Markets started out calm and in a wait-and-see pattern during this past week, possibly due to the flood of central bank liquidity and the lack of scheduled high impact releases… However, trading picked up as demand for USD soared as traders detected a harder line from Fed Chairman Bernanke in his semi-annual monetary report to Congress on Wednesday, when he noticeably excluded any reference to QE3.
In Europe, ECB lent approx €530B in its three-year LTRO to around 800 European banks, which is roughly inline with the previous LTRO result. ECB officials also warned that there would not likely be a third round of LTRO coming, and data out on Friday suggested that much of the net new liquidity from the operation was parked in the ECB’s overnight facility. At the EU Leaders’ Summit on Friday, 25 of 27 EU nations agreed to implement the new fiscal pact, but they deferred final approval of the second Greek bailout package to next Friday, when the results of the private debt swap (PSI) should be available.
Earlier in the week, the ISDA ruled that the terms of the debt swap did not amount to a default, meaning that Greek sovereign CDS have not been triggered. And the focus was shifted as sketchy reports (later denied) of a pipeline explosion in Saudi Arabia propelled front-month WTI crude above the $110 handle. However crude futures closed out the week lower, down 2.8%, snapping a three-week winning streak.
In the US, economic data out this week were strong, with the second reading of the Q4 US GDP figures a bit stronger than expected at +3.0%. Regional manufacturing surveys also continued to be very robust, not metioning the Consumer Confidence readings…
All in all the market will be focusing on this coming week’s US NFP release, along with Mario Draghi’s ECB Press Conference…
Here’s the list of upcoming tradable releases:
1. Mon March 5, 2012 – 4:30am EST – UK Services PMI
2. Mon March 5, 2012 – 10:00am EST – US ISM Non-Manufacturing PMI
3. Mon March 5, 2012 – 10:30pm EST – AU ECB Interest Rate
4. Tue March 6, 2012 – 10:00am EST – CA Ivey PMI
5. Tue March 6, 2012 – 7:30pm EST – AU GDP q/q
6. Wed March 7, 2012 – 8:15am EST – US ADP NFP
7. Wed March 7, 2012 – 3:00pm EST – NZ RBNZ Interest Rate
8. Wed March 7, 2012 – 7:30pm EST – AU Employment Change
9. Thu March 8, 2012 – 7:00am EST – UK BOE Interest Rate
10. Thu March 8, 2012 – 7:45am EST – EU ECB Interest Rate
11. Thu March 8, 2012 – 8:30am EST – EU ECB Press Conference
12. Thu March 8, 2012 – 9:00am EST – CA BOC Interest Rate
13. Fri March 9, 2012 – 7:00am EST – CA Employment Change
14. Fri March 9, 2012 – 8:30am EST – US NFP Employment
Thank you.
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