1,700 banks, insurers and large investment firms. Also today the Financial Conduct Authority begins oversight of the same firms, plus taking sole responsibility for another 25,000 businesses, mostly brokers. (Financial Times) Central Bank of Cyprus governor Panicos Demetriades tried to calm fears of a deposit flight once capital controls end. Demetriades told the FT the controls should be lifted "gradually". "I can't really tell you if it will be seven or 14 days before capital controls end." He denied there would be a run on deposits. "Once people realise how well capitalised the banks are there is little reason why there will be deposit flight." (Financial Times) US banks are weighing tactics to mitigate the effect of EU bonus caps. ""We are not thinking of transferring people from London to Dubai tomorrow," said one US banker. "But future growth in Africa could be led out of the Middle East or South Africa." Other approaches include restructuring remuneration packages. "JPMorgan is among the banks to have considered the introduction of "allowances" that could be increased or decreased annually, according to bank insiders." (Financial Times) The US has gained 387,000 managers and lost almost 2m clerical jobs since 2007, BLS data show. Employment growth came from healthcare, management, computing and food service jobs, but salaries for many of the fast-growing occupations are lower than for those they are replacing. (Financial Times) COMMENT AND CURIOS: - Jeffrey Sachs: Obama should think longer-term on economic policy. (New York Times) - Rumours of a cheap energy jobs boom remain just that. (New York Times) - Except maybe for European companies... (Washington Post) - 'Airpocalypse' drives expats from Beijing. (Financial Times) OVERNIGHT MARKETS: Asian markets Nikkei 225 down -100.20 (-0.83%) at 12,035 Topix down -3.95 (-0.39%) at 996.62 Hang Seng up +3.40 (+0.02%) at 22,303 US markets S&P 500 down -7.02 (-0.45%) at 1,562 DJIA down -5.69 (-0.04%) at 14,573 Nasdaq down -28.35 (-0.87%) at 3,239 European markets Eurofirst 300 up +4.86 (+0.41%) at 1,189 FTSE100 up +24.18 (+0.38%) at 6,412 CAC 40 up +19.78 (+0.53%) at 3,731 Dax up +6.22 (+0.08%) at 7,795 Currencies €/$ 1.29 (1.28) $/¥ 92.79 (93.21) £/$ 1.52 (1.52) Commodities ($) Brent Crude (ICE) down -0.24 at 110.84 Light Crude (Nymex) down -0.27 at 96.80 100 Oz Gold (Comex) up +2.60 at 1,603 Copper (Comex) down -0.75 at 336.00 10-year government bond yields (%) US 1.84% UK 1.78% Germany 1.29% CDS (closing levels) Markit iTraxx SovX Western Europe +0.51bps at 105.22bp Markit iTraxx Europe -2.83bps at 125.59bp Markit iTraxx Xover -5.69bps at 485.6bp Markit CDX IG -0.8bps at 90.01bp Sources: FT, Bloomberg, Markit
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