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

Location: Germany

Date: 06/06/2013

Time: 11:00 - 12:00

Strength: 2/3

Previous: -0.4% / Consensus: -0.2%

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.

#END

The 6am Cut

6am Cut London Posted 2013-06-06 05:36:10 by Joseph Cotterill Asian shares fell back towards their 2013 lows. The MSCI Asia Pacific index fell 0.7 per cent, towards its level in January. Japan's Nikkei swung to a loss from a 1.7 per cent increase earlier, and the Topix fell more than 1 per cent, down 15 per cent from the five-year high it set in May. (Bloomberg) The ESM will likely have a €50bn-€70bn limit on direct investments in banks. The condition on the bailout fund's draft direct recapitalisation tool was outlined in a policy paper following six months of talks on breaking the "vicious circle" between sovereigns and banks. The limit to recapitalisation funds reflects the higher provisions on this kind of investment compared to the ESM's more normal practice of lending to governments. (Reuters) France is threatening to upstage talks on the EU-US trade pact. Paris is said to have made "l'exception culturelle" -- protection of subsidies for local film, music and television -- a "red line" in advance of the talks' scheduled launch at this month's G8 summit. (Financial Times) The French government has also led the charge over a budding EU trade war over tariffs on Chinese solar-power exports. Beijing retaliated with an investigation into imports of French wine. (Wall Street Journal) Libor might become confused about its L under EU plans to supervise the rate from Paris. "Critical union benchmarks" including Libor and Euribor would come under the direct oversight of the France-based European Securities and Markets Authority under the draft proposal, which is due to be released this summer. (Financial Times) The IMF conceded major mistakes over its handling of the Greek bailout. Failures to restructure Greece's debt earlier and to forecast the extent of its economic collapse have dogged the programme since its beginning, the fund said in a paper published late on Wednesday. (Wall Street Journal) SAC Capital told employees it expects to stay open following a wave of client redemptions. Although the fund will not release a number for the amounts withdrawn by investors after a deadline this week, it will remain open to outside money and does not plan large reductions of staff. Some investors may reconsider their redemption requests if the legal situation becomes clearer over the fund's targeting by a government insider trading probe SAC founder Steve Cohen's "decision not to throw in the towel is in keeping with his personality". (Bloomberg) Gabon is taking back assets from a subsidiary of Sinopec and two other international oil companies. The reclamation of a major onshore site from China's Addax Petroleum comes before a licensing round for deep offshore discoveries in the Gabon Basin, said to rival the deep-water reserves lying off Brazil's coast for size. (Financial Times) Finra in the US has increased its scrutiny of dark pools. The requests for information from operators of the off-exchange share-trading venues are part of assessing whether their customers are being told how orders work, and to find out more about a fast-growing area of trading that remains relatively lightly-regulated. (Wall Street Journal) The UK's Help to Buy policy helped sell 4,000 new homes in its two months of existence, according to industry-produced data. The Home Builders Federation said it had received about 500 registrations a week under the scheme, which gives buyers a five-year interest-fee loan for up to 20 per cent of the value of a new-build home priced below £600,000. An extension of Help to Buy beyond new homes launches next year, allowing housebuyers to borrow with only a 5 per cent deposit with a government guarantee. (Financial Times) A Kiev court has frozen local assets of Bank of Cyprus and Laiki after claims were filed by Ukrainian depositors hit by losses imposed as part of the Cypriot bailout. (Reuters) COMMENT AND CURIOS - A Chinese econblogger, the secret police, and a "tea chat". (Bloomberg) - Why Google today is like "General Electric in the late 19th century". (Financial Times) - Gerhard Schröder tells France to make German-style reforms. (Financial Times) - Ford car parts, ultrasound devices, Barbie dolls: all 3D-printed. (Wall Street Journal) - Robert Shrimsley on this year's Bilderbergers: "Watford is often overlooked among Europe's glamour sites..." (Financial Times) OVERNIGHT MARKETS: DOWN Asian markets Nikkei 225 down -8.40 (-0.06%) at 13,006 Topix down -18.64 (-1.71%) at 1,071 Hang Seng down -252.25 (-1.14%) at 21,186 US markets S&P 500 down -22.48 (-1.38%) at 1,608 DJIA down -216.95 (-1.43%) at 14,960 Nasdaq down -43.78 (-1.27%) at 3,401 European markets Eurofirst 300 down -18.57 (-1.53%) at 1,192 FTSE100 down -139.27 (-2.12%) at 6,419 CAC 40 down -73.39 (-1.87%) at 3,852 Dax down -99.78 (-1.20%) at 8,196 Currencies €/$ 1.30 (1.30) $/¥ 99.16 (100.19) £/$ 1.53 (1.53) Commodities ($) Brent Crude (ICE) down 0.06 at 102.98 Light Crude (Nymex) up 0.11 at 93.85 100 Oz Gold (Comex) up 0.60 at 1,399 Copper (Comex) down 0.01 at 3.36 10-year government bond yields (%) US 2.09% UK 2.01% Germany 1.51% CDS (closing levels) Markit iTraxx SovX Western Europe at 84.67bp Markit iTraxx Europe +3.3bps at 107.5bp Markit iTraxx Xover +19ps at 443.4bp Markit CDX IG +4.1bps at 85.5bp Sources: FT, Bloomberg, Markit
#END

