Hello
EU: Tuesday's calendar gets underway at 0745GMT, with the release of the French
January business climate indicator, including the release of both manufacting
and service sector sentiment.
SPAIN: Spain Treasury confirmed final demand for its new 10-year syndicated bond
priced Tuesday exceeded E22.7bln, with 350 investor accounts.
- This demand was the highest figure obtained a syndicated loan in the history
of the Treasury and the E7.0bln issued was in line with two 10-year issues made
in 2009.
- foreign investors took 60% of the allocation, with UK taking (26%). The Euro
Zone countries tool 17%, Scandinavia 7%, 3% Middle East and the Americas
investors 3% of the total.
- By investor type: fund managers took 40% of the issue, followed by bank
treasuries with 34%, insurers and pension funds with 13% and central banks with
7%.
UK: UK data is expected at 0930GMT and sees the release of November and December
employment data. Recent data have shown the rate of job creation slowing and
several analysts expect the claimant count to have risen in December. However,
MNI's UK Reality Check series suggests that the rate of hiring has more or less
held up over the winter so far. And other survey data also suggest that the
number of people in employment is continuing to rise; the KPMG/REC Report on
Jobs showed another increase in permanent and temporary appointments during
December. Median forecasts look for a claimant count rate of 4.8%, a modest
increase in the claimant count and an ILO rate of 7.8%.
Also Wednesday morning,
UK PM David Cameron is set to make his long awaited speech on European policy,
with press reports suggesting Cameron will likely offer the UK electorate an
"In/Out" vote on EU membership by 2017 - assuming the Tories remain in power.
UK PM Cameron will make his long-awaited speech on Europe Wednesday and snipptes
say he will promise the UK electorate an "in/Out" referendum on the EU by 2017
in the Tories win the next election, the FT says. The paper adds Cameron will
attempt to put pressure on other EU leaders, saying no improvement in the UK's
membership terms could lead to an drift towards EU exit.
UK PRESS: Several senior UK cabinet ministers have urged Chancellor Osborne to
"look elsewhere" for budget savings as spending cuts in their departments have
reached a limit, the FT says.
UK PRESS: In an article released Tuesday, the ILO says as many as 203 million
people could be unemployed across the world in 2013, the Guardian says.
INDUSTRY NEWS: Barclays Bank is preparing to offshore hundreds on jobs in its
investment banking division in order to save costs, the Independent reports.
UK PRESS: The Times notes that UK engineering giant is to cut up to 400 jobs in
the UK as it closes a division related to maintenance of military jet engines.
reko kabel 
US: The US calendar gets underway at 1200GMT, withe the release of the MBA Mortgage
Index for the Jan 18 week, followed by the release of the ICSC-Goldman Store
Sales for the Jan 19 week at 1245GMT.
At 1355GMT, the Redbook Average for the January 19 week will cross the wires.
At 1400GMT, the November FHFA Home Price Index will be released.
At 1400GMT, the Bank of Canada rate announcement is expected. No change is
expected in policy, but the central bank also releases the quarterly domestic
and global economic outlook.
At 1500GMT, the IMF releases its quarterly World Economic Outlook.
Lastly, at 2000GMT, the US Treasury Allotments data for January will be
released.
EURO-DOLLAR: Closed in NY at $1.3321 after rate had recovered off lows of
$1.3278 to $1.3327 into the close. Rate was contained within a $1.3310/30 range
in early Asian dealing, the rate retreating from a challenge on $1.3330 to ease
below its early support to post session lows at $1.3305 before settling between
$1.3310/15 ahead of the European open. Asian traders noted decent sell interest
seen back in place above $1.3330, adding that bids in the area between
$1.3305/00 belong to CTA accounts. Main downside stops now seen on a break of
$1.3270, with short entry interest also noted should this level give way. A
fairly light data calendar, French business indicators due at 0745GMT to provide
the morning interest. Speakers at Davos could prove influential, Japan's
Economic and Fiscal Policy minister Akira Amari of note and possible effect on
euro-yen. Traders also note that Goldman Sachs have changed their euro-dollar
forecast to $1.40 flat over the next 3-mos and 6-mos from $1.25 and $1.33
respectively.
CABLE: Closed in NY at $1.5841 after rate had seen a late NY sell off back to
$1.5819 on reaction to BOE King's speech, the market concentrating on headlines
that the BOE stood ready to provide further stimulus and was open to a review of
the current policy regime. However, a deeper read of King's comments quickly had
analysts highlighting the comment that is was now 'sensible to review
arrangements ' for monetary policy but went on to argue in favour of key
elements of the current flexible inflation targeting regime. The speech is
expected to dampen effects of today's BOE Minutes, with market to focus on PM
Cameron's speech this morning concerning the UK/EU relationship going forward,
most of which has been picked up by the FT, as well as Friday's key release of
Q4 GDP data. The reactive dip in sterling saw euro-sterling move back to
stg0.8415, from session lows of stg0.8364, with rate consolidating the recovery
between stg0.8405/16 in Asia. Cable support remains around $1.5820, stronger
toward $1.5800 (barrier interest), with resistance at $1.5845/50 ahead of
$1.5880/85.
