http://www.finam.eu/ Trade FX, CFDs, Germany and Global Stocks at Finam Finam Limited http://www.finam.eu/i/finam.eu.logo.png http://www.finam.eu en http://www.finam.eu/daily/comments00002674C7/default.asp On Friday, May 18, key Asian equity benchmarks moved lower against the deepening financial crisis in Greece, the downgrade of credits ratings for Spanish banks and Greece and unfavorable stats out of the US. The media wired that international agency Moody’s Investors Service cut its ratings for 16 Spanish banks, citing the ongoing recession in the country and mounting losses on lending operations. Concurrently, the rating agency Fitch lowered Greece’s long-term national- and foreign-currency rating by one level, from B- to CCC, referring to political instability in the country and concerns the country may not be able to sustain euro membership. The economic data published stateside yesterday further dampened sentiment. Thus, the Federal Reserve Bank of Philadelphia’s general economic index dropped to -5.8 in May, against the forecast advance to 10, while the index of leading indicators slipped 0. Fri, 18 May 2012 16:51:00 +0400 http://www.finam.eu/daily/comments0000267478/default.asp On Thursday, May 17, European equity benchmarks finished lower for a fourth consecutive session. The highlight of the day was the suspension of ECB credits to a number of Greek banks and hearsay about the possible downgrade of Spanish banks’ ratings by Moody’s agency, with the news confirmed after the close of trade. Economic data out of the US was not conducive to buying either. Data showed that the initial claims for unemployment benefits were flat at 370,000 last week, against the forecast contraction to 365,000. The Federal Reserve Bank of Philadelphia’s general economic index dropped to -5.8 in May, against the forecast increase to 10 from 8.5 the previous month. Heading into the final bell, regional indicator STXE 600 slid 1.1% to close at 241.63. The British FTSE 100 index lost 1.24%, German’s main stock market indicator DAX gave up 1.18% and the French CAC 40 gauge eased 1. Fri, 18 May 2012 11:44:00 +0400 http://www.finam.eu/daily/comments0000267466/default.asp On Thursday, May 17, US benchmarks closed lower. Yesterday a correction gained momentum on the heels of bad news from Europe and weak economic data out of the United States as economic sentiment in the Mid-Atlantic region unexpectedly deteriorated, while initial jobless claims remained unchanged (370,000) despite forecasts of a drop. Europe, in turn, is still sitting on pins and needles. According to the Spanish media, the country’s banking sector seems to be facing problems and El Mundo wrote that Bankia customers have withdrawn over EUR 1 bn in the past seven days. In addition, the cost of money for the Spanish government jumped sharply at the latest auction. Under the influence of bad news stocks continued to move downhill, and demand was seen only in defensive stocks, i.e. gold, US and German government bonds. Sell-offs were seen across the board, with 9 of the Dow’s 10 sectors closing lower. Fri, 18 May 2012 10:58:00 +0400 http://www.finam.eu/daily/comments000026742E/default.asp NYMEX crude for June delivery retreated 25 cents, or 0.3%, to USD 92.56/bbl. Brent oil for July settlement slipped USD 2.26, or 2.1%, to end the session at USD 107.49/bbl on the London- based ICE Futures Europe exchange. Brent’s premium to the July WTI contract narrowed to USD 14.55/bbl. The oil market remained fixated on Greece Thursday amid a growing Eurozone debt crisis as the ECB has already stopped providing refinancing to some Greek banks found to be undercapitalized. Worries about a run on Greek banks have rattled Athens this week, after depositors withdrew at least EUR 700 mn on Monday alone. New elections are scheduled for June 17, after inconclusive polls this month left politicians unable to put together a ruling coalition. Concerns about the health of Spain's banks also resurfaced after a report that customers at Bankia had withdrawn over EUR 1 bn from their accounts in the past week, though the Spanish government said there had been no exit of deposits from the lender. Fri, 18 May 2012 08:41:00 +0400 http://www.finam.eu/daily/comments0000267415/default.asp Friday, May 18, is expected to see a thin flow of stats. Germany’s PPI for April will be announced at 6.00 GMT. Overall, the market forecasts the index to advance 0.3% m-o-m after a 0.6% m-o-m rise the prior month. Thu, 17 May 2012 20:04:00 +0400 http://www.finam.eu/daily/comments00002673F0/default.asp On Thursday, May 17, Asian stock indexes traded mixed with prevailing upside, paring losses after yesterday’s downfall. Yesterday’s news that the ECB temporarily withheld credits to some Greek banks sent jitters through the markets. Negativity was partly offset by the minutes of the recent US FOMC meeting, showing that some of its members spoke out in favor of economic stimulus measures, which fed optimism on Asian