US Consumer Credit Change

Location: United States

Date: 07/05/2013

Time: 20:00 - 21:00

Strength: 2/3

Previous: $18.14B / Consensus: $15.00B

Notes: The Consumer Credit released by the Board of Governors of the Federal Reserve is an amount of money that individuals borrowed. 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 (or Bullish) for the USD, whereas a low reading is seen as negative.

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DE Factory Orders n.s.a. (YoY)

Location: Germany

Date: 07/05/2013

Time: 11:00 - 12:00

Strength: 2/3

Previous: 0.0% / Consensus: -2.9%

Notes: The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.

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The 6am Cut

6am Cut London Posted 2013-05-07 05:47:51 by Kate Mackenzie Asian stocks rose for a second day after ECB president Mario Draghi reiterated the bank's readiness to cut interest rates further. The MSCI Asia Pacific was about 1% higher and the Nikkei, which was closed yesterday for a holiday, rose more than 3%, breaching 14,000 for the first time since June 2008. (Bloomberg)(Financial Times) China wants to water down key World Bank report: "According to people close to the matter, China wants to eliminate the ranking of countries in the Doing Business report, which compares business regulations – such as the difficulty of starting a company – in 185 different nations." China and other critics, including trade unions, international aid charities and some other developing countries, last year successfully pushed for an independent review of the report. "But a number of people involved in the process complain" that two longstanding critics of the report are advisers to the panel, which is due to report by the end of May. This year the report ranked China 91st out of 185 economies. (Financial Times) The IMF warned that Greece's debt remains "much too high" and European commitments to lighten it are welcome. The report highlights the need for future "official sector involvement" in Greece's bailout. (Wall Street Journal) Draghi talked up ECB's readiness to act in a speech yesterday: ""We will watch all the incoming data on the euro-area economy in the next weeks and if necessary we'll be ready to take further action," Draghi said, departing from a prepared speech at LUISS university in Rome to emphasize a point made last week at the ECB's monthly news conference." (Wall Street Journal) Australia's central bank cut rates to a record low. The RBA cut by 25bps to 2.75%. (Statement) "Microsoft is preparing to reverse course over key elements of its Windows 8 operating system, marking one of the most prominent admissions of failure for a new mass-market consumer product since Coca-Cola's New Coke fiasco nearly 30 years ago." (Financial Times) Rio Tinto plans to press ahead with a multibillion-dollar expansion of its iron ore mines in Western Australia barring a significant change to the supply-demand balance for the steelmaking commodity or a further increase in production costs. Sam Walsh, Rio chief executive, told institutional investors at meetings in Sydney this week that a $5bn plan to increase annual output from its Pilbara mines to 360m tonnes by 2015 would be put before the board of the Anglo-Australian resources group for approval later this year, according to two people present at the briefing. (Financial Times) Former KPMG auditor friend agrees to plead guilty: "The California jeweler who gave a former KPMG auditor cash, an expensive watch and concert tickets in exchange for inside information about public companies agreed on Monday to plead guilty to one count of conspiracy to commit securities fraud, according to court papers. Bryan Shaw, the jeweler who took tips on Herbalife, Skechers and other companies from his one-time golfing buddy Scott London, agreed to pay around $1.3 million in restitution and will continue to cooperate with the government as part of a plea deal with federal prosecutors, according to the documents." (Reuters) Protests mount on use of BP