Research: Recovery Will Remain Sluggish in France

Quotes from Societe Generale Cross Asset Research: -In September, the French INSEE business confidence index for the whole economy rose from 91 to 94.

Looking at the details, we can see that the continued improvement in the manufacturing sector over the past four months took a break in September, as the index lost one point,sliding to 97.


-Overall gains stem from the services sector as this component rose by 4 pt to 93, although it is still well below its long-term average.


-Overall, this reading is in line with our forecast of zero GDP growth in Q3 in France, and we continue to believe that the recovery will remain sluggish in France.

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the nbsp from france

2013-9-25 17:42

Источник: news.instaforex.com

the nbsp → Результатов: 13 / the nbsp - фото


Research: Taiwan's September Ip Growth Likely to have slowed Further

Quotes from Societe Generale Cross Asset Research:


-We expect Taiwan's industrial production to remain in the contraction zone in September after the disappointing reading in August (data to be released on 23rd October). Export orders, which usually lead industrial production by one month or more, disappointed in August, growing by just 0.5% yoy. The September trade data served as another reminder of the painfully slow recovery of the island's economy. 


-Exports contracted sharply by 7% yoy, slowing from +3.6% yoy in August. The base effect certainly played a role, but the underlying trend of external demand also failed to strengthen further. By destination, export growth to China slumped the most to -10.9% yoy from +3.6% yoy in the previous month.


-By goods, the contribution from machineries & electrical equipments (ME) to headline growth fell from +2.5ppt to -0.5ppt. Hence, the chance of getting another soft data point for production seems fairly high. 

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2013-10-21 17:42

Research: US Rating Downgrade Could Still Come Within Six Months

Quotes from Societe Generale Cross Asset Research:


-US President Obama signed off the short-term deal agreed overnight by the US Congress to immediately re-open and fund the government until 15 January 2014 and raise the debt ceiling until 7 February 2014.


-This implies that we should finally have a read on the September employment and retail sales report over the next four days which will be the next big event for investors. Asian equities were trading positive following US stocks as relief greeted the US compromise, but the USD is trading lower as UST 10y yields slip to 2.65%.


-The short-term nature of the approved bill (hostilities may resume in the new year, budget talks now set for 13 December) may not be enough for agencies like Fitch to drop their 'negative watch' which implies that a downgrade could still come within six months. 

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2013-10-17 12:42

Research: China's Q2 Gdp Likely to have Grown by 7.4%

Quotes from Standard Chartered:


-On Monday (15 July) we get China's Q2 GDP, June industrial production and retail sales data - numbers likely already being seen by decision-makers. For the key GDP print, the consensus is at 7.5% y/y. We expect a slightly lower 7.4% y/y, as we sense weakening momentum in June.


-The labour market is weak, but not disastrously so, which is what would be required in order for Beijing to pivot on policy. Premier Li Keqiang visited Guangxi province on 9 July and emphasised the importance of reform for growth. The short-term focus is on the quality not the quantity of growth.

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2013-07-11 12:31

Research: Australia at Moderate Risk in Terms of Overall Leverage

Quotes from Standard Chartered:


-We place Australia in the 'moderate risk' category in terms of overall leverage. As the economy rebalances structurally and the focus turns to domestic consumption and non-resource-led growth, Australia's Achilles' heel is in the household sector. The country's total debt level is low overall compared to other major economies, but the high level and concentration of debt among households is an area of vulnerability. 


-The Reserve Bank of Australia (RBA) has reduced the policy cash rate by 200bps since November 2011 to a low of 2.75%. Easy credit, a booming housing market and a push for greater consumer consumption can be a risky combination if households leverage up excessively. In Australia's case, though, domestic conditions have led to softer demand for debt from businesses and households as they consolidate following high levels of debt earlier.


-Recent data indicates that households are moving in the right direction, taking advantage of current low interest rates to repay their existing debt and deleverage. Further deleveraging from high levels is needed to ensure adequate debt repayment capacity as interest rise in the future, in our view. 

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2013-07-02 18:01

Research: Eur Review

Quotes from RBC Capital Markets:


-EUR: The ECB's Draghi spoke in London, repeating that the risks to growth are still on the downside but he sees a fragile and gradual recovery. He reminded that exit from exceptional monetary policy remains distant and that "we stand ready to act again when needed" but there are limits to what monetary policy can achieve. He says policy will remain accommodative for the foreseeable future. Elsewhere, the FT and La Repubblica quote a report by the Italian Treasury detailing the country's debt transactions for H1 2012 and suggesting the restructuring of eight derivatives contracts with foreign banks during that period could lead to up to EUR8bn in losses for Italy.


-The FT says the restructuring allowed the Tsy to stagger payments to foreign banks (on derivatives with a total notional value of EUR31.7bn) but the Italian govt had to accept more disadvantageous terms in some cases. The Italian Tsy has issued a statement in response saying the contracts were used to hedge against exchange rate/interest rate risks at the time of Italy's entry to the Euro, and carried a cost which is "justified by the need to protect against serious risks". Italian spreads are tighter on the day, largely ignoring the derivatives story in favour of the short-covering mood. 

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2013-06-26 16:47

Research: Gbp Continues to be more Tightly correlated With Risk Markets

Quotes from RBS:


-GBP continues to be more tightly correlated with risk markets such as equities than yield spreads. This looks set to continue until such time as investors worry more intently about the UK's twin deficits. We see equities remaining supported by low interest rates and the continued expansion of central bank balance sheets.


-For the Fed, the only two voices on the FOMC that really matter are Yellen and Bernanke, and they look set to continue their dovish stance. Given the recent  historic correlation with equities, this suggests some support for GBP/USD.


-However, while the fiscal cliff has been avoided, discussions around the debt ceiling and spending cuts are short-term risks to market sentiment (USD positive). At the same time, the better cyclical position of the US is seen supporting the USD.

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2013-01-08 12:02

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