EURO-STERLING: Macro sell interest in euro-sterling presses rate outside of its
overnight stg0.8405/16 range, extending the base to stg0.84025 and currently
holding heavy. Rate had seen lows of stg0.8364 Tuesday before bouncing back to
stg0.8408 at the NY close as market reacted to BOE King comments that the BOE
stands ready to provide further stimulus. Support seen into stg0.8400, a break
to open a deeper move toward stg0.8385/80. Resistance stg0.8415/20. PM Cameron
speech this morning on the UK/EU relationship going forward awaited, with BOE
Minutes due up at 0930GMT, though seen somewhat muted after King's comments
overnight.
YEN: Dollar-yen closed in NY at Y88.74, after rate had seen lows earlier in the
day at Y88.37 following the corrective pullback in yen pairs seen after the
initial positive reaction to Tuesday's BOJ monetary policy announcement (timing
of stimulus viewed as ambiguous). Rate touched an early high of Y88.79 before
turning lower on Japanese sales, the rate moved down to retest Tuesday's
mentioned low before demand emerged at the Tokyo fix. Rate retested the early
high before slipping lower through the Asian afternoon, moving through Y88.37 to
stg0.8812 and seen holding heavy into the Asia/Europe transition. Triggered
stops below Y88.30, with main sell weight seen from macro accounts, cited for
this late move, with next support seen into Y88.00 and larger stops below. Bids
reported toward Y88.80, with CTA stops noted on a break of Y88.90. Euro-yen
tracked dollar-yen moves overnight, initially dipping to Y117.72 from an early
high of Y118.32, the rate then recovering to Y118.34 before sliding lower
through the Asian afternoon to Y117.32 ahead of the European open. Rate
currently trades around Y117.38. Japan Economic and fiscal policy minister Amari
is due in Davos, comments from him will be in focus.
JAPAN STOCKS CLOSE: Japan's benchmark stock index was lower again Wednesday, as
a stronger yen again weighed. The Nikkei 225 ended the session lower by 222.94
points, or 2.08%, at 10486.99.
JAPAN STOCKS: The Nikkei 225 Index ends down 2.08% at 10,486.99.
GOLD: Spot gold prices are trading around unchanged levels Wednesday
after posting some marginal gains during the previous day. Spot gold
ended Tuesday's session $2.65 higher at $1692.70/oz after trading a
one-month high of $1696.15/oz. Prices have still failed to breach
$1700/oz as the precious metal continues to remain pinned in a narrow
range, lacking a fresh catalyst to drive prices convincingly in either
direction. Spot gold prices have remained stable so far during Asian
traded hours this morning, despite a moderate pullback in FX pair
Euro-dollar to below $1.3300. Gold has advanced from lows of $1689.40/oz
to intra-day highs of $1695.10/oz and now trades at $1692.40/oz, down
$0.30 on the session. Metals brokers expect $1700/oz to be tested at
some stage in the forthcoming sessions, with sell interest noted above
at $1706/oz and also $1711/oz. Medium sized bids are seen below the
market, working around $1684/85, with sell stops lurking around the
$1670/oz area.
OIL: March NYMEX WTI prices are trading marginally lower Wednesday, in
consolidation mode after yesterday's gains. March WTI futures ended
Tuesday's session up 64 cents at $96.68 a barrel after trading in a
$95.47 to $96.89 range. The February contract, which expired yesterday,
settled up $0.68 at $96.25 per barrel last night. WTI prices advanced,
along with other risk assets, after the BoJ's plans to shore up the
world's third largest economy and some unexpected strong investor
confidence data from Germany. This morning, WTI prices have consolidated
after Tuesday's gains ahead of weekly inventory data from the American
Petroleum Institute (API), due later in the day, followed on Thursday by
the inventory report from the Energy Information Administration (EIA).
March WTI futures have been tied to a narrow trading range so far during
Asian hours this morning, paring back from highs of $96.90 to intra-day
lows of $96.52 and now trade at $96.62 a barrel, down 6 cents on the
session.
NATURAL GAS: NYMEX February natural gas prices are trading higher
Wednesday after posting a lower close for the first time in four
sessions yesterday. February natural gas futures ended Tuesday's session
0.8% lower at $3.558 per million British thermal units (mln Btu). Prices
became subject of some moderate profit-taking after a 15% run to the
upside that saw prices reach highs of $3.645 per mln Btu in electronic
trading, the highest level seen since early December. February natural
gas futures have resumed their trend higher so far this morning,
advancing from initial lows of $3.567 to a fresh session high of $3.593
per mln Btu a few moments ago and prices remain at their best levels,
currently trading $3.593 per mln Btu, up from last night's close of
$3.558 per mln Btu.
