4 August 2010
Danske Daily
Key news
Market movers today: Today
Negative sentiment in equities driven by weaker than expected US data. US Bond
yields decline on the back of the sentiment in the equity market. US ISM non-manufacturing [Tex
The dollar continues to weaken against EUR and JPY. The yen has risen to an 8- US Treasury quarterly refunding
month high against the dollar, and 10Y Japanese yields are at an seven-year low. Results from Toyota, Lloyds and
Main event today is the US ISM non-manufacturing, where we expect a small decline. Soc Gen.
EU PMI service data
Markets Overnight
Market overview
The negative sentiment dominated the US equity markets as home sales, factory orders
07:30 1 day +/-,%
and consumer spending were weaker than expected, which supports the view of a fragile
S&P500 (clo se) 1120.5 -0.48
recovery in the US economy. S&P 500 fell 0.5% yesterday, while the Dow closed down S&P500 fut (chng fro m clo se) 1115.3 -0.27
0.3%. Nikkei 9493.4 -2.07
Hang Seng 21455.8 -0.01
The negative sentiment has continued in Asia this morning. It is mainly the exporters 17:00 07:30 +/-, bp
among Asian stocks that are seeing a decline due to the weak economic data from the US.
US 2y gov 0.52 0.52 0.0
The Nikkei is down more than 2% this morning, while other indices are down between US 10y gov 2.90 2.88 -2.5
Chief Analyst
Jens Peter Sørensen
+45 45128517
jenssr@danskebank.dk
www.danskeresearch.com
Danske Daily
Global Daily
Focus today: There are some interesting earnings announcements on the agenda today,
Non-manufacturing ISM
but focus will be on the release of global service PMIs. Over the past weeks a string of
65 Index 65
weak US economic data has increased fears of a hard landing in H2. Hence, macro data 60
ISM non-manufacturing Index
60
are now key focus for the markets. We believe that the US non-manufacturing ISM will 55 55
50 50
post a second decline to 53.1 today. While this is not a disastrous level, it will add further 45 45
evidence of a slowdown in growth at a time when the recovery remains fragile due to soft 40 40
35 35
job growth. In that light the ADP report will provide some interesting information ahead 30
ISM manufacturing
30
of Friday’s payrolls release. 02 03 04 05 06 07 08 09 10
Fixed income markets: Another bunch of weak US data and news that the Fed is Source: Reuters Ecowin
considering to re-invest the proceeds from its portfolio on mortgages put downward
pressure on US yields. With intensifying focus on macro data today’s service PMI will be
US S&P500 future
the major event. Given our expectation of a further softening in the ISM, risks remain
1124 1124
tilted toward lower bond yields today. Note that tonight the US Treasury will announce
1114 1114
refunding estimates for the second half.
1104 1104
FX markets: In the FX market the dollar continues to suffer on risk appetite and worries 1094 1094
that the Fed next week will announce new bond purchases to pump more money into the 1084 1084
economy after a string of weak US numbers. The next target for EUR/USD is 1.33. Today Mon Tue Thu Fri Mon Wed
the market will focus on the ISM non-manufacturing indicator to see if the weakness in Source: Danske Markets
the manufacturing sector has spread to the service sector. We also keep an eye on the oil
price that seems to gain further momentum after the USD70-80 a barrel range was broken
US 10y gov yield
yesterday - a development that might add further to the current dollar weakness.
3.03 3.03
Scandi Daily
2.93 2.93
Denmark: No events in Denmark.
2.83 2.83
Sweden: No events in Sweden.
Mon Tue Wed Fri Mon Wed
Norway: The calendar is empty in Norway today. The fixed income market will follow Source: Danske Markets
Euroland, whereas NOK might benefit from the move above USD80 a barrel for the oil
price.
Global FX
EUR/USD (LHS) USD/JPY (RHS)
1.329 88
87.1
Key figures and events 1.309
86.2
Wednesday, August 4, 2010 Period Danske Bank Consensus Previous 1.289 85.3
- OTH Earnings: Societe Generale, Standard Chartered, Lloyds Banking, Toyota Mon Tue Thu Fri Mon Wed
9:15 ESP PMI Services Index Jul 52.1 51.8
9:45 ITL PMI Services Index Jul 52.1 51.4 51.5 Source: Danske Markets
9:50 FRF PMI Services, Final Index Jul 61.3 61.3 61.3
9:55 DEM PMI Services, Final Index Jul 57.3 57.3 57.3
10:00 EUR PMI Services, Final Index Jul 56.0 56.0 56.0
10:00 EUR PMI Composite, Final Index Jul 56.7 56.7 56.7
10:30 GBP PMI Services Jul 5450.00% 54.4
Scandi FX
11:00 EUR Retail sales m/m|y/y Jun -0.1%|-0.2% 0.1%|0.0% 0.1%|0.2%
EUR/SEK (LHS) EUR/NOK (RHS)
13:00 USD MBA Mortgage applications 9.54
16:00 USD ISM, non-manufacturing Index Jul 53.1 53.0 53.8 8.03
9.49
16:00 USD US Treasury quarterly refunding announcement
7.97
9.44
9.39 7.91
9.34 7.85
Mon Tue Thu Fri Mon
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Danske Daily
0.53
0 0 DKK 1.05 1.15 10
2.89 SEK 0.50 0.94 44 07:30(-1)* 17:00 +/-, bp
NOK 2.00 2.69 69 DEM 10Y 2.68 2.61 -7
0.51 2.86 P LN 3.50 3.71 21 DKK 10Y 2.76 2.71 -5
07 10 13 16 19 22 01 04 SEK 10Y 2.78 2.71 -6
USD2Y (lhs) USD10Y (rhs) NOK 10Y 3.34 3.34 0
P LN 10Y 5.88 5.87 -2
* As of closing previous trading day
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