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Friday, October 26, 2012

Your forexlive.com ENewsletter

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BOJ said to mull downgrading economic assessment next meeting – Bloomberg

Posted: 26 Oct 2012 01:51 AM PDT

Wire reports anonymous sources as stating BOJ will consider downgrading its assessment of the economy at next weeks policy meeting.

I for one am not in the least bit surprised.

USD/JPY sits at 79.95.

Buy orders reportedly clustered 79.70 thru 79.50, sell stops below there.

Sell orders seen clustered 80.30 upto 80.50 where barrier option interest is noted.

Germany: Hesse CPI Unchanged, Stable At +2.0% Y/Y In October

Posted: 26 Oct 2012 01:50 AM PDT

Hesse CPI

October: flat m/m, +2.0% y/y
September: flat m/m, +2.0% y/y

—

FRANKFURT (MNI) – Consumer prices in the German state of Hesse were
unchanged for the second consecutive month in October, as cheaper energy
and leisure offset costlier foodstuffs and apparel, leaving the annual
rate stable at +2.0%, the state’s statistical office reported on Friday.

With Brent crude down 0.2% on average from September, motor fuel
prices plummeted 4.5% m/m. The 2.9% rise in heating oil prices helped to
lift household energy prices 0.6% m/m, but overall energy prices were
still down 1.3% m/m, lowering the annual rate to +4.9%.

Excluding energy, core CPI managed a modest 0.2% rise on the month,
lifting the annual rate to +1.7% y/y.

Earlier today, the Federal Statistical Office reported that German
energy imports fell 3.3% on the month, with crude oil prices down 4.2%
and natural gas 4.4% cheaper.

The International Energy Agency sees oil market fundamentals easing
over the medium term, theoretically permitting a $20 decline in barrel
prices by 2017.

However, “oil prices are expected to remain volatile over the
forecast period amid heightened supply and demand uncertainty,” the
agency cautioned earlier this month.

Leisure prices were down by an additional 0.4% on the month,
cutting the yearly rate to +1.6%, while restaurants and hotel services
were 0.7% cheaper m/m, but 1.8% higher on the year.

Conversely, the 3.2% jump in seasonal food prices lifted overall
foodstuff 0.9% on the month and brought the annual change to +4.9%.

Clothing and shoe monthly price inflation slowed to +2.3%, but
accelerated on the year to +1.8%.

Pipeline price pressures look to be building in the private sector,
a recent PMI report showed, with input costs seeing a solid rise, while
output prices increased for the first time in four months. Pricing power
remains subdued, however, as strong competition and weak economic
conditions weighed, the PMI poll added.

Speaking to members of the German Parliament earlier this week,
European Central Bank President Mario Draghi sought to assuage fears
that the central bank’s newly announced bond-buying program would lead
to higher inflation.

“In our assessment, the greater risk to price stability is
currently falling prices in some euro area countries,” Draghi said. “In
this sense, OMTs are not in contradiction to our mandate: in fact, they
are essential for ensuring we can continue to achieve it.”

For detailed information see data table on MNI MainWire.

– Frankfurt bureau: +49 69 720 142; email: twailoo@mni-news.com –

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

ECB’s Asmussen: OMT bond purchases won’t have inflationary consequences

Posted: 26 Oct 2012 01:32 AM PDT

  • ECB is ‘not firing up printing press’
  • Aid request’ won’t automatically trigger ECB buying’
  • ECB will decide on each case regarding bond buying
  • Europe is making good progress on deficit reduction

On China…

  • Paying back state loans is hurting some Chinese regions
  • Some local governments are close to broke
  • Questions sustainability of Asian economic growth
  • Rich-poor divide is widening due to Asian policies
  • China survived crisis through domestic investment

Comments made in a speech in Kronberg, Germany

Praet: OMT Tackles Unfounded Fears About Reversibility Of EMU

Posted: 26 Oct 2012 01:30 AM PDT

BERLIN (MNI) – ECB Executive Board member Peter Praet on Friday
defended the central bank’s new bond-purchasing program, OMT, stressing
that it tackles unfounded fears about the reversibility of the euro.

