The Banking and Strategy Initiative

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US Economy: FOMC, Greece, Retail Sales ex Auto hold up

Talks of the new QE have come back, with naysayers we like giving in to the Weak economy knocks played by the Housing market but a little bird inside us says it is likely to be even lower than NFL’s Salary Cap for the year which could not grow much and is all of $120.60 mln. it could in fact be even lower than what Redskins have for the next two years and would definitely add only to the MBS buying program as “limited opportunities” in the Securitisation and Munis for example show up the lack of overall liquidity with M2 going past the ordinary only once in the last 10 weeks and inflation subdued. JGBs held up fine with just Yen 65 tln in bailout lending(asset buying program) including Yen 3.5 Tln in growth loans up from the Yen 3.0 Tln earlier today.

If the Fed and Bernanke in particular decide not to go for it again, as in January, it would be understandable too as Retail Sales Data jumped out to 1.1% on the month led by gains in Auto sales in February and even the number for Retail ex Auto was higher at 0.9% with the last month’s star performer Retail ex Auto ex Gas the one we were looking for any reconstructive surgery to the Economy, keeping up to its January mark at 0.6% again

In the ICSC Goldman data, year on year retail sales jumped six tenths to 2.3% from an anemic 1.7% in the last week and Spring fashions aided the uptick to 0.7% further ( for the week ended March 10th) from the 1.3% last week, Goldman expecting Retail sales back in the 3-5% range ( th enew normal)

Meanwhile while Swiss and France Prices showed a year on year softness , inflation kept positive in Italy at 0.4% for the month and at the EU rate of 3.3% for the year. The Second Greek Economic Adjustment Programme ( Bailout ) is however now available in the public domain as accepted (open here ) and approved and is going to be in for some widely felt criticism with Economists and bureaucrats going with a prepackaged 0 budget schedule for 2013 for the trapped state. The target is about 7% of GDP to be recovered and the fiscal deficit which has improved from 15% to 9% this year in just two years, is at the same time expected to grow back to a near 0 2013. Greece is also expected to return to market financing after just three years. The three targets together have had most Economists’ a reason for continued no Confidence in Euro integration


Image by Getty Images via @daylife

and survival. However the program admits there will still ebe a domestic production contraction just short of 5% in 2012 but there does not seem to be enough updation of the fact of this delay in recovery in the body of the document, noting at the summary level that recovery has been delayed by a year.

Earlier, BIS II released data yesterday with due apologies for having set Percentage level Capital targets for European Banks as banks reported significant contraction in assets to meet the consequent EBA gap for June 2012. Also Asian banks have stepped up in th ebreech to show credit in Asian growth markets incl the Indian and Chinese megaliths continuing a the earlier pace without all the deleveraging, pouncing at the opportunity provided by the retreating tide to grab local market share.

Do be sure to read our EoD reviews and/or weekend analysis catch ups to catch the turn before you feel the quake in the markets everytime.

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