Friday, March 5, 2010

Today’s Top Stories $EWG

Today’s Top Stories

·         Japan closes up >2% on reports of easer monetary policy - the Nikkei says that the BOJ will continue further monetary easing; the WSJ says “Japan's central bank looks more likely to ease monetary policy further in coming months”.  These articles are contributing to the weakness in the yen. 

·         China - In China, the National People’s Congress starts and Chinese Premier Wen’s annual government work report was largely in line with JPM’s Q. Wang’s expectations (re-iterating the stability and continuity of overall macro policies, with supportive fiscal policy and appropriately accommodative monetary policy).

·         Europe - In Europe, the well subscribed bond sale from Greece yesterday helped allay worries about a sovereign crisis, however the focus is now shifting to other Eurozone countries. A WSJ article this morning discussing Spain says there is a growing worry around Spanish banks – “can Santander and BBVA outrun Spain’s downturn?” – as some analysts worry about whether the Spanish banking system is underreporting problem loans in general.  Other reports (WSJ/Reuters) point out that Greece still faces major financing needs going forward and the Eurozone as a whole is due to raise some EU1T in paper this year. 

·         European Union nations are working on a contingency rescue package for Greece to be funded by European governments (the article crossed on Bloomberg around 6am Fri morning and sounds similar to the article in Sun’s WSJ about how German and French state-backed banks could underwrite about 50% of a EU20-30B Greek bond sale).  The Bloomberg article says the plan would be used only as a contingency in the most dire of scenarios and that officials don’t think the current environment warrants such action.  Greek Prime Minister George Papandreou is due in Germany today and the message from the meeting is expected to be that the recent budget cuts, combined w/Thurs’ strong bond sale, should be enough to quell market concerns. 

·         tech update - pretty quiet Thurs night/Fri morning in tech land.  The big highlight was MRVL's earnings report - revs were inline w/print ests (although below actual ests) while EPS beat on better margins.  On the guidance front, MRVL is guiding ahead of the St print forecasts and better than their normal seasonality.  MRVL said its HDD biz would be flattish in the Apr Q while it sees networking falling MSD % Q/Q.  Other tech highlights - Mediatek bumped up its guidance for the Mar-end Q while Digitimes is reporting that the Chinese earthquake will mean that the panel market will be only 5% overuspplied in Q2 vs. prior 7%.  A separate Digitimes article mentions that global LCD panel glass substrate supply is ~10% short of demand.  Compal this morning is saying its Q2 notebook shipments should be flattish Q/Q (which may relieve some worries about a drop off in June-Q guidance for a lot of tech firms).  Looking at tech into next week: 2 more mid-Qs (TXN Mon and NVLS Wed).  NSM rpts Thurs night (first Feb-end Q report).  will start to get some sales from Taiwan (TSM on Tues).  analyst meetings from ADI and V

·         Iron ore - As per Bloomberg, JFE Steel has signed coking coal contracts at $200/MT (55% increase) with BHP Billiton Mitsubishi Alliance and this contract is for the April-June period, implying that quarterly contracts have come through. Historically the settlements reached by the Japanese steel mills tend to be accepted globally.  China’s Angang Steel said Chinese steel makers may have to accept a price increase higher than the 20 percent they expected for this year (Bloomberg)

·         Jobs - All eyes are on the BLS labor number this morning @ 8:30amET (the consensus at the moment is for a 63K loss; JPMorgan is forecasting a 90K loss; the desk thinks the market could absorb ~150K loss and not be too worried given the weather).  See link for the JPMorgan (Feroli) jobs preview – “We expect that employment dropped 90,000 in February after changes of -20,000 in January, -150,000 in December, and +64,000 in November. We also expect that the unemployment rate, which fell from 10.0% to 9.7% last month, rose to 9.9%”.

·         Dinosaur update - Scientists conclude asteroid, not volcanoes, wiped out dinosaurs.;327/5970/1214?maxtoshow=&hits=10&RESULTFORMAT=&fulltext=schulte&searchid=1&FIRSTINDEX=0&resourcetype=HWCIT  

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