Thursday, June 7, 2012

3 Things to Know Before Trading

3 Things to Know Before TradingPalm Beach, FL 6/7/12 (StreetBeat) -- Stocks were mixed in Asian trade. The Nikkei and Australia were both up one and a quarter percent or so and the Hang Seng rose 0.8%, but Shanghai fell 0.7% on the day; however the China rate cut came after the close of its markets. European indexes are strong this morning with the Footsie better by 1.5% and the Dax up 1.2%. US stock futures are up about a half to three quarters of a percent as I write.

*The May reading of Australia’s Unemployment Rate rose a tenth to 5.1%, matching the forecast. But the Employment Change was +38.9k, well above the expectation for a flat reading here.

*China surprised by cutting their benchmark lending and deposit interest rates earlier today; the first reduction in these rates since 2008. The deposit rate was reduced twenty-five basis points to 3.25% and the lending rate will drop to 6.31% from 6.56% effective tomorrow.

*Spain sold EU2.1 billion in debt today that is due to mature in two to ten years. The 10 Year paper had a rate of six percent, up from 5.70 percent at the April auction of this duration. But the bid cover for the paper was better than three to one; although it is said that the main buyers were Spanish banks, the sector that is the subject of intense bailout discussions in Brussels.

*The May reading of Switzerland’s seasonally adjusted Unemployment Rate was steady from the month before at 3.2%, a 3.1% result had been forecast.

*The May reading of Switzerland’s Consumer Price Index was flat on a monthly basis and -1.0% year on year; both measures matched the estimates.

*The May reading of the UK service sector Purchasing Managers Index was steady on the month at 53.3, but had been expected to fall by one point.

*The Bank of England kept their benchmark steady at 0.50% and their Asset Purchase Plan unchanged at BP325 billion; no changes were anticipated.

*Last night the Fed’s Janet Yellen maintained her dovish stance in comments; saying that it may be appropriate to insure against downside risks and that “scope remains” for further policy accommodation.

*The weekly report on Initial Jobless Claims is due out at 7:30am CDT, it is expected to be 378k.

*Fed boss Bernanke is scheduled to testify at 9:00am CDT before the Joint Economic Committee of Congress. Other Fed speak on the calendar today includes: Boston’s Rosengren spoke earlier in Copenhagen, (he is cautious about the economy and is pretty sure the unconventional policy has helped); Atlanta Fed boss Lockhart is on at 11:10am CDT; Minneapolis Fed’s Kocherlakota begins at 12:15pm CDT; and Dallas Fed’s Fisher talks at 2:30am CDT.

*The weekly report on inventories of Natural Gas is due to be released at 9:30am CDT, it is expected to show an increase of 58 bcf.

*The Fed is scheduled to sell Treasuries today that are due to mature between 12/15/13 and 2/28/14; the results of the operation will be announced just after 10:00am CDT.

*The Fed’s quarterly statistical report, the Flow of Funds, is due out at 11:00am CDT.

*The April reading of Consumer Credit is due to be released at 2:00pm CDT; it is expected to be +$11.0 billion. Take note that this release has been restructured by the Fed to reflect some regulatory changes in depository institutions that will affect the level of credit outstanding and the flow of credit; huh?! But in any case this could make the report’s data very different from the expected results; it could happen. In any case the revised back data will also be made available this afternoon.

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