8/9/2019 Morning Call July 7 2010

http://slidepdf.com/reader/full/morning-call-july-7-2010 1/4

Stone Street AdvisorsMorning Call – 7/7/2010

ChiBondKing – laszlochi@gmail.com

See Important Disclosures on page 4

Morning Focus

Interesting overnight session, particularly in Europe: French trade balance was worse than expected at -5.5b vs. forecast of -3.9B.

Previous was -4.3B. Eurozone quarterly GDP was in line with estimates, +0.2pct, while German factory orders declined by 0.5pct

vs. an expected 0.5 gain  –  this metric was previously +3.2pct. Baltic Dry index continues its slide, falling over 5pct as I put the

finishing touches on this morning update. Asian markets were a mixed bag ahead of key economic data due out on Thursday fromthe region: Australia down 0.5pct to 4254, Nikkei down 0.63pct to 9279, Hang Seng -1.13pct to 19857. The notable exception was

China (Shanghai) which was up 0.49pct to 2421. UK followed the broader Asian market lead  –  to the downside. Currently the FTSE

is down 0.85pct, DAX down 0.79pct, CAC40 down 1pct and ESTX down 0.86pct. No economic data in the US today, but the Ivey

PMI number in Canada is due out, refer to the economic calendar for details.

Notable Overnight Headlines

 Asia

Australian Leading Employment Indicator Rises In July (DJ)

China 5-yr bond sale yield towards bottom of forecast (Reuters)

PBOC Official: China 2010 GDP Growth Likely 9.5%, China GDP Growth To Slow 2H But Double Dip Unlikely (DJ)Japan Auto Association Head: Very Concerned About Yen Strength (DJ)

China committed to U.S. Treasuries, tepid on gold (Reuters)

Australian July Leading Employment Indicator Minus 0.599 Vs. Minus 0.832 In June: DEEWR

Australia construction sector shrinks in June (Reuters)

Japan's executive-worker pay gap narrows: report (MW)

Europe

Eurozone Q1 GDP Rises 0.6% On Year

Polish cbank chief urges govt to tackle budget gap (Reuters)

Greece June HICP Up 5.2% On Year, Down 0.2% On Month

ECB calls for bids in 7-day dollar lending operation, Overnight deposits at ECB fall (Reuters)

UK gilts boosted by equities slide, stress test concerns (Reuters)

Russia bank lending up 3-4 pct in Q2-cbank (Reuters)

EU lawmakers curb bank bonuses, risk taking (Reuters)

Hungary May Industrial Output Up 13.7% On Year, Consensus 8.2%

Portugal May Industrial New Orders Down 3.2% On Year

German May Factory Orders Fall 0.5% On Month, Consensus 0.3% Rise

US Pre Open

Economic News

OECD: Rich country unemployment may have peaked (AP)

3-Month USD Libor Falls To 0.52988% Vs 0.53113% Tuesday

Mortgage Loan Application Volume Rises 6.7% In Week Ended July 2nd Versus Previous Week  – MBA

Moody's sees positives in U.S. states' budgets (Reuters)

Equities

MSFT: Microsoft plans small job cuts  –  WSJ 

FDO: Family Dollar 3Q Sales $1.997B (DJ) 

STT: State Street Records Second-Qtr After-Tax Chg Of $251 M, Or $0.50 Per Shr 

NYX: NYSE Euronext U.S. share trading volumes decline (MW) 

8/9/2019 Morning Call July 7 2010

http://slidepdf.com/reader/full/morning-call-july-7-2010 2/4See Important Disclosures on page 4

Interesting Morning Reading

Professor Pinch - At The Precipice: The Choices We Make vs. The Choices We ’re Forced To Make:

http://professorpinch.wordpress.com/2010/07/06/at-the-precipice-the-choices-we-make-vs-the-choices-were-forced-to-

make/ 

Fundamental Trader  –  Bitumen & Bolts: http://fundamentaltrader.wordpress.com/2010/06/11/bitumen-bolts/ 

Telegraph  – With the US trapped in depression, this really is starting to feel like 1932:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7871421/With-the-US-trapped-in-depression-

this-really-is-starting-to-feel-like-1932.html Mish Shedlock on IL Construction Workers - http://globaleconomicanalysis.blogspot.com/2010/07/illinois-construction-

workers-make-50.html 

Notable Bond Market/Economic Events

Bond Auctions (1PM ET)

o  4 week bill

Upcoming Bond Auctions (This Week)

o  None.

Economic Releases For Today

o  None in the USo  10AM: Canada Ivey PMI, consensus 64.1

o  7:50PM

   Japan Core Machinery Orders

   Japan Bank Lending, yearly 

   Japan Current Account, cons. Y1.12T 

   Japan M2 Money Supply, yearly – cons. 3.1pct 

o  9:30PM

   Australian Employment Change, cons. +15.3k 

   Australian Unemployment Rate, cons. 5.2pct 

8/9/2019 Morning Call July 7 2010

http://slidepdf.com/reader/full/morning-call-july-7-2010 3/4See Important Disclosures on page 4

