Euro Slumps On German Short-Selling Clampdown

19 May 2010 09:37 GMT

Euro Slumps On German Short-Selling Clampdown

By Katie Martin Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--The euro plunged to a fresh four-year low against the dollar as traders digested news that Germany's financial regulator has banned some types of short-selling in euro-zone debt and selected financial stocks.

Currencies seen as safe havens in times of stress--the yen and the dollar among them--also jumped higher on the news, while riskier currencies like sterling, the Australian dollar and the Canadian dollar suffered.
Analysts were generally uncertain on just how the ban by the German regulator BaFin will trickle through to the 16-country currency. Investors are unsure exactly which instruments will be affected, and many fear that similar legislation could be enforced elsewhere in the euro zone. That is jangling already frayed nerves, and with negative positions in debt now more difficult to place, the euro is taking the strain.
"The most obvious trade now for speculative investors is via the euro," said Ian Stannard, a currencies analyst at French bank BNP Paribas SA.
"But it also has broader implications for longer-term investors as well. It could slow their inflows into the euro and even cause some outflows. It raises questions over the euro's status as a reserve currency," he said.
Stannard said the legislation, which so far affects only trading that is regulated within Germany, is "not thought through... It's all about German domestic politics".
Aside from its fresh bout of weakness against the dollar, the euro has also tumbled against sterling and yen.
"What we've learnt repeatedly in this crisis that every action has an equal and opposite reaction", said Jim Reid, a credit strategist at Deutsche Bank.
"If the authorities prevent free market activities in some areas, the risk is that the pressure moves somewhere else. In this case, the euro was left exposed", he added.
Gary Jenkins, head of fixed-income research at Evolution Securities in London joked that "maybe they need to sell short selling in the currency".
The BaFin ban dominated trading in European hours, and was a big factor behind the rise in the safe-haven yen, with the dollar falling from a high of Y92.24 to a low of Y91.25.
The yen's gains also came as the International Monetary Fund gave positive signals about the country's likely growth path. The Washington-based body suggested that the Bank of Japan should consider extra monetary easing. It also said it expects to see gross domestic product rising by 2% in 2010 and 2011 respectively.
Elsewhere, minutes from the Bank of England's May meeting showed that the vote to keep rates at a record low was unanimous, despite modest upward pressures on inflation. The minutes had no impact on sterling, which was under selling pressure because of the broader market nerves.
Amid this backdrop, Europe's emerging-market currencies sold off sharply, with the euro rising to over HUF280 against the highly risk-sensitive Hungarian forint. The Polish zloty, Turkish lira and Czech koruna were also weaker, along with the South African rand, which usually trades in line with these European currencies.
U.S. inflation data and minutes from the most recent Federal Open Market Committee meeting are due in New York trading hours.
At 0917 GMT, the euro was trading at $1.2184 against the dollar, from just over $1.22 late in New York Tuesday, according to trading system EBS. It hit a low of $1.2143 in Asian hours. That marks a sharp decline from the $1.24 area it occupied for much of Tuesday.
The dollar was at Y91.63 from Y92.30, while the pound was at $1.4275 from $1.4350.

Germany to Ban Naked Short-Selling: Report

Germany to Ban Naked Short-Selling: Report

Market Features

The German press is reporting that the country's BaFin financial services regulator will ban naked short-selling of shares and eurozone government bonds as of midnight tonight, and will reportedly include CDSs as well. No official confirmation. This has been done before on stocks by BaFin on a temporary basis, but not on bonds or CDSs, so the report is probably causing a bigger ripple.

More Related Stories Recall that the U.S. issued first issued a temporary ban on naked short-selling first in July 2008 on 19 financial stocks. Then in September 2008, the SEC widened that list to 799 financial companies and banned all short-selling for two weeks.

At around the same time, the U.K.'s FSA also instituted a ban on all short-selling of 32 financial companies, while BaFin banned only naked short-selling with regards to 11 companies in the German financial sector. Indeed, bans of some sort were also seen in France, Switzerland, Ireland, Australia, and Canada.

