Market Update - 15 August 2012

• Market was up before the US data was released yesterday with the US retails sales figure to start the week.

• The figures showed a 0.8% increase in July, the first rise in four months and a sharp rebound from last month’s fall of 0.5% which was actually revised down to -0.7% last night (the biggest contraction since 2009).

• Treasuries were softer again, yields up 7.4bps to 1.738%. Gold fell $10 to $1600 as the retail figure diminished hopes of QE. Oil Rose 06%.

• USDMYR opened a tad higher than where it closed yesterday but still trading in a tight range of 3.1100-3.1400 for now with the immediate range stuck at 3.1000-3.1500

 

• Sporting goods rose the most, but the rise was broad based across sectors, not sure if Olympics was the leading inspiring factor here?

• Not so goods from Europe however with German GDP growth slowing to 0.3% QoQ from 0.5% last.

• The figure was better than the survey of 0.2% but when coupled with all the leading indicators, including the ZEW survey last night showing a fall to -25.5 from -19.3 last, then the picture still looks pretty ugly going forward. French GDP was slightly better than forecast, Euro GDP was in line (-0.2%) and industrial production in the bloc contracted 0.6% after rising 0.9% last month.

• According to Olli Rehn, the EU’s Economic and Monetary Affairs Commissioner, “The Spanish Government has an open mind” on the issue of a sovereign bailout.

• The Euro was softer, down to 1.2322 after trading a high of 1.2395 just after German GDP. European stocks rose 0.7% while peripheral yields fell and core yields rose.

• Michael Fuchs, Merkel’s parliamentary deputy, told a German newspaper that unless Greece met its targets then Germany would veto the next round of aid, the Troika report is due mid Sept. Greece tapped the markets last night for €4bn of 3 month debt, paying 4.43%. They need the cash to pay back an ECB held bond due Aug 20 and to pay wages until the next aid package is available.