MARKETS & ECONOMY - Commentaries of the day

From the opening bell to close, our commentaries keep you updated with the latest market action.

08:30 AM

Morning Call

European Equity markets are trading little changed this morning managing to hold to gains seen in late trading yesterday afternoon on firm US markets and rallying Asian markets with comments made by Premier Wen that there is sufficient room left for further stimulus measures in order to boost growth giving stocks a lift to the upside. While without a doubt the verdict of the German constitutional court concerning the ESM is the highlight of the day and is being eagerly awaited by investors and traders alike, the proposal for the European banking union presented by European Commission President Barrosso during his annual state of the union speech this morning will also grab some attention as it could have huge ramifications especially in regard to future banking bailouts. Furthermore there are being elections held in the Netherlands today, with the outcome expected to have also a substantial impact on the EU with the current European wide austerity drive by German Chancellor Merkel not backed by all major Dutch parties.

After having risen substantially over the past few days in anticipation that the German constitutional court would basically clear the way for Germany’s participation in the ESM today, it wouldn’t come as much of a surprise that if indeed the German constitutional court confirms what everybody has anticipated that at some stage temporary profit taking will set in. However any profit taking should be limited with the focus expected to quickly to shift to tomorrow’s FOMC meeting with a majority of analysts convinced that a new bond purchasing program will be announced by Fed Chief Bernanke. Should the German constitutional court verdict be negative, markets most likely will find themselves back in turmoil with uncertainty staging once again a comeback.

Markus Huber - ETX Capital

08:45

Dette souveraine européenne : les Etats sont en avance dans leur programme de financement

Par Hugues Le Maire, DG de Diamant Bleu Gestion.

Malgré la crise de la dette, les Etats européens parviennent à convaincre les investisseurs sur les marchés obligataires. Au 10 septembre, la grande majorité d’entre eux est en avance dans leur programme de financement.

La Finlande surpasse de loin ses objectifs, avec 9.5 milliards d’euros de titres obligataires émis depuis le début de l’année contre 8 milliards anticipé, soit un taux de couverture de 119%. L’appétence des investisseurs s’explique par la qualité de la dette finlandaise (notation AAA, dette publique de 48.6% du PIB, déficit budgétaire de -0.5% en 2011) qui justifie son statut de valeur refuge.

Alors que 70% de l’année est écoulé, le taux de couverture est également très prometteur pour la Belgique (94%), les Pays-Bas (83%), la France (82%), l’Autriche (79%), l’Espagne (75%) ou l’Allemagne (73%)*. Si la gestion des Etats est souvent critiquée, les « directeurs financiers » remplissent pleinement leur mission.

Seule l’Italie prend du retard avec seulement 56% d’émissions réalisées par rapport à l’objectif annuel. Mais le pays attendait probablement une fenêtre plus opportune suite à la BCE jeudi dernier. Le pays devrait bénéficier de coûts d’emprunts plus attractifs pour émettre davantage dans les prochaines semaines.

Selon Hugues Le Maire, Directeur Général de Diamant Bleu Gestion, « il ne faut pas oublier que certaines émissions de pays périphériques n’ont pu se réaliser qu’au prix de taux très élevés au cours des derniers mois. Mais après l’annonce de dispositions monétaires d’envergure instaurées par la BCE pour assurer la solvabilité des Etats en difficulté, une détente significative des taux de financement s’est logiquement matérialisée sur les marchés obligataires souverains.

Même si les taux de rendement sont désormais moins attrayants pour les investisseurs, le mouvement de normalisation des courbes de taux devrait rassurer ces derniers sur certaines signatures. De quoi permettre à l’ensemble des pays européens de boucler avec succès leur programmes de financement d’ici la fin de l’année, dans des conditions plus appréciables.»

12:30 PM

European financial markets vaulted higher following the outcome of the German constitutional court who ruled in favour of the ESM’s legality. The German court ruling did however come with conditions as the country looks to limit future liabilities of sovereign bailout requests. However, the ratification of the ESM together with the last week’s ECB bond buying plan combine together as reasonably solid firewalls against sovereign defaults for the likes of Spain and Italy.

