The 6am Cut

London 6am Cut Posted 2013-06-10 05:50:47 by Cardiff Garcia Japan revised up Q1 growth to annual 4.1%: "Japan has revised up its first quarter economic growth to 1 per cent, giving Prime Minister Shinzo Abe a boost as he seeks to strengthen his grip on power in next month's upper house elections. Government data released on Monday showed that the economy expanded at an annualised rate of 4.1 per cent between January and March, lifted by strong household spending and a pick-up in private residential investment. That was much higher than the preliminary estimate of 3.5 per cent, which was already the fastest rate recorded by any Group of Seven economy." (Financial Times) Backlash over US snooping intensifies: "The Obama administration came under mounting bipartisan pressure on Sunday to scale back electronic surveillance following revelations last week that have raised new questions about government intrusion into citizens' privacy. The calls came as the UK's Guardian newspaper revealed that the whistleblower who leaked information about US surveillance activities was Edward Snowden, a 29-year-old former CIA employee who has taken refuge in Hong Kong, setting up a potentially delicate political issue with the Chinese authorities about his fate." (Financial Times) SEC counsel faces whistleblower's claims: "The new chief counsel to the Securities and Exchange Commission chairman is the subject of a discrimination complaint from a former colleague at Deutsche Bank, who claims he was fired for blowing the whistle on fraud. Robert Rice joined the SEC last week, working directly for Mary Jo White, the new SEC chairman. He moved from Deutsche where he was head of governance, litigation and regulation for the Americas." (Financial Times) US jobs report lifts Asia markets but China data limit gains: "Asian shares rebounded as investors were encouraged by a better-than-expected US jobs report, but gains were limited by poor economic data from China." (Financial Times) Bank reforms spur BNP Paribas to merge US units: "BNP Paribas is planning a full-blown merger of its US operations as it attempts to offset the impact of threatened US regulatory reforms for foreign banks, according to people familiar with the project. The French bank, which is one of the world's largest by assets, has drawn up detailed plans to combine BancWest, its US retail banking subsidiary, with its US corporate and investment banking operations in a move intended to improve its capital and funding efficiency in the country." (Financial Times) Hearing pits German monetary heavyweights against each other: "One of the bitterest fights in monetary policy lands in court this week as Germany's highest legal authority hears evidence over whether the European Central Bank's pledge to save the euro last year undermined the constitution. The hearing comes as crisis-weary Germans prepare to vote in a September general election that for the first time includes a eurosceptic party. But also of note are the star witnesses, two longstanding friends who have risen through the ranks to become arguably Germany's most powerful unelected officials. Both have been instrumental in framing the response to the eurozone crisis but are now fighting from opposing corners." (Financial Times) COMMENT AND CURIOS - Apple designer to showcase new vision for mobile devices. - Booz Allen grew rich on government contracts. - Hail the honesty about Greece's bailout. - If the NSA trusted Edward Snowden with our data, why should we trust the NSA? - Economic dynamism is still needed. - Do US tech companies have legal troubles in the EU? OVERNIGHT MARKETS Asian markets Nikkei 225 up +504.31 (+3.92%) at 13,382 Topix up +48.96 (+4.63%) at 1,106 Hang Seng up +95.99 (+0.44%) at 21,671 US markets S&P 500 up +20.82 (+1.28%) at 1,643 DJIA up +207.50 (+1.38%) at 15,248 Nasdaq up +45.17 (+1.32%) at 3,469 European markets Eurofirst 300 up +15.67 (+1.33%) at 1,194 FTSE100 up +75.88 (+1.20%) at 6,412 CAC 40 up +58.31 (+1.53%) at 3,873 Dax up +155.87 (+1.92%) at 8,255 Currencies €/$ 1.32 (1.32) $/¥ 98.05 (97.48) £/$ 1.55 (1.56) Commodities ($) Brent Crude (ICE) unchanged 0.00 at 104.56 Light Crude (Nymex) up +0.04 at 96.07 100 Oz Gold (Comex) up +2.80 at 1,386 Copper (Comex) unchanged 0.00 at 3.27 10-year government bond yields (%) US 2.16% UK 2.07% Germany 1.55 CDS (closing levels) Markit iTraxx SovX Western Europe +1.41bps at 87.66bp Markit iTraxx Europe -8.56bps at 104.28bp Markit iTraxx Xover -34.63bps at 436.66bp Markit CDX IG -3.01bps at 81.06bp Sources: FT, Bloomberg, Markit
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US Consumer Credit Change

