thenews 2016.10.14 09:44 #221

August 2016 Eurozone trade balance €23.3bn vs €20.4bn exp SA

Details of the August 2016 Eurozone trade balance data report 14 October 2016

Prior 20.0bn. Revised to 20.8bn
18.4bn vs 15.3bn exp. Prior 25.3bn
Exports 8.0% y/y
Imports 4.0% y/y

Non-EU Trade Balance - Gross Domestic Product - Balance of Trade -

thenews 2016.10.15 13:24 #222

Deutsche Bank considering changes to U.S. strategy: sources

Deutsche Bank is studying a possible change of its strategy in the United States, where it is fighting a $14 billion fine the Department of Justice (DoJ) is requiring over the sale of toxic mortgage bonds before the financial crisis, two sources close to the company said on Saturday.

They said that while abandoning the United States, its most important market, altogether was very likely out of the question for the bank, it could consider scaling down its activities, so as to focus more on the needs of German corporate clients overseas.

German newspaper Welt am Sonntag in an abstract of a story due to be published on Sunday said earlier that a change of business strategy might be part of a settlement with the DoJ, in addition to paying the fine, possibly by giving up its investment banking in the United States, but the two sources did not confirm this connection.

A Deutsche Bank spokeswoman declined to comment on the report.

The bank has been engulfed in crisis since news of the DoJ fine demand emerged last month.

It is fighting the fine but could have to turn to investors for more money if it is imposed in full.

Progress is also slow on steps to cut staff, overheads and the sell off of non-core businesses that chief executive John Cryan announced when he took on his job last year.

A source with direct knowledge of matters said on Friday that the bank's CFO last month told staff representative that job cuts could be double those planned, in a step possibly removing a further 10,000 employees.

A second source familiar with the discussions said on Friday the management was examining the countries where it is present so as to decide where it was worth staying.

Generally, the bank is looking hard where to generate future profits and whether to curb trading activities in its investment banking division.

Sueddeutsche Zeitung on Saturday said the supervisory board had been discussing how to proceed in the United States, including a complete withdrawal, although given that market's importance, this might be too radical a move.

A partial exodus from the U.S. could, on the other hand help save capital costs and expenditure, the newspaper said.

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thenews 2016.10.16 09:51 #223

1. European Central Bank Policy Meeting

The European Central Bank's latest interest rate decision is due at 11:45GMT (7:45AM ET) on Thursday, with most of the focus likely to be on President Mario Draghi's press conference 45 minutes after the announcement.

The ECB is not expected to move on rates, but Draghi could offer fresh clues on the time frame of its €80 billion monthly asset-buying program, due to run out in March.

A recent Reuters poll of economists showed that a stable but lackluster economic outlook will push the ECB to extend its stimulus program by year-end, although such a move will likely be reserved for December’s meeting when the central bank’s updated quarterly projections will be available.

2. China Q3 GDP

China is scheduled to release data on third-quarter gross domestic product at 2:00GMT on Wednesday (10:00PM ET Tuesday). The report is expected to show the world's second largest economy grew 6.7% in the three months to September. The economy grew by a similar amount in the second quarter and if confirmed, it could be a sign that growth in China is finally bottoming out.

The Asian nation will also publish data on September industrial production, fixed asset investment and retail sales along with the GDP report.

3. U.S. Inflation for September

The Commerce Department will publish September inflation figures at 8:30AM ET (12:30GMT) Tuesday. Market analysts expect consumer prices to ease up 0.3%, while core inflation is forecast to increase 0.2%.

On a yearly base, core CPI is projected to climb 2.3%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.

Rising inflation would be a catalyst to push the Fed toward raising interest rates.

4. U.K. CPI, Employment & Retail Sales

The U.K. Office for National Statistics will release data on consumer price inflation for September at 08:30GMT (4:30AM ET) on Tuesday. Analysts expect consumer prices to rise 0.9%, after increasing 0.6% a month earlier.

At 08:30GMT (4:30AM ET) Wednesday, the ONS will publish the monthly jobs report. The claimant count change is expected to rise by 3,000 in September, with the jobless rate holding steady at 4.9% in the three months to August. Wage growth including bonuses is forecast to rise 2.3%.

