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FINCOR – Sociedade Corretora, S.A.
Weekly Markets
Perspectives
September 10th, 2012
.
Fincor- Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders. The contents mentioned in this document do not
constitute (nor should they be interpreted as to form) any kind of counseling, or investment recommendation, or a record of our trading prices, or an
offer or solicitation to trade in any financial instrument. Fincor- Sociedade Corretora, S.A. will not accept any responsibility resulting from any use referring to
said content or about any resulting effect that could have occurred.
-Draghi announced the Outright Monetary
Transactions Program (OMT). Within it, the ECB will
define a target to Yields and if that value is exceed
they will intervene buying bonds on secondary
market. To apply to the program, each country
needs to implement reforms ands define financial
targets.
-Bonds will have a maturity between 1 and 3 years,
to guarantee that the ECB isn’t financing a State as it
goes against its mandate.
-The purchases will be revealed on a weekly basis,
to maintain transparency.
-The ECB won’t have seniority against other
investors on these bonds.
ECB – “The Euro is Irreversible”-Draghi told that in case a country starts deviating
from the Program signed with the Rescue Funds,
the ECB might start selling bonds, increasing the
costs of funding of the country.
The Eurozone will continue
contracting-The ECB revised its growth forecasts for the
Eurozone from -0,1% to -0,4% in 2012, and from 1%
to 0,5% in 2013.
Greece: Are you going to get
kicked from Eurozone?
-Schäuble told in a Press Conference after a meeting
with the Greek Finance Minister that the country
will only receive the next tranche if Troika’s report
reveals that Greece has been implementing the
austerity measures designed.
1,70%
3,20%2,90%
0,30%
-4,40%
2,00%1,40%
-0,40%
0,50%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Eurozone: GDP Growth
-Andalusia asked for a bailout of €1B from the
Government. It was the 4th region after Valencia,
Murcia and Catalonia. Over 60% from the €18B
capacity of the Regional Rescue Fund was already
spent with just these 4 regions.
-After the announcement of the OMT Program,
Spain’s Prime Minister told that his government will
study if a bailout will be advantageous for Spain. Olli
Rehn thinks that Spain shouldn’t wait any longer,
and should apply for a bailout.
-So, how long will Spain wait until asks for a bailout?
Spain – You don’t have any alternatives
Europe – The Outlook isn’t getting any better
0
10
20
30
40
50
60
70
PMI Manufacturing
Germany
France
Italy
Eurozone
UK
0
10
20
30
40
50
60
70
PMI Services
Germany
France
Italy
Eurozone
UK
US – The QE3 is getting closer after this week data-Manufacturing Data got its worst value since 2009. -Non-Farm Payrolls provided another sign that the
economy isn’t boosting.
49,6
48
51
54
57
60
63
ISM Manufacturing
202
112
157
223
275259
143
6887
45
141
96
Change in Non-Farm Payrolls
Weekly Preview
US The FOMC Meeting might be crucial for the Markets Performance over the next weeks. The
announcement of a QE3 is expected. It will be published economic data on the country, where
we should focus on inflation, retail sales, industrial production and consumer confidence.
Europe The most important events should be the Germany’s Constitutional Court decision over ESM,
Parliamentary Elections in Holland, a decision over Greece by Troika and any new details about
the start of the OMT Program by the ECB. We should follow closely Spain, as the country might
be close of asking for a bailout and qualifying for the Program.
Rest of
the
World
All eyes are above China after economic data that continues to point to a slowdown of the
economy.
Market IndicatorsWe remain positive for the markets, but there are some risks that can prompt them to fall.
Weekly Preview
Vicious Cycle of Europe. We are currently on level 2.
2,70
2,21
1,00
2,00
3,00
4,00
5,00
6,00
7,00
Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12
2Y Bond Yields: Spread VS
Germany
Spain
Italy
0,59
0
0,2
0,4
0,6
0,8
1
1,2
CBOE PutCall Ratio
Ideas for the week: Portugal BES: Buy at the market, stop-loss at 0,65€. Reasons to buy:
- The markets are rallying, due to the OMT from the ECB. As this Program will prompt to fall the Yields of
Government Bonds from countries that asked for assistance, the price of these securities will rise. As we
know, Portuguese Banks as BES are largely exposed to Portuguese Government Bonds.
- The markets risks are falling, and with it the costs of financing of these companies. For a Bank from a
peripheral country as BES, these are really good news.
- From the major Banks in Portugal, this was the only who didn’t require any assistance from the Portuguese
State for its recapitalization.
Weekly Preview
Disclaimer
Disclaimer
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transmissão e execução de ordens. Os conteúdos mencionados não constitui (e
não será concebido de forma a constituir) qualquer espécie de aconselhamento,
ou recomendação de investimento, ou um registo dos nossos preços de
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qualquer responsabilidade em consequência de qualquer uso que possa ser dado
ao referido conteúdo ou sobre qualquer efeito que daí advenha.
Contatos :
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Rua Castilho N.44, 4º Piso
1250-071 Lisboa, Portugal
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Fax.+351 21 380 30 49
www.fincor.pt
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