German Banking Group’s Kemmer: Spanish banks should be capitalized through the EFSF Posted: 22 Jun 2012 01:58 AM PDT - Not a good idea to directly capitalize banks in trouble
- Important to get transparency in Spain back again
- Moody’s downgrades were expected
- German banks have significant exposure to Spain, but “don’t have to fear” the situation in Spain
- Governments need to take right steps to improve the crisi situation
- Idea of a banking union is good in the long-term, but won’t help solve the current crisis
Comments made by the BDB chief in an interview with Bloomberg |
Ifo: Germany Business Climate Drops In June To 27-Month Low Posted: 22 Jun 2012 01:50 AM PDT Jun MNI analysts survey May Apr median range ———————————————————————— Business sentiment: 105.3 105.4 103.0 – 106.6 106.9 109.9 Current conditions 113.9 112.0 100.4 – 113.1 113.2 117.5 Six-month outlook: 97.3 99.7 99.0 – 100.5 100.8 102.7 – FRANKFURT (MNI) – Business sentiment in Germany fell in June to 105.3, its lowest level since March 2010, on declines in manufacturing and wholesaling and a deterioration in expectations, the Ifo institute reported Friday. The index roughly matched expectations of a drop to 105.4, according to MNI’s poll of economists, and marks the second straight sharp drop after holding above 108 from January to April this year. The business situation index rose to 113.9 from a downwardly revised 113.2 (113.3) in May, though it remains down sharply after averaging 117.4 from February to April. Expectations dropped to 97.3, the lowest level since December, and down from a downwardly revised 100.8 (100.9) in May. “The recent surge in uncertainty in the Eurozone is impacting the German economy,” Ifo President Hans-Werner Sinn said in a press release. Though down sharply the past two months, Sinn noted the business situation remains above its long-term average, even if companies “expressed greater pessimism about their business outlook.” By sector, the manufacturing index dropped to 5.0 from 10.5 in May and wholesaling fell to 5.0 from 7.9. Construction improved to -4.6 on the month from -5.2, while retailing turned mildly positive to 0.3 from -3.7. The services index meanwhile fell in June to 21.3, the lowest level since December and down from 24.8 the previous month. Ifo’s sentiment barometer, which reached a nine-month high in April, had been sending more positive signals than the PMI polls in past months. With the downturn in May and the sharper drop this month, Ifo’s indicator is now moving more into line with the composite PMI, which fell to a three-year low (48.5) in June. “While an impending ‘Drachmageddon’ scenario has been avoided, there nonetheless seems a deepening consensus among German businesses that the euro area turbulence has already damaged their growth prospects for the latter half of 2012,” said Markit senior economist Tim Moore. Investors polled in this month’s ZEW survey were pessimistic as well, as the market sentiment indicator dropped to its lowest point since August. “The financial market experts’ expectations are a strong warning against a too optimistic assessment of Germany’s economic perspectives in the remainder of this year,” warned ZEW President Wolfgang Franz. Hard and soft data suggest that 2Q is unlikely to see anything similar to 1Q’s 0.5% jump in economic activity, as a slowing global economy and a debt crisis continue to weigh on demand and morale. The Bundesbank has warned that uncertainty surrounding economic prospects had increased “notably” in recent weeks. “It still has to be seen to what extent the latest exacerbation of the debt crisis and signs of a slowing global economy will weigh on Germany’s economic outlook,” the central bank said. One bright spot, however, would be the recent downward trend in oil prices, which helped to push German CPI below 2% in May for the first time since December 2010 and led to easing price pressures for companies in June. A potential rate cut from the European Central Bank could also help underpin sentiment. “Cutting rates is certainly an option as far as our monetary policy is concerned,” ECB Executive Board member Benoit Coeure said in a recent interview. “It was discussed at the last Governing Council meeting and I would expect the next Council to discuss it again,” he said, adding, “We are in a situation where there is no threat to medium-term price stability.” – Frankfurt bureau: +49 69 720 142. Email: frankfurt@marketnews.com – [TOPICS: M$G$$$,MT$$$$,M$X$$$,M$XDS$,MAGDS$,MTABLE] |
