DAILY US OPENING NEWS - Greece remain at the forefront, but leaders warn not to expect resolution today...
- Markets play the waiting game ahead of Eurogroup meeting due later today, as leaders put Greece at the top of the agenda.
- Macro releases paint a mixed picture for the East-Asian economy, with China posting firm export gains, but Japan contracting 3.5% on an annualized basis over Q3.
- Markets look to remain quiet due to limited openings in the US over the Veterans Day holiday.
- RANsquawk European Morning Briefing Video: http://youtu.be/8mHTsrIwRvI
Market Re-Cap
Markets traded range bound in an anticipation of further clarity surrounding Greece. According to latest reports, no decision is expected today, but as noted by an official from the Greek debt agency PDMA, the country expects to meet its EUR 5bln T-bills auction target on Tuesday. In order to mitigate any concerns surrounding collateral requirements, the PMDA said it will accept non-competitive binds up to 0.60 percent of the amount auctioned, which will bring total proceeds to EUR 5bln. As a result, EUR/USD is seen little changed, while GBP/USD is lower as markets look forward to the Quarterly Inflation report from the BoE later on in the week. Given the market holiday in the US, there will no major macro releases in the second half of the session.
Asian Headlines
Asian equities saw a mixed close, as Chinese and Hong Kong markets benefited from a favourable trade balance being posted over the weekend, as China reported a surplus of USD 31.99bln for October, as exports beat expectations at 11.6% Y/Y. As such, the Shanghai Composite closed with gains of 0.5%, and the Hang Seng Index with gains of 0.2%. However, the Nikkei 225 suffered heavily from a very poor annualized Q3 GDP print of -3.5% as the China/Japan trade dispute hit output over the three-month period, as the local stocks close with losses of 0.9%.
US Headlines
Moody's have said they would maintain the US credit rating and outlook in event of the fiscal cliff and will await further cues. (Newswires)
EU & UK Headlines
A Greek debt agency official has said he is confident that Tuesday's EUR 5bln T-bill auction to be fully funded, and has discussed it with ECB. (Newswires) Last week, the country?s debt management office PDMA has announced plans to cover the EUR 5bln debt through a Treasury bill auction. However according to sources, Greek banks, which have been prime buyers of debt can only raise about EUR 3.5bln of collateral acceptable to the ECB. But in order to mitigate this, the PDMA will accept non-competitive bids up to 0.60 percent of the amount auctioned, which will bring total proceeds to EUR 5bln.
A number of European leaders have been dampening any expectations of an imminent Greek resolution post-budget bill vote, reiterating that no final decisions are to be made at today?s meeting. EU?s Juncker said that the Greek Troika report was sent overnight, however a German finance ministry spokesman clarified that technical documents were sent, however a full analysis is still yet to be handed over.
Equities
European equities trade mixed but broadly within range of their opening levels as the light calendar and the upcoming Eurogroup meeting provide little catalyst for price action. The European telecommunications sector is seen as a modest outperformer as Telecom Italia receive interest from Egyptian entrepreneur Naguib Sawiris. As such, Telecom Italia shares are trading with 4.9% gains at the midpoint of the session. With the calendar seeing a distinct lack of macroeconomic data releases, market direction will likely continue to revolve around the Greek issues.
FX
The EUR saw little relief from the news that the Greek parliament passed their 2013 budget bill, as focus remains on the upcoming tasks from the Eurogroup meeting later today. With markets across the board playing the wait-and-see approach, EUR/USD has remained within a tight 20 pip range for the European morning, with little in the way of macro releases to divert attention. An option expiry at 1.2700 is holding influence as markets progress towards the 10am (1500GMT) NY cut.
Despite the poor Japanese GDP print, the JPY has once again proved resilient against any extended weakening, as the range-bound theme translates into the USD/JPY pair, trading within a 10 pip range throughout the European session, below the 79.50 mark. Elsewhere, the GBP/USD pair trades close to a 1.5900 option expiry for today?s 10am (1500GMT) NY cut.
Commodities
WTI and Brent crude futures have drifted lower since the European open, and head into the midday point in negative territory with a lack of volume due to today?s Veterans Day closes in the US. Spot gold and silver are trading marginally higher, despite slight USD-strength, as Chinese trade balance figures suggest the Chinese economy is retaining some strength.
Last price taken at: 1246GMT
**Note:
US Veterans Day
- FX & interest rates floor trading closed
- Globex equity, interest and FX regular close
- NYSE LIFFE regular close
- NYMEX regular close
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Print 13:00 - Economic commentary - Source: RANsquawk
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