On Thursday, the ONS will produce a report on September retail sales at 08:30GMT (4:30AM ET), with analysts expecting an increase of 0.3%, following a drop of 0.2% in the preceding month.

The Bank of England kept monetary policy on hold last month, but indicated that it could cut interest rates again as soon as November in a bid to buffer the economy from a 'hard Brexit'.

5. Bank of Canada rate decision

The Bank of Canada's latest interest rate decision is due at 10:00AM ET (14:00GMT) on Wednesday, with most experts expecting the central bank to stand pat on rates.

Still, with energy prices persistently low, global trade generally weak, and U.S. demand relatively soft, Canadian rates are likely to stay low for even longer than earlier thought.

source

Labor Productivity - Canada Bank of England Minutes Consumer Price Index -

thenews 2016.10.18 03:04 #224

Dollar takes breather, market ponder near-term Fed rates view

The dollar took a breather from its recent gains on Tuesday, edging away from seven-month highs against a currency basket as investors took stock of U.S. monetary policy expectations over the near term.

The dollar index, which tracks the greenback against six major rivals, slipped 0.2 percent to 97.733 (DXY), after rising as high as 98.169 in the previous session, its highest level since March 10.

Against the yen, the dollar was down 0.2 percent at 103.72 .

"Rangebound trading continues, with the 104 level heavy for the dollar-yen," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. "It's just short-term guys, playing in the market."

U.S. interest rates remain a key focus of the markets, he said, with a December rate hike still anticipated.

However, a rate increase this year is still not a done deal.

Federal Reserve Vice Chairman Stanley Fischer said on Monday that economic stability could be threatened by low interest rates, but it was "not that simple" for the Fed to hike.

A suggestion by Federal Reserve Chair Janet Yellen on Friday that the central bank may allow inflation to exceed its 2 percent target pushed U.S. bond yields to four-month highs and gave the dollar a lift.

The euro added 0.2 percent to $1.1017 , moving away from a nearly three-month low of $1.0962 hit on Monday, as investors looked ahead to the European Central Bank's policy meeting later this week.

Dollar steps back from seven-month high; Aussie trims gains

The dollar stepped back from a seven-month high against an index of currencies on Wednesday after U.S. consumer prices showed a moderation in underlying inflation, prompting markets to trim bets on a December Federal Reserve rate hike.

The U.S. dollar's index against a basket of six major currencies (DXY) <=USD> stood at 97.846, off Monday's seven-month high of 98.169.

The Australian dollar pared some of its earlier gains after a barrage of Chinese economic data. The overall reaction across major currencies was limited, however, as there were no huge surprises.

China's third-quarter gross domestic product matched market forecasts, while September industrial production came in below expectations.

"There was probably some profit-taking in the wake of the (Australian dollar's) rise seen since yesterday," said Hirofumi Suzuki, an economist for Sumitomo Mitsui Banking Corporation in Singapore, adding that there may have been some reaction to the slightly disappointing data on industrial output as well.

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thenews 2016.10.20 03:16 #227

Will ECB Rescue The Euro?

It was a relatively quiet day in the foreign-exchange market with the exception of big moves in the Canadian dollar. There was very little consistency in the performance of the greenback, which extended its slide versus the Japanese yen, Australian and New Zealand dollars while ticking higher versus the euro, sterling and the loonie. At the start of the week, we said the dollar would take a backseat to all of the major event risks abroad and that is exactly what we have seen so far. Wednesday morning’s mixed housing-market reports had no major impact on the greenback but the Federal Reserve’s Beige Book managed to inspire some USD/JPY buying. According to the Beige Book, the job market is tight and the outlook mostly positive. Most Fed districts saw an uptick in spending and housing activity. As a result, U.S. yields stabilized after falling for two straight days while USD/JPY rebounded off its lows as a result. The Philly Fed survey, existing home sales and jobless claims are scheduled for release on Thursday -- none of which should have a major impact on the U.S dollar, which is due for a stronger recovery against many currencies such as the euro, yen and New Zealand dollars.