In a proper short sale, the investor is supposed to borrow the stock, sell it and then repay the borrowed stock that's bought (hopefully) cheaper. When it's naked, the short-seller never borrows the stock in the first place, and so it is never delivered.

A big question if this story comes to pass is whether other countries follow suit. Of course, the other eurozone members would most likely go along with Germany on this. But given that this most recent leg of the crisis is centered on the peripheral eurozone, we can't see why the U.S. or the U.K. would get involved in this move.

And given the global nature of the financial world, couldn't a German investor simply use a U.S. counterparty to get around this ban? The report raises more questions than it answers.

Meanwhile, the euro has taken it on the chin after Europe closed, with the cycle low against the dollar from Monday only a hair's breadth away. Our near-term target of 1.18 remains in play (low from early 2006).

We think the momentum was to the downside even before the short-selling news, but critics could say that the Europeans continue to fret about the symptoms rather than the actual illness and so could have accelerated this latest move in the euro.

thestreet.com
By BBH FX Strategy  05/18/10 - 02:13 PM EDT1

Market Updates: Bank of America (NYSE:BAC), Citigroup Inc. (NYSE:C)

Market Updates


John Paulson, the hedge-fund manager who amassed a fortune by betting against U.S. mortgage markets, was among 56 investment groups that added at least 5 million shares in Bank of America (NYSE:BAC) during the first quarter. 


Paulson & Co., based in New York, bought 16.8 million Bank of America shares and held 167.8 million as of March 31, according to a filing yesterday with the U.S. Securities and Exchange Commission. The largest purchase came from Fidelity Management Group, which picked up 42.3 million shares of the Charlotte, North Carolina-based bank and held 256.8 million as of March 31. Furthermore, Paulson left unchanged his Citigroup Inc. (NYSE:C) stake of 506.7 million shares, according to the filing. The New York-based bank is Paulson’s third-largest reported holding. His biggest reported holding is SPDR Gold Trust, an exchange-traded fund backed by bullion. 
–Bloomberg

Citigroup (NYSE:C) Stock To Grow On Wealth Building Management

Citigroup (NYSE:C) Stock To Grow On Wealth Building Management

Wednesday, May 12, 2010

Citigroup Inc. (NYSE:C) has been beefing up its wealth building team, and the strategy seems sound. By targeting individuals with over $250,000 of ‘investable assets,’ Citigroup is looking to expand its capital base under management rapidly. By strengthening its retail network, and targeting wealthier clients, it seems to be a signal that the unit is ready to grow.

In another sign that Citigroup is targeting wealthy individuals in order to grow the company’s wealth, the company announced that is hiring U.S. Trust executive Charles Merrill to work as their New York regional executive. Merrill is the latest in a line of executives to come over from U.S. Trust, which is a unit of Bank of America. Since Bank of America took over Merrill Lynch, a number of top people have left BAC and defected to C.

Merrill Lynch and U.S. Trust target extremely different customers. Merrill Lynch targets the ‘merely affluent’ where as U.S. Trust targets the ‘ultra-rich.’

The strategy seems sound for Citigroup. As they target ‘ultra-high-net-worth’ individuals the amount of money they manage should rise dramatically. At the same time, management costs should remain low, since you aren’t dealing with a broad base of customers. Instead of targeting the mass market, they’re bulking up their higher end business in order to find clients with real money who might not be as needy as lower net worth individuals tend to be.

For a company that needs to improve its cash flow organically, extending offerings to your highest income customers and trying to find new ones with a lot of money seems like time well spent.

Improved operating margins could fry the shorts

Citi needs to keep one step ahead of the shorts and boo birds, who are coming back to the company the way the swans make it back to Capistrano

Citigroup short interest has risen to 482 million shares in the last two weeks, marking a sudden rise in those who wish to profit from a Citigroup stock collapse.

The shorts seemed to have pounced on two key issues that have soured some on C’s chances.

First, the European debt crisis got the short’s motors running. Secondly, the Goldman Sach’s scandal turned them on even more. The realm of short sellers loves scandals and crisis, so many sellers jumped on the band wagon and dumped shares.