US Fed's Beige Book

Location: United States

Date: 05/06/2013

Time: 19:00 - 20:00

Strength: 2/3

Previous:

Notes: The Beige Book reports on the current US economic situation. Through interviews with key business contacts, economists, market experts, and other sources are gathered by each of the 12 Federal Reserve Districts. The survey gives a picture of the overall US economic growth. An optimistic view of those authorities is considered as positive, or bullish for the USD, whereas a pessimistic view is considered as negative, or bearish for the Dollar.

#END

US ADP Employment Change

Location: United States

Date: 05/06/2013

Time: 13:15 - 14:15

Strength: 2/3

Previous: 119K / Consensus: 170K

Notes: The Employment Change released by the Automatic Data Processing, Inc is a measure of the change in the number of employed people in the US Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Generally speaking, a high reading is seen as positive, or bullish for the USD, while a low reading is seen as negative, or bearish.

#END

UK Markit Services PMI

Location: United Kingdom

Date: 05/06/2013

Time: 9:28 - 10:28

Strength: 2/3

Previous: 52.9 / Consensus: 53.2

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.

#END

DE Markit Services PMI

Location: Germany

Date: 05/06/2013

Time: 8:53 - 9:53

Strength: 2/3

Previous: 49.6 / Consensus: 49.8

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.

#END

US Trade Balance

Location: United States

Date: 04/06/2013

Time: 13:30 - 14:30

Strength: 2/3

Previous: -$38.8B / Consensus: -$41.0B

Notes: The Trade Balance released by the Bureau of Economic Analysis and the U.S. Census Bureau is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the USD. If a steady demand in exchange for US exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the USD.Review Alex Nekritin's Article - Trading US Dollar with US Trade Balance

#END

EMU Producer Price Index (YoY)

Location: European Monetary Union

Date: 04/06/2013

Time: 10:00 - 11:00

Strength: 2/3

Previous: 0.7% / Consensus: 0.3%

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).

#END

UK PMI Construction

Location: United Kingdom

Date: 04/06/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: 49.4 / Consensus: 49.6

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).

