Shawshank, VA 10/6/2011 (PennyPayDay) – THE DAY AHEAD
*Stocks were strong in Asian trade. The Hang Seng, back from one day off, was up five and two thirds percent, Australia rose three and two thirds percent and the Nikkei was up one and two thirds percent; Shanghai was again closed for a holiday. European indexes are also broadly higher this morning with the Dax one percent better and Footsie up about two percent at the moment. US stock futures are up about a quarter percent as I write.
*The Swiss National Bank announced this morning that its Foreign Currency Reserves rose SF29 billion in September to a record high value of SF282.4. The increase occurred because of the SNB’s efforts to reduce the value of the Franc versus the Euro, with the stated intention to cap the EU/SF cross at 1.2000 by purchasing unlimited quantities of currencies if needed to defend the cap. The increase is said to be a smaller amount than expected, indicating their threat to create Franc “out of thin air” was just as important a component to their strategy as was the sales of Francs in favor of the Euro.
*The September reading of Switzerland’s Consumer Price Index was up 0.3% on a monthly basis and +0.5% year on year; both results were a couple of tenths more than forecast.
*UK house prices fell 0.5% on a month on month basis in September, according to Halifax; prices had been anticipated to gain a couple of tenths on the month.
*The Bank of England kept their key rate steady at 0.50% as expected, but raised the asset purchase target from BP200 billion up to BP275 billion; which was not universally expected. In a statement the BOE says they see severe strains in bank funding markets and after rising, they see inflation falling back sharply in 2012.
*The August reading of German Factory Orders was -1.4% on a month on month basis, but had been expected to be unchanged from the month before.
*The ECB kept their benchmark interest rate steady at 1.50%; there were mixed opinions on whether they would lower this rate at today’s meeting. Trichet will conduct his final post policy meeting press conference as ECB boss today at 7:30am CDT and tell us how he managed to reach a unanimous vote on this decision.
*Steve Jobs passed away last night, he was 56 years old.
*US chain stores are reporting their September same store sales results this morning, some of the early reports include: Freds +1.1%; Limited Brands +11%; Cato Stores -3%; and the Wet Seal -0.3%.
*The weekly report on Initial Jobless Claims is due out at 7:30am CDT, it is expected to be 410k.
*The weekly report on inventories of Natural Gas is due out at 9:30am CDT, it is expected to show an increase of 99 bcf.
*The Fed is scheduled to do the first sell tranche of Operation Twist today. They will sell Treasuries that are due to mature between 1/15/12 and 7/31/12; the results of the operation will be announced just after 10:00am CDT.
*Dallas Fed boss Fisher is set to talk about the Texas economy at 10:00am CDT.
*The Treasury is set to announce at 10:00am CDT the details for next week’s auctions of 3 and 10 Year Notes and 30 Year Bonds.