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Reports Europe

European stock market, economy and companies update (February 19, 2014)

February 19, 2014, Wednesday, 10:27 GMT | 05:27 EST | 14:57 IST | 17:27 SGT
Contributed by Trade The News


***Notes/Observations***
- Emerging markets weaker amid escalation of violence in Ukraine as some European officials weigh sanctions,
- Italy and Spain bond yields remain near multi-year lows amid widening in debt spreads
- Fed minutes in focus , UK Dec ILO unemployment data worse than expectations and remains above BoE's 7% threshold
- ECB Nowotny suggests ECB moving closer to agreement on ending sterilization of SMP bond purchases


*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Equities**
Indices [Stoxx50 -0.2%, FTSE 100 flat at 6,802, DAX -0.1% at 9,653, CAC-40 flat at 4,332, IBEX-35 -0.4% at 10,001, FTSE MIB -0.2% at 20,440, SMI -0.4% at 8,387, S&P 500 Futures -0.1% at 1,835]

Market Focal Points: European equities trade mixed as peripheral indices lag, Peugeot rises after narrowing FY loss and confirming capital raise, Credit Agricole's shares supported by dividend

By Sector
Consumer Discretionary [Peugeot UG.FR +5% (FY loss narrowed, confirmed capital raise), Swedish Match SWMA.SE +3% (Q4 profits above ests), Carlsberg CARLB.DK +3% (Q4 profits below ests); TF1 TFI.FR -3% (Q4 sales declined y/y), Carnival CCL.UK -1% (ex-dividend), Carrefour CA.FR -1% (broker commentary)]
Financials [Credit Agricole ACA.FR +1% (announced dividend payment)]
Technology [Monitise MONI.UK -5% (reaffirmed outlook), Atos ATO.FR -2% (FY sales declined y/y)]
Basic Materials/Resources [Lafarge LG.FR +2% (Q4 profits rose y/y); Clariant CLN.CH -1% (Q4 results in line)]
Industrials [BAE Systems BA.UK +1.5% (reached pricing agreement related to contract)]
Stoxx50 Sectors [ Consumer Cyclical -0.5%, Energy -0.4%, Financials -0.3%, Consumer Non-Cyclical -0.2%, Industrials -0.1%, Basic Materials -0.1%, ;Utilities +0.7%, Telecom +0.2%, Technology +0.2%]

Speakers:
- (EU) ECB's Nowotny: Getting close to the unanimity needed to agree on non-sterilization of SMP bond purchases - press
- Japan Chief Cabinet Sec Suga: Eto's remarks on US are not Japan's policy
- Indonesia Ministry: Could possibly cut rates in 2014
- Ukraine acting PM Arbuzov: protestors are pushing the economy into a corner; Won't give in to provocations
- Poland PM Tusk: Ukraine developments to determine future of Eastern Europe region; Calls for EU to impose financial sanctions on Ukraine targeting individuals behind violence
- Japan Cabinet office Feb report: Economic assessment unchanged as economy is recovering moderately
- Japan Econ Min Amari: Japan yet not out of deflation; Important for prices to rise in a stable manner
- Italy outgoing Econ Min Saccomani: Global growth is vulnerable due to emerging market turbulence
- EU single resolution mechanism (SSM) incoming chief Nouy: ECB bank assessment key for credibility of supervisor
- Russia Pres Putin's Press Secretary: Russia to maintain policy of non-intervention regarding Ukraine
- EU's Aston: Restrictive measures to be explored on Ukraine

Currencies/Fixed Income:
- Much of the focus has moved to emerging currencies with instability the Ukraine being the main focus. Its currency the Hryvnia has declined 1.8% near 5-year lows. The last time the currency reached this level Ukraine importers were allowed to buy dollars on the market after central bank controls expired.

- Once again Russia Central Bank adjusted the floating Ruble corridor upward by 10 kopecks to 34.80-41.80 in dollar/euro basket. This marks the 46th adjustment since August 2013.

- GBP/USD came of session highs to 1.6658 after jobless claim changes were larger than expected. EUR/USD remained range bound around 1.3755, but hovering just off 7-week highs ahead of FOMC meeting minutes expected later in the US session, the Greenback has been under heavy pressure recently, if minutes show commitment to tapering it could be a turning point. USD/CHF carried the weak dollar trend seen in the euro pair, spending time near 0.8880 and pushing 7-week lows.

