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Tag Archives: JPY

Leaked China CPI Number Boost Chinese Stocks

Morning Notes

- China CPI number appears to have been leaked a day early- the rumor, which was probably leaked by a PBOC source, is that the CPI number would be in line (+4.6%)
- Recall: last month China CPI came in notably higher than expected at +5.1%
- A controlled CPI number would stem the need for further tightening in China
- The leaked data boosted indices in Asia, with the Shanghai Comp closing up nearly 2%, Hang Seng up 1.1%
- Nikkei was up 40bps- tech stocks were strong following solid IBM and AAPL earnings last night
- Japanese yen showed some strength, hindering further gains in the Nikkei
- Europe trading mixed to relatively flat this morning- the bourses have pulled back from opening highs
- There was a report out that Germany is looking at the potential effects of a debt restructuring
- Also there was a relatively successful 1 yr debt auction in Portugal
- Dollar seeing further weakness
- December Housing Starts: 529K vs. 550K
- December Building Permits: 635K vs. 554K
- December Housing Starts m/m: -4.3%
- December Building Permits m/m: +16.7%
- S&P futures down about 4 handles from FV
- Fairly tight pivots for the Spooz today
- Spooz on the S3 buy signal, trading between S4 and S3

Jobless Claims at Lowest Level Since July 2008, But No One Seems to Care

Morning Notes

- Noteworthy overseas mkt action was in Nikkei, which closed down 1.1% with weakness attributed to strength in the yen
- Nikkei will be closed tomorrow so today was year end trading for the Japanese index
- Comments out of China from the PBOC around potential for more rate hikes in the first half of 2011; also mentioned that appreciation of the yuan would help the Chinese economy, not harm it
- Quiet trading in Europe again and indices there are down small

Best Jobless Claims Number, But No One Cares

- Commodities are flat
- Dollar is weak again
- S&P futures are pretty much unch’d
- Initial Jobless Claims: 388K vs. 416K; prior revised up to 422K from 420K
- Continuing Claims: 4.128M; prior was 4.071M

- Initial Claims number of 388K is actually the lowest level since July 2008, so certainly a positive sign for the economy
- S&P futures not reacting too much to the claims number release
- Remaining on the economic calendar for today: Chicago PMI @ 9:45a ET; Pending Home Sales @ 10a; Crude/Gas Inventories @ 11a
- U.S. market will be open all day tomorrow; note that the Japan and Korean markets will be closed tomorrow and the Uk, France, and Hong Kong will have a half day

Futures Hovering Over S4 Pivot For First Time In A Few Weeks

Spain Potential Downgrade

Morning Notes
- Overseas markets are all lower this morning following news that Moody’s may downgrade Spain
- Adding further weakness in the markets is the Tankan Survey results in Japan, which showed that business confidence in the country has fallen for the first time in two years
- JPY weakness has added little support to Nikkei, which closed down just 10bps
- Also, UK unemployment rate came in higher than expected
- Dollar up small
- Gold and oil are down
- NY Empire Manufacturing Survey: 10.57 vs. 3.00; prior was -11.14
- November Core CPI: +0.1% vs. +0.1%
- November CPI m/m: +0.1% vs. +0.2%; prior was +0.2%

- Futures not really reacting to data release
- Other economic items on the calendar for today: Industrial Production and Capacity Utilization at 9:15a ET; NAHB Housing Idx at 10a; Crude Inventories at 10:30a
- S&P futures are down about 4 handles from FV
- Tight pivots in the Spooz today- we are on the S3 buy signal , although that could change quickly given that we are hovering right above S4 and we had been on the S4 sell signal earlier in the pre

Tax Cuts For All

Morning Notes
- Overseas markets up in the o/n session
- President Obama gave a speech last night re: extension of tax cuts across all income levels for two years and extension of unemployment benefits; also to reduce payroll taxes and to allow biz investments to get getter tax treatment
- Shanghai Comp recovered nicely off its lows (was down as much as 1.5%), which it made when rumors were out that the PBOC would increase rates this weekend

Obama Tax Cuts

- Those types of rumors (of a rate hike) have been out in the past (it’s getting old so I’m not surprised at the stocks’ recovery off its lows)
- Also a rate hike is probably baked in by now; the main question now is how much of a rate hike they will see
- Australia kept benchmark rates unch’d
- JPY showed some strength, making the Nikkei the only index that was down among the global indices
- In Europe, Ireland rolled out its austerity plans to comply with the EU’s bailout pkg
- Euro is up while yields on sov debt of Spain/Italy/Greece/Portugal are up as well
- In commodities land, copper made a new high today; as a reminder, gold had made a new high yesterday
- Another quiet day on economic calendar: there is a 3-yr Notes auction today with results to be released @ 1p ET; IBD/TIPP Economic Optimism @ 10a

ECB President Trichet’s Not Helping Here

Morning Notes
- Overseas markets posting another day of solid gains
- ECB President Trichet begins conference at 8:30a ET- probably will not disclose any clear details around plan, and a simple reassurance of backing troubled nations may be good enough for the markets
- Nikkei closed up 1.8% as yen weakened and exporters were strong following yday’s US economic data
- Reuters report out speculating that China is mulling a $1.5 trillion investment in strategic industries, e.g., alt energy, biotech, adv materials, alternative fuel cars, and green technologies
- ECB left interest rates unc’d @ 1%, which was expected
- S&P futures were up about 5 handles from FV, but has pulled in since- after Trichet conference began
- Retails reported November same stores sales, almost all beat expectations, but names are trading mixed in the pre market, slightly skewed to the upside
- Initial Jobless Claims: 436K vs. 424K; prior revised up to 410K from 407K
- Continuing Claims: 4.27M vs. 4.2M; prior was 4.217M
- Now just awaiting Pending Home Sales @ 10a ET
- S&P futures continued to see weakness following commencement of ECB President Trichet’s press conference
- Trichet did not address an expanded bond purchasing program; did mention though that refinancing and special terms offers will continue at least through April 2011 as scheduled; all this pulling in the futures
- Euro also pulled in, dollar recovered as did Treasuries
- S&P futures are now up 2.5 handle from FV ahead of the open

