Daily Comment Raiffeisen RESEARCH

1 August 2011

Chart of the day

Hourly QEUR=
Price USD Cndl; QEUR=; Bid 06:00 01.08.2011; 1,4393; 1,4403; 1,4387; 1,4391 Cndl; QEUR=; Bid 06:00 01.08.2011; 1,4393; 1,4403; 1,4387; 1,4391 100,0% 1,4441 61,8% 1,4458 07:00 22.07.2011 - 21:00 01.08.2011 (GMT) 38,2% 1,4465 Price USD

Important indicators today

RBI USA
16:00 ISM Manufacturing IT: PMI Manufacturing CN: PMI Manufacturing CN: PMI Manufacturing (HSBC) Jul. Jul. Jul. Jul. 54.5 48.5 n.a. n.a. 55.0 49.0 50.1 55.3 49.9 50.9 50.1

Kons.

last

1,444

38,2% 1,4439

1,444 1,442 1,44 1,438 1,436 1,434 1,432

1,442 38,2% 1,4418 1,44 1,438 1,436 1,434 38,2% 1,4342 1,432
61,8% 1,4313

Europe
09:45 03:00 04:30

Emerging Markets

1,43 1,428 1,426 1,424 38,2% 1,4234 1,422 1,42

.1234 1 4192 09:00 17:00 20:00 04:00 12:00 20:00 01:00 09:00 17:00 01:00 09:00 17:00 01:00 09:00 17:00 01:00 09:00 17:00 20:00 04:00 12:00 20:00

1,43 1,428 1,426 1,424 1,422 1,42

.1234

Source: Bloomberg, Raiffeisen RESEARCH

22 Juli 2011

25 Juli 2011

26 Juli 2011

27 Juli 2011

28 Juli 2011

29 Juli 2011

01 August 2011

Source: Thomson Reuters, Raiffeisen RESEARCH

EUR/USD

Last: 1.4397 Buy 1.4415 Target: 1.4465 1.4507 Bullish Flag, stop 1.4326 -> 1.4228 1.4192. August 01st, 2011 07:34 CET

Market overview
cur.
Interest rates, yields 3M Euribor EUR 3M Libor USD Bund Future EUR US T Note Future Currencies EUR/USD EUR/JPY EUR/CHF EUR/CZK EUR/HUF EUR/PLN Equity markets S&P 500 Dow Jones I. A. Nasdaq Comp. DJ EuroStoxx 50 DAX ATX Nikkei 225 Emerging Markets Hang Seng (China) Sensex (India) Bovespa (Brazil) JALSH (South Africa) Commodities Brent Oil USD/bbl Gold USD/oz Credit markets iTRAXX Europe ITRAXX Crossover iTRAXX Fin. Senior 5J CDS Greece. 5J CDS Spain 5J CDS Portugal 111 411 177 1722 289 914 4 BP 5 BP 5 BP 12 BP 13 BP 3 BP 126 531 210 2571 301 1131 94 352 107 661 121 188 12 BP 1 BP 0 BP 648 BP 11 BP 492 BP 118 1613 1.1% -0.9% 125 1633 79 1175 24.0% 13.5% 12613 18341 58823 31208 1.9% 14219 0.8% 21109 0.2% 73103 -0.8% 33335 11296 17296 58009 26432 -0.6% -10.6% -15.1% -2.8% 1292 12143 2756 2670 7159 2611 9973 -0.6% 1371 1040 9937 2099 2560 5834 2366 8228 2.8% 4.9% 3.9% -4.4% 3.5% -10.1% -2.5% 1.439 111.700 1.141 24.197 268.040 3.989 0.1% 1.0% 0.9% 0.1% -0.6% -0.2% 1.49 123.3 1.4 25.4 289.6 4.12 1.26 105.4 1.1 23.9 261.9 3.83 -7.5% 2.9% -9.6% -3.4% -4.0% 0.6% 1.61% -0.1 BP 0.26% 0.2 BP 130.36 125.41 0.7% -0.2% 1.6% 0.4% 134.8 125.9 0.9% 0.2% 119.9 115.1 60.3 BP -4.7 BP 4.0% 6.1%

