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The EUR and risk are trading a touch softer

Monday, December 12, 2011 1:00 PM GMT

Good morning,

  • The EUR and risk are trading a touch softer after the EU leader meeting Thursday/Friday of last week. We have a heavy data week ahead with interest rate decisions in the United States and Switzerland. Italy, Netherlands and France will sell bills today.
  • Stocks: Nikkei +1.37 %, Hang Seng -0.83 %, Shanghai Composite -0.83 %, Dow Jones +1.55 %, S+P500 +1.69 %
  • Moody's Investors Service said on Monday it will revisit the ratings of European nations in the first quarter of 2012, after last week's summit did not produce decisive initiatives and left the euro area prone to further shocks.
  • Higher involvement by the International Monetary Fund (IMF) in the euro zone's efforts to stem its debt crisis would be an act of desperation, outgoing European Central Bank chief economist Juergen Stark said, calling for a quantum leap by the currency bloc.
  • Bundesbank chief Jens Weidmann on Saturday welcomed the EU summit's results as progress in fighting the euro zone's debt crisis and reiterated his opposition to calls for the European Central Bank to do more.
  • Countries in the Organization for Economic Cooperation and Development will face a challenge to raise financing for the foreseeable future amid uncertainty in the euro region and the global economy, the Financial Times reported, citing Hans Blommestein, head of the OECD's public-debt management. The OECD says gross borrowing of its members is expected to reach $10.4 trillion in 2011 and $10.5 trillion next year, the FT said.
  • Italy will be able to withstand an increase in borrowing costs for at least for a few years as its relatively long debt maturity helps mitigate the effects of record bond yields , the Bank for International Settlements said. The cost of servicing its debt would rise by just 0.95 percent of gross domestic product next year if 10-year yields stayed at the record 7.48 percent reached last month, the BIS said, citing its own calculations. The "worst-case scenario" would have to persist for three years for the additional costs to exceed 2 percent of output, the bank said.
  • Germany's Bundesbank will seek approval from parliament before authorizing as much as an additional 45 billion euros in loans to the International Monetary Fund to assist the euro area bailout, DPA reported, citing an interview with board member Andreas Dombret.
China Data Recap Period Survey Actual Prior
Trade Balance (USD) Nov 15.20b 14.52b 17.03b
Exports yoy% Nov 10.9 13.8 15.9
Imports yoy% Nov 18.8 22.1 28.7
  • China's stocks fell to the lowest level in more than two years, after the government pledged to keep property curbs next year and slumping growth in exports to Europe added to concerns the economic slowdown is deepening.
  • China President Hu Jintao urged developed nations to ease their limits on exports to China. China is committed to providing equal market access and opening up its services, cultural and agricultural industries, Hu said. Retail sales will grow more than 15 percent a year to reach 32 trillion yuan by 2015, he said.
Australia Data Recap Period Survey Actual Prior
Trade Balance Oct 2000m 1595m 2249m rev. from 2564m
Home Loans Oct 0.0 % 0.7 % 1.9 % rev. from 2.2 %
Investment Lending Oct   -5.5 % 0.4 % rev. from 1.9 %
Japan Data Recap Period Survey Actual Prior
Domestic CGPI mom Nov -0.1 % 0.1 % -0.8 %
Domestic CGPI yoy Nov 1.5 % 1.7 % 1.7 %
Consumer Confidence Nov 38.3 % 38.1 % 38.6 %
  • IMM Positions: EUR -96k vs -104, JPY 38k vs 41k, GBP -44k vs -47k, CHF -11k vs -9k, CAD -20k vs -27k, AUD 30k vs -13k, NZD 4k vs 8k
  • 2000 US Monthly Budget Statement Nov
    0800 Germany Wholesale Price Index Nov
    0845 France Current Account Oct
    1900 BOC Carney (CET)

Have a good start into the new week!

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