Right now Citigroup is under enormous selling pressure, but the fundamentals indicate the company is doing well from a technical standpoint. The company is in a maturing phase of a multiyear turnaround. Investors who are shorting because of GS and the Europeans might just be in for a rude awakening as the stock market settles back down.

Unemployment has been one of the biggest issues facing Citigroup, and that problem is beginning to abate. With unemployment comes high default rates, which is the bane of any enormous financial services company. As the American consumer gets back to work, he’ll start paying his bills again. Not only that, but he’ll buy more products, which will stimulate the overall economy. When that happens, the people who are holding on to shares of Citigroup they bought in the $4 a share range will be happier than pigs in slop.

Right now the shorts are having their fun, but it wouldn’t take much for C shares to rally back. Right now C shares have found support at around $4.20 a share. For a big cap of this magnitude, C shares look like a complete bargain at the current price

Citigroup, (NYSE:C),

Powered by ScribeFire.

Buyers Stepping In - Citigroup

Buyers Stepping In - Citigroup

New York, May 10th (TradersHuddle.com) - Unusual high volume detected on shares of Citigroup Inc. (NYSE:C), early in the trading session. Citigroup is currently trading higher by 5.62%, so definitely the buyers stepping in, as the stock's volume is on pace to break its average.

Citigroup Inc. (NYSE:C) is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers around the world. Its services include investment banking, retail brokerage, corporate banking, and cash management products and services.

Citigroup has already traded 0.906 times its 3-month average volume, and has calculated support and resistance at $3.9 and $5.07 respectively. Traders like to use volume as their lie detector for price action moves through predefined trading ranges.

The overall market index S&P 500 is trading higher by 4.09% from its previous trading close, which means that Citigroup stock is outperforming the overall market.

Powered by ScribeFire.

Moody's avisa que pode baixar "um ou dois níveis" do 'rating' português

Moody's avisa que pode baixar "um ou dois níveis" do 'rating' português

A agência de notação financeira Moody's anunciou hoje que poderá baixar "um ou dois níveis" do 'rating' da dívida portuguesa, num contexto em que Portugal se debate com a correção do défice orçamental e recuperação económica.

A Moody's tem a dívida portuguesa com 'outlook' negativo desde Outubro, estando actualmente com o 'rating' Aa2.

De acordo com a agência, a decisão de provável revisão em baixa poderá acontecer nos próximos três meses e reflectirá a recente deterioração das finanças públicas portuguesas, assim como os desafios da economia a longo prazo.

LUSA | Lisboa, 05 Maio

Moody's, outlook, rating, dívida portuguesa, economia

Powered by ScribeFire.

Citigroup Inc (NYSE: C) Update

Citigroup Inc (NYSE: C) Update

Citigroup Inc (NYSE: C) – Citigroup shares are down 3.17% today with markets still worried about the debt issues surrounding several EU countries.

The company has had several employee related matters hit the news in past couple of hours.

Citigroup sued Gautam Hazarika, their former global markets director for telling Deutsche Bank (NYSE: DB) its trade secrets. In other news, Bill Kennish, head of European telecoms, media and technology banking has left his post at Citigroup to join Australian investment bank Macquarie. Also, Jay Glasse, a proprietary trader has quit to join Japanese brokerage Nomura Holdings Inc.
Daily Metro News

Citigroup Inc, NYSE, C, Deutsche Bank,

Powered by ScribeFire.

Juros da dívida portuguesa a 5 anos baixam pela primeira vez em 13 sessões

Juros da dívida portuguesa a 5 anos baixam pela primeira vez em 13 sessões

Os juros das Obrigações do Tesouro (OT) a cinco anos estão hoje a descer, pela primeira vez desde o dia 12 de Abril, aliviando assim do máximo histórico fixado na quarta feira, de acordo com os dados da agência Bloomberg.

Por volta das 11:00, os juros ('yield') das OT portuguesas estavam nos 5,5245 por cento, depois de terem atingido na quarta feira um novo recorde desde a existência da moeda única europeia, nos 5,6667 por cento, culminando uma série de 13 sessões seguidas a subir.

