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European Market Update: Portugal Looks For Spending Cut Alternatives

Published 04/08/2013, 07:11 AM
Updated 01/01/2017, 02:20 AM
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Both European core and peripheral yields continue to move lower; JPY at multi-year lows after BOJ gives details on bond buying scheme

Notes/Observations

(CN) Three more cases in China bring H7N9 cases to 21, with 6 dead - China press.

(CN) PBoC Beijing Branch increases down payment for second home purchase and commercial bank mortgages.

Shanghai Composite declined to fresh 2013 lows; Nikkei225 hits highest level since Aug 2008.

(JP) BOJ will begin its new monetary easing effort with the purchase of ¥1.2T in JGB with maturities over 5 years in the next few days.

Japan Current Account registers first time in 4 months but down 47% y/y; Trade balance remains in deficit.

Portugal looks for spending cut alternatives after Constitutional court ruled out some austerity measures; Portugal 10-year bond recovers after opening up 25bps to test 6.50%

France, Austria, Belgium and Netherland 10-year Govt bond hit fresh record lows.

Germany 6-month BuBill yild moves back into negative territory and at 3-month low.

U.S. Corporate earnings season official gets underway after market close today.

Economic Data

(JP) Japan Mar Bankruptcies Y/Y: -20.0% v -11.8% prior.

(JP) Japan Mar Eco Watchers Current Survey: 57.3B v 53.2 prior (5th straight monthly rise); Outlook Survey: 57.5 v 57.7 prior, first MoM decline in 5 months.

(AU) Australia Mar Foreign Reserves: A$48.7B v A$43.7B prior.

(ZA) South Africa Mar Gross Reserves: $50.0B v $50.4B prior; Net Reserves: $46.1B v $47.2B prior.

(FI) Finland Feb Preliminary Trade Balance: -€85M v -€437.0M prior.

(HU) Hungary Feb Preliminary Trade Balance: €672.6M v 716.8Me

(CZ) Czech Feb Industrial Output Y/Y: -5.7% v -5.0%e; Construction Output Y/Y: % v -9.3% prior.

(CZ) Czech Feb Trade Balance (CZK): 28.7B v 28.8Be

(DK) Denmark Feb Industrial Production M/M: -4.8% v -1.6%e

(TR) Turkey Feb Industrial Production WDA M/M: 1.5% v 2.3% prior; Y/Y: 4.4% v 2.4%e

(EU) ECB: €19.0M borrowed in overnight loan facility vs. €20.0M prior; €134.9B parked in deposit facility vs. €135.5B prior.

(CH) Swiss Q4 Industrial Production Y/Y: 1.7% v 2.5% prior.

(SE) Sweden Mar Budget Balance (SEK): 5.8B v 15.6B prior.

(TW) Taiwan Mar Total Trade Balance: $3.2B v $2.1Be; Total Exports Y/Y: 3.3% v 2.2%e; Total Imports Y/Y: 0.2% v 4.2%e

(NO) Norway Feb Credit Indicator Growth Y/Y: 6.3% v 6.2%e

(NO) Norway Feb Industrial Production M/M: -1.9% v -4.9% prior; Y/Y: -10.7 v -8.1% prior.

(NO) Norway Feb Manufacturing Production M/M: 0.9% v 0.2%e; Y/Y: 4.2% v 2.5% prior.

(EU) Euro Zone Apr Sentix Investor Confidence: -17.3 v -12.8e

(HK) Hong Kong Mar Foreign Currency Reserves: $303.8B v $304.8B prior.

(IT) Bank of Italy Mar Balance-Sheet: ECB funding to Italian banks at €268.2B vs. €281.0B prior.

(SG) Singapore Mar Reserves: $258.2B v $259.1B prior.

Fixed Income:

(DE) Germany sold €3.49B in 6-month BuBills; Avg Yield: -0.0002% (three-month low) v +0.0103% prior; Bid-to-cover:1.9 x v 2.0x prior.

(NO) Norway sold NOK5B in 12-month bills; Yield: 1.66%

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM.

Equities

FTSE 100 +0.30% at 6,270, DAX +0.40% at 7,685, CAC-40 +0.70% at 3,689, IBEX-35 +0.30% at 7,822, FTSE MIB +0.50% at 15,327, SMI +0.0.60% at 7,685, S&P 500 Futures +0.20% at 1,549

The major European equity markets opened the session higher, following the losses in Friday's session. Portugal's PSI 20 has lagged following the recent ruling by the country's constitutional court on austerity measures. European banks are trading mixed. Outperformers include Santander and Intesa. In Greece, shares of Eurobank and National Bank have declined by over 25% on the planned delay to their merger transaction. Resource related shares are mostly higher, in line with the gains being seen for commodity prices. European airline companies are trading mixed, following the sharp declines seen on Friday's session on bird flu concerns. In terms of focal points for the markets, U.S. Fed Chairman Bernanke is due to speak later today. Also, Alcoa is due to report its quarterly earnings following the U.S. equity close.

U.K. movers [ENRC +5.5% (broker commentary), Premier Oil +4.5% (oil find), Aggreko +3% (broker commentary), Polymetal +2.5% (FY profits rose y/y), WPP +2% (broker commentary); Mecom Group -30% (profit warning)]

Germany movers [United Internet +4.5% (broker commentary), Bilfinger Berger +1.5% (long-term sales guidance), Bayer +0.50% (FDA issues priority review for RIOCIGUAT); SAP -0.50% (broker commentary), BMW and Daimler trade lower amid concerns about weaker yen vs euro]

Italy movers [Maire Tecnimont +12% (capital raise); Pirelli -3.5% (to delay business plan)]

Switzerland movers [Novartis +1.5% (broker commentary); Barry Callebaut -1% (H1 results below ests)]

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