Gulf compensation money: Out of $1bn promised in 2011 for early restoration of the Gulf of Mexico coast after the Deepwater Horizon disaster, $85.5m was allocated to building a convention centre in Alabama to replace a lodge that was wrecked by Hurricane Ivan in 2004. Several other projects are not directly related to damage caused by the spill. (Financial Times) Three JP Morgan investors are yet to be persuaded on backing the company in a vote on whether Jamie Dimon should retain his dual role of chairman and chief exectuive. BlackRock, Vanguard and Fidelity Investments, who together hold more than 12% of the company's shares, all remain undecided, said people close to the firms. The votes will be tallied on May 21. (Wall Street Journal) New York attorney general Eric Schneiderman plans to sue Bank of America and Wells Fargo over claims they violated terms of the National Mortgage Settlement, a sweeping $26bn pact brokered last year between five of the nation's biggest banks and 49 state attorneys general. He said the two banks didn't follow guidelines on how banks field and process requests from homeowners trying to modify their mortgages, which formed part of the settlement's terms. (NYT DealBook) US regulators eyeing Bitcoin supervision: The currency "is for sure something we need to explore", Bart Chilton, one of the five commissioners at the CFTC told the Financial Times. A person familiar with the CFTC's thinking said that the regulator is "seriously" examining the issue. (Financial Times) Biggest EU economies back moves to support carbon prices: "Ministers from Germany, France and the UK, along with those from four other countries, have issued a joint statement, seen by the Financial Times, declaring that it is time to end "myths over the potential costs and risks" of bolstering the EU's battered emissions trading system." However confusion remains over Germany's position. (Financial Times) US pension fund sues big banks over CDS 'dominance': The class action antitrust suit filed by the Sheet Metal Workers Local No. 33 Cleveland District Pension Plan pension fund accuses banks including Citigroup, Deutsche Bank and JPMorgan of engaging in "anti-competitive conduct" when it comes to CDS contracts. The fund said it had entered into CDS deals with Citigroup. It claims buy-side CDS market participants must "participate in an inefficient market" due to the dominance of large financial institutions. (Financial Times) COMMENT AND CURIOS: - European banks' losses must be recognised. (Financial Times) - Gideon Rachman: China's dream smothered in toxic smog. (Financial Times) - Andrew Hill: Graduates are still lining up to become bankers. (Financial Times) - Shortage of able-bodied men in quake zone illustrates China's demographic threat. (Bloomberg) - US mortgage lenders have eased standards - slightly - for prime borrowers. (Wall Street Journal) - How an Indian ponzi scheme won a political bailout. (Bloomberg) - Creepy but useful Google Now. (BusinessWeek) OVERNIGHT MARKETS: UP Asian markets Nikkei 225 up +440.41 (+3.22%) at 14,134 Topix up +31.86 (+2.76%) at 1,185 Hang Seng up +31.13 (+0.14%) at 22,946 US markets S&P 500 up +3.08 (+0.19%) at 1,618 DJIA down -5.07 (-0.03%) at 14,969 Nasdaq up +14.34 (+0.42%) at 3,393 European markets Eurofirst 300 down -0.97 (-0.08%) at 1,218 FTSE100 up +60.75 (+0.94%) at 6,521 CAC 40 down -5.91 (-0.15%) at 3,907 Dax down -10.21 (-0.13%) at 8,112 Currencies €/$ 1.31 (1.31) $/¥ 99.03 (99.33) £/$ 1.55 (1.55) Commodities ($) Brent Crude (ICE) down -0.39 at 105.07 Light Crude (Nymex) down -0.68 at 95.48 100 Oz Gold (Comex) down -3.80 at 1,464 Copper (Comex) unchanged 0.00 at 331.00 10-year government bond yields (%) US 1.75% UK 1.73% Germany 1.25% CDS (closing levels) Markit iTraxx SovX Western Europe -3.16bps at 90.47bp Markit iTraxx Europe -4.03bps at 91.52bp Markit iTraxx Xover -9.67bps at 377.71bp Markit CDX IG -0.86bps at 70.62bp Sources: FT, Bloomberg, Markit
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EMU ECB President Draghi's Speech