In a draft for a speech to be delivered at a conference in Milan,
Praet noted that the ECB had drawn up the OMT “in order to address
severe distortions in government bond markets which in particular
originate in unfounded fears on the part of investors of the
reversibility of the euro.”

Moreover, the “OMT also aims to safeguard the monetary policy
transmission mechanism in all countries of the euro area, thereby
preserving the singleness of the ECB’s monetary policy,” the ECB chief
economist said.

However, “while monetary policy can alleviate deleveraging
pressures in crisis times, it cannot address their root causes,” Praet
cautioned.

“It is of the utmost importance that national governments and
European policy-makers undertake all needed structural measures to
address the fundamental sources of the current crisis,” he stressed.

“In fact, to tackle the underlying problems, a wide-ranging policy
response is necessary, inter alia, pertaining to public finances,
economic competitiveness and the financial sector,” Praet insisted.

The European banking sector is currently experiencing a “necessary
correction to overcome past excesses and to restore its health,” he
explained.

While the deleveraging of the banking sector is necessary to
correct the imbalances built up prior to the crisis, disorderly
deleveraging can represent a “serious threat to price stability,” Praet
warned.

The transmission to the real economy of shocks hitting financial
institutions’ balance sheets “is exceptionally strong if banks are not
able to shield credit supply and if borrowers are highly dependent on
bank credit to finance investment and consumption,” he pointed out.

Many banks in the Eurozone have been highly dependent on market
funding and have therefore been vulnerable to sudden stops, he noted.

Moreover, banks are the main providers of funds to the
non-financial sector in the Eurozone. “Therefore, the potential for a
very large amplification of shocks to the real economy is particularly
strong in the euro area,” Praet said.

The ECB’s non-standard measures have prevented “destructive
self-sustained dynamics,” he reckoned. “They have also helped to address
heterogeneity in the transmission mechanism of monetary policy across
different euro area countries. And most importantly they have
contributed to ensuring price stability.”

Yet, the Executive Board member conceded that there are risks from
the ECB’s unconventional measures.

“First, there is a risk of distorting the incentives to carry out
the necessary adjustment by favouring evergreening of loans and
‘zombie-bank’-type dynamics. This would represent a continued source of
uncertainty about banks’ exposures to non-performing loans, about the
possible implicit liabilities faced by governments and ultimately a drag
to economic growth.”

Moreover, large liquidity-providing repo operations increase asset
encumbrance in the banking sector, he noted. “Banks tie up certain types
of collateral with the central bank, and these assets are no longer
available to the bank for other types of transactions,” he elaborated.
This increases banks’ difficulties to issue unsecured bonds and can
potentially worsen their access to private sources of refinancing.

Now, a more integrated financial market union “is one of the top
priorities” in Europe, the central banker argued. The first step is the
establishment of the planned single banking supervisory mechanism.

“As a further key element, the European Commission recently
released a proposal for a bank recovery and resolution directive, which
contains important crisis prevention, early intervention, and resolution
tools,” Praet said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$$EC$,MGX$$$,M$X$$$,MT$$$$,M$$CR$]

ITALY DATA: October SA business confidence 76.6 vs…

Posted: 26 Oct 2012 01:10 AM PDT

ITALY DATA: October SA business confidence 76.6 vs 76.0 in September
–October current orders fall to four-month low of -42
–3-month outlook for output -6 in October vs. -7 in September
–Current inventory levels at +2 in October, unchanged from September

GERMANY DATA: Hesse October CPI unch m/m, +2.0% y/y;.

