The MorningSnapshot- 02/28

The MorningSnapshot
February 28, 2012

Morning Commentary
U.S. equity futures are higher this morning as investors look to the ECB’s long-term liquidity operation to boost risk appetite, and oil has pulled back from its nine-month high above $109 last week; Brent crude is trading down -0.7% on the day. Economic confidence rose more than forecast in February; an index of executive and consumer sentiment in the 17-nation euro-zone rose to 94.4 from 93.4 in January. The median estimate from 31 economists in a Bloomberg News survey for 94.  According to Howard Archer, the chief European economist at HIS Global Insight in London, “the euro zone is past the worst… Even so, sentiment is still at a pretty low level and the euro zone is far from out of the economic woods.” The euro has been strengthening, up around +0.4% for the day, as bond risk declines a day before the ECB will provide a second round of unlimited funds to support the banks. European banks are expected to tap the ECB for €470B euros in three-year funds according to a Bloomberg News survey. Jeremy Stretch , the head of currency strategy at Canadian Imperial Bank of Commerce in London says, “In the short term, the LTRO operation should be risk- and euro-supportive… The liquidity that the operations have injected into the market has reduced some of the solvency fears, particularly in the European banking market, and that’s provided a much better risk environment.”

Today’s Economic Data Lineup (EST)
8:30am, Durable Goods, Jan., est. -1.0 from 3.0% Ex-Transport, 0.0% from revised 2.2%
9:00am, S&P/Case-Shiller 20 City, Dec. est. -0.35% from – 0.70%
9:30am, ECB calls for bids for its 3-yr and 3-month LTROs
10am, Fed’s Duke testifies on housing to Senate Banking Committee
10:00am, Consumer Confidence, February, est. 63 from 61
10:00am, Richmond Fed, Feb., est. 14 from 12
11:00am, Fed buying $4.25b-$5b notes in 5/15/2020-2/15/2022 range
11:30am, U.S. selling 4-week bills, $20b 49-day bills
~5:00pm (midnight Athens time), Greek  parliament votes on implementation law for austerity measures
7:15pm, Fed’s Pianalto speaks on economy in Westfield Center, Ohio

Other News:

  • Germany’s lower house passed the €130B bailout package for Greece on Monday afternoon.
  • Italy sold €3.75B euros of a new ten-year bond at 5.5% meeting its target for the auction; its 10yr bonds fell -8bps, while 2yr bonds slipped -10bps
  • Belgium sold €3.01 euros of short-term debt which fell -4bps as its borrowing costs fell to its lowest level in almost two years
  • Portuguese debt costs fell; its bond due April 2021 experienced a yield decline of -4bps

“The greatest glory in living lies not in never falling, but in rising every time we fall.”
-Nelson Mandela
____________________________
Taylor Anderson
Business Analyst
Clearing House

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

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