More Fear Drives the Markets Lower

Morning Notes
- Markets are down across the board on news that N.Korea fired shots at a S.Korean island and the S.Korean Navy fired back
- Futures have not really recovered from their o/n lows
- Korean mkts had closed before the news came out
- Nikkei closed today for holiday
- Yen is lower
- Hang Seng saw the worst impact, closing down 2.67%
- Eurozone PMI came in better than expected, which initially helped push their mkts higher
- Dollar up a bit; dollar had spiked on Korea news
- Eurozone debt concerns still lingering and as such Irish/Spanish/Portuguese debt yields have spiked
- On the rest of the economic calendar for today: Existing Home Sales and Richmond Fed Manufacturing @ 10a EST, FOMC minutes @ 2p
- Revised Q3 GDP(annualized): +2.5% vs. +2.4%
- Revised Q3 GDP Deflator/Price Index: +2.3% vs. +2.3%
- This GDP was second estimate

Ireland Bailout News Provides Only Short Lived Relief

Morning Notes
- Ireland bailout was main catalyst in the o/n
- Bailout pkg estimated to be 95B EUR
- Now concerns are gathering around Portugal debt
- In Hong Kong, an increase of stamp duty on property added pressure to their market
- PBOC’s increase in bank reserve ratio was announced Friday after Asian mkts were closed so today’s action reflects that announcement
- Hence, Hang Seng and Shanghai Comp closed down small
- Nikkei, however, closed higher on yen weakness
- Futures have dropped significantly off its overnight highs as concerns are now directed at Portugal and Spain
- Euro also backed off its highs after spiking off Ireland news
- October Chicago Fed Manufacturing: -0.28; prior was -0.52
- S&P futures down about 6 handles from FV now trading right above the S4 pivot level
- Gold up a smidge; crude flat
- No other economic news on the calendar for today

Inflation Fears are the Name of the Game

Morning Notes

-       Overseas mkts are all down this morning

-       Shanghai Comp fell the most, down -3.98%

-       JPY weak, adding more pressure to Nikkei

-       S.Korea increase interest rates (largely unexpected), stirring more fears of inflation resulting in further rate hikes (namely by the PBOC, as was speculated—and feared—last week going into the weekend)

-       Eurozone and UK CPI both came in worse than expected- further inflation fears here

-       German ZEW sentiment data came in better than expected

-       Debt concerns still lingering in Europe

-       Gold and crude both down

-       Dollar nicely bid, TLT as well

-       This morning on CNBC, NY Fed Pres. Dudley came out defending QE2, saying it is not geared at weakening the dollar

-       Decent amount of economic data coming out today starting with PPI @ 8:30a EST, Industrial Production and Capacity Utilization @ 9:15a, finally NAHB Housing Mkt Idx @ 10a

-       S&P futures down about 5.5 handles from FV ahead of data releases

-       October PPI m/m: +0.4% vs. 0.8%; prior +0.4%

-       October PPI Ex Food & Energy m/m: -0.6% vs. +0.1%; prior +0.1%

-       Futures not really reacting to PPI numbers

-       S&P futures down about 4.25 handles from FV, trading between the S4 and S3 pivot levels

Overseas Markets Lower As Dollar Gains Again

Morning Notes

-       Overseas markets down w/ exception of Nikkei, which was solidly bid as the yen moved lower

-       People’s Bank of China (PBOC) increased bank reserve requirements by 50bps, effective Monday

-       China’s trade balance showed surplus- will stir more FX policy criticisms

-       Gold down, silver down, dollar up again, treasuries down

-       S&P futures down a bit, about 1 handle from FV ahead of jobless claims number, trading between S3/R3 pivot levels (on no pivot signal)

-       Note as tomorrow is Veterans Day, we are receiving Initial Jobless Claims data a day early today

-       Also on economic calendar for today is Import Price Index and Trade Balance at 8:30a (same time as claims data)

-       30-yr bond auction at 1p should be of more interest than usual given yesterday’s sharp sell off in treasuries

-       Initial Jobless Claims: 435K vs. 450K; prior revised up to 459K from 457K

-       Continuing Claims: 4.301M vs. 4.3M, prior was 4.387M

-       Import Prices Ex Oil: +0.3%, prior +0.3%

-       Trade Balance: -$44B vs. -$45B; August revised down to -$46.5B from -$46.3B

-       Futures initially spiked on data, but has since dropped back to same level as prior to data release

-       G20 summit begins tonight EST, tomorrow in S.Korea

Weak Data Overseas While GDP Comes In In-Line

Morning Notes

-       Overseas mkts all down

-       Japan Industrial Production and Household Spending came in weaker than expected

-       Meanwhile JPY showing strength, adding further pressure to Nikkei, which is down 1.75%

-       Eurozone CPI and unemployment rate worse than expected

-       Gold and oil down, but seeing spike now

-       Dollar is up a bit

-       Q3 Advanced GDP: +2.0% vs. +1.8%

-       Personal Consumption: +2.6% vs. 2.5%

-       S&P futures now down about 3 handles from FV, getting a very slight lift after GDP data

-       S&P futures on the S3 Buy pivot signal

-       Up ahead, we have Chicago PMI and UMich Confidence data out at 9:45a and 9:55a, respectively

-       Note that today is the last trading day of the month, for whatever that’s worth