stock exchanges. Japanese macro data added to optimism. Preliminary data shows that Japan’s GDP expanded 1.0% q-o-q in the first quarter, against the projected growth of 0.9% after a 0.2% slide the previous quarter. The March data on industrial production was revised upward from 1.0% to 1.3%. Recapping stock indices, the regional stock indicator MSCI Asia Pacific added 0.6% to close at 114.97. China’s CSI 300 benchmark advanced 1.53% and Japan’s Nikkei 225 stock average climbed 0. Thu, 17 May 2012 16:29:00 +0400 http://www.finam.eu/daily/comments00002673C4/default.asp On Wednesday, May 16, Europe’s benchmark stock indexes mostly headed lower. The political situation in Greece continues to keep players on edge. The last-ditch attempt to form a governing coalition fell through and repeat elections were set for June 17. Markets also priced in speculation about ECB’s initiative to temporarily suspend lending operations for Greek banks, which was confirmed after the final bell. It also became known that Greeks withdrew large sums from their bank accounts after the elections on May 6, placing the entire banking industry in jeopardy. The negative news flow was partly offset by the results of the auctions held in France and Germany and a string of economic data. Notably, the French government has raised EUR 8 bn through the sale of two-, three-, four- and five-year bonds, with the yields on the paper in decline. In the meantime, Germany has floated ten-year bunds for a total value of EUR 4. Thu, 17 May 2012 12:14:00 +0400 http://www.finam.eu/daily/comments0000267395/default.asp On Wednesday, May 16, US equities ended the session in negative territory. It should be noted that bullish sentiment was seen in the first half of the session on the back of better-than-forecast economic data, but the bulls failed to hold ground as new fears over the European situation reignited. As data disclosed showed, US manufacturing rose 1.1% in April against an anticipated increase of 0.6% after March’s 0.6% drop (revised reading). At the same time, housing starts totaled 717,000 in April compared to the forecast 680,000, while the March reading was revised upward from 654,000 to 699,000. However, robust economic data were not enough to extend the gains. As the media wired, the European Central Bank (ECB) suspended monetary operations for a number of Greek banks as they have not yet been successfully refinanced, fueling fears about the future of Europe. Moreover, ECB chief Mario Draghi acknowledged for the first time since he has taken office that Greece could leave the Eurozone. Thu, 17 May 2012 10:39:00 +0400 http://www.finam.eu/daily/comments0000267365/default.asp Brent crude continued its descent, down 64 cents at USD 111.60/bbl, while NYMEX crude oil was down USD 1.28 to USD 92.70/bbl, up from an earlier low of USD 91.81/bbl, the lowest close in about 6 months. Oil prices slid alongside global equities and the euro on Wednesday as investors were spooked by the political crisis in Greece, triggering another flight from riskier assets. A Greek caretaker government will prepare new elections, probably on July 17, after President Karolos Papoulias failed to broker a governing coalition in meetings with other political leaders. German Finance Minister Wolfgang Scheuble said the new elections will be a referendum on whether Greece stays in the euro. We think the above date is important for the oil market, since it is unlikely that any stability or major upside will be possible at least until that time. That said, other sources claim the repeat elections could be held as early as next month. Thu, 17 May 2012 08:31:00 +0400 http://www.finam.eu/daily/comments000026734D/default.asp Thursday, May 17, is expected to see a light flow of economic data. Exchanges in a number of European countries, including Germany and Switzerland, will be closed for Ascension Day. Final data on Japan’s industrial production in March will be made public at 4.30 GMT. For the record, preliminary data showed the metric rose 1%. At 12.30 dollar investors are advised to keep an eye on US initial jobless claims for the previous week. The Index of Leading Indicators for April will come out of the United States at 14.00 GMT. As Wall Street forecasts, the index rose at a slower pace than a month before (0.2% vs. 0.3%). Philadelphia Fed Manufacturing Index for May will also be announced at 14.00 GMT. Generally, analysts anticipate the index to grow from 8.5 to 9.7. A speech by Saint Louis Fed president James Bullard will begin at 16.35 GMT. Wed, 16 May 2012 20:39:00 +0400 http://www.finam.eu/daily/comments000026731B/default.asp On Wednesday, May 16, Asian stock exchanges closed lower against the backdrop of political instability in Greece, where politicians remain gridlocked and unable to form a governing coalition. New elections lie ahead for the country and the possibility that the radical left, which is adamantly opposed to an austerity program will win the