As such, we have seen equities [particularly financial stocks] surge following the ESM ruling while the euro has jumped up against its rivals. Bond yields for Spain and Italy have slid sharply, with the Italy’s 10-year falling to six-month lows, while Spain’s 10-year hits five-month lows. By contrast, German bunds have declined sharply as appetite for risk increases. With the ESM finally ratified, there should be fewer strains on the ECB’s bond buying programme and immediate help for Spain as soon as it requests assistance.

We are now waiting for Spain to make its move but PM Mariano Rajoy is being rather coy, refraining to officially request aid with reports saying he wants to study the ECB’s latest action carefully as conditions are attached to a bailout. But, it is just a matter of time before Spain asks for EFSF/ESM support and hence ECB interventions and we look to the Ecofin meeting at the end of this week for further clarity on Spain’s position.

Meanwhile, the ECB has welcomed the European Commission's proposal on putting the central bank in charge of supervising all banks within the euro area as a first step to improve the financial stability of the region. In economic data, euro zone industrial production rebounded in July, while higher energy prices led to a pickup in the annual rate of inflation in August making it less likely that the ECB will cut its key interest rate. Separately in the UK, the jobless claims fell 7,000 in the three months to the end of July, compared with the three months to April, to total 2.59 million. But, the unemployment rate was 8.1% over the same period, versus a rate of 8.0% in the three months to June.

Looking ahead, ETX Capital see the DJIA up around 63 points and the S&P 500 higher by 7 points. The Federal Reserve kicks off its two-day policy meeting today, with a conclusion tomorrow which is likely to result in unchanged rates but an extension of its QE programme. Markets are almost convinced that the Fed will turn on the liquidity taps as the sluggish performance of the labour market is a major concern for the Fed. Also in focus will be Apple Inc., who are hotly tipped to unveil their latest iPhone model.

Ishaq Siddiqi - ETX Capital

STATISTICS of the day

08:30 AM

GERMANY - The Federal Statistical Office (Destatis)

Consumer prices in August 2012: +2.1% on August 2011
In August 2012, consumer prices in Germany were up by 2.1% on August 2011. This means that the rise in prices has accelerated. In June and July 2012, the inflation rate as measured by the consumer price index had been +1.7% each. The last time that the inflation rate was above 2.0% was in April 2012, when it stood at 2.1%, too. Compared with July 2012, the consumer price index increased by 0.4% in August 2012. The Federal Statistical Office (Destatis) thus corrects upwards its preliminary result for August 2012 by 0.1 percentage points both for the year-on-year and the month-on-month comparison.

GERMANY

Turnover in the service sector up 2.4% in the 2nd quarter of 2012
In the second quarter of 2012, the turnover in selected service branches increased by 2.4% in nominal terms compared with the second quarter of 2011. The Federal Statistical Office (Destatis) also reports that, based on first calculations, turnover in transportation and storage rose by 1.3%. In information and communication it was up by 1.6% and in professional, scientific and technical activities by 3.3%. The highest increase of 5.3% was recorded for administrative and support service activities.

CANADA - STATISTIQUE CANADA

Commerce international de marchandises du Canada, juillet 2012
Les exportations de marchandises du Canada ont diminué de 3,4 %, et les importations ont baissé de 2,2 % en juillet. Ainsi, le déficit commercial du Canada avec le monde s'est accru, passant de 1,9 milliard de dollars en juin à 2,3 milliards de dollars en juillet.

FRANCE - INSEE

Les prix à la consommation augmentent de 0,7 % en août 2012 ; ils augmentent de 2,1 % sur un an

En août 2012, l’indice des prix à la consommation (IPC) augmente de 0,7 %, après une baisse de 0,4 % en juillet. Sur un an, l’indice progresse de 2,1 % (+1,9 % en juillet). Hors tabac, l’indice augmente également de 0,7 % en août (+2,0 % sur un an), les prix du tabac progressant en août de +0,1 % (+5,7 % sur un an). Corrigé des variations saisonnières, l’indice mensuel augmente de 0,5 % (+2,1 % sur un an). L’augmentation des prix en août s’explique par la hausse des prix de l’énergie, par celle, saisonnière, des produits manufacturés au sortir des soldes estivales, et par celle de certains services liés au tourisme. Ces hausses sont légèrement atténuées par le repli, également saisonnier, des prix des produits frais.
Vive hausse des prix des produits pétroliers