Italian 10 year govt bond yield rises to 5.89% Posted: 22 Jun 2012 01:36 AM PDT Up 13 bps on the day. Italian 5 year credit default swaps rise 10 bps to 518 bps. That ain’t gonna help the consumer confidence any EUR/USD edges up to 1.2545, seemingly unperturbed. Go figure. |
France’s 1Q Pay Gains Accelerate In Line With Inflation Posted: 22 Jun 2012 01:20 AM PDT –Government Eyeing 2% Minimum Wage Increase: Press PARIS (MNI) – French monthly base salaries rose 0.9% in 1Q and hourly wages were up 1.0% after 4Q gains of 0.3% for both, the Labor Ministry said Friday, confirming its initial estimates. Annual base pay gains slowed from 2.3% to 2.2% for salaries and were steady at 2.3% for wages. Nominal pay increases tend to be larger at the start of the year and the 1Q gains also reflect a catch-up with high inflation rates, which had been undermining real purchasing power. The pick-up in wages follows a back-to-back hike in the minimum wage by 2.1% in December and another 0.3% in January. As consumer prices (excluding tobacco) rose by 0.9% over the course of 1Q, real base pay gains were negligible both on the quarter and the year. Last month the European Commission projected a slowdown in full-year pay gains from 2.8% last year to 2.1% this year and 2.0% next year, reflecting its forecast for a half-point rise in the jobless rate this year and another 0.1-point increase next year. However, future pay gains at the low end could prove somewhat stronger, as the new government is eyeing a hike in the minimum wage of 1.5% to 2.5% this summer, the business daily Les Echos reported Friday, The range reflects the government’s dilemma of fulfilling a campaign promise of President Francois Hollande without further undermining the cost-competitiveness of domestic producers. If, as the newspaper reports, the final decision to be announced Tuesday is likely to be for a minimum wage hike of around 2%, a large part would be merely an advance on the regular adjustment for inflation that will come next January. As consumer prices have already risen by 1.4% since the previous adjustment, the extra boost now would amount to only 0.6%. While such a hike would be too modest in the view of most union leaders, one advisor to Labor Minister Michel Sapin has estimated that the E27 monthly increase in the monthly minimum wage this would represent could potentially cause job losses of 30,000 to 50,000, Les Echos said. Hollande had also pledged to add an economic growth increment equivalent to half the real income gains of salaried workers to cost-of-living adjustments in the minimum wage in the future. With production slowing, the rise in French unit labor costs could accelerate to 2.1% this year (+0.6% in real terms), then slow to 1.1% next year (-0.6%) as the business cycle turns around, the Commission forecast. –Paris newsroom +331 4271 5540; email: ssandelius@marketnews.com [TOPICS: M$F$$$,MAFDS$,M$X$$$,MGX$$$] |
Not so confident Italians Posted: 22 Jun 2012 01:11 AM PDT Italy June consumer confidence came in at 85.3, down from 86.5 in May and weaker than Reuters’ median forecast of 86.0. |
IFO June Business climate falls to 105.3 from 106.9 in May Posted: 22 Jun 2012 01:03 AM PDT Weaker than Reuters consensus of 105.9 June current conditions up to 113.9 (exp 112.3) from 113.2, expectations down to 97.3 (exp 99.8) from 100.8 All in all, a bit of a mixed bag… EUR/USD’s static around 1.2538 |
German FinMin: Want to push transactions tax today with “all emphasis” Posted: 22 Jun 2012 01:00 AM PDT Meanwhile Dutch FinMin says remains opposed to financial transaction tax, as it would be very damaging for the Dutch economy. I like it when everyone’s singing from the same hymn sheet The EU always reminds me of trying to herd cats |
GBP/USD bounces on sovereign buying Posted: 22 Jun 2012 12:55 AM PDT Latest dip to 1.5586 was met with Asian sovereign demand and bounced the pair back above 1.5600 to a day’s high of 1.5628. Offers await a further run up around 1.5650/60 GBP’s around 1.5620 |
