Intraday Market Thoughts

Greek Disagreements Weighs On Euro, Canada PMI Next

by Patrik Urban
Feb 6, 2012 14:26

Greek disagreement on austerity; Portugal coming to focus again; UK Halifax HPI rose; Eurozone sentix improved; German factory orders strong; ECB deposits over half a trillion again. Canadian Ivey PMI is next; 2 speeches by Fed presidents. A new Monday Premium Intermarket Insight will be issued at the London Close.

The greenback is stronger against other majors but it is losing a part of its earlier gains. Major European equities are losing between -0.3% and 1%.

Sentiment worsened as disagreement on Greek austerity measures and the delay on Greek swap deal increased uncertainty. In addition, rumors that Portugal will have to restructure its debt are circulating again. Surprisingly, Portuguese 10 year yield is lower at 13.47% from 14.05% high, significantly lower compared to last week's high above 18%.

On the data front, UK Halifax HPI rose in January 0.6% from previous -1% contraction and Eurozone sentix investor confidence improved for February to -11.1 from previous -21.1. German factory orders in December surprised to the upside as they grew 1.7% from previous contraction -4.9% m/m. Annual orders were unchanged.

ECB deposits increased again on Friday to EUR 511.43 bln from Thursday's EUR 488.8 bln.

The only fundamental report that is due during the NY session today is Canadian Ivey PMI that is expected considerably lower in January at 58.6 from previous 63.5. The report is due at 10:00 am ET. USDCAD is trading around 0.9970 which is about 50 points above Friday's low.

Market volatility could also increase at 8:55 am and at 12:15 pm when St. Louis Fed president James Bullard delivers a speech on inflation targeting in Chicago and Dallas Fed president Richard Fisher speaks in Washington on economic and policy outlook. Fed President Fisher said last Thursday that QE3 is not needed so his speech has a potential to underpin the greenback.


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