Recap 2-1-12

Main Items:

  • ISM Mfg improved to 54.1 in Jan vs 54.5 exp and 53.9 prev
  • ADP Employment declined to 170k in Jan vs 182k exp and 325k prev
  • IAEA inspectors said they had a “good” trip to Iran although added that more week was still needed – Reuters
  • Romney won Florida by an 14pt margin
  • CBO estimates that the Social Security Trust fund will now run into a deficit by 2019, although it is based on expectations that unemployment increases above 9%. It also decreased its estimate of the output gap to 5.55 from 6.7% previously.


  • EU CPI Estimate for Jan was unchanged at 2.7% YoY as exp
  • Italian Mfg PMI improved to 46.8 vs 45.3 exp and 44.3 prev
  • UK Mfg PMI improved to 52.1 vs 50.0 exp and 49.6 prev
  • Swiss Mfg PMI declined to 47.3 vs 51.2 exp and 50.7 prev
  • Swedish Mfg PMI improved to 51.4 vs 49.5 exp and 48.9 prev


  • China Mfg PMI improved to 50.5 in Jan vs 49.6 exp and 50.3 prev. the HSBC measure improved to 48.8 vs 48.7 prev
  • South Korea HSBC Mfg PMI improved to 49.2 vs 46.4 exp
  • Australia Mfg PMI improved to 51.6 vs 50.2 prev


35% of EU banks reported tightening lending standards last quarter, but almost all were outside Germany. This was the highest reading since +43 in April 2009

This is a healthy reminder that despite the 6.5% gain in the Eurostoxx 50 YTD, the economic contraction in the EU is likely to continue. Euribor contracts corrected last month but have recovered and broken through previous highs. Odds for a continuation of the advance look good.