IMK: Euro Gains on China Debt Talk, Slips On ECB Tender
LONDON, December 22 (MNI)- Euro strength built from the Asian opening on reports of China's intention to support the EU debt situation after very early sales related to euro-swiss. Further gains were seen mid-morning as unconfirmed and unnamed sources reported that China was preparing to buy E4-5 billion of Portuguese debt, rallying the euro to a high of $1.3180, before easing back towards $1.3140 following the ECB tender.
EURO SUMMARY: Opened in early Europe around $1.3136
this session. Rate opened Asia around $1.3100 and came under early sell pressure from a Swiss name that took it back to $1.3080, while euro-Swiss extended life lows to Chf1.2533. Move lower in euro-dollar met profit take demand which lifted rate back above the figure. Upside momentum gained a boost on press reports, an unnamed European official suggesting that China has promised further action as regards supporting EMU debt. Rate edged to $1.3135 before stepping its way up to a late session high of $1.3150. Rate eased back to $1.3125 in early Europe, as euro crosses came under pressure, euro-Swiss targeting the barrier at Chf1.2500, marking fresh life lows at Chf1.2497. Euro-dollar edged back to $1.3145, dropped to $1.3120 then spiked to $1.3180 as market reacted to a report suggesting China ready to buy E4-5bln of Portuguese debt. Bigger than expected take up of ECB 98-day LTRO eased rate back to $1.3145/40.
ECB: The ECB allotted E149.5bn in 98-day tender, above market expectations.
EUROZONE: Press pick-ups in the Eurozone Wednesday, * UK PRESS: Citigroup has warned of a fresh wave of bank failures and sovereign defaults in Europe unless EU leaders come up with a credible response to the crisis, the Telegraph reports. Prof Willem Buiter, the bank's chief economist, said the Eurozone was paralysed by a "game of chicken" between the European Central Bank and EMU governments, the paper says.
EUROZONE: Data released in the eurozone Wednesday, * GERMANY: German import prices rose 1.2% on the month in November to their highest level since September 2008, the Federal Statistical Office reported on Wednesday. The annual change came to +10.0%. - Germany Nov import prices above MNI median m/m fcast (+0.4%) - Germany Nov export prices +0.3% m/m, +4.5% y/y; Oct +4.3% y/y - Germany Nov ex-oil/oil products +0.8% m/m, +8.5% y/y - Germany Nov import prices: energy goods +3.4% m/m, +25.4% y/y - Germany Nov import prices: oil +4.9% m/m;natural gas +0.4% m/m - Germany Nov import prices: petroleum products +4.3% m/m * GERMANY: The German economy is likely to have grown by 0.7% q/q in the final quarter of 2010, the German Institute for Economic Research DIW said Wednesday. DIW said economic indicators continue to point to favorable developments and "an ongoing rise in demand" ahead. However, "new orders already show clear sings of a moderate slowdown,"the institute warned. Hopes for a quick transition towards domestically driven growth are exaggerated, DIW said, noting that "exports remains a key driver for the German economy." * ITALY: ISAE's consumer sentiment index rises 0.6 point in December to 11-month high of 109.1 - Above most forecasts in MNI analysts survey; median forecast 108.3 * ITALY: October nominal, seasonally adjusted retail sales rose 0.3% m/m and fell 0.6% y/y in unadjusted terms. - Monthly rise was the result of gains in both food and non-food sales and follows a decline of 0.3% in Sept and an increase of 0.1% in Aug. - The three month-moving average rose 0.2% in the months from August to October 2010, compared with the previous 3 months. - Italy's domestic 'NIC' inflation index rose 1.7% y/y in October.
JAPAN: Releases in Japan Wednesday, * The Japanese government today maintained its assessment of the economy in its monthly report for December, saying it is "pausing" after a modest recovery from the global financial crisis and recession. This assessment was adopted in October, when the government revised down its view on the economic climate for the first time in 20 months. While maintaining the overall assessment, it downgraded its verdict on the trend of exports and business confidence. * JAPAN: The government released official economic outlook for the year to March 2010: - Japan Govt Forecast: FY2011 Real GDP +1.5% Y/Y - Japan Govt Forecast: FY2011 Total CPI unchanged Y/Y - Japan Govt Forecast: FY2011 Nominal GDP +1.0% Y/Y - Japan Revises FY10 Real GDP Forecast To +3.1% From +2.6% - Japan Revises FY10 TOTAL CPI Forecast To -0.6% From -0.9%
JAPAN: Data released in Japan Wednesday, * Japan Nov Trade Surplus -55.4% Y/Y Vs Oct Revised +2.6% - Nov Trade Surplus Y162.8 Bln; MNI F'cast Y459 Bln - Trade Surplus Posts 1st Y/Y Decline In 3 Months - Nov Exports +9.1% Y/Y, Up 12 Months In Row - Exports Y/Y Change Compares With MNI F'cast +10.2% * The average price of regular gasoline in Japan rose to Y133.7 ($1.60) per liter, or $6.1 per gallon, this week from Y133.2 last week, posting the fourth straight weekly rise, according to data released today by the Oil Information Center. * The Bank of Japan's real, seasonally adjusted export index fell 1.7% m/m to 115.0 in November (against 100.0 for base year 2005), the fourth straight monthly decline, according to BOJ data released Wednesday. The data underscore the impact that weak foreign demand and the strong yen are having on the Japanese economy, The export index is down 7.1% since peaking at 123.8 in July. The BOJ calculated the real, seasonally adjusted index based on the unadjusted November trade data released by the Ministry of Finance earlier today. The export index hit a recent bottom of 76.5 in February 2009, after the collapse of Lehman Brothers in September 2008. In contrast, the real, seasonally adjusted import index rose 1.2% m/m in November to 103.4, the first rise in five months. * Sales at Japan's shopping malls totaled Y2.228 trillion in November, up 1.8% y/y, the second monthly rise in a row following a 1.9% gain in October, the Japan Council of Shopping Centers announced Wednesday. The industry group said the November sales were pushed up mainly by consumers' last-minute buying of appliances, ahead of Dec. 1 when the government halved the reward points it offers for buying TVs, air conditioners/heaters and refrigerators. The organization, however, said falls in sales are likely in December in payback for the rush buying in November, keeping the mall sales outlook uncertain. The numbers have been adjusted to facilitate comparison on a same-store basis. The increase in October sales was the first in 26 months.
YEN SUMMARY:Asia opened Y83.75/Y109.70 ranged Y83.72-85/Y109.56-110.07.
Thursday's Japanese holiday and looming Christmas period. Europe opened with a slow fall through Y83.70, which accelerated on a euro- dollar rally fueled by talk on talk of China bond buying assistance in the Portuguese market, sending dollar through reported semi- official bids at Y83.50 and tripping some stops to a low of Y83.42, before recovering to Y83.50. Exporter and other offers are layered from Y84.00 to Y84.50, with stops through Y84.55. Euro-yen was a bit livelier with an early rally to Y110.07 before drifting lower to Y109.73 and as euro strength was negated by the falling dollar-yen. Sterling yen slipped briefly below Y129 to Y128.92 following stg data and BOE minutes, before recovering to Y129.10. Aussie-yen remained range-bound Y83.30/50 despite a visit to parity from the aussie-dollar. Focus later today will be on the US Q3 GDP (1330GMT) and November Existing home sales data at 1500GMT.
