Overnight Market Summary

Site Administrator | July 19, 2012

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Overnight News

-EU Officials: Greece seen missing debt reduction targets; further restructuring necessary

-IMF Paper: argues for ECB to restructure Greek debt; ECB seniority undermines crisis-fighting powers; IMF assessing whether to keep funding Greek bailout

-German CDU’s Barthle: a 2nd debt haircut for Greece is an option if bailout terms not met

-German econ Min: further criticised Greece; no further aid without implementation of reforms

-Spa/Ger FinMins joint statement: German govt & parliament majority support Spain’s rescue plan

-French & Italian officials denied a joint French-Italian-Spanish call for swift implementation of EU action

-DBRS (smaller rating agency): Spain nearing a tipping pout; must restore investor confidence or potentially need to seek a bailout

-Moody’s cuts German & Dutch sub-sov outlook (after cut to sov outlook)

-Moody’s cuts outlook on EFSF to Negative from Stable (after Ger, Neth & Lux outlook cuts)

-German Econ Advisor Feld: a Euro collapse would cost Germany €3.3Tr

-Spiegel: outlook cut could stiffen Berlin’s opposition to aid

-Kathimerini: Greek PM rules out bailout changes for now

-Greek market regulator extends stock short selling ban to October 31st

-WSJ Hilsenrath: Fed close to action if growth doesn’t pick up soon; Options include QE, rate guidance & lower reserve rate; Action as early as next week or in Sept

-Solid 2y Auction: B/C 4.00x (3.62x prev) but tails WI by 0.3bps

-IMF: China set for a soft landing; needs further reforms; softens Yuan language to “moderately undervalued”

-China Ministry of Industry:  economic environment is severe; growth likely to pick up in H2

-BoJ’s Yamaguchi: will maintain powerful easing until inflation tgt met; wont hesitate to take more action if risks worsen

-Japan: June trade balance was in surplus at 61.7B vs exp deficit of 140B

-Australia: 2Q CPI 0.5% q/q vs 0.6% cons

-Aus Treasurer Swann: CPI is consistent with forecasts; RBA has flexibility to cut rates

-Equities: Apple: Weak 3Q results:  EPS $9.32 (v 10.37 exp); Revs slso miss; stock -5.5% AH


Mkt Recap:


**** US Markets ****

S&P 1,338 (-0.9%); Dow 12,617 (-0.8%); Nas 2,863 (-0.9%)

NYSE volume: 109% 20 day Av;  VIX 20.5 (+1.9pts)

Sectors: BKX +0.0%, SOX -0.4%, XAU -0.3%, UTY -0.9%, DRG -1.1%


Cash USTs: flattened

Yields: 2y +0.4bp, 5y -1.1bp, 10y -3.0bp, 30y -4.6bp

2/10s: flatter (-3.4bp); 10/30s: flatter (-1.6bp)

Euro$: Whites +0.0 to +0.5; Reds +0.0 to +0.5; Greens +1.0 to +2.0


**** Asian Markets ****

Equities : N225 -1.7%, HSI -0.7%, A200 -0.2%, SHAI -0.3%

Sectors: Bnk -0.4%, Semi -1.3%, Elec -2.9%, Auto -2.3%, Mine -0.5%, Steel -2.7%

SP Futs: -3.75


Cash USTs: Trading richer and flatter

Yields: 2y -0.6bp , 5y -1.1bp , 10y -2.2bp , 30y -1.9bp

2/10s: flatter (-1.6bp); 10/30s: near unch (+0.5bp)

Euro$: Whites +1.0 to +1.5; Reds +1.0 to +1.5; Greens +1.0 to +1.5


**** FX & Commods ****

EUR 1.2071 (+0.0018); GBP 1.5511 (+0.0008); JPY 78.13 (-0.06)

Gold 1576.1 (+7.72); Copper 335.3 (+1.05); Oil 88.5 (-0.34)


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