Les prix de l’énergie progressent de 3,6 % en août (+6,9 % sur un an) sous l’effet d’une vive hausse des prix des produits pétroliers : les prix des combustibles liquides augmentent de 6,6 % (+13,6 % sur un an) et les prix des carburants croissent de 5,3 % (+7,8 % sur un an). En outre, les prix de l’électricité et du gaz restent dynamiques en lien avec l’augmentation des tarifs hors taxes et des contributions d’utilisation des réseaux de distribution publics : ils augmentent respectivement de 1,2 % et 1,0 % (+3,2 % et +6,2 % sur un an).
Augmentation des prix des produits manufacturés à la sortie des soldes d’été

Les prix des produits manufacturés augmentent de 1,2 % en août (+0,5 % sur un an) avec la fin des soldes d’été. Les prix de l’habillement-chaussures progressent ainsi de 6,7 % après une baisse de 13,6 % en juillet.

PLUS: http://www.insee.fr/fr/themes/info-rapide.asp?id=29&date=20120912

FRANCE - INSEE

In August 2012, the consumer prices index increased by 0.7%; year-on-year, it rose by 2.1%

In August 2012, the consumer prices index (CPI) rose by 0.7%, after a decline by 0.4% in July. The year-on-year change stands at 2.1%, up from 1.9% in July. The price index without tobacco was also increasing by 0.7% (+2.0% year-on-year). In August 2012, price of tobacco was up by 0.1% (+5.7% year-on-year). Adjusted from seasonal variations, the monthly change went up by 0.5% (+2.1% year-on-year). The largest upward pressures on the change in the CPI of August resulted mainly from the increase of prices of energy, especially the sharp rise of oil products. It reflected also the seasonal rises of manufactured products at the end of summer sales and the growth, also seasonal, of prices of services linked with tourism. Those rises were slightly reduced by the seasonal decrease of fresh products.
Prices of energy speeded up

In August 2012, prices of energy went up by 3.6% (+6.9% year-on-year). Prices of oil products jumped (+5.3% ; +8.7% year-on-year). Town gas prices grew also but to a lesser extent (+1.0% ; +6,2% year-on-year), as did those of electricity (+1.2% ; +3.2% year-on-year), linked with increases of contributions for using public distribution networks.
Increase of prices of manufactured products at the end of summer

In August 2012, prices of manufactured products increased by 1.2% (+0.5% year-on-year). Prices of clothing and footwear rose by 6.7% after a drop in July (—13.6%).
Slight seasonal increase of prices of services

For seasonal reasons, prices of services increased in August 2012 (+0.2%; +1.9% year-on-year).
Prices of food products went down

Prices of food products weakened in August 2012 (—0.5%; +2.4% year-on-year). This change resulted from the seasonal decline of prices of fresh products (—4.9%; +5.2% year-on-year), especially those of fresh fruits (—8.7% ; +4.6% year-on-year). Prices of food products except fresh products went up by 0.2% (+2.0% year-on-year).

MORE: http://www.insee.fr/en/themes/info-rapide.asp?id=29&date=20120912

10:30 PM

FRANCE - Indice de prix EDHEC IEIF Immobilier d'Entreprise France

Indice de prix EDHEC IEIF Immobilier d'Entreprise France - Août 2012
L'indice de prix EDHEC IEIF Immobilier d'Entreprise France est resté quasi stable en août après avoir perdu 0,6% en juillet.
L'indice est 3,7% en dessous de son niveau d'il y a douze mois. Sa volatilité annuelle sur longue période (depuis 1980) est de 7,5%.
L'indice de performance globale affiche une hausse de 1,4% sur douze mois. Le rendement du dividende de l'indice sur le deuxième trimestre s'élève à 5,0%.

RATES

Tableau de bord financier - Financial Dashboard

Cotations, indices et taux. Mise à jour quotidienne par Finyear.
Quotations, indices and rates. Updated daily by Finyear.

Link : http://www.finyear.com/Tableau-de-bord-financier-Financial-Dashboard_a15066.html