Location: United States

Date: 07/06/2013

Time: 20:00 - 21:00

Strength: 2/3

Previous: $7.97B / Consensus: $12.00B

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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US Average Hourly Earnings (YoY)

Location: United States

Date: 07/06/2013

Time: 13:30 - 14:30

Strength: 2/3

Previous: 1.9% / Consensus: 2.1%

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: 07/06/2013

Time: 13:30 - 14:30

Strength: 3/3

Previous: 165K / Consensus: 170K

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 Unemployment Rate

Location: United States

Date: 07/06/2013

Time: 13:30 - 14:30

Strength: 3/3

Previous: 7.5% / Consensus: 7.5%

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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DE Industrial Production s.a. w.d.a. (YoY)

Location: Germany

Date: 07/06/2013

Time: 11:00 - 12:00

Strength: 2/3

Previous: -2.5% / Consensus: -0.8%

Notes: The Industrial Production released by the Federal Ministry of Economics and Technology, measures outputs of the German factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. A high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).

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UK Goods Trade Balance

Location: United Kingdom

Date: 07/06/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: -�9.056B / Consensus: -�8.800B

Notes: The trade balance released by the is a balance between exports and imports of goods A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP. If a steady demand in exchange for UK exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the GBP.Review Alex Nekritin's Article - Trading British Pound with UK Trade Balance

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UK Total Trade Balance

Location: United Kingdom

Date: 07/06/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: -�3.13B / Consensus: -�3.00

Notes: The trade balance released by the is a balance between exports and imports of goods A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP. If a steady demand in exchange for UK exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the GBP.

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UK Trade Balance; non-EU

Location: United Kingdom

Date: 07/06/2013

Time: 9:30 - 10:30

Strength: 2/3

Previous: -�3.47B / Consensus: -�3.60B

Notes: The trade balance released by National Statistics 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 GBP. If a steady demand in exchange for UK exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the GBP.Review Alex Nekritin's Article - Trading British Pound with UK Trade Balance

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DE Trade Balance s.a.

Location: Germany

Date: 07/06/2013

Time: 7:00 - 8:00

Strength: 2/3

Previous: �17.6B / Consensus: �17.2B

Notes: The Trade Balance released by the Statistiches Bundesamt Deutschland is a balance between exports and imports of total goods and services. A positive value shows a trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the EUR. If a steady demand in exchange for German exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the EUR. Review Alex Nekritin's Article - Trading the Euro with Germany Trade Balance