Posted: 26 Oct 2012 01:10 AM PDT

GERMANY DATA: Hesse October CPI unch m/m, +2.0% y/y; Sep +2.0% y/y
– Hesse October CPI ex-energy/seasonal foods +0.2% m/m, +1.4% y/y
– Hesse October CPI ex-energy +0.2% m/m, +1.7% y/y
– Hesse October CPI energy -1.3% m/m, +4.9% y/y
– Hesse October CPI food/non-alc. beverages 0.8% m/m, +4.3% y/y
– Hesse October CPI alcohol/tobacco +0.1% m/m; healthcare -0.1%
– Hesse October CPI food prices +0.9% m/m; seasonal foods +3.2%
– Hesse October CPI clothing/shoes +2.3% m/m; education -0.3%
– Please see MNI Mainwire for further details

ECB’s Praet: Fears of reversibility of euro are “unfounded”

Posted: 26 Oct 2012 01:08 AM PDT

  • “Utmost importance” governments tackle key sources of crisis
  • Must carefully monitor side effects of abundant liquidity
  • Monetary policy can alleviate deleveraging pressures in times of crisis but cannot solve underlying problems
  • Wider policy response needed to address root causes of deleveraging pressures

Italy October manufacturing business confidence falls to 87.6

Posted: 26 Oct 2012 01:03 AM PDT

From 88.3 in September, weaker than Reuter’s median forecast of 88.7.

EUR/USD steady around 1.2925.

IMF concedes Greece will miss debt target

Posted: 26 Oct 2012 12:54 AM PDT

Greek debt will be above the target of 120 percent of GDP in 2020, a preliminary report by the IMF showed late on Thursday, and Athens will need more reforms before emergency credit from international lenders can start flowing again.

An anonymous eurozone offficial was quoted as saying ”It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged. It will be rather 136 percent, and this would be under a positive scenario of a primary budget surplus, a return to economic growth, and privatisation”

More... ekathimerini

 

It’s all go!!! Anyone got any exciting weekend plans?

Posted: 26 Oct 2012 12:28 AM PDT

Guess market wants to take a look at this afternoons US Q3 GDP data release.

Japanese FinMin Jojima: Stable bond market is important for the economy

Posted: 26 Oct 2012 12:11 AM PDT

  • Deficit bond bill delay will affect market greatly
  • Aims to pass the bond bill swiftly in extraordinary DIET session
  • Will work to ensure market trust in fiscal policy

Speaking at a Bond Market Panel meeting (Jojima is the first minister to  attend one since 2004)

JAPAN DATA: Domestic production by top three………

Posted: 26 Oct 2012 12:10 AM PDT

JAPAN DATA: Domestic production by top three carmakers indicates
Japan’s combined automobile output fell on year in September:
–Toyota Motor’s domestic output -12.2% y/y in September vs. +3.9%
in August
–Nissan Motor’s output -13.9% y/y vs. -1.3% in August
–Honda Motor’s output -3.6% y/y vs. +23.3% in August

Swiss October KOF economic indicator fell to 1.67

Posted: 26 Oct 2012 12:03 AM PDT

Slightly down from a revised 1.68 in September

Spanish Q3 Unemployment rises to 25%

Posted: 26 Oct 2012 12:00 AM PDT

from 24.6% in Q2 and against Reuters forecast of 25.1%.

A new record high but hardly gonna raise any eyebrows :(

FRANCE DATA: 4Q mfg demand outlook recovers to -7 vs.

Posted: 25 Oct 2012 11:50 PM PDT

FRANCE DATA: 4Q mfg demand outlook recovers to -7 vs 3Q -16
–But 4Q foreign mfg demand outlook weaker at -15 vs 3Q -14
–3Q mfg capacity utilization 79% vs 80% in 2Q
–4Q sa mfg PPI seen +0.2% q/q; 3Q was +0.3% q/q

FRANCE DATA: October consumer morale 84; September…

Posted: 25 Oct 2012 11:50 PM PDT

FRANCE DATA: October consumer morale 84; September 85
– Buying-propensity stable
– Future inflation worries down one point
– Jobless fears down two points
– Please see MNI Mainwire for further details

French October consumer confidence falls to 84

Posted: 25 Oct 2012 11:46 PM PDT

From 85 in September, in line with Reuter’s median forecast.

