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EUROPEAN OPENING NEWS INCLUDING: Portugal has been discreetly sounding out advisers on options to restructure its debt
February 06 2012, 8:23am
ASIA
JGB prices remained lower, as many domestic real money accounts remain reluctant to chase higher prices after US treasury yields rebounded relatively sharply last Friday on stronger-than-expected US jobs data. At 0630GMT JGBs were trading down 22 ticks at 142.48. (RTRS)
The IMF have commented that Chinese economic growth is expected to stay above 8% over the 2012-2013 period, adding that inflation is coming down to a more comfortable level in the economy. The IMF further commented that if the Euro area suffers a sharp recession, Chinese growth would drop abruptly. (Sources)
US
T-notes settled in negative territory on Friday and close to lows for the session following blockbuster NFP data, beating the consensus by over 100K. This cast doubt on whether the Fed would maintain their pledge to key low rates until 2014, as the 10y note yield had its largest one-day gain in three months. At the pit close, t-notes settled at 131.10, down 27+ ticks. Finally the DJIA finished up 1.22% at12860.57, the S&P 500 finished up 1.45% at and the Nasdaq 100 finished up 1.34% at 2529.17. T-notes were trading up 7 ticks at 131.17+ heading into the European session on continued worries surrounding Greece. Last price taken at 0630GMT. (RANsquawk)
Fed's Bullard says surprising US strength weakens case for QE and the Fed may need to raise interest rates before 2014. (Sources)
EU
Talks between Greek party leaders and further talks with the IIF were continuing last night as the Greek Finance Minister admitted that Greece was “on a knife edge”. (RTRS) The Troika and other lenders bluntly told Greece it must achieve political consensus across all parties in the unity government over budgetary reforms and achieve a binding PSI deal with creditors before any further bailout funds are released. Greek television reported that PM Papademos has set a deadline of midday today for the three leaders to let him know whether they agree in principle with the proposed austerity measures, before he meets them again later in the day. (FT-Alphaville)
Greece has agreed to recapitalise its banks through a planned bond swap with common shares of restrictive voting rights. There were also reports that the ECB is being pushed to free up to EUR 10bln for Greece by “decisive actors.” (RTRS/Suddeutsche Zeitung)
Pro-European Niinistö has been elected Finnish Prime Minister. The 63-year old ex-Finance Minister won the position with 62.6% of the vote. (FT-More)
Portugal has been discreetly sounding out advisers on options to restructure its debt. Although the government has yet to formally appoint any firm, IFR has learnt that ministers have been watching developments in Greece closely with a view to replicating elements of any final agreement. (International Financing Review)
The Spanish government will not introduce further tax increases this year in order to reduce its budget deficit according to the finance minister. (El Pais) He also noted that growth in Spain will be -1.5% in 2012.
The Troika will let Ireland invest any proceeds it gets from privatisations rather than the previous arrangement in which all cash was to be used to pay down debts. (RTRS) The Irish PM indicated that the money would be used for job creation.
GEOPOLITICAL
Iran will attack any country whose territory is used by “enemies” to launch a military strike against its soil according to the deputy head of the Revolutionary Guards. (Fars/Tehran Times) Additionally, Iran has started to mass produce a new short range naval cruise missile according to the Defence minister.
Following the Russian and Chinese veto to a Syrian UN Security Council resolution the US Secretary of State Clinton called the decision a “travesty” and said it was not possible to bridge the gap with Russia. (RTRS/Sources)
FX
CFTC's COT report said the net EUR short position was USD 25.8bln as of Tuesday 31st Jan, a decrease of 8% for the week, the net JPY long position was an increase of 30% for the week and the net CHF short position was a decrease of 10% for the week. (CFTC)
Australian Retail Sales Ex Inflation (Q4) Q/Q 0.4% vs. Exp. 0.6% (Prev. 0.5%)
Australian Retail Sales (Dec) M/M -0.1% vs. Exp. 0.2% (Prev. 0.1%) (Sources)
The IMF have commented on the CNY, stating that upwards pressure on the currency has diminished recently. (Sources)
COMMODITIES
WTI crude futures were trading down USD 0.61 at USD 91.23 heading into the European session, concerns still surround Greece which is threatening the European economy and demand for fuel. Last price taken at 0630GMT. (RANsquawk)
Russian gas exporter Gazprom has brought European supplies back to normal but is unable to meet increased demand according to Russian PM Putin. (RTRS)