1T 52W H

52W L

Ytd

-0.8% 12876 -0.4% -0.8% -0.4% -0.5% 2888 3077 7600 3013

Established markets: In the US President Obama and leading representatives of both parties agreed on Sunday evening to raise the US debt ceiling in two stages by a total of USD 2,100 billion (which covers the period until after the 2012 elections) tied to spending cuts of USD 917 billion as well as additional budget consolidation measures of USD 1,500 billion (both of which are to be cumulative over 10 years), with the latter still to be finalised in detail by the end of the year (should no agreement be reached by then, spending cuts will be implemented automatically across the entire budget). The agreement must still be approved by Congress, with a first vote planned for today. The chances that it will be passed are good. Moodys already welcomed the agreement; with respect to S&P, however, we continue to expect that the consolidation efforts will be rated too low, resulting in a downgrade to AA (which would be manageable). The USD this morning recouped Fridays losses against the JPY, while gold and US govies were down this morning. Friday surprised to the downside with very weak US economic data Q2 GDP growth came in at only 1.3% qoq (annualized), with Q1 revised downward to 0.4%, and the Chicago PMI fell 2.3 points to 58.8. growth Todays ISM index is all the more keenly awaited as a result a slight decline is likely following last months surprisingly strong increase; however, a level of 54.5 would still be significantly stronger than the actual economic growth in the second quarter. In Italy the PMI index will be released today; with a current reading of 49.9, it is expected to decline further. Equity markets: The paralysing debate regarding lifting the US debt ceiling (an agreement is now anticipated soon), little to calm worries about the situation in the countries of the eurozone periphery and not always completely pleasing company results for the second quarter made it a gloomy week on the international stock markets. The broad S&P 500 fell on each of the five trading days and is looking back at the poorest week of the year so far and the third month in a row of capital losses. Not even the reporting season is managing to give the markets much of a boost. In the US, the majority of companies were able to beat forecasts (78%) so that Q2 profit estimates were subsequently revised upwards considerably (from 12.7% at the start of July to the current 18.1%), whereas the greatest number of disappointments were reported in Europe and Japan. This trading week will see the pub-

1.4% 10892

Prices as of 1 August 11, 07:59 a.m. (CET) Source: Bloomberg

Daily Comment

lication of several more company results. In addition, developments in the public debt crisis and important economic data will have an impact on the market environment. On the Japanese stock market, the foreseeable agreement on the debt limit got the new week off to a friendly start. Futures indications point to a solid opening on the European stock markets. Credit markets: On Friday Moodys announced its intention to review the ratings of five major Spanish banks (incl. BBVA, Banco Santander) with a view to a possible downgrade. S&P commented negatively on Danish banks on Friday as the agency regards some banks as being at risk for two reasons these relate both to asset quality and to the strict bank insolvency legislation in Denmark. Reflecting this, the five-year Danish USD CDS increased by 15bp to 88bp on Friday. Emerging Markets: The emerging equities markets in Asia start the day with significant gains, with Chinese stocks in Hong Kong up 2% while Indias equities markets rise by some 0.8%. The PMI data for China were better than expected. The official PMI held firm at 50.7 (50.2 projected), with domestic order receipts up, but export orders down. Inventories and output also declined. At 49.3, the PMI published by HSBC was higher than the projected figure of 48.9. Conversely, at 53.6 the PMI for India fell sharply from the previous 55.3. CEE: The selling pressure on Italian and Spanish government bonds (and the consequences for the refinancing markets for banks) is weighing on the CE and SEE region. Of the Emerging Market regions, these are the most dependent on external bank financing (including via Italy). Todays purchasing manager index figures in Central Europe should indicate a cool down though still at a high level of over 50 points. Among the various central bank meetings this week (Wednesday Romania, Thursday Czech Republic), at least the latter might vote to raise interest rates (from 0.75% to 1%). The surprisingly strong increase in inflation expectations in Poland (to 4.7% in July, after 4.2% in June) might motivate the central bank there to take another interest step this year which is our baseline scenario. Serbia disclosed it will first issue inflation-indexed bonds denominated in dinar worth USD 200 million; afterwards it intends to place USD 800 millions worth of USD-denominated Eurobonds.

