MacroMaven

Real-time forex news feed

2012-08-05T23:52:00.003-04:00

Great real-time news feed for forex market moving events at: http://www.forex-profiteer.com/StreamingNewsFeeds

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2012-07-27T10:22:00.000-04:00

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2012-05-17T20:38:00.005-04:00

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2012-05-08T00:44:00.004-04:00

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US Consumer Credit: Headline strengthens, details more mixed

2011-11-07T15:53:00.002-05:00

US Consumer Credit increased USD 7.386 bln, exceeding expectations of a USD 5,150 bln rise over the month of September. Though the prior month's USD 9.682 bln fall was revised down a bit, but the fact that this month's number is back in positive territory is "a good thing" (as convicted felon Martha Stewart would say).

However,
'revolving credit', which doesn't include federally-backed student loans or rock-bottom fixed-rate mortgages are not doing as well:

This suggests the deleveraging process in the household sector is far from over. Personally, I think it's best to get the whole deleveraging process over and done with already, so we can start a new cycle based on solid foundations. Yes, there will be a few tough quarters, but affter that there is nowhere to go but up.

Alas, our great leaders in Washington (and practically everywhere else) prefer a slow bleed. One way of another, the debt that financed consumption over the past couple of decades must be eliminated-- either through pating it down, writing it off, or some combination thereoff.

PAPANDREOU SAYS REFERENDUM POSSIBLY ON DEC. 4 -Wire

2011-11-02T19:01:00.000-04:00

The date appears set. Note: IMM Dec Options Expiry on EUR Futures is Dec 9. So, just in time...

Canada GDP in Aug: 0.3% m/m (prior rev to 0.4% from 0.3%) ; 2.4% y/y (prior rev to 2.4% from 2.3%)

2011-10-31T08:31:00.001-04:00

Hawkish Trichet: Draghi over-interpreted on bond buys, says Trichet

2011-10-30T21:30:00.004-04:00

RTRS: Draghi over-interpreted on bond buys, says Trichet

FRANKFURT: Sun Oct 30, 2011

Reuters - Markets have over-interpreted comments by incoming European Central Bank chief Mario Draghi on the bank's readiness to go on buying the bonds of troubled euro zone states, outgoing ECB President Jean-Claude Trichet said.In a wide-ranging interview at the end of his eight-year term, Trichet welcomed what he saw as a commitment by euro zone governments at a summit last week to intervene in bond markets via the EFSF rescue fund to fight the bloc's debt crisis.

The ECB embarked on its own bond-buying programme in May of last year but the plan has proven controversial, leading to the resignation of two leading German policymakers at the bank, and Trichet has appeared keen to withdraw from the policy.
Draghi seemed to take a different stance last week, appearing to signal that the ECB stood ready to go on buying bonds, intervening in debt markets to lower the borrowing costs of countries snared by the crisis.
Trichet said too much had been read into Draghi's comments.
"I don't think that Mr Draghi said that," he said of the message understood by financial markets that the ECB would go on buying bonds.
"I think there has been an over-interpretation," he added, looking out from the 32nd floor of the ECB's Frankfurt headquarters.
The confusion over Draghi's message highlights the importance of communicating ECB policy -- an area where Trichet has largely succeeded, delivering a clean, consistent message that has endeared him to financial markets.
A Reuters poll of euro money market dealers conducted after Draghi's comments showed a majority expect the ECB to carry on buying sovereign debt in secondary markets once the European Financial Stability Facility (EFSF) is empowered to do the same.
Speaking in Rome on Wednesday, as EU leaders were heading to Brussels for their summit, Draghi said: "The Eurosystem (of euro zone central banks) is determined, with its non-conventional measures, to prevent malfunctioning in the money and financial markets creating an obstacle to monetary transmission."
Draghi used language similar to that employed by the ECB to explain the reactivation of the bond-buy programme in August, when it said the plan was aimed at "restoring a better transmission of our monetary policy decisions taking account of dysfunctional market segments".

For the rest of the story click: here

The German High Court Speaks

2011-10-28T03:55:00.003-04:00

Thought the European deal reached yesterday was a done deal? Apart from all those pesky details like, where all the money will come from, the German Constitutional Court is not allowing the ink to dry, just yet.

German court suspends use of parliament EFSF committee

BERLIN Fri Oct 28, 2011 3:35am EDT

BERLIN Oct 28 (Reuters) - Germany's Constitutional Court on Friday temporarily suspended the use of a special parliamentary committee to take decisions in urgent matter on the euro zone bailout fund on behalf of Bundestag lawmakers.
Click here to read the rest...

