ZuluTrade Blog

Risky assets jumped overnight as investors read remarks by central bankers in Europe and the U.S

Market View | Thursday, June 7, 2012 3:53 AM GMT

Good Morning ,

- Risky assets jumped overnight as investors read remarks by central bankers in
Europe and the U.S. as a signal that more monetary stimulus may be on the way.
EURUSD rose to 1.2586 or JPY-crosses were stronger across the board (high
EURJPY 99.88, USDJPY 79.45). AUDUSD rose also on a stronger than expected
job market report (high 0.9967). All eyes will be on Switzerland at 9.00 am(CET)
Zurich, when the central bank publishes the currency reserves for May.

- Stocks: Nikkei +1.28 %, Hang Seng +1.18 %, Shanghai Composite
Dow Jones +2.37 %, S+P500 +2.30 %

- German Chancellor Angela Merkel played down expectations on Thursday that a
European summit at the end of the month could produce a master plan for the
future of Europe but said it would come up with an agenda to integrate
further. "I don't believe that there will be one single summit that will
decide the big throw," Merkel said in an interview with ARD public
broadcasters yesterday.

- Germany and European Union officials are urgently exploring ways to rescue
Spain's debt-stricken banks although Madrid has not yet requested assistance
and is resisting being placed under international supervision, European
sources said on Wednesday. (Reuters)

- "I think it would be a sensible option" for Spain to request funds from the
European rescue fund, ECB Nowotny said in an interview with Austrian state
broadcaster ORF yesterday. "Spain de facto already took actions that
correspond with what one would have to do for the rescue fund. This is what
the rescue fund is for and I think this would increase the trust in Spanish
banks again."

- Recent U.S. economic data has been "pretty disappointing," with the economy
probably growing at a 2 percent rate and the labor market stalled for now,
the Federal Reserve's number two policy-maker said on Wednesday. Fed Vice
Chairman Janet Yellen hinted that the central bank would be prepared to act
if it suspects that growth will remain tepid for too long.

- Federal Reserve Bank of San Francisco President John Williams said the
central bank should be ready to step up stimulus in case economic growth
slows and threatens to delay improvement in the job market.

- Federal Reserve Bank of Atlanta President Dennis Lockhart said extending
Operation Twist, the program to lengthen maturities of debt on the central
bank's balance sheet, is an "option on the table."

- The Federal Reserve said yesterday that the U.S. economy maintained a
moderate pace of growth as factory output rose and the real-estate market
improved. "Overall economic activity expanded at a moderate pace" from early
April to late May, the Fed said in its Beige Book business survey, which is
based on reports from its 12 district banks. "Hiring was steady or increased
slightly."

- Australian employment surged by 38,900 in May to beat all expectations.
Today's data showed the unemployment rate rose as expected to 5.1 percent
from a revised 5.0 percent, but only because of a sharp rise in the
participation rate as more people went looking for work.

- Australia Data Recap                      Period    Survey    Actual    Prior    Revised
* Employment Change                      May         0.0k      38.9k     15.5k       7.0k
* Unemployment Rate                      May         5.1 %    5.1 %    4.9 5       5.0 %
* AiG Perf of Constr Index                May           -         34.7        34.9         –

- China's outbound investments accelerated to $21.4 billion in the first three
months of 2012 after stalling last year, with assets in the resource sector
and South America the most sought-after by mainly state-backed buyers, a
study showed on Thursday.

- China delayed tightening bank capital rules to the beginning of next year,
signaling support for loan growth as policy makers seek to arrest a slowdown
in the world's second-largest economy. New draft rules from the China Banking
Regulatory Commission seek to set "reasonable" schedules for banks to meet
capital targets in a way that helps "maintain appropriate credit growth," the
government said on its website yesterday, without giving a deadline for
compliance. The rules, announced in August, had been set to go into effect on
Jan. 1, 2012.

- 1430 US Initial Claims
- 2100 US Consumer Credit Apr
- 1145 Fed Rosengren
- 1600 Fed Bernanke testifies to US lawmakers on economic outlook
- 1810 Fed Lockhart
- 1915 Fed Kocherlakota
- 2130 Fed Fisher
- 0730 France ILO Unemployment Rate Q1
- 0745 Switzerland Unemployment Rate May
- 0900 Switzerland Foreign Currency Reserves May
- 0915 Switzerland CPI May
- 0900 UK Halifax House Price May
- 1030 UK PMI Services May
- 1300 Bank of England announces rates
- 1300 Bank of England asset purchase target
- 1000 Norway Industrial Production Apr
- 1000 Norway Industrial Production Manufacturing Apr
- 1600 Canada Ivey PMI May

(CET)

Have a good day !

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