Market Summary  –  8AM

Futures Currencies Fixed Income

Symbol Last Chg Symbol Last Chg Symbol Last Symbol Last

DOW 9666 -16 EURUSD 1.2588 -0.0038 2s5s 114.00 US2Y .61

SP500 1022.25 -2 GBPUSD 1.5124 -0.0025 2s10s 232.00 US5Y 1.75

NSDQ 1732.75 -1.75 EURJPY 109.77 -0.67 2s30s 328.00 US7Y 2.40

ZB 128'02 +0'02 USDCAD 1.0578 0.0037 5s10s 118.00 US10Y 2.93

ZN 122'245 +0'010 USDJPY 87.25 -0.26 5s30s 214.00 US30Y 3.89

ZF 118'217 +0'025 NZDUSD 0.6916 -0.0024 10s30s 96.00 UK5Y 2.04

ZT 109'142 +0'007 UK10Y 3.34

CLN0 72.3 0.32 UK30Y 4.14

Spreads Bps Spreads Bps

UK25 129.00 USUK2 14.00

UK210 259.00 USUK5 29.00

UK230 339.00 USUK7 32.00

UK510 130.00 USUK10 41.00UK530 210.00 USUK20 70.29

UK1030 80.00 USUK30 25.00

8/9/2019 Morning Call July 7 2010

http://slidepdf.com/reader/full/morning-call-july-7-2010 4/4

Stone Street AdvisorsMorning Call – 7/7/2010

ChiBondKing – laszlochi@gmail.com

Disclosure/Legal

THE MATERIAL CONTAINED IN THIS DOCUMENT IS INFORMATIONAL ONLY, AND IS NOT INTENDED AS AN OFFER OR A SOLICITATION TO

BUY OR SELL ANY SECURITIES. THE AUTHOR IS NOT ACTING AS AN ADVISOR OR FIDUCIARY IN ANY RESPECT IN CONNECTION WITH

PROVIDING THIS INFORMATION AND NO INFORMATION OR MATERIAL CONTAINED WITHIN THIS DOCUMENT IS TO BE RELIED UPON FOR

THE PURPOSE OF MAKING OR COMMUNICATING INVESTMENT OR OTHER DECISIONS NOR CONSTRUED AS EITHER PROJECTIONS OR

PREDICTIONS. INVESTORS MUST MAKE THEIR OWN INDEPENDENT DECISIONS REGARDING ANY SECURITIES, FINANCIAL INSTRUMENTS

OR STRATEGIES MENTIONED HEREIN. PLEASE CONTACT YOUR FINANCIAL ADVISOR TO DETERMINE THE SUITABILITY OF THE MATERIAL

CONTAINED HEREIN TO YOUR INVESTMENT GOALS, OBJECTIVES AND RISK CRITERIA. THE MATERIAL CONTAINED IN THIS DOCUMENT IS

INTENDED FOR QUALIFIED INVESTORS ONLY. THE PERSON OR PERSONS INVOLVED IN THE PREPARATION OR ISSUANCE OF THE

INFORMATION CONTAINED IN THE MATERIAL WITHIN THIS DOCUMENT MAY DEAL AS PRINCIPAL IN ANY OF THE SECURITIES

MENTIONED, AND MAY HAVE A LONG OR SHORT POSITION IN (INCLUDING POSSIBLY A POSITION THAT WAS ACCUMULATED ON THE

BASIS OF THE MATERIAL PRIOR TO IT BEING DISSEMINATED AND/OR A POSITION INCONSISTENT WITH THE INFORMATION WITHIN THIS

DOCUMENT), ACCORDINGLY, INFORMATION INCLUDED IN OR EXCLUDED FROM THIS DOCUMENT IS NOT INDEPENDENT FROM THE

PROPRIETARY INTERESTS OF THE AUTHOR, WHICH MAY CONFLICT WITH YOUR INTERESTS. CERTAIN TRANSACTIONS, INCLUDING THOSE

INVOLVING FUTURES, OPTIONS, DERIVATIVES AND HIGH YIELD SECURITIES, GIVE RISE TO SUBSTANTIAL RISK AND ARE NOT SUITABLE

FOR ALL INVESTORS. FOREIGN CURRENCY DENOMINATED SECURITIES ARE SUBJECT TO FLUCTUATIONS IN EXCHANGE RATES THAT

COULD HAVE AN ADVERSE EFFECT ON THE VALUE OR PRICE OF OR INCOME DERIVED FROM ANY INVESTMENTS DISCUSSED HEREIN . 

UNLESS OTHERWISE SPECIFICALLY STATED, ALL STATEMENTS CONTAINED WITHIN THIS DOCUMENT (INCLUDING ANY VIEWS, OPINIONS

OR FORECASTS) ARE SOLELY THOSE OF THE INDIVIDUAL(S) MAKING THE STATEMENT, AS OF THE DATE INDICATED ONLY, AND ARE

SUBJECT TO CHANGE WITHOUT NOTICE. CHANGES TO ASSUMPTIONS MADE IN THE PREPARATION OF SUCH MATERIALS MAY HAVE A

MATERIAL IMPACT ON RETURNS. THE AUTHOR OR AUTHORS DOES NOT UNDERTAKE A DUTY TO UPDATE THESE MATERIALS OR TO

NOTIFY YOU WHEN OR WHETHER THE ANALYSIS HAS CHANGED. WHILE THE INFORMATION CONTAINED WITHIN THIS DOCUMENT IS

BELIEVED TO BE RELIABLE, NO REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, IS MADE AND NO LIABILITY OR

RESPONSIBILITY IS ACCEPTED BY THE AUTHOR OR AFFILIATED PARTIES AS TO THE ACCURACY OR COMPLETENESS THEREOF .