Political/In the Papers:
-(DE) ECB's Weidmann: Reiterates either deflationary or inflationary scenarios are unlikely over next few years
-(FR) France Fin Min Moscovici: France deplores use of violence in Ukraine
-(PH) Philippines Central bank chief Guinigundo: Risks to CPI weighted to the upside
-(PL) Poland Deputy Fin Min Kowalczyk: 2014 avg CPI won't exceed 1.5%; Poland has almost 100% of Fx needs covered; 60% of gross borrowing needs
-(CN) China Insurance Regulatory Commission (CIRC) issues policies on investment ratio for insurers; To set limits for equity assets, real estate assets, other financial assets, overseas investment percentage are 30%, 30%, 25% and 15% respectively
- (IQ) Iraq resumes crude exports via Ceyhan
- (EU) ECB's Nowotny: Getting close to the unanimity needed to agree on non-sterilization of SMP bond purchases; EUR/USD might head lower without action from the ECB this year; Skeptical on possible negative deposit rates
- (UR) Ukraine opposition leader Klitschko: Pres Yuanukovich wants to meet with him and other opposition members today - German press

**Looking Ahead***
- 06:00 (BR) Brazil Feb Final IGP-M Inflation: 0.3%e v 0.5% prior
- 06:00 (PT) Portugal Jan PPI M/M: No est v 0.4% prior; Y/Y: No est v -0.1% prior
- 06:45 (US) Daily Libor Fixing
- 07:00 (US) MBA Mortgage Applications w/e Feb 14th: No est v -2.0% prior
- 07:00 (RU) Russia Jan Unemployment Rate: 6.1%e v 5.6% prior
- 07:00 (RU) Russia Jan Retail Sales Real M/M: -26.0%e v +19.4% prior; Y/Y: 3.7%e v 3.8% prior
- 07:00 (RU) Russia Jan Real Disposable Income: 2.5%e v 1.5% prior
- 07:00 (RU) Russia Jan Real Wages Y/Y: 3.0%e v 1.9% prior
- 07:00 (RU) Russia Jan Investment in Productive Capacity: 0.5%e v 0.3% prior
- 07:45 (US) ICSC Chain Store Sales w/e Feb 15th
- 08:00 (PL) Poland Jan Sold Industrial Output M/M: +2.7%e v -9.7% prior; Y/Y: 3.5%e v 6.6% prior
- 08:00 (PL) Poland Jan PPI M/M: 0.1%e v 0.0% prior; Y/Y: -0.8%e v -0.9% prior
- 08:30 (US) Jan Housing Starts: 950Ke v 999K prior; Building Permits: 978Ke v 991K prior (revised from 986K)
- 08:30 (US) Jan PPI M/M: 0.1%e v 0.1% prior; Y/Y: 1.2%e v 1.1% prior
- 08:30 (US) Jan PPI Ex Food and Energy M/M: 0.1%e v 0.0% prior; Y/Y: 1.4%e v 1.2% prior
- (JP) BOJ Monthly Report
- 08:55 (US) Redbook Retail Sales w/e Feb 15th
- 09:00 (EU) Weekly ECB Forex Reserves:
- 10:00 (US) Q4 MBA Mortgage Delinquencies: No est v 6.41% prior; MBA Mortgage Foreclosures: No est v 3.08% prior
- 10:30 (BR) Brazil Weekly Currency Flows Weekly
- 12:15 (US) Fed's Lockhart speaks on Economy in Macon, Georgia
- 13:00 (US) Fed's Bullard speaks to Exchequer Club in Washington
- 14:00 (US) Fed Minutes from Jan 28-29 FOMC Meeting
- 14:00 (AR) Argentina Q4 Unemployment Rate: 6.7%e v 6.8% prior
- 16:30 (US) Weekly API Crude Inventories
- 18:50 (JP) Japan Jan Trade Balance: -¥2.487Te v -¥1.302T prior; Adj Trade Balance: -¥1.51Te v -¥1.149T prior
- 19:00 (US) Fed's Williams speaks on the Economy in New York
- 20:45 (CN) China Feb HSBC/Markit Flash Manufacturing PMI: 49.5e v 49.5 prior


***Economic Data***
-(UK) DEC QUARTER ILO UNEMPLOYMENT RATE: 7.2% V 7.1%E; EMPLOYMENT CHANGE 3M/3M: +193K V +250KE
-(UK) JAN JOBLESS CLAIMS CHANGE: -27.6K V -20.0KE; CLAIMANT COUNT RATE: 3.6% V 3.6%E
-(CH) SWISS FEB CREDIT SUISSE ZEW EXPECTATIONS SURVEY: 28.7 V 36.4 PRIOR
-(EU) EURO ZONE DEC CONSTRUCTION OUTPUT M/M: +0.9% V -0.6% PRIOR; Y/Y: -0.2% V -1.7% PRIOR
-(GR) GREECE DEC CURRENT ACCOUNT BALANCE M/M: -€215M V -€744M PRIOR
-(UK) BOE VOTED 9-0 TO MAINTAIN ASSET PURCHASE TARGET (APT) AT £375B
-(UK) BOE VOTED 9-0 TO LEAVES INTEREST RATES UNCHANGED AT 0.50%

Fixed Income:
(RU) Russia cancels today's OFZ bond auction due to lack of demand
(SE) Sweden sells total SEK15B in 3 and 4-month Bills

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