Location: European Monetary Union

Date: 06/05/2013

Time: 14:00 - 15:00

Strength: 3/3

Previous:

Notes: The European Central Bank's president Mario Draghi was born in 1947 in Rome, Italy. Graduated of the Massachusetts Institute of Technology (MIT), Draghi became the president of the European Central Bank in 2011. As part of his job in the Governing Council he gives press conferences in the back of how the ECB observes the current European economy. President's comments may determine positive or negative the Euro's trend in the short-term. Usually, if he shows a hawkish outlook, that is seen as positive (or bullish) for the EUR, while a dovish is seen as negative (or bearish).

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EMU Sentix Investor Confidence

Location: European Monetary Union

Date: 06/05/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: -17.3 / Consensus: -15.2

Notes: With among 1600 financial analysts and institutional investors, the Sentix Investor Confidence is a monthly survey which shows the market opinion about the current economic situation and the expectations for the next semester. The index, released by the Sentix GmbH, is composed by 36 different indicators. Usually a higher reading is seen as positive for the Euro zone, that means positive, or bullish, for the Euro, While a lower number is seen negative or bearish for the unique currency.Review Alex Nekritin's Article - Trading Euro with ESI

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DE Markit Services PMI

Location: Germany

Date: 06/05/2013

Time: 8:53 - 9:53

Strength: 2/3

Previous: 50.9 / Consensus: 49.2

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 2013-05-06 05:45:14 by Kate Mackenzie Asian markets rose on Monday, bouyed by the better than expected US jobs data on Friday. The MSCI Asia Pacific index excluding Japan advanced 0.9%, with Australia's S&P 200 index 0.6% higher and Hong Kong's Hang Seng index rising 1%. Markets in Japan and Thailand were closed for a public holiday. Malaysia's currency rallied after the ruling coalition won re-election. (Bloomberg)(Financial Times) China's services sector growth slowed sharply in April, according to the HSBC/Markit services PMI survey. The April PMI was 51.1, a big fall from 54.3 in March and the lowest figure since August 2011. Staffing levels in the sector were below 50 for the first time since January 2009. (Reuters) "Brussels is increasing efforts to clamp down on tax avoidance by wealthy investors, including private equity partners and hedge funds, by forcing all 27 EU members to share confidential information on individuals' investment income and capital gains for the first time." (Financial Times) Think-tank calls for 'Tell Syd' style RBS and Lloyds sell-off: George Osborne's favourite think-tank, the Policy Exchange, will this month urge him to reprivatise RBS and Lloyds Banking Group through a mass share distribution to the public. Senior Conservatives, who believe it will help prepare public opinion for a big share handout before the 2015 general election. (Financial Times) Malaysia's ruling Barisan Nasional coalition won re-election on Sunday, fending off a strong challenge from a resurgent opposition. Investors on Monday cheered the election victory by sending the country's stock market up by over 7% at the open amid the prospect of political continuity and the extension of the government's gradual economic reforms. (Financial Times) The Obama administration has signalled support for more plants to export liquefied natural gas, as the US embraces its surging energy production as a key new element of its national security policy. Only one plant has been approved to export LNG to non-FTA countries, but another 19 applications for approval have been made and are being opposed by some US manufacturers and chemicals sectors who fear it will raise gas prices. Geopolitics is becoming an increasingly important consideration in domestic energy policy. (Financial Times)(Wall Street Journal) Forex trades give investment banks an information edge. A study by the Cass Business School in London has shown that investment banks can make windfall profits by copying customers' foreign exchange trades, raising fresh concerns about the lack of transparency in the $4tn, mostly-over the counter forex market. "Using historical data on customers' trades at UBS, the authors of the study, which was published by the Bank for International Settlements, found that if a bank developed a portfolio to mimic clients' trades it would make an average of 10 per cent a year." (Financial Times) No big news at Berkshire Hathaway's annual meeting: Warren Buffett was probed on succession by a bearish invitee, short seller Doug Kass of Seabreeze Partners, but remained insistent that his son would become non-executive chairman, and that a decision had been made on who would replace Buffett senior himself, although it wouldn't be revealed. Buffett said he remained uninterested in gold despite its recent falls. (Financial Times)(Wall Street Journal)(Bloomberg) Greek finance minister Yannis Stournaras said "the worst is over" and that the country had turned a corner, ahead of the release of an IMF report today which local media reports say will praise improvements in tax collection. Stournaras told Greek newspapers on the weekend the country could be in a position to return to international debt markets by May 2014. (The Telegraph) "Ten of thousands of far-left French protesters marched to denounce economic austerity on Sunday to mark the end of President Francois Hollande's first year in office." (Reuters) COMMENT AND CURIOS: - British skyline gap: More cranes in London than rest of the country put together. (Financial Times) - John Authers: The energy efficiency 'mega trend'. (Financial Times) - Treasuries bears have been wrong-footed this year, again. (Wall Street Journal) - Non-QE growth is needed to curb asset distortion. (Financial Times) - Wolfgang Münchau: Don't expect a substantial departure from austerity in Europe. (Financial Times) - Ruchir Sharma: The oil and gold booms are both over. (Bloomberg) OVERNIGHT MARKETS: UP Asian markets Nikkei 225 down -105.31 (-0.76%) at 13,694 Topix down -5.09 (-0.44%) at 1,153 Hang Seng up +219.60 (+0.97%) at 22,910 US markets S&P 500 up +16.83 (+1.05%) at 1,614 DJIA up +142.38 (+0.96%) at 14,974 Nasdaq up +38.01 (+1.14%) at 3,379 European markets Eurofirst 300 up +12.07 (+1.00%) at 1,219 FTSE100 up +60.75 (+0.94%) at 6,521 CAC 40 up +54.19 (+1.40%) at 3,913 Dax up +160.58 (+2.02%) at 8,122 Currencies €/$ 1.31 (1.31) $/¥ 99.06 (99.04) £/$ 1.56 (1.56) Commodities ($) Brent Crude (ICE) up +0.55 at 104.74 Light Crude (Nymex) up +1.02 at 96.63 100 Oz Gold (Comex) up +11.20 at 1,476 Copper (Comex) down -2.25 at 329.10 10-year government bond yields (%) US 1.74% UK 1.73% Germany 1.24% CDS (closing levels) Markit iTraxx SovX Western Europe -3.16bps at 90.47bp Markit iTraxx Europe -4.03bps at 91.52bp Markit iTraxx Xover -9.67bps at 377.71bp Markit CDX IG -2.79bps at 71.48bp Sources: FT, Bloomberg, Markit
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US Average Hourly Earnings (YoY)

