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09:00 A.M
Moody’s overnight downgrade of 15 major banks is expected to only moderately impact market action today as these downgrades have been widely expected for weeks and should be priced into the markets to a huge degree already.
Main focus today will be on the German IFO index where another decline has been predicted. The risk with this important economic figure seems certainly to be to the downside especially with the ZEW Index just a few days ago having posted a rather dramatic and much bigger decline than predicted. Unlike last year Germany continues not only to suffer from the ongoing European financial crisis, general uncertainty and European austerity measures but also from a global slowdown in growth with their most important trading partners the USA and China increasingly suffering too. The meeting in Rome between Monti, Hollande, Merkel and Rajoy isn’t expected to yield any major progress in containing the financial crisis.
While for now things have calmed down a bit regarding the situation in Greece and Spain with periphery yields on the retreat the main concern hurting markets is sharply slowing growth not only seen in Europe but globally with a recovery in 2012 becoming ever less likely. Furthermore neither of the major central banks seem to be willing or able to intervene in a major way to stem the ongoing decline causing worries between investors that the worst for the global economy and equity markets might is still to come in the months ahead.
Markus Huber - Head of German HNW Trading - ETX Capital
09:00 A.M
ETX Capital calls the UK’s FTSE 100 down 21 points, Germany’s DAX off 28 points and France’s CAC-40 down 8 points.
European stock markets are to decline at Friday’s open, pressured by losses in US and Asian markets overnight amid fears over slowing global growth. Moody’s downgrading 15 global banks late Thursday adds a further weight on sentiment. Results of the Spanish bank audit contained no nasty surprises, but questions remain about how Spain will use the bailout money effectively. Looking ahead, Germany’s Ifo survey should garner some attention. Poor macro indicators from Germany have painted a shaky picture of the economy recently, and the Ifo index is expected to reflect this increased cautiousness amongst German investors. The meeting of euro zone leaders in Italy will also be under attention, with markets hoping leaders can provide bolder measures to spur growth for the euro zone.
Ishaq Siddiqi - Market Strategist, ETX Capital
10:30 A.M
Overall the German IFO Index confirmed what most recent data like the ZEW Index and PMI figures have already indicated that the German economy like their major counterparts in China and the US is also on the retreat again and that the strong bounce in growth seen in Q1 most likely will be short lived. Unlike last year where solid growth in China and the US helped to counteract sharply slowing economy activity in Europe, this time around the economies of Germany’s most important trading partners outside of Europe are also increasingly suffering from the fallout of the European financial crisis and general uncertainty hampering investments and consumption worldwide.
Positive however unlike yesterday’s Philly Index in the US and the ZEW Index in Germany a few days ago, the decline seen in the IFO today turned out less dramatic and pronounced as many had feared indicating that the slowdown in growth might be less steep with the economy possibly stabilising later in the year.
Markus Huber - Head of German HNW Trading - ETX Capital
12:30 PM
Heading into the weekend, European stock markets are registering modest losses as stalling global growth concern continue to hamper enthusiasm for risk, hurting resource and energy players, despite recovering commodity prices. The UK’s FTSE is down around 34 points, while Germany’s DAX is down 39 points. Since the European open, stock prices have recovered from lows, helped by firmer US stock futures.
Yesterday, stocks on Wall Street sold-off sharply – but the slump was largely overdone, setting the US market up for a rebound. As such, ETX Capital calls the DJIA up around 56 points and the S&P 500 up 7 points.
Another poor data release from Germany underpinned the slowing growth worries, with the Ifo survey confirming what most recent data like the ZEW survey and PMI figures have already suggested.
The German economy, like China and the US, is on the retreat and the strong bounce in growth seen in 1Q’12 will most likely be short lived. Unlike last year where solid growth in China and the US helped to counteract sharply slowing economy activity in Europe, this time, the economies of Germany’s most important trading partners outside of Europe are also increasingly suffering from the fallout of the euro zone financial crisis and general uncertainty hampering investments and consumption worldwide.
The positive however, unlike yesterday’s Philly Fed Index in the US and the ZEW index in earlier this week, is that the decline seen in the Ifo today turned out to be less dramatic and pronounced as many had feared, indicating that the slowdown in growth might be less steep than anticipated, with the German economy possibly stabilising later in the year.
Elsewhere, bank stocks have pared losses to perk up, with the broader Stoxx 600 banks index now trading in positive territory. Moody’s move to cut 15 global banks late Thursday pressured Asian markets overnight, smacking European markets in early trade. However, the market appears to have largely shrugged off Moody’s action, as the cuts were priced-in and flagged during Thursday’s trading session.
Spanish 10-year bond yields continue to ease from elevated levels and with two successful debt auctions out of the way – pessimism surrounding Spain seems overdone. Indeed, Spain’s IBEX-35 index is trading higher today, outperforming its European peers. Yesterday’s bank stress test results from the independent audit turned out to be lower than expected. Despite these bright spots, the current rally for Spanish stocks and bonds may not be as sustainable as one would hope. The country’s economic troubles will be catching up again with markets soon enough, making another extended move to the downside likely.
There are no major data releases due for the rest of the session, so the attention will be on the meeting of euro zone leaders in Italy, with PM Monti hosting Merkel, Hollande and Rajoy in Rome. The likely topic will be fiscal and banking union proposals and any Greek developments. But leaders will need to propose bolder measures in order to kick-start growth for the euro zone. No major surprises are expected out of the meeting, with the Eurogroup meeting at the end of the month being the main focus for now.
