The MorningSnapshot- 07/25

The MorningSnapshot
July 25, 2012

Morning Commentary
Sentiment is positive this morning as the Spanish 10yr retreats from record highs after the ECB’s Nowotny said there are strong arguments for giving the ESM a banking license. The U.S. 10yr Treasury yield has rebounded from historic lows and is up +4.2bps to 1.43%. In Europe, sovereign debt yields are mostly lower, and spreads to German Bunds are significantly tighter. Futures on the S&P 500 are trading +0.427% higher, European stocks are all in the green with the Euro Stoxx 50 up +1.28%, and Asian equity indices closed slightly to modestly lower. Commodities are mostly modestly higher, with Brent Crude up +0.33% on the day.

Today’s Economic Data Lineup (EST)
7:00 am: MBA Mortgage Applications, July 20 (prior 16.9%)
10:00 am: New Home Sales, June, est. 372k (prior 369k)
10:00 am: New Home Sales M/m, June, est. 0.8% (prior 7.6%)
FOMC meeting begins July 31
11:00 am: Fed to purchase $4.5b-$5.5b notes due 8/15/20-5/15/22
11:00 am: U.S. to sell $35b 5-yr notes

North America

  • U.S. home prices rose +0.8% M/M versus estimates calling for a +0.4% rise, according to a report out yesterday.

Europe

  • The U.K. economy shrank the most since 2009 in Q2 and more than economists forecast. GDP fell -0.7% from Q1, when it dropped -0.3%; economists had forecast a -0.2% decline according to the mean estimate of 36 economists in a Bloomberg News survey.
  • Germany sold €3B in 30yr notes at a record low average yield of 2.17% in an auction early this morning.
  • German business confidence fell more than forecast by economists in July to the lowest level in more than two years as the worsening debt crisis dampened the outlook for economic growth and increased company earnings. The figure fell to 103.3 from 105.2 in June.
  • Spanish 10yr bond yields hit all-time highs after gaining +13bps to 7.63%.

Asia

  • The IMF’s top official in China says the nation may refrain from stepping up its monetary stimulus or increasing spending because measures now in place seem sufficient to support growth.
  • Thailand held its benchmark one-day bond repurchase rate at 3% as predicted by all 14 economists in a Bloomberg News survey. Policymakers also cut its growth forecast for this year to 5.7% from 6%.  
  • BOK Governor Kim Choong Soo said Korea runs the risk of failing to meet a growth estimate for 2012 that the central bank already cut two weeks ago because of the prolonged crisis in Europe.
  • Singapore’s growth could fall below 1% should the U.S. and Chinese economies slump and the European crisis significantly worsen according to their central bank.

“Burning desire to be or do something gives us staying power – a reason to get up every morning or to pick ourselves up and start in again after a disappointment.”
-Marsha Sinetar
____________________________
Taylor Anderson
Business Analyst
Clearing House

T 312 634 8902
F 312 930 3187
C 312 618 8339

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