Location: United States

Date: 03/05/2013

Time: 13:30 - 14:30

Strength: 2/3

Previous: 1.8% / Consensus: 1.9%

Notes: The Average Hourly Earning released by the US Department of Labor is a significant indicator of labor cost inflation and of the tightness of labor markets. The Federal Reserve Board pays close attention to when setting interest rates. A high reading is also positive for the USD, while a low reading is negative.

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US Nonfarm Payrolls

Location: United States

Date: 03/05/2013

Time: 13:30 - 14:30

Strength: 3/3

Previous: 88K / Consensus: 150K

Notes: The nonfarm payrolls released by the US Department of Labor presents the number of people on the payrolls of all non-agricultural businesses. The monthly changes in payrolls can be excessively volatile. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).

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US Average Hourly Earnings (MoM)

Location: United States

Date: 03/05/2013

Time: 13:30 - 14:30

Strength: 2/3

Previous: 0.0% / Consensus: 0.2%

Notes: The Average Hourly Earning released by the US Department of Labor is a significant indicator of labor cost inflation and of the tightness of labor markets. The Federal Reserve Board pays close attention to when setting interest rates. A high reading is also positive for the USD, while a low reading is negative.

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US Unemployment Rate

Location: United States

Date: 03/05/2013

Time: 13:30 - 14:30

Strength: 3/3

Previous: 7.6% / Consensus: 7.6%

Notes: The Unemployment Rate released by the US Department of Labor is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the US economy. Therefore, a decrease of the figure is seen as positive (or bullish) for the USD, while an increase is seen as negative (or bearish).

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EMU Producer Price Index (MoM)

Location: European Monetary Union

Date: 03/05/2013

Time: 10:00 - 11:00

Strength: 2/3

Previous: 0.2% / Consensus: -0.2%

Notes: The Producer Price Index released by the Eurostat is an index that measures the change in prices received by domestic producers of commodities in all stages of processing (crude materials, intermediate materials, and finished goods). Generally, a high reading is seen positive ( or bullish ) for the EUR, while a low reading is seen as negative ( or bearish ).

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EMU Producer Price Index (YoY)

Location: European Monetary Union

Date: 03/05/2013

Time: 10:00 - 11:00

Strength: 3/3

Previous: 1.3% / Consensus: 0.6%

Notes: The Producer Price Index released by the Eurostat is an index that measures the change in prices received by domestic producers of commodities in all stages of processing (crude materials, intermediate materials, and finished goods). Generally, a high reading is seen positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

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UK Markit Services PMI

Location: United Kingdom

Date: 03/05/2013

Time: 9:28 - 10:28

Strength: 2/3

Previous: 52.4 / Consensus: 52.4

Notes: The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does. Traders want the highest possible reading as that will be taken as positive for the GBP. Any reading above 50 signals expansion, while a reading under 50 shows contraction.