OPTIONS: FX: Option expiries for today's 1000ET cut,
* Euro-dollar; $1.3200, $1.3295, $1.3300, $1.3350, $1.3365, $1.3400
* Dollar-yen; Y86.50, Y87.15, Y87.75, Y88.50, Y89.00, Y89.50
* Cable; $1.5850, $1.6000
* Euro-Swiss; Chf1.2335
* Aussie; $1.0500, $1.0550
EUROZONE T-BILL ISSUANCE: Eurozone sovereign T-bill issuance has been completed
for this week, with E15.725bln allocated by Netherlands, France, Spain, and ESM,
compared to E20.551bln allotted last week. To recap, on Monday Netherlands sold
E2.31bln 3-month DTC at average yield -0.011% and sold E1.08bln 6-month DTC at
average yield -0.007%. In the afternoon, France sold E4.394 3-month BTF at
average yield 0.007%, E1.593bln 6-month BTF at average yield 0.037% and
E1.594bln 12-month BTF at average yield 0.089%. On Tuesday Spain sold E1.206bln
3-month Letra at average yield 0.441% and sold E1.578bln 6-month Letra at
average yield 0.888%. Finally ESM sold E1.97bln 6-month Bill at average yield
0.0245%. In terms of T-bill issuance planned for next week we have, Germany,
France, and Italy, and could total E19.0bln.
EUROZONE ISSUANCE: Sovereign bond issuance in the eurozone this week so far
totals E10.51bln with Portugal next likely country to come to the market,
perhaps as soon as today. Portugal has mandated Barclays, Banco Espirito Santo,
Deutsche Bank and Morgan Stanley as lead managers for syndicated tap of its
4.35% Oct 2017 PGB bond, sources familiar with the deal told MNI. This will be
Portugal's first syndicated sale since Feb 2011, when it last sold a new 6.40%
Feb 2016 bond and its first sale since April 2011 when it was frozen out of the
bond market for funding after Lisbon requested external aid from the EU/IMF. As
a recap, Slovakia kicked off supply on Monday with taps of the 4.625% 2017
SLOVGB & 4.35% 2025 SLOVGB issues for E223mln and E197.4mln, respectively. On
Tuesday, the Netherlands conducted its off-the-run DSL sale of 1.00% Jan 2014
DSL and 3.75% Jan 2042 DSL for E2.085bln. Also on Tuesday, Germany conducted its
linker auction of 0.10% Apr 2023 Bundei for E1.0bln and Spain priced E7.0bln of
its syndicated new 10-year benchmark bond issue at mid-swaps +365bps, which
equated to a spread of +26bps vs the 5.85% Jan 2022 Bono issue and re-offer
price of 99.991, yield 5.403% and coupon 5.40%.
EUROZONE: Timeline of key events in the eurozone for next few weeks:
- Jan 23/27 World Economic Forum annual meeting in Davos
- Jan 23 IMF publishes world economic outlook update
- Jan 23 Portugal releases year-to-date budget report
- Jan 24 EMU Jan flash manufacturing/services PMI
- Jan 25 ECB announces 3-year LTRO payback size
- Jan 28 Italy linker/CTZ auctions
- Jan 29 Italy T-bill auction
- Jan 30 ECB 3-year LTRO 1 year anniversary
- Jan 30 Italy BTP auction
- Jan 31 Spain & Greece ban on short-selling due to expire
- Jan 31 Italy T-bill redemption for E9.775bln
- Jan 31 Spain bond redemption for E14.286bln
- Feb 01 Italy BTP bond redemption for E21.009bln
- Feb 07 ECB Governing Council meeting, Draghi press conference
- Feb 07/08 European Leaders summit in Brussels
US: Timeline of key events in the US for the next few weeks:
- Jan 21-23 US House of Reps to meet
- Jan 21-25 US Senate to meet (tent)
- Jan 23 UST $30.0 BN 4-week bill auction
- Jan 23 House expected vote on legislation suspend debt-limit until May 19
- Jan 23/27 World Economic Forum annual meeting in Davos
- Jan 23 MNI Chi Rpt (Chi PMI) seasonal factor revisions
- Jan 23 FHLB Global announcement
- Jan 24 $15 BN 10-yr TIPS auction
- Jan 24 UST announces auctions: 3m, 6m bill; 2-yr, 5-yr and 7-yr notes
- Jan 25 US Treasury Geithner officially leaves office (COB?)
- Jan 25 US Tsy Dep Secretary Wolin becomes acting secretary until Lew installed
- TBD Confirmation hearing, committee vote, Senate confirmation of Lew as US
Treasury Secretary
- Jan 28- Feb 01 US Senate to meet (tent)
- Jan 29/30 FOMC policy meeting (no press conf, no estimates)