elections, triggered a sell-off in shares and a surge in demand for defensive assets, foremost among which are the US dollar and German bunds. The weak regional macro data merely fanned the flames. Orders in the Japanese engineering sector unexpectedly fell 1.1% in March, confounding the 4.4% growth forecast. That said, a weaker yen helped mitigate losses in Japanese shares and the Nikkei 225 and Topix indexes closed approximately 1.1% lower. In Japan trading, the mechanical engineering sector underperformed the broader market, with construction equipment producers Komatsu and Hitachi Construction Machinery sinking 2. Wed, 16 May 2012 16:47:00 +0400 http://www.finam.eu/daily/comments00002672D5/default.asp On Tuesday, May 15, European equity benchmarks closed the session in negative territory, with regional indicator STXE 600 hitting a low since last December, as the political situation in Greece reached a deadlock. The Socialist leader, Evangelos Venizelos, stated that a last-ditch attempt to form a coalition government in the country flopped, due to which early parliamentary elections would be held next month. The news heightened investor concerns about the country’s further membership in the Eurozone. Meanwhile, the international agency Moody’s Investors Service lowered its credit rating of 26 Italian banks, citing weak quarterly results from the banks and the outlook for economic growth in the country, which adversely affected the outcome of trading, with several Italian lenders ending the day lower. Additional negativity came from predominantly weak economic data out of the US and Europe. Wed, 16 May 2012 12:03:00 +0400 http://www.finam.eu/daily/comments00002672B2/default.asp On Tuesday, May 15, US equity benchmarks traded slightly lower despite some gains in the first half of the session. The bulls mainly ruled in early hours due to favorable economic data released in the United States as the New York Manufacturing Index jumped more than expected (from 6.56 to 17.09 against consensus forecasts of 8.5), and the NAHB Housing Index rose from 25 to 29 in May, while analysts had, on average, anticipated the metric to equal 26, and preliminary GDP numbers for Q1 out of the Eurozone and Germany came in better than expected. Meanwhile, US retail sales for April grew less than forecast, just 0.1%, i.e. a sharp slowdown vs. March, but initially investors paid no special attention to this. During the final hour of trading losses deepened on statements by Greek leaders that parliamentary re-elections would be held in June, and this outcome was virtually inevitable as over the weekend the Greek President failed to persuade key political leaders to reach any agreement. Wed, 16 May 2012 10:48:00 +0400 http://www.finam.eu/daily/comments000026727F/default.asp Brent oil for June settlement gained 71 cents, or 0.6%, to USD 112.28/bbl on the London-based ICE Futures Europe exchange. June futures expire today. The more-active July contract rose 43 cents, or 0.4%, to USD 111.43/bbl. NYMEX crude was last down 38 cents to USD 94.40/bbl, up from Monday's fall to USD 93.65, the weakest intraday price since mid-December. Prices got a boost after economic growth in Germany, Europe’s largest economy, outpaced economists’ projections. German gross domestic product rose 0.5% in the first quarter, while economists predicted a 0.1% gain, according to the median forecast. Oil closed mixed after a second Greek election was called for as attempts to form a government fizzled out, sending the euro tumbling. Futures dipped after Pasok party leader Evangelos Venizelos said a second ballot is inevitable. The euro declined against the dollar after the announcement. Wed, 16 May 2012 08:20:00 +0400 http://www.finam.eu/daily/comments0000267268/default.asp Wednesday, May 16, is expected to see a thin flow of economic data that we find interesting. Pound investors are advised to keep an eye on the UK’s March unemployment numbers at 8.30 GMT. On the whole, the market forecasts the UK’s unemployment rate to remain unchanged (8.3%). Switzerland’s ZEW Investor Sentiment Index for May will be released at 9.00 GMT. The forecast for this index is negative and analysts anticipate the metric to drop to -8.0, while it came in at 2.1 a month before. The final reading of the Eurozone’s April CPI is due out at 9.00 GMT. On average, the market expects no revision of the preliminary data that showed a 2.6% y-o-y increase. Another key driver for the euro (the Eurozone’s trade balance for April) will be made public at the same time. Dollar investors are advised to take a look at US housing starts for April at 12.30 GMT. We’d like to note that analysts, on average, forecast housing starts to increase from 654,000 to 680,000, and this could provide support to the greenback. Tue, 15 May 2012 20:35:00 +0400 http://www.finam.eu/daily/comments000026723E/default.asp On Tuesday, May 15, Asian equity benchmarks closed on a mixed note. Greeks’ inability to form a governing