ZuluTrade Blog

No major news from the G20 meeting in Mexico...

Market View | Monday, November 5, 2012 2:23 AM GMT

     Good Morning,


- Quiet start into the news week. No major news from the G20 meeting in Mexico. Data out of China and Australia was better than expected. AUDUSD traded in a 1.0333-1.0369 range. EUR-crosses remain heavy, after most of them broke some key levels on Friday.


- Stocks: Nikkei -0.48 %, Shanghai Composite -0.04 %, Hang Seng -0.34 %, Dow Jones -1.05 %, S+P500 -0.94 %


- Policy makers from the Group of 20 nations are confident that the U.S. will reach some kind of bipartisan agreement to resolve the so-called fiscal cliff, said an official from one of the countries who declined to be identified because the talks were private. The G-20 official said that while the clock is ticking and accidents can happen there was a view that the U.S. was fully aware of the dangers and did not need to be reminded of them, the G-20 official said.


- The European Central Bank is looking into whether it is treating Spanish government Treasury bills too generously when commercial banks present them as collateral for loans, potentially reviving concerns over the safety of the central bank's 3 trillion euro balance sheet. An ECB spokeswoman confirmed the collateral examination Sunday after Germany's Welt am Sonntag newspaper reported, based on its own research, that the ECB hasn't followed its own rules when banks presented some Spanish government securities. The issue involves about 80 billion the ECB accepted as collateral for its loans. The Treasury bills under question were given the highest collateral rating, but Welt am Sonntag's research suggests many of the securities should have been given a lower rating, meaning more bills would have needed to be posted to obtain the same amount of ECB credit.


- European Central Bank Governing Council member Erkki Liikanen urged shareholders and creditors to take over losses at distressed banks, Sueddeutsche Zeitung reported today, citing an interview with Liikanen.


- Federal Reserve Bank of San Francisco President John Williams said the central bank should extend its program of bond purchases into next year by buying both mortgage-backed securities and Treasuries.


- China ’s services industries rebounded from the slowest expansion in at least 19 months, adding to manufacturing gains that indicate the world’s second-biggest economy is recovering from a seven-quarter slowdown.


- China Data Recap                  Period     Survey      Actual     Prior

* Non-manufacturing PMI          Oct          -              55.5      53.7

* HSBC Serivce PMI                  Oct           -             53.5      54.3


- Australian Treasurer Wayne Swan comments in e-mailed weekly note: * “From my initial meetings, it’s clear most of my G-20 colleagues view the global recovery as fragile” * Calls recent measures by central banks in Europe, the U.S. and Japan “a step in the right direction” * Says governments in Europe must continue to move toward closer banking, fiscal, political ties * Calls U.S. recovery ‘shaky’ even after recent encouraging data * “The most pressing issue for whoever wins this week’s presidential election will be working with Congress to avert the ‘fiscal cliff’


- Japanese Economy Minister Seiji Maehara speaks to reporters in Tokyo about government and Bank of Japan joint statement that was issued last week: * Govt and BOJ issued joint statement to show commitment to beating deflation * Govt, BOJ must work together to end deflation * BOJ should continue powerful monetary easing * Japan has to consolidate its fiscal situation * Must create economic environment in which sales tax can be raised



- IMM Positions: EUR -58k vs -55k, JPY -37k (biggest short since May18) vs -18k, GBP 23k vs 18k, CHF 2k unchanged, CAD 79k vs 89k, AUD 52k vs 46k, NZD 17k vs 16k



G20 Finance Ministers and Central Bank Meeting


US ISM Non-Manufacturing Composite Oct


Eurozone Sentix Investor Confidence Nov


UK PMI Services Oct


Switzerland Reat Estate Bubble Index Q3


Canada Building Permits Sep


Sweden PMI Services Oct


Have a good start

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