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Market View

US suffering from financial irresponsibility

Friday, December 16, 2011 1:05 PM GMT

Good Morning,

  • Asian stocks rose for the first time in four days as metals and the Australian dollar climbed after better than expected U.S data signaled the world's biggest economy is strengthening. Euro headed for the steepest weekly drop vs the greenback in three months as European nations prepare for bill auctions next week amid concern policy makers can't contain the region's debt crisis.
  • The Reserve Bank of India has introduced measures to stem speculation in the INR. INR surged the most in 2.5 years after the Central bank took steps to curb speculation in the market
  • Bank of America Corp., Goldman Sachs Group Inc. and Citigroup Inc. had their credit grades cut by Fitch Ratings as the impact of financial regulation and market turmoil weighed on the industry. The lenders' long-term issuer default ratings were cut one level to A from A+, Fitch said yesterday in a statement. Barclays Plc, based in London, Credit Suisse Group AG, Deutsche Bank AG and BNP Paribas SA also had their grades lowered. The moves complete a review of financial firms by the three major rating companies. Moody's Investors Service cut banks in September, citing a lower probability that the U.S. will support the industry in an emergency. Standard & Poor's lowered ratings last month. Lenders including Bank of America and Citigroup have said they may have to post billions of dollars in collateral and face higher funding costs in the event of downgrades.
  • S&P cuts ratings of 10 Spanish banks
  • Fitch upgrades Indonesia to investment grad or BBB- from BB+, outlook stable
  • IMF Lagarde. EU crisis escalating, warns to 1930s style threats
  • Fiscal union drive diluted as new treaty faces limits: Paris's grand hopes are being reduced to a document of two or three pages- Article in FT
  • Euro group may meet Monday on IMF bilateral loans- Dutch Fin Min
  • ECB/ Luxembourg CB Mersch, small EZ states shouldn't be excluded from veto rights, markets only half convinced by rescue measures, ECB won't buy bonds endlessly, printing money permitting inflation nonsense common EZ bonds not solution
  • Japan's PM Noda said, aim to cap spending at JPY 71tn and new bond issuance at JPY 44tn while compiling the budget for next fiscal year.
  • Fed Dudley. US faces significant downside risk from EU crisis, further Fed efforts not expected.
  • Fed Lockhard, US suffering from financial irresponsibility – DowJones
  • Fed bought USD 4.9 bil of Treasuries maturing between August 2018 and November 2018. Dealers submitted USD 13.7 bil of Treasuries for consideration, according to NY Fed
  • Fed FX liquidity swaps to foreign central banks total USD 52.384 tln ind Dec 14 week, ECB USD 52.287 tln
  • Australia banks ordered to run stress tests. Australian Financial review

Todays Figures

11.00 EZ Eurostat trade NSA
11.00 EZ labour cost
11.00 EZ Wages in Euro Zone
14.30 CA Securities Canadians and foreign
14.30 US CPI mm and yy
14.30 US Core CPI Index
14.30 US real weekly earnings mm

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