Data Watch: Thursday

2011-10-27T01:07:00.000-04:00

While markets will undoubtedly spend much of their time digesting the Euro-zone 'deal', one eye will remain on the incoming data.

Foremost will be the first reading of US Q3 GDP expected to accelerate to a 2.5% annualized rate from the sluggish 1.3% in Q2.

On the European front, the Riksbank is expected to keep rates on hold at 2.00% when it announces the result of its deliberations at 3:30 am ET. Also, Euro-zone M3, confidence surveys and prelim estimate of German inflation in Oct (expected at 2.8% y/y) will flicker in the corner of investors' eyes.

Official doc: the self-congratulations + nitty gritty details...

2011-10-27T00:48:00.001-04:00

Can be found here

My personal fave:

We call on the Eurogroup to finalise the terms and conditions for the implementation of these moalities in November, in the form of guidelines and in line with the draft terms and onditions prepared by the EFSF.

I'm a big 'modalities' fan ...

European Leaders Come to an Agreement Putting the Euro on Life Support for Months to Come

2011-10-26T22:23:00.001-04:00

The main points of the agreement:

- EFSF to be leveraged 4x - 5x bringing its total firepower to 1.4 trillion

- Banks to take a [voluntary] 50% haircut (estimated to amount to ~100 bln) on their Greek debt holdings.
Apparently, the term 'voluntary' has a different meaning in Euro-speak.

- EU banks will have to raise 147 bln of extra capital

In sum the doctors have prescribed more debt as a cure for excessive existing debt.

The EFSF will borrow money (issue debt) to purchase PIIGS debt. Euro-zone countries will have to issue more debt to give over-indebted Greece 130 bln. And countries will have to issue even more debt to recapitalize banks who just agreed to take a loss of 100 bln (50% haircut) in Greek debt.

The Euro rallied ~95 pips following the announcement, thereafter giving back half those gains as investors are left wondering what to make of all this card shuffling of debt.

Tomorrow, Sarkozy plans to phone China to entice them into entering this debt pyramid. Does he have the charm to pull it off? He sweet-talked Bruni into marriage, so I suppose anything is possible...

BOC MPR- Projecting 'gradual rate rise' through 2013

2011-10-26T10:39:00.000-04:00

Report

Chart: Months' Supply of New Homes

2011-10-26T10:17:00.000-04:00

New Home Sales: +5.7% (rev from -2.3% to -0.3%); 313K (rev from 295K to 296K)

2011-10-26T10:01:00.001-04:00

report

Germans were right to be weary of 'Super Mario'

2011-10-26T08:55:00.002-04:00

He hasn't even become president, but Mario Draghi is already making dovish comments:

Incoming ECB head gives euro zone pre-summit boost -RTRS

8:45am EDT

By Luke Baker and James Mackenzie
BRUSSELS/ROME (Reuters) - The incoming head of the European Central Bank threw the euro zone a lifeline hours before a crucial summit on Wednesday by signaling the bank would go on buying troubled states' bonds to combat market turmoil.

Durables-> Headline: +0.8% ; Non-Defence CapGoods ex-Air Orders: +2.4% (prior month rev to +0.5% from +1.1%)

2011-10-26T08:33:00.000-04:00

report

Morning Data Releases

2011-10-26T07:46:00.002-04:00

From the US, we get the Durable Goods Report with -1.0% m/m for headline 'Orders' and a 0.5% m/m rise in non-defence Capital Goods ex-Aircraft. At 10:00, the US is expected to report New Home Sales rising 1.7% m/m to 300k annualized.

After S&P affirmed its 'AAA/A-1+' long and short-term sovereign
credit ratings, as stable, Canada will see the release of its Monetary Policy Report.

Banks Borrow EUR 56.9 bln in 12 Month LTRO

2011-10-26T07:26:00.002-04:00

This puts the actual figure below the median of both Bloomberg and Reuters survey results. However, the three month EURIBOR-OIS spread continued to edge up (to 80 bps) and banks continue to deposit evermore cash in the ECB's Deposit Facility (see chart below).

Italy May Hold Early Elections

2011-10-26T07:15:00.012-04:00

Italian newspapers have published reports that Italy, the third largest country in the Euro-zone, is poised to hold early elections. With its 10 year benchmark bond hovering just below 6%, making refinancing evermore difficult and painful (despite ongoing BTP bond purchases by the ECB).

Political instability is unlikely to improve matters. However, given the pain of scandals inflicted on Berlisconi, a new face at the helm might give investors fresh hope that the country may yet put its finances in order sooner, rather than later.