Spanish 10 year govt bond yield up 5 bps at 5.67%

Posted: 25 Oct 2012 11:28 PM PDT

Why you no ask for bailout?

EUR/USD has been some slight early slippage, presently at 1.2922.   Stops remain through 1.2915.

Australia facing a hard landing: Andy Xie

Posted: 25 Oct 2012 11:18 PM PDT

MNI Japan Survey: Sep Output, Jobs, Spending, Retail Sales

Posted: 25 Oct 2012 11:10 PM PDT

TOKYO (MNI) – The following are the median forecasts for Japanese
data due in the coming week provided by economists surveyed by MNI.

September industrial output, a coincident indicator of the economy,
is forecast to post a third straight month-to-month fall due mainly to
slumping automobile output.

Economists warn that output is expected to lose traction in the
face of slower global demand and due to an end to government subsidies
for buying low-emission vehicles, which had supported factory production
as well as retail sales until a few months ago.

According to the Ministry of Economy, Trade and Industry, output of
transportation vehicles including automobiles is projected to show a
sharp 11.6% fall in September, which would be a fifth straight
month-on-month drop after -0.7% in August.

If economists’ outlook is met, output for the July-September
quarter will mark a 4.9% q/q fall, a second consecutive quarterly drop,
after -2.0% in Q2 and +1.3% in Q1. That will indicate that Q3 GDP, due
out on Nov. 12, will post the first q/q contraction in five quarters.

Personal consumption and retail sales will continue show y/y gains,
but the pace of their increases are expected to have slowed from the
previous month as the government finished accepting applications for
subsidies for buying greener cars on Sept. 21.

Automobile sales in September fell 8.1%, the first year-no-year
fall in 13 months, according to the Japan Auto Dealers Association.

Meanwhile, the recent month-to-month improvement in the labor
market is forecast to mark time, with the unemployment rate seen at 4.2%
in September, unchanged from August, when it fell from 4.3% in July.

Looking at the longer-term trend, the focus is on whether job
creation will lead to a rise in payrolls compared with year-earlier
levels.

The unadjusted number of employed people marked a ninth-straight
y/y fall in August but the pace of decline decelerated further to -20,000
from -90,000 in July.

Monday, Oct. 29, 0850 JST (2350 GMT Sunday): The Ministry of
Economy, Trade and Industry releases September retail sales.

Forecast: +0.5% y/y in September, a second straight monthly rise
after +1.7% in August and -0.7% in July.

Tuesday, Oct. 30, 0830 JST (2330 GMT Monday): The Ministry of
Internal Affairs and Communications releases the unemployment rate and
the Ministry of Health, Labour and Welfare releases the ratio of job
offers to job seekers, both for September.

Forecast: Unemployment 4.2%, unchanged from August; the job offers
to seeker index 0.83 (83 job offers for every 100 people looking for
work), also unchanged from the previous month.

Tuesday, Oct. 30, 0830 JST (2330 GMT Monday): The Ministry of
Internal Affairs and Communications releases September household
spending.

Forecast: +0.5% y/y in real terms, an eighth straight monthly rise
after +1.8% in August.

Tuesday, Oct. 31, 0850 JST (2350 GMT Monday): The Ministry of
Economy, Trade and Industry releases September industrial output.

Forecast: -3.4% m/m, which would be a third straight monthly fall
after -1.6% in August and -1.0% in July and weaker than METI’s forecast
for -2.9%.

Wednesday, Oct. 31, 1400 JST (0500 GMT): The Ministry of Land,
Infrastructure, Transport and Tourism releases September housing starts.

Forecast: +16.7% y/y, compared with a 10.8% drop in the same month
2011 and marking the first y/y gain in four months after -5.5% in
August; A seasonally adjusted annualized rate of 879,000 units, down
from 888,000 in August.

skodama@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4823 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]


at 5:04 PM

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