Thursday's focus will be on the euro with the European Central Bank monetary policy announcement on the calendar. EUR/USD has fallen within arm's reach of its post-Brexit low and many traders are hoping the ECB will rescue the euro. The currency pair dropped to a 2-month low on Wednesday, to 1.0955. The move has confounded many investors because the 2-year German – U.S. yield spread bottomed this month and is moving higher, which should be positive for the currency. There also hasn’t been many market-moving Eurozone or U.S. releases this week. In order for the euro to rally, we need ECB President Draghi to suggest that he’s comfortable with the current level of monetary policy. Taking a look at the table below, there’s been significantly more improvement than deterioration since the last ECB meeting -- so there’s a case to be optimistic. The lower euro also goes a long way in supporting the economy through trade and inflation. Yet we’ve seen a lot of conflicting headlines over the past few weeks. There was a story on tapering asset purchases and also a story on extending / tweaking QE. Everything that we’ve heard from policymakers tells us they are comfortable with the current level of stimulus but stand ready and willing to increase it if the economy weakens. The last time the ECB met, President Draghi expressed more confidence about the outlook for the Eurozone economy, using the word "resilience" on numerous occasions. However they also lowered their growth forecasts and announced Eurosystem committees to further evaluate stimulus options. If Mario Draghi puts greater emphasis on the need for more stimulus, further losses are likely. But if he’s optimistic and emphasizes resilience -- and we think he will given recent data -- EUR/USD could find its way back to 1.11.

Big offloading going on in EURIBOR - Livesquawk

Livesquawk noting heavy selling in EURIBOR

Not much in the way of details but apparently there's some big selling going through with over 200,000 lots been sold already.

It might be someone liquidating a position following the ECB meeting yesterday.

Update: The LS guys note that contracts expiring 2018 are the ones being sold.

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thenews 2016.10.22 10:17 #229

EU-Canada trade talks: Can a deal be made?

BBC reporting that emergency talks now underway 22 Oct

Emergency talks are under way in Brussels in an effort to save an EU free trade deal with Canada (Ceta), blocked by a Belgian region.

European Parliament head Martin Schulz is to hold separate talks with Canadian Trade Minister Chrystia Freeland and the head of Belgium's Wallonia region.Ms Freeland abandoned talk yesterday, after seven years of negotiations.

Failure to reach agreement on Ceta would call into question the EU's ability to forge other trade deals.All 28 EU member states support the Ceta agreement, which was to be signed next week.

However, exercising its right under the Belgian federal constitution, Wallonia has called for clarity on safeguards to protect labour, environmental and consumer standards

What's Behind The 'Return' Of The USD? What's Next?

After a period of being range-bound, we have seen a breakout in currency markets, with the USD posting gains. The DXY Index is nearing the important 100 level, which has proven to be a key technical resistance level. Since 2015, the DXY has surpassed that level twice, only for it to retrace lower (see Figure 2). So while that psychological level will remain a magnet for currency markets, it will require a major catalyst to propel the DXY beyond it. We doubt the catalyst will come in the form of the upcoming 8 November US presidential election or even the highly anticipated FOMC meeting on 14 December. The reason being that markets have already largely priced those events in.

Given that expectations – and more importantly, market pricing – is reflecting a Clinton win and a December Fed rate hike, it is hard to see the USD being propelled higher by those alone.

What will give the USD another leg higher are further signs that inflation in developed economies are accelerating. Previously, the absence of inflation has seen major central banks keeping policy very accommodative or pursuing even more aggressive easing. The resultant injection of global liquidity and a low interest rate environment has resulted in a sharp inflow of capital into emerging markets as investors chased yield and moved up the risk curve. But there are signs that the low in inflation has been reached in G7 economies and will start moving higher. Base effects and the rebound in oil prices are partly behind this. Crude oil prices bottomed in January 2016 and have been steadily rising. There is a strong correlation between oil prices and G7 inflation.

Strategic Conclusion:All in all, we see the backdrop as continuing to favour the USD for the time being. Policy divergence certainly remains in favour of the USD, but so too will the shift in the political risk focus towards Europe once the US election is out of the way. Higher inflation in the G7, even if driven mainly by base effects and oil prices, is a significant development that will result in volatility in capital flows. All in all, we continue to expect the USD to fare well.