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Mid-Day Report: Risks Recover Mildly after Selloff, Sterling Pressured after BoE Inflation Report

Greece triggered selloff in risk markets seems to have exhausted today as markets recovered in early US session on US housing data. The near term situation is somewhat cleared that Council of State president Panagiotis Pikramenos will lead the caretaker government till election, which is now set to be on June 17 after political leaders met with Greek President Papoulias today. There are still much uncertainties on what’s next for Greece but sentiments could stabilize for a session or two first. Meanwhile, Sterling was hit hard earlier today as BoE revised lower inflation and growth forecast in the quarterly inflation report.

As noted before, the anti-austerity Syriza might be a front-runner to win the next election as latest poll showed.

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Global Prime Property Trust Revaluation REPOST

by Global Prime Analysts in Analyst Reports, Trade Ideas 7 May 2012

• One of the key central thematics we have had for investors has been the re-rating of infrastructure stocks as the combination of improving dividend yields, stable earnings, corporate activity and investment inflows would lead to significant price gains. .
• We have been bullish property trusts in the same spirit but with less aggressiveness and support – UNTIL NOW.
• Many utilities were trading below NTA and have over the 6-12 months moved to now be in line or above NTAs.
• As the RBA begins to cut rates from an artificially high 4.75% to in our long-term view to 3.25/3.50% this will make property trust yields extremely attractive.
• Moreover, it is clearly obvious property values are not going to plummet, prices have stabilised and aside from some pockets of weakness in residential, other classes are slowly increasing as supply tightens .
• Many trusts are now tackling the issue of the market price to NTA gap with buybacks. Th

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Risk FX Refuses to Fall

An early morning rally in risk FX fizzled on the last trading day of the month as EUR/USD settled into a familiar 1.3300-1.3350 range that it has been trapped in all week long. As end of the month fixing flows dominated trade, the majors saw  a burst of buying in late Asia and early European dealing with some key levels triggering some stops.

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Cochlear update

Aside from fears of reputational damage, one of the big concerns surrounding Cochlear’s recall earlier this year, was how long it would take to return to market.  As you know we purchased shares after the announcement that it had recalled its Nucleus CI500 cochlear implant much to the chagrin of some investors who follow our musings here at the Insights blog.

In NSW every child receives a hearing test within two days of birth.  Those identified as having profound hearing loss are often assisted by Cochlear.  And thats just NSW.  Cochlear sells its devices in 100 countries.  Once implanted changing devices is not easy.  Changing brands may be even harder.  Audiologists and speech pathologists are involved and the devices are finetuned to ensure the device suits the individual.

As Matthew pointed out here on the blog a few days ago:  “A family member [of Matthews’s] is a key member of a large Australian charity that does a lot of work with children that are deaf and many get the implants. All the equip

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Euro Back Up While Gold Sinks

Even though we saw the U.S Dollar show some gains over the Euro during Wednesday’s trading, news out of the Euro-zone has been comforting for the 17 nation currency.

The Euro was 0.4% shy of a one-month high after European finance ministers are reportedly set to discuss plans of increasing the rescue fund.The Euro was preparing for its first quarterly gain against the Greenback since June prior to data reports out of Germany, the region’s largest economy that unemployment in the region was it its lowest in 20 years.The figures showed that the number of people out of employment dropped 10,000 from the month of February.

A draft statement written for European finance ministers showed the goverments in the region are preparing for a one-year increase rescue aid to 940 billion euros to keep the debt crisis under control.

Meanwhile, the safe-haven commodity gold showed a drop of 1.6% as the yellow metal failed to breach the $1,700 mark.

As some of you may or may not know,gold and the US dollar have a very interesting connection. Bot

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Cable Crashes on High PSNB, Dovish MPC Minutes

Cable crashed in morning London trade dropping more than 70 points in the wake or worse than expected Public Sector Net Borrowing numbers and more dovish MPC minutes. The PSNB report for February printed at 12.9B versus 5.2B more than double the market expectations as borrowing increased markedly despite the austerity measures implemented by the government of  David Cameron.

Meanwhile the MPC minutes revealed that 7-2 vote on QE with both Miles and Rosen preferring an additional 25B sterling of monetary easing as growth conditions in the UK economy remain lackluster. The BOE was concerned that the prospect of higher borrowing costs could hurt spending in month’s to come. Ov

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Mid-Day Report: Swiss Franc Jumps after SNB, Dollar Firm on Data

Markets are pretty steady today except that much volatility is seen in the Swiss Franc. EUR/CHF dived sharply and breached 1.21 level again after SNB maintained the EURCHF floor at 1.2. We’d maintain that there is no scope for sustainable rebound in the cross at least before Thomas Jordan becomes SNB president formally. Meanwhile, dollar is firm in tight range after some solid economic data from US. Empire State manufacturing index unexpectedly rose to 20.21 in March. Initial jobless claims improved to 351k. PPI moderated less than expected to 3.3% yoy in February while core PPI was unchanged at 3.0% yoy.

As expected, the SNB left its monetary policy unchanged in March. The central bank maintained the 3-month Libor target range at 0-0.25% and pledged to maintain the minimum exchange rate of CHF 1.20 per euro ‘with utmost determination’.

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Market Update February 20, 2012

Overnight Markets Dow Jones Index +46.47 FTSE 100 +19.60 S&P 500 Index +3.22 DAX 30 +96.07 NASDAQ Index -8.07 CAC 40 +46.37 Gold -$2.50/oz Nikkei +146.07 Silver -$0.15/oz Oil +$0.93/bbl COMMENTARY  - Expect local stocks to trade firmer today amid expectations that the Greek debt crisis will have some positive news tonight. The data calendar is light today, with little more than Japanese Trade numbers to be released globally today.

European Equities

European stocks opened firmer on Friday and traded with a strong bid after Germany seemed to clear the way for a deal the Greek debt deal as soon as Monday. E

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