G3 Recap 12-01-10

Main Items:

  • US ADP Manufacturing printed +93k in Nov vs 70k expected. October’s print was also revised higher by 39k. This is the highest print since November 2007. The ADP print today is consistent with a payrolls print of ~120k. 145k is currently expected for the headline.
  • US ISM Manufacturing printed 56.6 vs 56.5 expected and 56.9 previously. The underlying components weakened slightly.
  • Trichet made some comments that suggested the ECB could expand its PIGS bond purchasing program tomorrow, saying that “observers are tending to underestimate the determination of the governments and the EU as a whole.” – FT
  • The EU is planning a new wave of bank stress tests in 2011
  • S&P has said it may cut Portugal’s credit rating on concern that the government has made little progress on boosting economic growth to offset the fiscal drag from scheduled 2011 budget cuts.

Overseas:

  • November manufacturing PMI’s all came in at high levels, with most exceeding expectations:
  • Chinese PMI improved to 55.2 vs 54.8 expected and 54.7 previously. The HSBC also improved to 55.3 vs 55.4 expected an 54.8 previously
  • Australian PMI slowed to 47.6 vs 49.4 previously
  • South Korea HSBC manufacturing PMI improved to 50.2 vs 46.7 previously
  • South Korean CPI slowed to 3.3% YoY vs 3.7% expected and 4.1% previously
  • Italian PMI slowed to 52.0 in vs 53.0 expected and previously
  • UK PMI Jumped to 58.0 vs 54.7 expected and 54.9 previously
  • Russian PMI printed 51.1 vs 51.8 previously

Commentary:

  • After Trichet’s comments, people are now expecting that the ECB will announce that it will buy more PIGS debt tomorrow. Let’s see if they deliver. Also, note that the EU bank stress tests discussed in the media today also could foreshadow equity injections.
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