lunedì 30 luglio 2012

U.K. Q2 GDP: The Sterling Is Not A Safe Haven

In the UK, Q2 GDP data came out worse than expected, with a 0.7% q/q contraction. The consensus expectations were for a 0.2% q/q decline. Compared to the same period 1 year ago, the GDP contracted by 0.8%. The ONS indicated that (continue on seekingalpha)...

giovedì 26 luglio 2012

Very volatile data today in the USA

Economic data released today were very volatile: 1) Initial jobless claims fell from 388k to 353k vs market consensus. The data was very volatile in the last weeks due to plant shutdown and difficulties in seasonal adusting the data. However, the data is a positive indication for the labour market in July. Jobs creation in July may slightly below 100k. 2) durable goods orders rose by 1.6% m/m vs expectations at 0.3% m/m. The ex-transportation data fell by 1% m/m. The data is in line with the contination of a moderate of growth for the manufacturing sector in Q3.

Euro zone: M3 data rose but loans declined

The data for June released today by the ECB signalled that the Money supply growth accelerated slightly but loans to the private sector decreased. the M3 rate of growth rose from 3.1% y/y (revised from 2.9% y/y) to 3.2% y/y. The annual total credit growth to the private sector fell from -0.2% to -0.4%. Loans to household remained unchanged at +0.3% (for home purchases +0.8%, consumer credit -1.9%). Loans to financial corporations fell from 0.0% to -0.6% y/y. The latest data signals that the situation of the credit market is still dire and increases the possibilities that the ECB may further ease monetary policy over the next week.

mercoledì 25 luglio 2012

Italian consumer confidence rebounded in July

The Italian consumer confidence index unexpectedly rebounded from 85.4 in June - the historical low of the index - to 86.5 in July. The improvement was led by the view on the Italian economic outlook and a better view on the labour market. Despite the rebound in July the index remains on historically low level, signalling that consumer spending may continue contracting in Q3.

martedì 24 luglio 2012

S&P 500: Is It Too Risky Investing Now?

Despite the debt crisis in the eurozone, the signs of weakening of the economic growth in the USA and in China, the S&P 500 remains only 4% below the highest close since '08 posted on April 2nd at 1419. Over the last week, the index managed to gain 0.4%, with the decline on Friday (-1%) only limiting the performance. continue on seekingalpha

PMI indices: Euro zone outlook continues deteriorating

In our article "No Sign Of Relief In The Eurozone" we highlighted that the major business confidence indices due for release over this week should confirm that the Euro zone economic has been deteriorating fast.
The PMI indices for the Euro zone just released had mixed results despite confirning that an recovery is not coming anytime soon. Indeed, while the PMI manufacturing index unexpectedly fell from 45.1 to 44.1 vs market consensus at 45.2, the PMI services rose from 47.1 to 47.6 vs expectations for an unchanged reading. The PMI composite index remained unchanged at 46.4, a level in line with a 0.5% q/q contraction of the Euro zone GDP in Q3.

Moody's cut the German outlook to negative. Rating unchanged at AAA

Moody's decided to cut yesterday the outlook for Germany, Luxembourg and the Netherlands to negative but confirmed the AAA rating. The rating agency explained in a statement that: "The level of uncertainty about the outlook for the area and the potential impact of plausible scenarios on member states, are no longer consistent with stable outlooks".
The German Finance Ministry said the risks in the euro zone are “not new” and that Germany remains “in a very sound economic and financial situation.” In counterpoint to Moody’s, it cited the verdict of financial markets that have rewarded Germany with record low borrowing costs on government bonds.
The Moody's announcement may have a limited impact on the financial markets. After S&P stripped France and the U.S. of AAA grades, interest rates paid by the countries to finance their deficits dropped rather than rose
Some links on the topic:

lunedì 23 luglio 2012

Euro zone consumer confidence index at the lowest since 2009

The European Commission consumer confidence index for the Euro zone fell in July from -19.8 to -21.6, the lowest since 2009. A rebound of the consumer confidence is unlikely until the outlook of the labour market does not improve. The data is line with a further contraction of the Euro zone GDP in Q3 and anticipates the continuation of the downward trend of the PMI indices due for release tomorrow.

No Sign Of Relief In The Eurozone

Over the next week, the most important event in the eurozone will be the release of the business confidence indices for July in the eurozone (PMI indices) and in Germany (IFO index).
We do not expect any improvement (continue on seekingalpha)

mercoledì 11 luglio 2012

Is The EUR/USD Heading Toward 1?

Last week's ECB decision to cut the Refi Rate and the deposit by 25bp - respectively to 0.75% and 0% - was not enough to push up the European equity markets as the CB did not give any indication on a further easing of monetary policy in the months ahead. (continue on seekinalpha)...