Assim, o prémio pedido pelos investidores para comprarem dívida portuguesa em vez da dívida alemã baixou para os 351,5 pontos base, depois da forte pressão que os mercados têm colocado sobre Portugal, devido à subida da percepção de risco sobre a economia portuguesa, com o foco apontado ao desequilíbrio nas finanças públicas.

Jornal "i"

Obrigações do Tesouro (OT), Juros da dívida, yield, finanças públicas

Powered by ScribeFire.

Jornais europeus dizem que Portugal está a ser arrastado pela Grécia

Jornais europeus dizem que Portugal está a ser arrastado pela Grécia
Economia

Aos olhos do mundo, Portugal está a ser arrastado pela crise Grega. A notícia vem em todos os jornais, com Portugal a ser identificado como alvo dos mercados mas há, pelo menos, uma excepção à regra.
rtp.pt | 2010-04-28

Portugal também já arde, diz Financial Times alemão

Portugal também já arde, diz Financial Times alemão

A edição alemã do Financial Times abre hoje com um retrato negro da crise nacional. Com o título "Portugal também já arde", o jornal económico escreve que os piores receios parecem ter-se concretizado depois de a agência Standard & Poor's ter cortado dois níveis no rating de longo prazo do país, de A+ para A-, e do principal índice da bolsa portuguesa, o PSI 20, ter registado a maior queda desde Outubro de 2008 quando ontem fechou a perder 5,36%.

"Temendo a falência do país mais pobre da Europa Ocidental, os investidores fugiram em massa dos títulos portugueses", escreve o Financial Times, dizendo ainda que a dívida coloca a bandeira portuguesa "a meia haste."
Jornal "i"

rating, Financial Times, Portugal, Standard & Poor's, PSI 20

Powered by ScribeFire.

FOREX-Euro resumes declines after S&P downgrades Spain

FOREX-Euro resumes declines after S&P downgrades Spain

* Euro resumes declines, hits one-year low

* S&P downgrades Spain's credit rating

* IMF sees aid to Greece worth 100 bln-120 bln euros

(Reuters)

The euro resumed declines against the U.S. dollar on Wednesday and hit a one-year low after Standard & Poor's downgraded Spain's credit rating, snapping earlier bursts of optimism that had put single currency in see-saw trade.

S&P cut its ratings on Spain by one notch to AA from AA-plus, citing a more protracted period of sluggish economic growth than previously expected. The outlook for the country is also negative.

News of an imminent aid package to debt-stricken Greece helped the euro earlier, but the credit downgrade renewed risk aversion on investor worries that the euro zone debt crisis is spreading. The downgrade on Spain came just one day after S&P had slashed its ratings on Portugal.

Analysts said the downgrades on Portugal and Spain reflect wider credit risks in the euro zone, which could create cracks in the euro system and further batter the single currency.

"There's no upside potential for the euro right now, seriously" said Win Thin, a currency strategist at Brown Brothers Harriman & Co. in New York.

"Any aid package now will come in too late," he said. "If the help had arrived a couple of months earlier, it would have prevented the situation from deteriorating further not only in Greece but in other countries such as Portugal and Spain."

In late morning trading in New York, the euro was 0.2 percent lower at $1.3140 [EUR=], after hitting a one-year low at $1.3114, on electronic trading platform EBS.

Earlier, the euro rose as high as $1.3268 on news a euro zone/International Monetary Fund aid package for Greece was imminent and may be worth more than previously expected.

http://www.reuters.com/article/idUSN2821497220100428

BCP Q1 profit drops 10 pct, but beats forecast

BCP Q1 profit drops 10 pct, but beats forecast

LISBON, April 28 (Reuters) - Millennium bcp (BCP.LS), Portugal's largest listed bank, posted on Wednesday an almost 10 percent fall in first-quarter net profit, which still exceeded market consensus as trading gains fell far less than expected.

FINANCIALS

The bank said in a statement net profit totaled 96.4 million euros ($128.4 million). Net interest income fell 9 percent to 340.6 million euros.

Analysts in a Reuters poll had expected, on average, a quarterly net profit of 66 million euros and net interest income -- the difference between interest paid on deposits and interest charged on credit -- of 346 million euros.