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The 6am Cut

6am Cut London Posted 2013-06-07 05:35:24 by Joseph Cotterill Bear market for the Nikkei. The index entered bear territory after the strong yen pushed it down more than 1.3 per cent on Friday, bringing the decline since its May 23 peak to around 20 per cent. (Wall Street Journal) The Topix is down 18 per cent from its May high, but remains up 22 per cent for 2013. Japan's finance minister ruled out immediate intervention in the yen despite its 2.2 per cent jump against the dollar on Thursday and continued strength on Friday. "We are carefully watching, but we don't have any immediate intention of taking any action, such as intervention," Taro Aso said. (Bloomberg) The US dollar had at one point on Thursday dipped 3 per cent against the yen, a sell-off attributed to investors reversing views on how long the Fed will maintain QE3. (Financial Times) Apple, Google, Facebook, Microsoft and Yahoo denied all knowledge of secret US government efforts to tap their central servers for users' data. The National Security Agency programme, codenamed PRISM, boasted of collection "directly from the servers of these U.S. Service Providers: Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube, Apple," according to documents leaked to the media. (Washington Post, Guardian.) PRISM was created in 2007 to replace domestic surveillance policies of the Bush administration, and has provided data used in one in every seven daily intelligence briefings submitted to the President. (Bloomberg, Financial Times) The NSA has also logged phone-call data from the US networks of AT&T and Sprint, in addition to Verizon. The recent leak of a secret US court order to Verizon for millions of records revealed the extent of the surveillance, which has also been extended further to data on credit-card transactions. (Wall Street Journal) Prosecutors in the US and UK are close to bringing criminal charges over the Libor scandal. Former Barclays employees are likely to be charged later this summer. Barclays itself settled with regulators a year ago over allegations it attempted to manipulate Libor, but it has taken time since then for the authorities on both sides of the Atlantic to coordinate their cases against individuals. (Wall Street Journal) S&P blamed "ambiguous policy signals" for putting a negative outlook on Brazil's credit rating. The agency also pointed to a third year of "modest" economic growth as a reason for the cloud over its long-term BBB and short-term A2 grading of the country. (Financial Times) Apple will start offering trade-in for iPhones next month. Brightstar will run the exchange programme for Apple, which is trying to get more consumers to upgrade to iPhone 5s to combat the decline in its sales growth. (Bloomberg) Dalian Wanda is close to snapping up Sunseeker for £300m. "We bought the best yacht company in the UK," said Wang Jianlin, chairman and founder of the Beijing-based property group. Sunseeker's yachts -- built in Poole, Dorset -- would add another top brand to the armoury of western luxury assets being compiled by Chinese companies. (Financial Times) COMMENT AND CURIOS - Fixing banks is the real priority for Britain, says Martin Wolf. (Financial Times) - It should be the eurozone's too, Stephen Fidler argues. (Wall Street Journal) - And Australia's fastest-growing mortgage lender is... (Bloomberg) - Why a US-China grand bargain is needed to stop the IMF becoming irrelevant. (Financial Times) - If this is Turkey's 1968, where's its De Gaulle? (Financial Times) OVERNIGHT MARKETS: DOWN Asian markets Nikkei 225 down -256.42 (-1.99%) at 12,647 Topix down -22.23 (-2.08%) at 1,048 Hang Seng down -288.74 (-1.32%) at 21,549 US markets S&P 500 up +13.66 (+0.85%) at 1,622 DJIA up +80.03 (+0.53%) at 15,040 Nasdaq up +22.57 (+0.66%) at 3,424 European markets Eurofirst 300 down -14.18 (-1.19%) at 1,178 FTSE100 down -83.20 (-1.30%) at 6,336 CAC 40 down -38.16 (-0.99%) at 3,814 Dax down -97.37 (-1.19%) at 8,098 Currencies €/$ 1.32 (1.30) $/¥ 96.38 (99.16) £/$ 1.559 (1.53) Commodities ($) Brent Crude (ICE) up 0.16 at 103.77 Light Crude (Nymex) up 0.08 at 94.84 100 Oz Gold (Comex) down 3.10 at 1,412 Copper (Comex) unchanged at 3.31 10-year government bond yields (%) US 2.07% UK 2.02% Germany 1.52% CDS (closing levels) Markit iTraxx SovX Western Europe at 84.67bp Markit iTraxx Europe +4.8bps at 112.4bp Markit iTraxx Xover +24.6ps at 468.6bp Markit CDX IG -1.8bps at 83.6bp Sources: FT, Bloomberg, Markit
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US Initial Jobless Claims

Location: United States

Date: 06/06/2013

Time: 13:30 - 14:30

Strength: 2/3

Previous: 354K / Consensus: 345K

Notes: The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the USD.

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EMU ECB Interest Rate Decision

Location: European Monetary Union

Date: 06/06/2013

Time: 12:45 - 13:45

Strength: 3/3

Previous: 0.5% / Consensus: 0.5%

Notes: ECB Interest Rate Decision is announced by the European central Bank. Usually, if the ECB is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the EUR. Likewise, if the ECB has a dovish view on the European economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.Review Alex Nekritin's Article - Trading the Euro with the ECB Rate Decision

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UK BoE Asset Purchase Facility

Location: United Kingdom

Date: 06/06/2013

Time: 12:00 - 13:00

Strength: 3/3

Previous: �375B / Consensus: �375B

Notes: The Asset Purchase Facility is the value of money the BoE plans to create and inject into the economy through open market bond purchases as a way to influence long-term interest rates. This monetary policy tool is also called Quantitative Easing.

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UK BoE Interest Rate Decision

Location: United Kingdom

Date: 06/06/2013

Time: 12:00 - 13:00

Strength: 3/3

Previous: 0.5% / Consensus: 0.5%

Notes: BoE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the U.K. economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.Review Alex Nekritin's Article - Trading British Pound with BoE Rate Decision

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