Nobby Groubout nails it……. Posted: 22 Jun 2012 12:37 AM PDT He’s good…. EUR/USD bounces from 1.2520 low, presently at 1.2540. I guess the above is why there were buy orders clustered 1.2520/30, sell stops below |
SNB Quarterly report Posted: 22 Jun 2012 12:36 AM PDT - Will defend Franc cap with “upmost deterrmination”
- Ready to buy currency at unlimited quantities
- Franc remains “high” at current levels
- Won’t tolerate further franc appreciation
- Uncertainty about future developments has increased
- Companies employemnt, investment plans remain cautious
All rather similar to comments made last Thursday …. |
AUD/USD sell stops triggered…. Posted: 22 Jun 2012 12:09 AM PDT …through 1.0025 to lows around 1.0008, but bids ahead of parity holding up for now . There’s some sell stops through 1.0000 ahead of tech support 0.9980/85 (see orderboard) AUD’s since bounced a tad to 1.0016 |
EU Leaders To Hand Over Banking Supervision To ECB; Press Posted: 21 Jun 2012 11:50 PM PDT BERLIN (MNI) – EU heads of states and governments at their summit next week want to make the European Central Bank responsible for banking supervision in Europe in the future, Germany’s daily Die Welt reported Friday, citing a non-identified EU diplomat. EU Council president Herman van Rompuy “has the agreement of the 27″ member states, the paper cited the EU source as saying. According to Die Welt, the Council will assign the European Commission to present a draft bill swiftly after the summer recess. –Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com [TOPICS: M$X$$$,MGX$$$,M$$CR$,M$$EC$] |
Orderboard Posted: 21 Jun 2012 11:28 PM PDT All a bit thin this morning, guess the market is a bit shell shocked or just tired but here goes.. EUR/USD: Bids 1.2520/30, sell stops below ahead of more bids 1.2500/10, sell stops below. Offers 1.2580/00, and 1.2610/20 with buy stops above GBP/USD: Bids 1.5575/85, tech supp 1.5550/55 (1.5552 21 day MA), offers 1.5650/60 EUR/GBP: Bids 0.8025/30 and 0.7995/00. Offers 0.8055/60 and 0.8080/85 USD/JPY: Buy stops up through 80.60, Bids 80.00/10 and 79.70/80 EUR/JPY: Bids 100.50/60, tech supp 99.90/00 Offers 101.50/60 likely buy stops through 101.65 EUR/CHF: Bids 1.2000/10(SNB), Offers 1.2025/50 buy stops through 1.2055 USD/CHF: Offers 0.9590/00, Bids 0.9500/10 (possibly officia|) AUD/USD: Tech supp/bids 1.0030/40, sell stops through 1.0025 ahead of bids 1.0000/10,sell stops below ahead of tech sup 0.9980/85 (38.2% 0.9580/1.0225). Offers 60/70 (tech res 1.0075/80 (55 day MA @ 1.0078), AUD/JPY: Tech supp 80.35/40 and 80.20/25, Offers 81.00/10 tech res 81.55/60 EUR/AUD: Tech supp 1.2470 (61.8% of this year's rally), Bids 1.2435/45 and 1.2395/05, strong tech supp 1.2350/55 NZD/USD: Bids 0.7830/40, sell stops through 0.7800 |
And for fxgai……..a USD/JPY poll Posted: 21 Jun 2012 10:57 PM PDT We sit at 80.45. What’ll we see first, 79.50 or 81.50 Reasoning/s for choice always welcome, but not obligatory |
Rpt:BOE Weale: Stronger QE Case If Funding Policy Impact Slow Posted: 21 Jun 2012 10:40 PM PDT -Repeats Item Transmitted At 1724 GMT Thursday -Not Sure QE Impact As Powerful As Some BOE Estimates -Sterling May Need To Fall Further To Help Close Trade Gap GUILDFORD (MNI) – The case for further quantitative easing in the near term will be strengthened if the impact of the Bank Of England and Treasury bank funding initiatives are slow to materialize, BOE Monetary Policy Committee member Martin Weale said. BOE Governor Mervyn King outlined in last week’s Mansion House speech a joint BOE/Treasury plan to provide banks with cheap funding in return for increased lending, along with new BOE liquidity injections of six month money. Weale said the key reason he did not back for stimulus at the June MPC meeting was he wanted to assess the likely impact of these new schemes. “Ahead of the next meeting I want to try and form a better view of the likely effects of these measures (ECTR) in terms of demand. That will then influence whether and, if so, by how much I think there should be more asset purchases,” Weale told reporters. The Funding-for-Lending scheme is still under development, although King said it could