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US OPENING NEWS INCLUDING: Precious metals and in particular platinum prices are trading sharply higher this morning

January 15 2013, 2:26pm
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Japanese Economic Minister Amari said an excessively weak JPY has negative effects on livelihoods and is not good for the economy

According to German ministry official, German government sees 0.4% GDP in 2013 from prev. view of 1.0% and 1.6% in 2014

RANsquawk European Morning Briefing Video:  http://youtu.be/BHQoHXNyYQY

Market Re-Cap

Heading into the North America open, stocks in Europe are flat to minor negative territory after Germany cut growth forecast for 2013 to 0.4%. Peripheral bond yield spreads are wider, ahead of supply from France, Germany and Spain this week. However, Italian bonds outperformed, after the Treasury tightened guidance on its 15y Euro benchmark bond to + 30bps over 2026 BTP from initial target of +35bps. USD/JPY continues to trade heavy, in reaction to overnight comments from Japanese Economic Minister Amari who said that an excessively weak JPY has negative effects on livelihoods and is not good for the economy. EUR/CHF remains on an uptrend, supported by a long recommendation from a tier-1 Swiss name with a target of 1.2550. Touted offers from corporate names at 1.2380 slowed the grind higher, barriers said to be placed at 1.2400 level. Elsewhere, precious metals and in particular platinum prices are trading sharply higher this morning after it was reported that Anglo American Platinum said it will indefinitely close four of its shafts in platinum belt. Platinum hit a three-month high this morning, regaining its premium over gold for the first time since last March. Going forward, market participants will get to digest the latest US Retail Sales, PPI and Empire Manufacturing reports.

Asian Headlines

Japanese Economic Minister Amari said an excessively weak JPY has negative effects on livelihoods and is not good for the economy. He added that companies must be able to overcome some forex disadvantages.

EU & UK Headlines

According to German ministry official, German government sees 0.4% GDP in 2013 and 1.6% in 2014. This came after earlier source comments, that 2013 GDP forecasts have not yet confirmed and to be discussed in cabinet on Wednesday, adding that German government to cut 2013 GDP growth forecast to 0.5% from 1.0%. Furthermore, German statistics office said that German economy probably shrank 0.5% in Q4. 

UK CPI (Dec) Y/Y 2.7% vs. Exp. 2.7% (Prev. 2.7%)

UK CPI Core (Dec) Y/Y 2.4% vs. Exp. 2.6% (Prev. 2.6%)

UK RPI (Dec) Y/Y 3.1% vs. Exp. 3.0% (Prev. 3.0%)

- ONS says biggest upward contributions to CPI from utility bills and biggest downward pressures on CPI from transport. 

Fitch sees AAA sovereigns underpressure in 2013 and beyond, citing risks of China "hard landing" and US fiscal policy. 

Fitch also noted that Spain is unlikely to request ESM aid program in 2013 and that Spain rating at risk of downgrade even if it manages to avoid going into rescue programme. Of note, this morning, the Spanish Treasury sold EUR 5.76bln in 12 and 18-Month T-bills, above the indicative range of EUR 4.5-5.5bln.

US Headlines

Fitch said that debt ceiling delay would prompt formal US rating review. Furthermore, in the absence of an agreed and credible medium-term deficit reduction plan that would be consistent with sustaining the economic recovery and restoring confidence in the long-run sustainability of US public finances, the current negative outlook on the AAA rating is likely to be resolved with a downgrade later this year even if another debt ceiling crisis is averted. 

Equities

Heading into the North America open, stocks in Europe are flat to minor negative territory after Germany cut growth forecast for 2013 to 0.4%.Anglo American Platinum said it will indefinitely close four of its shafts in platinum belt. The closure of the unit will lead to a reduction in production of some 400,000oz a year. The unit set a new baseline production target of 2.1-2.3mln oz annually. 

Burberry reported Q3 Total Revenue GBP 613mln vs. Exp. GBP 601.4mln. Q3 retails comparable sales up 6% vs. Exp. 0.7%, up 1% in Q2. Co. says sees FY 2012/13 licensing revenue 'broadly' unchanged. 

Allianz says outlook has unchanged despite hit from hurricane Sandy. 

SAP announced record FY and Q4 2012 non-IFRS software and software related service revenues increases 17% to EUR 13.2bln. 

- 2012 Q4 software revenue EUR 4.66bln vs. Exp. EUR 4.7bln.

- 2012 Q4 non-IFRS total revenue EUR 5.06bln vs. Exp. EUR 5.12bln.

- 2012 Q4 non-IFRS operating profit EUR 1.96bln vs. Exp. EUR 2.0bln.

FX

USD/JPY continues to trade heavy, in reaction to overnight comments from Japanese Economic Minister Amari who said that an excessively weak JPY has negative effects on livelihoods and is not good for the economy. of note, Goldman Sachs Asset Management Chairman Jim O’Neill said the BoJ must show it is serious about inflation targeting for the JPY to weaken further. EUR/USD and GBP/USD came under persistent selling pressure, driven lower by a firmer USD, as well as the ongoing trend higher in EUR/CHF. The currency cross (EUR/CHF) benefited from a long position recommendation from a tier-1 Swiss name with a target of 1.2550. However touted offers from corporate names at 1.2380 slowed the grind higher, barriers said to be placed at 1.2400 level.

Commodities

Precious metals and in particular platinum prices are trading sharply higher this morning after it was reported that Anglo American Platinum said it will indefinitely close four of its shafts in platinum belt. Platinum hit a three-month high this morning, regaining its premium over gold for the first time since last March. 

Iran has announced its plans to construct a pipeline called 'Friendship' to supply gas to Iraq and Syria. The gas pipeline is expected to have enough capacity to supply gas from Iran to other neighbouring Muslim countries, including Jordan and Lebanon. The IAEA aims to finalise framework agreement in this week's talks in Iran according to an official. Says hopes to be allowed to visit Parchin military site in Iran. Gas exports from the US surged as sanctions undermined Iran. US sales jumped 27% last year as those from Iran fell 18%.

 

 

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