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The 6am Cut

6am Cut London Posted 2013-05-03 05:43:00 by Kate Mackenzie Asian stocks rose for the first time in three days as investors awaited the release of US jobs data and reacted to the ECB's rate cut. Metals gained, while the dollar weakened. The MSCI Asia Pacific ex Japan was 0.2% higher, the Hang Seng rose 0.7%. Japan's markets are closed. Bloomberg's analyst survey median forecast is for a 140,000 gain in April in official US payrolls later today. (Bloomberg) RBS to send clearest signal on reprivatisation: Sir Philip Hampton, chairman, will announce today that the bank will be ready to start preparing information on a share sale as soon as next year. RBS had previously indicated that next year would be a suitable time to consider the future of the government's 82% stake. Although this announcement will be the strongest signal yet that RBS is on the final stretch of its massive restructuring, Sir Philip will not be calling on the government to begin a reprivatisation. (Financial Times) Three frontrunners have emerged to take the reins at Shell when Peter Voser steps down as CEO next year. "The three are Marvin Odum, who heads Shell's exploration and production – or upstream – division in the Americas; Andy Brown, who runs all other upstream operations; and Simon Henry, the group's chief financial officer, who plays a key role in crafting Shell's corporate strategy." (Financial Times) Bharti Airtel to receive $1.26bn Qatari investment after missing profit estimates: "Bharti will sell 199.9 million new shares to the Qatar endowment, representing a 5 percent stake, according to an e- mailed statement today. Shares rose as much as 4.7 percent in Mumbai trading." (Bloomberg) JP Morgan devised 'manipulative schemes': "Government investigators have found that JPMorgan Chase devised "manipulative schemes" that transformed "money-losing power plants into powerful profit centers," and that one of its most senior executives gave "false and misleading statements" under oath." The bank is under by at least eight US regulators. (New York Times) Macquarie Group has recorded an increase in annual profits for the first time in three years and announced a big dividend increase, sending shares in the Australian investment bank to their highest level since 2010. (Financial Times) Intel has promoted 30-year veteran Brian Krzanich to CEO, as the world's largest chipmaker by sales navigates a post-PC world dominated by smartphones and other mobile devices. In contrast to his predecessor Paul Otellini, who was the first non-engineer to lead Intel, Krzanich has been heavily focused on the manufacturing operations. (Financial Times) Italy wants to join 'virtuous' deficit club: Fabrizio Saccomanni, finance minister in the country's new coalition government, talked of joining a "small group of virtuous countries" that have met Europe's budget targets said Italy is committed to remaining within that limit. Saccomanni and Enrico Letta, the new prime minister, have stressed their commitment to keeping Italy within the 3% budget deficit limit this year, even while promising to cancel tax increases imposed by Mario Monti's previous technocrat government. (Financial Times) Slovenia issued $3.5bn of bonds on Thursday, ameliorating concerns that it will have to be bailed out by the eurozone to pay for its banking sector clean-up. The bond sale had been scheduled for Tuesday but was delayed after Moody's that day cut the country's credit rating to "junk". However demand for the five and 1o year bonds was even stronger than when the book had first been closed. (Financial Times) COMMENT AND CURIOS: - Samuel Brittan: Reinhart & Rogoff and the spell of magic numbers. (Financial Times) - Steve Jobs would've bought Tesla. (Bloomberg) - William Pesek: Abenomics and the second 100 days curse. (Bloomberg) - The Pentagon approved Blackberry 10s and Samsung phones for use on its network. (Bloomberg) - How China's flexing of its anti-trust muscle is causing headaches for global mergers. (Reuters) OVERNIGHT MARKETS: UP Asian markets Nikkei 225 down -105.31 (-0.76%) at 13,694 Topix down -5.09 (-0.44%) at 1,153 Hang Seng up +155.40 (+0.69%) at 22,824 US markets S&P 500 up +14.89 (+0.94%) at 1,598 DJIA up +130.63 (+0.89%) at 14,832 Nasdaq up +41.49 (+1.26%) at 3,341 European markets Eurofirst 300 up +5.00 (+0.42%) at 1,207 FTSE100 up +9.42 (+0.15%) at 6,461 CAC 40 up +2.01 (+0.05%) at 3,859 Dax up +48.00 (+0.61%) at 7,962 Currencies €/$ 1.31 (1.31) $/¥ 97.95 (97.95) £/$ 1.55 (1.55) Commodities ($) Brent Crude (ICE) down -0.22 at 102.63 Light Crude (Nymex) down -0.19 at 93.80 100 Oz Gold (Comex) up +4.50 at 1,472 Copper (Comex) up +4.55 at 315.00 10-year government bond yields (%) US 1.62% UK 1.63% Germany 1.17% CDS (closing levels) Markit iTraxx SovX Western Europe -0.3bps at 93.63bp Markit iTraxx Europe -4.75bps at 95.55bp Markit iTraxx Xover -15.55bps at 387.38bp Markit CDX IG -3.5bps at 74.27bp Sources: FT, Bloomberg, Markit
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