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Danske Daily
Key news
Last night the Greek parliament approved the austerity package, which has lifted sentiment in the Asian session. On Friday evening Standard & Poors added to the negative sentiment when it downgraded 34 Italian banks including Unicredit. Japans GDP declined 0.6% q/q in Q4, dragged down by falling exports.
Market movers today:
Today
[Tex
Markets Overnight
Last night the Greek parliament approved the austerity package with 199 for and 74 against after a weekend of protests and riots in Athens, which escalated Sunday evening and spread to other places in Greece. 43 Members of the governing socialists and conservatives voted against and were immediately expelled by their parties. The risk of more social unrest in the coming days remains. The Greek government still has to detail the remaining EUR350m austerity measures before the Eurogroup meets to approve the second rescue package for Greece on Wednesday. Large protests against austerity measures also took place in Portugal on Saturday and in Spain the unions announced that protests against the labour market reform, which was approved on Friday, will take place on 19 February. Standard and Poors added to the negative sentiment when it downgraded 34 Italian banks including Unicredit, following the sovereign downgrade last month, emphasising Italian banks significantly diminished ability to roll over their wholesale debt. US consumer sentiment data (University of Michigan) for February released Friday disappointed with a fall from 74.4 to 73.6, fuelling the negative sentiment. This morning showed a disappointing 0.6% q/q decline in Japans GDP, which was dragged down by falling exports and production that was negatively affected by floods in Thailand. The US equity market closed Friday with S&P experiencing the biggest daily loss so far this year (-0.7%) and all 10 sectors down due to concerns about developments in Greece. Cyclical sectors faced the biggest losses. This morning the Nikkei index is up 0.65% on the Greek austerity approval despite the falling exports. The S&P future is up 0.5% US bond yields rose slightly in the short end, while 10-year yields first declined and then reversed in a nervous market late in Fridays session. Since the European markets close on Friday the US curve has steepened slightly. The FX markets saw EUR/USD fall below 1.317 late Friday on concerns about Greece, but the cross has been lifted above 1.325 since. The yen has weakened slightly this morning on the disappointing GDP numbers. EUR/CHF trades around 1.21.
S&P500 (clo se) S&P500 fut (chng fro m clo se) Nikkei Hang Seng 17:00 US 2y gov US 10y gov iTraxx Europe (IG) iTraxx Xover (Non IG) 0.27 1.98 135 597
0.4 1.9 0.2 1.0 +/-, % 0.45 0.04 0.00 0.26 0.08 -0.17 USD 0.66 0.31
117.5 1722.6
118.3 1727.9
Note: * The iTraxx Europe Index show the spread development for the most liquid investment grade CDS contracts in the euro credit market. **The iTraxx Europe Crossover show the spread development of the most liquid non-investment grade CDS contracts in the euro credit market.
Source: Bloomberg
Important disclosures and certifications are contained from page 4 of this report.
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Global Daily
Focus today: In the absence of major market movers, focus is likely to remain on developments in Greece ahead of the Eurogroup meeting on Wednesday, which is expected to approve the second rescue package for Greece if the Greek government details where it will find the last EUR350m austerity measures. Chinese producer and import prices for January to be released this morning might show a small increase. ECBs weekly bond purchases in its Securities Market Programme will be announced in the afternoon. Chinas vice president will start his official visit to the US today. The 14th EUChina summit will be held later in the week. Fixed income markets: Following a nervous close on Friday, this week could prove more positive for the markets. Greece has voted for a new round of austerity measures with a large majority and the negotiations with the Troika can hopefully progress. In the US we expect to see robust data throughout the week, which should underpin a broadening of the US recovery. If we are right, this should support steeper curves and a less dovish pricing of the Fed rate path. On the auction front, there will be a full calendar from the EUR issuers with as much as EUR30bn coming to the market from Italy, France, Spain and the Netherlands. . FX markets: The Greek Parliamentary approval of the austerity measures has already supported the euro and EUR/USD is expected to trade above 1.33 today. However, the market might be slightly cautious ahead of Wednesday's Eurogroup meeting where the second bailout package for Greece is expected to be approved. The weekly CFTC data released late Friday showed that bets against the euro have fallen by approximately 10% as of 7 February, and at the same time the market has scaled back its aggregated USD holdings significantly by one-third. The position data show that there is less concern about the euro now and that the speculative flows are moving towards riskier currencies. The latter is also supported by low FX volatility that in general is back at a level not seen since before the collapse of Lehman in 2008.