be launched within weeks. The MPC may not have any clear evidence of its impact for some time, but Weale said they would try and predict its effect on market interest rates. “We take account of what we think their effects may be, when we expect them to happen. If some of the new policies are relatively slow to have an effect then that would increase the case for further asset purchases in advance of that,” Weale said. In the question and answer session after his speech, Weale said the trade gap needs to close and sterling may well need to fall further to help it do so. Weale said the trade gap was an important issue for him and that sterling’s fall back in 2008 had had less impact on it than he had expected, and that the currency may need to become more competitive still. “The depreciation that we had in 2008 I thought would do more to close the trade deficit than so far it has, there may be a number of explanations for that, the international trade environment hasn’t been comfortable to say the least,” Weale said. “The trade deficit will need to close further and sometimes I do wonder whether the exchange rate might need to be more competitive than it is at the moment in order to help with that,” he added. Sterling fell sharply on its trade weighted index from very late 2007 through 2008, declining from 100.2 on its broad trade weighted index on December 18 2007 to below 80 in December 2008. In response to a question on the effectiveness of QE, Weale set out the BOE’s view that it is working through driving down gilt yield and subsequent portfolio effects, but he thought some BOE research may have exaggerated its impact. “I’m not sure that it has necessarily been as powerful as some of the estimates from the bank have suggested,” Weale said. He said the latest BOE and joint BOE/Treasury initiatives, the Extended Collateral Term Repo auctions and the Funding for Lending plan, should reach parts of the system that QE has not. -London Bureau +20 7862 7491; drobinson@marketnews.com/wwilkes@marketnews.com [TOPICS: M$$BE$] |
Cyprus continues rescue package talks with EU, Russia Posted: 21 Jun 2012 10:36 PM PDT An anonymous government official has confirmed that the Cypriot government have also approached Russia for a loan. Russia’s deputy Fin MIn Storchak earlier told reporters that no request had been received from Cyprus , but said that any request would be considered…. More.. ekathimerini |
Japan May Supermarket Sales Post 3rd Drop on Bad Weather Posted: 21 Jun 2012 10:30 PM PDT – Japan May Supermarket Sales -1.7% Y/Y Vs Apr -1.9% TOKYO (MNI) – Sales at supermarkets in Japan open for at least a year fell 1.7% in May from a year earlier to Y1.04 trillion, posting the third straight y/y drop after -1.9% in April, an industry group said on Friday. Stormy weather conditions and low temperatures as well fewer public holiday compared with May last year led to the sales decline, the Japan Chain Stores Association said. In February, supermarket sales marked the first y/y gain in seven months on the leap-year effects and solid winter clothing sales. The latest figures are based on the combined sales at 57 supermarket chains which together operate 7,784 outlets. The numbers have been adjusted to facilitate comparison on a same-store basis. Including sales at stores newly opened during the past year, revenue fell 2.0% in May after falling 2.3% in April. tokyo@marketnews.com ** MNI Tokyo Newsroom: 81-3-5403-4835 ** [TOPICS: M$J$$$,M$A$$$,MAJDS$] |
European stocks seen opening lower Posted: 21 Jun 2012 09:59 PM PDT Financial bookies see FTSE down around -1%, DAX down around -0.9% and CAC 40 down around -0.8%. I guess if you’d followed the adage “sell in May and go away” you’d be feeling pretty chuffed round about now……. |
Greece could get a 2 years extension to implement reforms Posted: 21 Jun 2012 09:57 PM PDT |
Poll-time Posted: 21 Jun 2012 09:47 PM PDT With the 1.2600 lower parameter of the latest poll having been reached and breached, it’s time for another. Congratulations to all those who guessed 1.2600 before 1.2800. We sit at 1.2553. What’ll we see first, 1.2450 or 1.2650? Reasoning/s always welcome, but not compulsory. |
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