BetOnMarkets Weekly Briefing
Contents This Week:
Economic calendar for week 9th - 13th March 2009.
Commentary: The week ahead.
Economic Calendar for week 9th - 13th March 2009
PLEASE NOTE - All times GMT
Monday march 9th:
EU - 09:30 - Sentix Investor Confidence.
Tuesday March 10th
UK - 00:01 - BRC Retail Sales Monitor Y/Y.
UK - 00:01 - RICS House Price Balance.
GE - 07:00 - Trade Balance.
GE - 07:00 - Final CPI M/M.
FR - 07:45 - Industrial Production M/M.
FR - 07:45 - Gov Budget Balance.
UK - 09:30 - Manufacturing Production M/M.
UK - 09:30 - Industrial Production M/M.
US - 12:30 - Fed Chairman Bernanke Speaks.
US - 14:00 - IBD/TIPP Economic Optimism.
US - 14:00 - Wholesale Inventories M/M.
Wednesday March 11th
UK - 00:01 - NIESR GDP Estimate.
GE - 07:00 - PPI M/M.
UK - 09:30 - Trade Balance.
GE - 11:00 - Factor Orders M/M.
US - 12:30 - Challenger Job Cuts Y/Y.
US - 14:30 - Crude Oil Inventories.
US - 18:00 - Federal Budget Balance.
Thursday March 12th
FR - 07:45 - CPI M/M.
FR - 07:45 - Final Non-Farm Payrolls Q/Q.
EU - 09:00 - ECB Monthly Bulletin.
UK - 09:30 - Consumer Inflation Expectations.
EU - 10:00 - PPI M/M.
UK - 10:00 - CB Leading Index M/M.
GE -11:00 - Industrial Production M/M.
EU - 11:30 - ECB President Trichet Speaks.
US - 12:30 - Retail Sales & Core Retail Sales M/M.
US - 14:00 - Business Inventories M/M.
US - 14:30 - Natural Gas Storage.
UK - 18:30 - MPC Member Barker Speaks.
Friday March 13th:
GE - 07:00 - WPI M/M.
EU - 10:00 - Retail Sales M/M.
US - 12:30 - Trade Balance.
US - 12:30 - Import Prices M/M.
US - 13:55 - Prelim UoM Consumer Sentiment.
US - 13:55 - Prelim UoM Inflation Expectations.
EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany
The week ahead.
Last week, major stock markets marked their fourth losing week in a row. The Dow fell 6.2% on the week while the S&P 500 fell 7%. Both major indices have now fallen 24% in 2009 alone, with the S&P 500 hitting its lowest level since September 1996. Gold closed the week unchanged after a volatile week that saw it dip below $900 briefly. Oil managed to gain slightly, holding above the $45 marker.
Very few sectors kept their heads above water, even the supposed safe haven of gold failed to make any progress last week, finishing largely unchanged in volatile trading. Banks were once again at the forefront of the selling. Lloyds group hit headlines over the weekend after the government took majority control. After a week of arguments over the terms an asset insurance scheme with the government, the only option available was for the government to take a majority stake. The problems largely stem from the HBOS divisions which Lloyds chief Daniels admitted to doing less than the usual amount of due diligence on before the takeover. Lloyds wasn't the only UK bank to hit the headlines though, with HSBC crashing to its lowest level since 1998. A few weeks ago, Morgan Stanley analyst Michael Helsby first mooted the idea of a HSBC needing a massive cash injection. At the time he was criticised and met by a strong rebuttal from HSBC.
Barclays were hit hard in particular on speculation that they may have to millions back to the Lehman brothers liquidator. Aviva's dire performance has also hit financials hard with Royal & Sun Alliance and Standard Life also taking a hit on the day.
On Tuesday, Bernanke's testimony caused further volatility after he revealed that more than the allocated $700bn will be needed to fix the banks. Investors weren't be entirely surprised by this, but it was hardly fuel for rampant buying. The bailouts, rescue packages and rights issues seem to follow a similar pattern of denial, speculation and then further cash injections. It is little wonder that investors have lost their patience with stock markets. Bernanke has said that financial stability must come first before any recovery. The chairman of the federal reserve is also thought to be against nationalising US banks, but if the economic slump continues, this may be the only option left to secure financial stability. In a potentially significant speech, Kansas City Fed President Thomas Hoenig called for the nationalisation of all insolvent banks on Friday.
The ECB and MPC cut rates by 0.5% as expected, though the euro has been volatile following Trichet's press conference which seemed to imply that there were further cuts to come. The Central Bank of Australia surprised everyone by keeping rates on hold and then announcing it was sliding into a deep recession just a few days later.
On Friday, the US Non Farm Payroll report was almost an afterthought following an already volatile week. Unemployment rose to 8.1%, bringing the total recession job-losses to four million. Markets took a dive on the news, but the Dow Jones managed to close the day higher.
Next week's economic highlights include Bernanke speaking on Tuesday and the Royal Bank of New Zealand setting rates on Wednesday. Thursday brings US retail sales, while Friday sees the release of US consumer sentiment figures.
The weekend's government bailout of Lloyd's group could put more pressure on the pound this week. A One Touch trade predicting that GBP/ USD will hit 1.3893 during the next 5 days could return 67%. This move may already have happened by the time markets open on Monday, but there could be pullbacks that allow for re-entry.
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