morning call june 28 2010

Upload: chibondking

Post on 30-May-2018

214 views

Category:

Documents


0 download

TRANSCRIPT

  • 8/9/2019 Morning Call June 28 2010

    1/4

    Stone Street AdvisorsMorning Call 6/28/2010

    ChiBondKing [email protected]

    See Important Disclosures on page 4

    Morning Focus

    The big event this weekend was the result of the G20 summit, which Im sure youre familiar with by now. Joe Weisenthal

    summed up what happened at the G20 quite nicely, you can find a link to his article in the interesting morning reading. Besides

    making rosy optimistic promises about halving deficits in the next few years, the G20 was surprisingly lackluster on the China

    Issue

    around the Yuan revaluation. Most notably were the rathertame

    statements saying

    we expect the Yuan to rise over

    time, etc. This calls into question the action by the China central bank earlier this month in floating the Yuan, which, in my

    opinion was nothing more than throwing a teaser at the G20 participants: It appears to have worked. Light news over the

    weekend, but for the week ahead we have a lot: 600B ECB financing operation, US jobs number. Asia indices mostly down with

    the exception of HK shares: Australia -0.65pct to 4384.50, Nikkei -0.45pct to 9693.94, Hong Kong +0.17 to 20726.68, Shanghai -

    0.69pct to 2535.28. US futures posting modest gains this morning, overnight US bond markets relatively quiet.

    Notable Overnight Headlines

    Asia

    China G20

    o HU SAYS CHINA ALSO TRYING TO MAKE ECONOMIC POLICIES MORE FLEXIBLE, must be cautious about timing,intensity of existing stimulus policies (Reuters)

    o G20 drops China-sensitive plaudits on yuan reformIndia PM: rush to exit stimulus has recession risk

    Taiwan May Leading Index Rises To 110.5 From 110.1 In April

    BIS-Taiwan dollar not affected by yuan reform (Reuters)

    Chinese c.bank sets yuan mid-point at 6.7890 (Reuters)

    South Korea c.bank sells 1-yr MSBs at 3.15 pct (Reuters)

    Singapore Govt prices 2 year bond (Reuters)

    Russia M2 on June 1 2.3 pct m/m, 30.7 pct y/y (Reuters)

    EuropeDeutsche CEO says "regulatory arbitrage" a worry (Reuters)

    Overnight deposits at ECB rise (Reuters)

    Euro zone M3 falls, private loans rise (Reuters)

    Greece to issue T-bills mid-July - deputy FinMin (Reuters)

    Italy's 7 billion euro debt sale modestly received (Reuters)

    Bank deposits increase in Greece, other peripherals (Reuters)

    ECB Funding

    o Nearly 600bln in ECB transactions this weeko Market participants worried; Eurozone banks hoarding cash and increasing o/n operations with various ECB

    facilities

    US Pre Open

    Economic News

    Obama: Countries Shouldn't Rely On Exports To US For Growth, Countries Can't Run To Stimulus Exits All At Same Time

    (DJ)

    All eyes on US Jobs number this Friday for signs of recovery or double dip

    Equities

    RDS: Shell CEO says to continue deep-water drilling (Reuters)

  • 8/9/2019 Morning Call June 28 2010

    2/4

    See Important Disclosures on page 4

    BP: Weekend chatter indicating higher open as co says no plans to replace CEO Hayward

    BP: UPDATE: Russian Official says BP Hayward is set to resign (Reuters, 7:30AM ET)

    Interesting Morning Reading

    The Third Depression Paul Krugman, NYT:

    http://www.nytimes.com/2010/06/28/opinion/28krugman.html?src=twt&twt=NytimesKrugman

    G20 Officially Reveals Its Total Pointlessness Joe Weisenthal, TBI:http://www.businessinsider.com/g20-officially-

    reveals-its-total-pointlessness-2010-6SEC Loss Shows Difficulty of Insider-Trading Cases WSJ:

    http://online.wsj.com/article/SB10001424052748704846004575333144054961702.html?mod=googlenews_wsj

    Notable Bond Market/Economic Events

    Bond Auctions (1PM ET)

    o 13, 26 week billsUpcoming Bond Auctions (This Week)

    o 6/29: 1Y bill, 4wk billEconomic Releases For Today

    o8:30AM

    Core PCE, cons. 0.1pct Personal Spending, cons. 0.1pct Personal Income, cons. 0.5pct

    o 7:30PM Japan Household Spending Japan Unemployment Rate, cons. 5pct

    http://www.nytimes.com/2010/06/28/opinion/28krugman.html?src=twt&twt=NytimesKrugmanhttp://www.nytimes.com/2010/06/28/opinion/28krugman.html?src=twt&twt=NytimesKrugmanhttp://www.businessinsider.com/g20-officially-reveals-its-total-pointlessness-2010-6http://www.businessinsider.com/g20-officially-reveals-its-total-pointlessness-2010-6http://www.businessinsider.com/g20-officially-reveals-its-total-pointlessness-2010-6http://www.businessinsider.com/g20-officially-reveals-its-total-pointlessness-2010-6http://online.wsj.com/article/SB10001424052748704846004575333144054961702.html?mod=googlenews_wsjhttp://online.wsj.com/article/SB10001424052748704846004575333144054961702.html?mod=googlenews_wsjhttp://online.wsj.com/article/SB10001424052748704846004575333144054961702.html?mod=googlenews_wsjhttp://www.businessinsider.com/g20-officially-reveals-its-total-pointlessness-2010-6http://www.businessinsider.com/g20-officially-reveals-its-total-pointlessness-2010-6http://www.nytimes.com/2010/06/28/opinion/28krugman.html?src=twt&twt=NytimesKrugman
  • 8/9/2019 Morning Call June 28 2010

    3/4

    See Important Disclosures on page 4

    Market Summary 7AM

    Futures Currencies Fixed Income

    Symbol Last Chg Symbol Last Chg Symbol Last Symbol Last

    DOW 10130 26 EURUSD 1.2345 -0.0032 2s5s 124.00 US2Y .65

    SP500 1078.75 4 GBPUSD 1.5063 0.0003 2s10s 244.00 US5Y 1.89

    NSDQ 1847 7.75 EURJPY 110.25 -0.2 2s30s 341.00 US7Y 2.56

    ZB 125'18 +0'07 USDCAD 1.035 -0.0003 5s10s 120.00 US10Y 3.09

    ZN 121'195 +0'040 USDJPY 89.31 0.07 5s30s 217.00 US30Y 4.06

    ZF 117'307 +0'030 NZDUSD 0.7097 -0.0046 10s30s 97.00 UK5Y 2.11

    ZT 109'107 +0'005 UK10Y 3.40

    CLN0 78.35 -0.51 UK30Y 4.25

    Spreads Bps Spreads Bps

    UK25 135.00 USUK2 11.00

    UK210 264.00 USUK5 22.00UK230 349.00 USUK7 23.00

    UK510 129.00 USUK10 31.00

    UK530 214.00 USUK20 61.81

    UK1030 85.00 USUK30 19.00

  • 8/9/2019 Morning Call June 28 2010

    4/4

    Stone Street AdvisorsMorning Call 6/28/2010

    ChiBondKing [email protected]

    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.