Stress Measure: European Interbank Lending

2011-10-25T23:29:00.000-04:00

One of the simplest ways of gauging the health of a banking system is the terms on which they agree to lend to one another. Though this is not the only (or even the best way) its simplicity makes it popular.

In the case of the Euro-zone (discussed in the prior post) one can simply take the three month EURIBOR fixing rate and subtract the three month OIS (Overnight Index Swap) rate. The wider the spread (or the bigger the difference), the more banks are demanding compensation for the credit risk they perceive in lending to other banks in Euros.

The following chart illustrates how mistrust amongst banks operating in Europe has been increasing in the past few weeks. Notice, however, that we are nowhere near post-Lehman levels. Bank recapitalizations in the Euro area are aimed, in part, on alleviating this mistrust, so banks are willing to lend.

The Other Euro-Zone Event to Keep an Eye on Tomorrow...

2011-10-25T22:17:00.005-04:00

The results of the ECB's 3 month and 12 month LTROs (Long-term Refinancing Operations), which it offered today, will be published at 11:15 am CET (03:15 am ET) on Wednesday.

The last time the ECB conducted a 12 month LTRO was in December of 2009. It discontinued them, thereafter, citing an easing in 'financial stress'. At the last ECB meeting, it announced they would be reintroduced given that 'stress' has re-emerged.

In plain English, European banks no longer trust eachother, so they are reluctant to lend to one another (except at ever higher rates). The 12 month LTRO enables banks to borrow from the ECB at the average of its benchmark rate (currently 1.5%) over the term of the loan.

The result will give us an indication of the liquidity squeeze banks are feeling and the degree to which they mistrust one another. The more they borrow, the greater the 'stress'.

How much is a lot? it may be tempting to make a comparison to the last set of 12 month LTROs, however, this time
expectations are for the ECB to cut rates over the next year, which wasn't the case last time around. If the ECB were to cut rates soon, banks would be better off parking excess cash in the deposit facility (as overnight borrowing would be cheaper). The last time around the first couple of LTROs were at a fixed rate, providing a hedge against an ECB rate hike.

So, how to jusge the outcome? A poll by Bloomberg indicated that the median expectation is for EUR 70 bln in loans, while respondents to the Reuters poll were eyeing EUR 60 bln. The EUR 60 bln - 70 bln range appears to be a reasonable baseline to judge the result.

If the result is massively to the upside, that may force the
Euro-lites to rethink wasting more time kicking the can down the road and into the abyss by releasing yet another communique of platitudes following their umpteenth meeting tomorrow.

European Summit Tomorrow

2011-10-25T21:28:00.004-04:00

After failing to agree on much at this past weekends summit with assurances that all will be well at Wednesday's meeting, European leaders have already begun to employ the tried and true MBA method of "managing expectations." Notice how they are always managed 'downward'?

It's kinda like before earnings season, when companies lower their earnings guidance to the point where the final announced earning almost always surprise on the upside-- no matter how grim. Of course, it's easier for a citizen of a Euro-zone country to move out of the stock market than it is for him to leave the Euro-zone (Greece has already imposed a 15% tax on it's citizens who move their deposits from a Greek bank abroad...)

It began earlier today when the scheduled meeting for EU finance ministers was abruptly cancelled. If that wasn't a big enough hint a draft communique
was leaked to the FT after the market close. The document showed little in the way of resolving the relatively simple question of the size of the Greek haircut, let alone weightier issues like how the ESFS will be leveraged or by how much.

Note the weasel word "signalling" in the article below:

Fears euro summit could miss final deal -FT

By Peter Spiegel in Brussels, Gerrit Wiesmann in Berlin and Matt Steinglass in Amsterdam

Eurozone leaders were struggling on Tuesday to reach agreement on a much-anticipated deal to reverse their spiralling debt crisis amid mounting signals a definitive agreement would not be reached at a key summit on Wednesday night

Click to read the full story.

Perhaps if these esteemed leaders spent less time on "signalling" and "expectations management" and instead actually focused on solutions, we wouldn't need quite so many meetings (or PR Eurocrats, for that matter).

Jobs are many things, but 'Plentiful' ain't one of them...

2011-10-25T10:26:00.003-04:00

According the Conference board survey:

War of Words Between Britain and France Heats up

2011-10-25T10:07:00.002-04:00

Nicolas Sarkozy tells David Cameron to 'shut up' in euro clash, according to The Independent. The ratcheting up of discord follows a humiliating defeat in the Commons for Cameron in which 79 of his own party's backbencher voted to hold a referendum in the UK on leaving the European Union.