Market Commentary: riflettori puntati su Eurogruppo e Pmi
Nell’assenza di progressi sulle negoziazioni in corso per salvare gli Usa dal Fiscal Cliff, i mercati aprono con un’intonazione rialzista (grazie al dato sulla produzione manifatturiera proveniente dalla Cina) una settimana chiave per tutta una serie di dati macro e annunci di politica monetaria che potrebbero forgiare il sentiment da qui a fine anno. La speranza è che il mese di novembre abbia portato con sè un po’ di respiro sul fronte dell’industria manifatturiera anche nel resto del globo, a cominciare dall’Europa, dove questo pomeriggio si riuniscono i leader dell’Eurogruppo con la definizione dei dettagli del piano di riacquisto del debito greco: in questa sede si discuterà in particolare del controverso schema di buy back volontario cui sono chiamati i bondholder detentori di circa 60 miliardi di euro di titoli e dal cui buon esito dipende il successo dell’ultimo piano di salvataggio. Il dilemma nel quale il Vecchio Continente si dibatte senza soluzione di continuità è proprio questo, ovvero credere che basterà l’ennesima iniezione di liquidità per salvare la Grecia da un’insolvenza cronica mentre la mancanza di qualsiasi politica volta a combattere la disoccupazione e l’attività economica in caduta libera non lascia che l’interrogativo su chi sarà il prossimo Paese con il cappello in mano (Cipro sembrerebbe il prossimo candidato). Mentre le buone notizie giungono invece dalla Cina, dove gli ultimi indicatori sembrerebbero aver marcato un segnale di svolta positivo per la seconda economia mondiale. Le previsioni di un ritocco al ribasso dei tassi australiani questa notte non potrebbero muovere l’Aussie all’ingiù più di quanto al contrario potrebbe muoverlo al rialzo la decisione da parte della banca centrale di mantenere invariato il costo del denaro.
Eurogroup meeting and manufacturing PMI’s in focus
By Michael Hewson (Senior Market Analyst at CMC Markets UK)
The first week of December is set to be a key week for financial markets with a whole host of important economic data announcements, central bank meetings and policy statements which investors will have to digest as we head into year end. Having seen November Chinese manufacturing PMI data improve over the weekend the hope is we see a similar trend in Europe and the US today.
This week not only we have manufacturing data from all over Europe, the UK, the US and China, but we also have central bank rate meetings in Australia, Canada, Europe, and the UK, the latest Autumn Statement from the UK Chancellor, as well as key US unemployment data at the end of the week.
We start the week off in Europe as we have done for most of this year as policymakers here grapple with a debt crisis which has crippled economic performance from the southern periphery to the northern core. Today’s latest Eurogroup meeting will be focussing on finessing the latest details of the Greek bailout, particularly the controversial voluntary debt buyback scheme on the remaining €60bn of bonds still in private hands, the success of which will determine the outcome of the latest bailout plan.
Given that these private bond holders have already seen their holdings undertake a haircut once already this year they could well resent being asked to take yet another loss on their holdings, while EU governments continue to refuse one of their own. The poor performance of the European economy for November is also expected to be confirmed today by the final Manufacturing PMI’s for France, Germany, Italy, Spain and the Eurozone area as a whole.
There is an expectation of slight improvement in Spanish and Italian PMI albeit from a very low level with Spanish PMI expected to improve from 43.5 to 43.9, which Italian PMI is also expected to improve to 46 from 45.5. French, German and Eurozone manufacturing PMI’s are expected to remain unchanged at 44.7, 46.8 and 46.2 respectively.
These recessionary levels of economic activity and output highlight the problems facing Europe’s leaders, which they seem increasingly oblivious to. They refuse to acknowledge the reality that Greece remains insolvent, and no amount of fiddling around the edges will fix its finances. Meanwhile the lack of any policies to tackle rising unemployment and falling economic activity continues to take a back seat to the question of who gets bailed out next, with Cyprus the next in line.
In the UK the latest manufacturing PMI for November is expected to show a small improvement to 48.1, from October’s 47.5, with the weak activity in the sector expected to focus the markets attention on Wednesday’s Autumn Statement where the Chancellor of the Exchequer, is expected to have to shift his targets for a balanced budget further out into the decade as economic activity continues to underperform and tax revenues decline.
In the US while the main focus remains on the deadlocked fiscal cliff negotiations, which continue to roil the markets in both directions, the economy continues to tick along slowly, though this afternoon’s ISM Manufacturing reading for November could take a hit from last month’s storm related events caused by Sandy. Analysts do appear to be underestimating the effects of last month’s storm though, if their predictions are anything to go by, predicting that activity for November will drop from 51.7 in October to 51.5.
Chinese Data Sustains the Mood of Financial Markets
By Tim Waterer (Senior Trader, CMC Markets)
In the absence of progression on the US budget talks, it was left to some rosier-looking Chinese data to sustain the mood of financial markets. PMI data coming in at a seven-month high on the weekend helped Asian markets get off to a decent start to the new trading week. Further numbers today from China are also helping reinforce the view that the world’s second largest economy may have turned the corner.
Chinese economic indicators of late have given the market reason to cheer, which is helping to offset the negative sentiment from the Washington stalemate. In fact, if it were not for the recent manufacturing readings from China coming in above the 50 mark (indicating expansion) then we likely would have been seeing plenty of one way traffic to the downside from markets. The Chinese numbers of late could be considered to be a saviour of sorts, which is helping the market to retain recent gains.
While Chinese numbers today were solid, the same could not be said for Australian retail sales data, which came in disappointingly flat (forecast was for a 0.4% rise). The soft result sent the AUDUSD rate below 1.04 however a recovery effort by the currency was made when the Chinese economic releases came out. The AUD will likely remain under pressure in the lead up to Tuesday’s RBA rate announcement where it seems only a one in four chance that the RBA holds fire.
Given that the central bank will not meet in January it would stand to reason that they may take the opportunity to lower rates at this juncture after last month’s lineball decision to hold. However, with the chances of a cut already heavily priced into the AUD, if we get the RBA pausing again the potential upside move to the AUD could be in the order of half to three-quarters of a cent. The Australian sharemarket commenced the new week in much the same fashion as it finished the one prior, with solid gains from key sectors keeping the benchmark ASX200 supported above the 4500 level.
Signs of a turnaround in the Chinese economy translated into a sprightly start to the week for Asian markets, despite there still being little advancement in the US regarding avoidance of the fiscal cliff. Locally, the financial sector was among the better performers on the ASX today, while overall, traders were happy to look beyond the soft domestic retail sales data and instead concentrate on the healthier looking Chinese economic indicators.