#END

The 6am Cut

6am Cut London Posted 2013-06-04 05:26:55 by Joseph Cotterill Asian shares were muted. The Nikkei rose 1 per cent following Monday's weak ISM manufacturing number in the US. (Reuters) Topix fact du jour: analysts expect its earnings to rise 57 per cent this year, compared to a global average of 19 per cent. (Bloomberg) Japan's public pension funds are to be recruited to buy stocks and real assets in the Abe government's latest move to mobilise the country's savings for growth. A panel will be set up to review investment guidelines for the public funds, which have previously piled into Japanese sovereign bonds, including the mighty Government Pension Investment Fund. The guidelines would come into force by April 2015 under the draft plan. (Reuters) Japanese wages rose by the most in a year in April. The 0.3 per cent increase in monthly pay follows recent salary rises at Toyota, Honda and Hitachi. (Bloomberg) The Reserve Bank of Australia kept rates unchanged at 2.75 per cent. (RBA statement) Concern is rising that volatility in Japanese and US government bond yields could swamp banks' Value at Risk models. While banks increasingly use "stressed" VaR as part of their regulatory capital calculations, preparing them for repeats of the worst volatility of recent years, traditional models can be used to set internal trading limits. One investment bank breached its limits after recent statements by Japan's new central bank governor. (Financial Times) The most popular brand of bond mutual funds have been caught out by recent jumps in yields. US funds investing in higher-rated debt of less than 10 years' maturity lost 1.8 per cent in May, their worst performance since October 2008. (Financial Times) No ECB "bazooka" planned for small-business credit crunch. The central bank is unlikely to commit large resources to improving SMEs' access to funding, after concluding that clean-up of banks' balance sheets would do more to encourage lending. Separate ECB plans to work with the European Investment Bank to reopen the ABS market for SME funding are not expected to have a large impact. (Financial Times) Small Italian companies are increasingly turning to "minibonds" to replace bank loans. (Wall Street Journal) Europe "losing the 4G race": some 19 per cent of US network connections are expected to be using LTE, a 4G technology, by the end of 2013 -- compared to fewer than 2 per cent in Europe, despite recent efforts by companies including Vodafone to boost investment there. (Wall Street Journal) North-west England could be sitting on a shale gas bonanza after a leading explorer vastly increased its estimate of the amount of gas lying in its licence area. IGas said that the region could contain between 15 and 172tn cubic feet, compared to a preliminary estimate of 9 tcf. (Financial Times) European Commission plans to centralise bank resolution powers could rankle with Germany. A draft "single resolution mechanism" identifies the Commission as the "best placed institution" to deal with failing lenders, including the ability to overrule national governments and to finance rescues from a fund backed by "assets of euro area banks". Germany has resisted Commission control over bank closures, arguing that it conflicts with EU treaties. (Financial Times) More on Japonica, the investor which announced a €2.9bn 'tender offer' for Greek bonds. The market shrugged off the proposal to buy the debt at a minimum 45 cents in the euro, a contrast with Japonica founder Paul Kazarian's past as an activist investor in US companies ranging from a maker of home appliances to an ice-cream giant. (Wall Street Journal) COMMENT AND CURIOS - Janan Ganesh on UK austerity politics: "entire limbs of Leviathan are off-limits". (Financial Times) - Dani Rodrik analyses the Turkish protests -- and Erdogan's economic legacy. (Financial Times) - Reconstructing the London Whale trades. (Bloomberg) - The incredible endurance of the permanent contract, by Brian Groom. (Financial Times) - But Australia's resources boom starts shedding jobs... (Bloomberg) - How the world's No. 1 chess player is preparing for the most-anticipated match since the 1970s -- in Chennai, India. (Wall Street Journal) OVERNIGHT MARKETS: UP Asian markets Nikkei 225 up +142.96 (+1.08%) at 13,404 Topix up +14.45 (+1.32%) at 1,111 Hang Seng down -65.19 (-0.29%) at 22,217 US markets S&P 500 up +9.68 (+0.59%) at 1,640 DJIA up +138.46 (+0.92%) at 15,254 Nasdaq up +9.46 (+0.27%) at 3,465 European markets Eurofirst 300 down -8.52 (-0.70%) at 1,207 FTSE100 down -57.97 (-0.88%) at 6,525 CAC 40 down -27.92 (-0.71%) at 3,920 Dax down -63.04 (-0.76%) at 8,285 Currencies €/$ 1.30 (1.30) $/¥ 99.61 (100.64) £/$ 1.53 (1.52) Commodities ($) Brent Crude (ICE) down -0.26 at 101.80 Light Crude (Nymex) down -0.43 at 93.02 100 Oz Gold (Comex) down -0.70 at 1,411 Copper (Comex) unchanged at 3.33 10-year government bond yields (%) US 2.12% UK 2.00% Germany 1.52% CDS (closing levels) Markit iTraxx SovX Western Europe at 85.95bp Markit iTraxx Europe +4.8bps at 107.4bp Markit iTraxx Xover +17ps at 438.4bp Markit CDX IG -0.6bps at 78.5bp Sources: FT, Bloomberg, Markit
#END

US Markit Manufacturing PMI

Location: United States

Date: 03/06/2013

Time: 13:58 - 14:58

Strength: 2/3

Previous:

Notes: The Manufacturing Purchasing Managers Index (PMI) released by 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 the United States. Readings above 50 imply the economy is expanding, making investors understood it as a bullish for the USD, whereas a result below 50 points for an economic contraction, and weighs negatively on the currency.

#END

US FOMC Member Williams speech

Location: United States

Date: 03/06/2013

Time: 12:20 - 13:20

Strength: 2/3

Previous:

Notes: John C. Williams is the president of Federal Reserve Bank of San Francisco.

#END

UK Markit Manufacturing PMI

Location: United Kingdom

Date: 03/06/2013

Time: 9:28 - 10:28

Strength: 2/3

Previous: 49.8 / Consensus: 50.1

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.

#END

DE Markit Manufacturing PMI

Location: Germany

Date: 03/06/2013

Time: 8:53 - 9:53

Strength: 2/3

Previous: 48.1 / Consensus: 49.0

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.

#END

US Personal Spending

Location: United States

Date: 31/05/2013

Time: 13:30 - 14:30

Strength: 2/3

Previous: 0.2% / Consensus: 0.0%

Notes: Personal spending, released by Bureau of Economic Analysis, Department of Commerce, measures purchases of goods and services by households and by nonprofit institutions that serve households from private business.

#END