ECB bond purchases
400 EUR bn 350 300 250 200 150 100 50 0 -50 -100 EUR bn << Asset purchases (covered+government bonds) ECB purchases, per week >>
Securities Market programme
22,5 20,0 17,5 15,0 12,5 10,0 7,5 5,0 2,5 0,0 -2,5
US S&P500 future
1347 1337 1347 1337
2.06
1.96 1.86 1.76 Mon
Scandi Daily
There are no major releases out of Scandinavia today.
Fri
Tue
Wed
Thu
EUR/USD (LHS)
USD/JPY (RHS)
77.8
77.2
76.6 76 Mon
Scandi FX
EUR/SEK (LHS) EUR/NOK (RHS)
7.69 8.87 8.83 8.79 8.75 Thu 7.65 7.61 7.57 Mon
Fri
Tue
Wed
Thu
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0.10
-0.30 -0.70 -1.10 -1.50
Eurostoxx Intraday, %
0.1
Max Min
Max Min
-0.3
-0.7
-1.1
-1.5
-1.30
Grey line indicates closing of Danish markets
-1.30
15 16 17 18 19 20 21
09 10 11 12 13 14 15 16 17 18
Grey line indicates opening of US markets
4.2% 6.8%
3.0% 4.2%
FX & COMMODITIES
133.0 132.6 132.2 131.8 131.4 07 10 13 16 19 22 01 04
EUR/USD Intraday
133.0 132.6
1 7:00 1 .88 31 1 02.32 83.70 759.85 880.60 743.27 421 .36 1 7:00 77.59 1 57.57 91 .74
07:30 1 32.47 1 02.83 83.91 758.56 743.24 420.1 9 07:30 77.62 1 57.86 91 .33 881 .31
+/0.59 07:30 0.51 1day 0.22 1mo nth -1 .29 0.71 -0.03 -1 7 .1 +/0.03 0.29 07:30 1day 1mo nth Year-t-date
G o ld, $ 1 727.89 5.89 88.89 1 9 64.1 CRB 1M f ut ure 31 4 2.1 -3.36 4.44 6.84
O il, B re nt , $ 1 8.28 1 0.97 7.84 1 0.90 C R B , R aw Indus t ria ls 549.43 1 .04 28.46 32.59
Max Min
## ## 0.4
5.67 2.86
GB P CHF
-0.41 Year-t-date
* The chart plot s 07:30 - 23:00 Fri and 23:00 Sun t o 07:30 Mon
P o lic y R a t e USD 0.25 1 .00 0.50 0.70 1 .75 1 .75 4.50 EUR GB P DKK SEK NOK P LN
1 7:00 1 .98 3.1 3 0.98 07:30(-1 )* 2.01 1 .97 0.00 # N/A N/A 5.56
07:30 2.00 3.1 5 0.98 1 7:00 1 .94 1 .90 1 .87 2.38 5.58
+/-, bp 2 2 0 +/-, bp -7 -7 1 87 2
2.00
1.97
0.24
1.94
07 10 13 16 19 22 01 04
USD2Y (lhs) USD10Y (rhs)
* The chart plot s 07:30 - 23:00 Fri and 23:00 Sun t o 07:30 Mon
3.68 4.0
3.0 2.0 1.0 0.0
USD JPYGBPFRF ITL -0.03 DKKSEKNOKPLN -0.05 -1.0 -0.93 -2.0 -2.0 -1.0
2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0
US Yield Curve
0.9 0.4 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 DEM2Y
## M ax ## M in
USD2Y
-0.1
1 0 .21 -1 .560
-0.6 -1.1
## M ax # # # ## M in # # #
-4.2
-6.2 -8.2
USD5Y
-1.6 USD10Y
DEM5YR
-10.2 DEM10Y
D-t-D +/-, bp (right axis) 07:30 (left axis) 1 month ago (left axis)
D-t-D +/-, bp (right axis) 07:30 (left axis) 1 month ago (left axis)
Credit spreads
1,000 900 800 700 600 500 400 300 200 100 0 Feb Mar May Jun Aug Sep Nov Dec Feb iTraxx Europe (IG) (left axis)
07:30 9 2 1 7:00 42 50 60
+/0
1day 5 9 30
+/3 0 4
40 50 56
220 361 91
1 3 22 2
-53 -1 27 -1 9
So urce: B lo o mberg
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