Thursday, July 12, 2012

3 Things to Know Before Trading

3 Things to Know Before TradingNorthern, WI 7/12/12 (StreetBeat) -- Stocks were mixed in Asian trade. The Hang Seng fell two percent, the Nikkei was down one and a half percent, and Australia lost 0.7%, but Shanghai was up a half percent. European indexes are generally weak this morning, with the Dax and Footsie both down a bit more than one percent. US stock futures are down by three quarters of a percent as I write.

*The June reading of Australia’s Unemployment Rate was up one tenth from the month before to 5.2%, as was forecast. But in June the net change in Employment was a decline of 27k and this was expected to be unchanged on the month.

*The Bank of Japan surprised the market by expanding its asset purchase fund to Y45 trillion from Y40 trillion, while at the same time they cut the credit lending program by Y5 trillion to Y25 trillion. They kept their overnight target rate steady at 0.0% – 0.10%. The changes to their policy tools were made in order to continue powerful easing, said BoJ Governor Shirakawa. The yield on the 10 Year JGB is down to about 0.76%, the lowest since 2003.

*An ex-judge on Germany’s Constitutional Court, Paul Kirchhoff, warns of Germany drifting into “illegality” if the current dynamics on European decision making continues. “We are playing with fire” he said in an extensive article with Frankfurt’s leading newspaper the FAZ. Private sector losses must not be financed by the state, is one of many points that he makes. It is not clear if this is any indication how the court will rule on the current case involving the ESM and EU., but it is worth noting anyway.

*The May reading of Euro Zone Industrial Production was +0.6% on a month on month basis, well above the forecast for unchanged. Regardless, the dollar/euro has fallen below 1.2200 for the first time in two years; currently down fifty pips at 1.2190.

*The UK sold BP3.5 billion 10 Year Gilts at a yield of 1.719%; a record low yield at auction.

*The weekly report on Initial Jobless Claims is due out at 7:30am CDT, it is expected to be 370k. The June reading of the Import Price Index is also due out at 7:30am; it is forecast to be -1.6% on a month on month basis. The Treasury is set to release their June Budget Statement at 1:00pm CDT, it is expected to show a deficit of $60.0 billion; in June 2011 it showed a $43.1 billion deficit.

*The weekly report on inventories of Natural Gas is due out at 9:30am CDT, it is expected to show an increase of 27 bcf.

*The Fed is scheduled to sell Treasuries today that are due to mature between 7/15/13 and 1/31/14; the results of the operation will be announced just after 10:00am CDT.

*The Treasury plans to sell $13 billion re-opened 30 Year Bonds today; the auction results will be announced just after noon CDT.

*San Francisco Fed boss Williams is set to speak at 2:20pm CDT.

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