Ishaq Siddiqi - Market Strategist, ETX Capital
www.etxcapital.com
Moody’s overnight downgrade of 15 major banks is expected to only moderately impact market action today as these downgrades have been widely expected for weeks and should be priced into the markets to a huge degree already.
Main focus today will be on the German IFO index where another decline has been predicted. The risk with this important economic figure seems certainly to be to the downside especially with the ZEW Index just a few days ago having posted a rather dramatic and much bigger decline than predicted. Unlike last year Germany continues not only to suffer from the ongoing European financial crisis, general uncertainty and European austerity measures but also from a global slowdown in growth with their most important trading partners the USA and China increasingly suffering too. The meeting in Rome between Monti, Hollande, Merkel and Rajoy isn’t expected to yield any major progress in containing the financial crisis.
While for now things have calmed down a bit regarding the situation in Greece and Spain with periphery yields on the retreat the main concern hurting markets is sharply slowing growth not only seen in Europe but globally with a recovery in 2012 becoming ever less likely. Furthermore neither of the major central banks seem to be willing or able to intervene in a major way to stem the ongoing decline causing worries between investors that the worst for the global economy and equity markets might is still to come in the months ahead.
Markus Huber - Head of German HNW Trading - ETX Capital
09:00 A.M
ETX Capital calls the UK’s FTSE 100 down 21 points, Germany’s DAX off 28 points and France’s CAC-40 down 8 points.
European stock markets are to decline at Friday’s open, pressured by losses in US and Asian markets overnight amid fears over slowing global growth. Moody’s downgrading 15 global banks late Thursday adds a further weight on sentiment. Results of the Spanish bank audit contained no nasty surprises, but questions remain about how Spain will use the bailout money effectively. Looking ahead, Germany’s Ifo survey should garner some attention. Poor macro indicators from Germany have painted a shaky picture of the economy recently, and the Ifo index is expected to reflect this increased cautiousness amongst German investors. The meeting of euro zone leaders in Italy will also be under attention, with markets hoping leaders can provide bolder measures to spur growth for the euro zone.
Ishaq Siddiqi - Market Strategist, ETX Capital
10:30 A.M
Overall the German IFO Index confirmed what most recent data like the ZEW Index and PMI figures have already indicated that the German economy like their major counterparts in China and the US is also on the retreat again and that the strong bounce in growth seen in Q1 most likely will be short lived. Unlike last year where solid growth in China and the US helped to counteract sharply slowing economy activity in Europe, this time around the economies of Germany’s most important trading partners outside of Europe are also increasingly suffering from the fallout of the European financial crisis and general uncertainty hampering investments and consumption worldwide.
Positive however unlike yesterday’s Philly Index in the US and the ZEW Index in Germany a few days ago, the decline seen in the IFO today turned out less dramatic and pronounced as many had feared indicating that the slowdown in growth might be less steep with the economy possibly stabilising later in the year.
Markus Huber - Head of German HNW Trading - ETX Capital
12:30 PM
Heading into the weekend, European stock markets are registering modest losses as stalling global growth concern continue to hamper enthusiasm for risk, hurting resource and energy players, despite recovering commodity prices. The UK’s FTSE is down around 34 points, while Germany’s DAX is down 39 points. Since the European open, stock prices have recovered from lows, helped by firmer US stock futures.
Yesterday, stocks on Wall Street sold-off sharply – but the slump was largely overdone, setting the US market up for a rebound. As such, ETX Capital calls the DJIA up around 56 points and the S&P 500 up 7 points.
Another poor data release from Germany underpinned the slowing growth worries, with the Ifo survey confirming what most recent data like the ZEW survey and PMI figures have already suggested.
The German economy, like China and the US, is on the retreat and the strong bounce in growth seen in 1Q’12 will most likely be short lived. Unlike last year where solid growth in China and the US helped to counteract sharply slowing economy activity in Europe, this time, the economies of Germany’s most important trading partners outside of Europe are also increasingly suffering from the fallout of the euro zone financial crisis and general uncertainty hampering investments and consumption worldwide.
The positive however, unlike yesterday’s Philly Fed Index in the US and the ZEW index in earlier this week, is that the decline seen in the Ifo today turned out to be less dramatic and pronounced as many had feared, indicating that the slowdown in growth might be less steep than anticipated, with the German economy possibly stabilising later in the year.
Elsewhere, bank stocks have pared losses to perk up, with the broader Stoxx 600 banks index now trading in positive territory. Moody’s move to cut 15 global banks late Thursday pressured Asian markets overnight, smacking European markets in early trade. However, the market appears to have largely shrugged off Moody’s action, as the cuts were priced-in and flagged during Thursday’s trading session.
Spanish 10-year bond yields continue to ease from elevated levels and with two successful debt auctions out of the way – pessimism surrounding Spain seems overdone. Indeed, Spain’s IBEX-35 index is trading higher today, outperforming its European peers. Yesterday’s bank stress test results from the independent audit turned out to be lower than expected. Despite these bright spots, the current rally for Spanish stocks and bonds may not be as sustainable as one would hope. The country’s economic troubles will be catching up again with markets soon enough, making another extended move to the downside likely.
There are no major data releases due for the rest of the session, so the attention will be on the meeting of euro zone leaders in Italy, with PM Monti hosting Merkel, Hollande and Rajoy in Rome. The likely topic will be fiscal and banking union proposals and any Greek developments. But leaders will need to propose bolder measures in order to kick-start growth for the euro zone. No major surprises are expected out of the meeting, with the Eurogroup meeting at the end of the month being the main focus for now.
Ishaq Siddiqi - Market Strategist, ETX Capital
www.etxcapital.com