coalition is putting pressure on markets and traders have begun to price in a risk that Greece will default on its credit liabilities and exit the Eurozone. That said, stocks managed to recoup a major part of losses before the final bell on news the German economy showed 0.5% growth in Q1, which topped analyst estimates. Of the regional stats, we’d like to highlight a slight decrease in Japan’s consumer confidence in April and data on South Korea’s trade balance. Exports from the latter country slowed 4.8% in April, outpacing economist estimates, while imports slid 0.2%, against the 1.4% rise forecast, which left the country with a fractionally lower trade deficit. The Japanese stock market emerged among the laggards, with the Nikkei 225 and Topix indexes losing 0.81% and 1.23%, respectively. Tue, 15 May 2012 16:50:00 +0400 http://www.finam.eu/daily/comments00002671EB/default.asp On Monday, May 14, European equity benchmarks traded to the downside. Players cannot yet divert their attention away from the unresolved political issue in Greece, which is being stoked by a heated debate about the possibility of Greece exiting the Eurozone, which has exacerbated a wave of pessimism in the region. Notably, the Christian-Democratic Union, led by Federal Chancellor Angela Merkel, suffered a stinging defeat in the elections in Germany's most populous state North Rhein-Westphalia to the Social Democrats, the main opposition party, allowing them to reinforce their positions. It should be noted that support for the Christian-Democratic Union has dropped to its lowest level since World War II. The economic data released also brought no releif. Industrial production in the Eurozone unexpectedly slid 0.3% m-o-m in March, while analysts, on average, had forecast growth of 0. Tue, 15 May 2012 12:12:00 +0400 http://www.finam.eu/daily/comments00002671CD/default.asp On Monday, May 14, primary American benchmarks posted mild losses, with the blue-chip index hitting a low since January. No economic data came out of the United States, and for this reason all eyes were on Europe, where the worst-case scenario continues to unfold in Greece. For the record, over the weekend Greek President Karolos Papoulias failed to persuade the leaders of the largest parties to form a coalition, as they still have severe disagreements. Under the circumstances, even a chance of the formation something akin to a ‘national unity’ government is quite thin. Today, May 15, the Greek President will make a last-ditch attempt to stave off a new round of parliamentary elections by holding another meeting with party leaders. One way or another, the investment community has already begun to discuss the idea that Greece could leave the Eurozone before long. The topic, once considered taboo, is becoming a reality as ECB officials and German economists already noted that Greece’s exit from the Eurozone would not be fatal. Tue, 15 May 2012 10:50:00 +0400 http://www.finam.eu/daily/comments000026719A/default.asp Brent for June settlement dipped 69 cents, or 0.6%, to USD111.57/bbl on the London-based ICE Futures Europe exchange, while NYMEX crude for June delivery declined USD1.35 to USD94.78/bbl Crude-oil futures traded lower after Greece failed to agree on a unity government and European Union officials considered what has been dubbed Grexit, the growing possibility that the country could break away from the Eurrozone. Saudi Arabia would like crude prices to come down further, said Ali al-Naimi Sunday, even as the kingdom has been pumping at the fastest rate in almost three decades. Saudi Arabia wants an oil price of around USD100/bbl for Brent and would like to see global inventories rise before demand picks up in H2. The kingdom pumped 10.1 mn bpd in April, about 200,000 bbl more than the previous month, an OPEC report showed May 10. All in all, sentiment has soured due to the lack of confidence in the market, and this has taken a heavy toll on oil prices. Tue, 15 May 2012 08:48:00 +0400 http://www.finam.eu/daily/comments0000267184/default.asp Tuesday, May 15, is expected to see a heavy flow of economic data that we view as significant. Japan’s CPI for April will be made public at 5.00 GMT. For the record, this March the index came in at 40.3 and if in April the index improved, this could bolster the yen. Euro investors are advised to focus on the preliminary reading of Germany’s Q1 GDP at 6.00 GMT. As analysts forecast, economic growth in the Eurozone’s largest economy equaled 0.1% q-o-q after a 0.2% q-o-q contraction the prior quarter. Pound investors are advised to keep an eye on the UK’s trade balance for March at 8.30 GMT. On average, the market expects the UK’s trade deficit to fall from GBP 8.77 bn in February to GBP 8.40 bn, which could be good news for the pound sterling. The Eurozone’s preliminary GDP data for Q1 will be announced at 9.00 GMT. A contraction in the Eurozone’s 17 economies is expected to slow down from 0. Mon, 14 May 2012 20:28:00 +0400