Wednesday, November 17, 2010

3 Things to Know Before Trading

*Stocks were generally weak in Asia, with some exceptions. The Hang Seng and Shanghai both fell two percent and Australia was down 1.6%. The Nikkei however managed a fractional gain. European indexes are mixed and not sharply changed on the session; The Dax is up about 0.3% but the Footsie is currently down 0.20%. US stock futures are up a fraction.

*The Q3 reading of Australia’s Wage Cost Index matched the forecast of +1.1% on a quarter on quarter basis; it is the highest result since Q4 2008.

*The final September reading of Japan’s Leading Economic Index was revised down 0.3 to 98.6; that’s the lowest result since February and the fourth decline in the last five months.

*The Bank of England policymakers were split in three ways, with seven voting for steady rates and levels of QE, one (Posen) in favor of more Q% and one (Sentence) in favor of hiking rates twenty five basis points, according to the minutes from their latest policy meeting. The majority is said to be ready to adjust policy in either direction as needed.

*The September reading of the UK Unemployment Rate was steady at 7.7%, as expected. In October the net change in the number of jobless claims fell 3.7k, a good surprise versus the expectation of +6.0k.

*Ireland is going to begin meetings with the EU and IMF tomorrow to see what can be done to solve the country’s debt crisis. Irish PM Cowen has been insisting they can handle the situation even as the EU, etc. continues to diplomatically insist they cannot. Earlier today LCH Clearnet raised the margin requirement for Irish bond trading to 30 percent of the net position, a move that raises the stakes in a real money way.

*US mortgage applications fell 14.4% in the week ended November 12, according to the Mortgage Bankers Association, both key components, applications for purchase and refinancing were down on the week.

*The October reading of the Consumer Price Index is due out at 7:30am CST. Headline CPI is expected to rise 0.3% on a month on month basis and the estimate for Core CPI is +0.1%. The forecasts for the year on year measures are +1.3% and +0.7% respectively. The October reading of Housing Starts is also due out at 7:30am. Starts are expected to be 598k units at an annualized rate, or -2.0% from the month before; the estimate for Building Permits is 568k units annualized or +3.9% up from September’s rate.

*The weekly report on energy inventories is due out at 9:30am CST. Stocks of Crude Oil are forecast to fall 70k barrels, inventories of Gasoline are expected to decline 600k and the estimate for Distillates is -2.13 million.

*The Fed is scheduled to buy Treasuries today that are due to mature between 2/15/18 and 11/15/20; the results of the operation will be announced just after 10:00am CST.

*There are a couple of Fed speakers on the calendar today. Boston Fed’s Rosengren will talk at 7:00am CST and St. Louis Fed boss Bullard will speak at 8:15am CST.


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