Tallahassee, FL 12/15/11 (StreetBeat) --Stocks were weak in Asian trade. Shanghai was among the worst with a decline of 2.1% on the day (this index isdown fourteen percent in the last month alone), the Hang Seng fell one and three quarters percent, the Nikkei lost one and two thirds percent and Australia was off by 1.2%. European indexes are broadly higher, with the Dax better by one percent and the Footsie up 0.7%. US stock futures are up by a half percent give or take as I write.*The Q4 reading of Japan’s Tankan Large Manufacturers Index is -4; down six points from the month before and two points below the forecast.
*The ECB boss Draghi spoke in Berlin this morning. He said there was likely an unavoidable short-term contraction coming for Europe, the interest rate transmission mechanism is hampered and this has weakened the impact of the rate cuts, the ECB deposit facility is at post-Lehman level, the ECB moves are trying to enable the banks to lend long, and he reiterated that the ECB bond purchases are not eternal or infinite.
*The preliminary December reading of Germany’s manufacturing sector Purchasing Managers Index was up two tenths on the month at 48.1, a half point better than expected. The preliminary December reading of Germany’s service sector PMI rose more than two points to 52.7, a slight decline was forecast.
*The Q3 reading of Swiss Industrial Production is -1.4% on a quarter on quarter basis and -1.4% annualized; both results were much worse than expected.
*The Swiss National Bank kept their interest rate target steady at 0.00% as expected, but they did not change the Franc’s minimum exchange rate target versus the euro, leaving it at 1.200. “The SNB stands ready to take further measures at any time if the economic outlook and the risk of deflation require,” said SNB boss Hildebrand,, “the SNB is expecting temporarily negative inflation rates, but not a sustained decline in the general price level.”
*The November reading of UK Retail Sales, including fuel fell 0.4% on a month on month basis and excluding fuel Sales were down 0.7% on the month; both results were worse than forecast.
*There are four reports due out at 7:30am CST, including: the November reading of the Producer Price Index is expected to be up 0.2% on a month on month basis and the Core PPI was forecast to be +0.2% as well; the Q3 reading of the Current Account Balance is expected to be a deficit of $108.4 billion ; the December reading of the Empire State Manufacturing Index is forecast to be 3.00, up from 0.61 the month before; and the weekly report on Initial Jobless Claims is expected to be 390k. The Treasury will announce at 8:00am CST the net change in October in the foreign holdings of long-term US securities, the TIC data, it is forecast to be +$62.5 billion. The Fed will announce at 8:15am CST the November readings of Industrial Production and Capacity Utilization; Production is expected to be +0.1% on a monthly basis and the estimate for Utilization is steady on the month at 77.8%. The December reading of the Philly Fed Business Activity Index is due out at 9:00am CST, it is forecast to be 5.0, up from 3.6 the month before.
*The weekly report on inventories of Natural Gas is due out at 9:30am CST, it is expected to show a decline of 90 bcf.
*The Fed is scheduled to buy Treasuries today that are due to mature between 12/31/17 and 11/15/19; the results of the operation will be announced just after 10:00am CST.
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