Market overview
current
Other interest rates EUR Eonia 1M Euribor EUR 3M Euribor EUR 6M Euribor EUR 12M Euribor EUR 2Y Swap EUR 3Y Swap EUR 5Y Swap EUR 10Y Swap EUR Other currencies EUR/GBP EUR/HRK EUR/RON EUR/SEK EUR/RUB EUR/UAH EUR/TRY EUR/BRL EUR/CNY EUR/ZAR Bond market 2Y Bund EUR 5Y Bund EUR 10Y Bund EUR 2Y US Treasury 5Y US Treasury 10Y US Treasury Interest rates CEE 3M Pribor 3M Wibor 3M Bubor 10Y Czech Rep. 10Y Poland 10Y Hungary Equity markets CEE Turkey (ISE Nat. 100) Croatia (CROBEX) Poland (WIG20) Romania (BET) Russia (MICEX) Serbia (BELEX15) Czech Rep. (PX) Hungary (BUX) Commodities WTI Oil USD/bbl Fuel oil USD/mt Diesel USD/mt CO2 EUA Fut. EUR/mt Silver USD/oz Platinum USD/oz Palladium USD/oz Steel USD/mt Aluminium USD/mt Copper USD/mt 96.9 982.0 997.0 12.1 39.4 1795.8 836.5 607.0 2624.0 9830.0 1.2% 1.1% -0.9% -2.3% -1.3% 0.9% 0.6% -1.8% -0.5% 115.6 1064.5 n.a. 15.8 49.8 862.3 609.0 76.9 614.5 n.a. 13.5 17.7 459.3 459.0 2.7% 28.8% 26.2% -15.9% 27.3% 1.4% 4.3% 10.8% 6.2% 2.4% 62296 2174 2726 5345 1705 712 1175 21618 -0.4% 0.6% 0.2% -0.4% 0.0% 0.3% -0.1% 1.4% 71777 57655 2338 2942 6099 1865 829 1278 1773 2373 5035 1328 600 1107 -5.6% 3.0% -0.7% 1.5% 1.0% 9.3% -4.0% 1.4% 0.8 4.6 6.1 3.9 5.8 7.5 0.0 BP 1.0 BP 0.0 BP 6.6 BP -0.7 BP 7.0 BP 0.9% 4.6% 6.1% 4.2% 6.4% 8.4% 0.8% 3.7% 5.3% 3.2% 5.3% 6.6% -2 BP 76 BP 24 BP -1 BP -26 BP -45 BP 1.16% 2.54% 0.38% 1.40% 2.84% -7.9 BP -9.5 BP 2.4 BP 4.2 BP 4.5 BP 1.9% 2.8% 3.5% 0.8% 2.4% 3.7% 0.6% 1.2% 2.1% 0.3% 1.0% 2.4% 29.8 BP -11.7 BP -42.5 BP -21.5 BP -60.8 BP -45.2 BP 1.72% -10.2 BP 0.875 7.461 4.262 9.021 39.677 11.504 2.437 2.231 9.260 9.588 -0.1% 0.0% 0.8% -0.2% -0.1% -0.1% 1.3% -0.7% 0.7% -0.4% 0.9 7.5 4.3 9.5 43.9 11.9 2.5 2.4 9.7 10.0 0.8 7.2 4.1 8.7 38.8 9.9 1.9 2.2 8.5 8.7 2.0% 1.0% -0.4% 0.4% -2.9% 8.8% 15.2% 0.4% 4.7% 7.4% 0.97% 1.43% 1.61% 1.82% 2.18% 1.93% 2.05% 2.48% 3.14% 7.3 BP -0.3 BP -0.1 BP -0.3 BP -0.5 BP 2.5 BP -1.1 BP 1.6 BP 1.6 BP 1.7% 1.5% 1.6% 1.8% 2.2% 2.5% 2.8% 3.2% 3.8% 0.3% 0.6% 0.9% 1.1% 1.4% 1.1% 1.4% 1.6% 2.3% 15.5 BP 65.1 BP 60.3 BP 59.4 BP 67.1 BP 37.6 BP 16.2 BP -1.1 BP -18.6 BP

1T 52W H 52W L

Ytd

24531 20147

1886.5 1489.0

2803.0 1982.3

0.2% 10190.0 7028.3

Prices as of 1 August 11, 07:59 a.m. (CET) Source: Bloomberg

Daily Comment
This report was completed on 1 August 2011

Acknowledgements

Editor
Raiffeisen RESEARCH GmbH A-1030 Vienna, Am Stadtpark 9 Tel: +43 1 717 07-1521 Head: Peter Brezinschek (1517) Research Sales: Werner Weingraber (5975) Economics, Fixed Income, FX: Valentin Hofsttter (Head, 1685), Jrg Angel (1687), Wolfgang Ernst (1500), Gunter Deuber (5707), Julia Neudorfer (5842), Matthias Reith (6741), Andreas Schwabe (1389), Gintaras Shlizhyus (1343), Gottfried Steindl (1523), Martin Stelzeneder (1614) Credit/Corporate Bonds: Christoph Klaper (Head, 1652), Christoph Ibser (5913), Igor Kovacic (6732), Martin Kutny (2013), Peter Onofrej (2049), Gleb Shpilevoy (1461), Alexander Sklemin (1212), Jrgen Walter (5932) Stocks: Helge Rechberger (Head, 1533), Aaron Alber (1513), Christian Hinterwallner (1633), Jrn Lange (5934), Hannes Loacker (1885), Richard Malzer (5935), Johannes Mattner (1463), Christine Nowak (1625), Leopold Salcher (2176), Andreas Schiller (1358), Connie Schmann (2178), Magdalena Wasowicz (2169) Quant Research/Emerging Markets: Veronika Lammer (Head, 3741), Mario Annau (1355), Lydia Kranner (1609), Nina Kukic (1635), Albert Moik (1593), Manuel Schuster (1529) Technical analysis: Stefan Memmer (1421), Robert Schittler (1537)

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