Trading gains fell 10 percent, BCP said, while analysts had predicted a fall of nearly 70 percent. BCP also said its Core Tier 1 capital ratio rose to 7.3 percent at the end of March from 7.1 percent at the end of last year. 

(Reporting by Andrei Khalip and Sergio Goncalves)

Bolsa fecha em queda em dia de "montanha-russa"

Bolsa fecha em queda em dia de "montanha-russa"
PSI-20 perde 1,75%
Depois do pânico inicial, altura em que afundou mais de 6%, a bolsa nacional oscilou entre ganhos e perdas ao longo de toda a sessão. O PSI-20 acabou por encerrar a cair 1,75% num dia marcado pela forte volatilidade que fez disparar os negócios em Lisboa. O facto da S&P ter cortado o “rating” também para Espanha acentuou a queda.

O PSI-20 recuou para 7.027,44 pontos, com 19 acções em queda e uma em alta. Os congéneres europeus também oscilaram entre ganhos e perdas, com os índices a reagirem logo de manhã de forma muito negativa ao facto da S&P ter reduzido o “rating” da dívida para Portugal e Grécia, aumentando os receios em relação a incumprimentos e necessidade de acelerar as ajudas. [...]


A pressionar esteve a Mota-Engil, que perdeu 8,33% para os 2,521 euros, o sector da banca e a Sonaecom, que deslizou 5,82% para os 1,23 euros. No restante sector tecnológico, a Portugal Telecom depreciou 0,67% para os 7,413 euros e a Zon deslizou 4,28% para os 3,20 euros.

Na banca, o BES e o BPI foram quem mais contribuiu para a tendência com quedas de 2,69% para os 3,153 euros e de 1,98% para os 1,636 euros, respectivamente. Já o BCP, que afundou 17% para um mínimo histórico nos 0,50 euros, fechou a cair 1,94% para os 0,658 euros.

No sector de energia a EDP perdeu 1,33% para 2,587 euros, a EDP Renováveis deslizou 0,77% para 5,024 euros e a Galp Energia escorregou 2,22% para os 11,685 euros.

Do lado dos ganhos apenas a Brisa que somou 1,86% para os 5,246 euros no dia em que vai anunciar resultados.

ANALYSIS-EU fumbling leaves euro zone seeking credibilit

ANALYSIS-EU fumbling leaves euro zone seeking credibility


* Lack of clarity by EU leaders makes matters worse
* Risk of contagion to Portugal and others now real
* Euro zone and euro facing moment of "kill or cure"

By Luke Baker 28/04/2010

BRUSSELS, April 28 (Reuters) - The European Union's inability to take quick, firm decisions has exacerbated Greece's debt crisis and increased the risk of contagion to other euro zone countries such as Portugal.

Four months of talks and summits have only just brought the EU to a point where it can release emergency funds to Athens -- a degree of indecision that financial markets have exploited and which now threatens Lisbon and possibly others.

The result, analysts say, is a crisis of confidence in the 16 countries that share the euro single currency. Winning that confidence back is going to take time and leadership, and will probably require deep structural changes to several economies.
"The problem here is the recurring inability in the European project to say brutal truths honestly and clearly and act on them in a realistic manner," said Hugo Brady, a senior research fellow at the Centre for European Reform.

Queda acentuada no PSI-20

Queda acentuada no PSI-20

Que entre ontem (27) e hoje chegou a quedas de cerca de 6%

(ver em tamanho ampliado)

EUA Senado: Goldman Sachs tinha plano para faturar com a crise imobiliária

Goldman Sachs tinha plano para facturar com a crise imobiliária
EUA - Senado

O banco Goldman Sachs preparou um plano para tirar lucros da crise imobiliária e recolheu grandes dividendos à custa dos seus clientes, revelou uma investigação de um subcomité do Senado norte-americano hoje divulgada.

Além disso, os executivos da instituição enganaram os seus clientes com investimentos imobiliários complexos que resultaram em falências.

"O Goldman Sachs colocou reiteradamente os seus interesses acima dos dos seus clientes", afirmou Carl Levin, presidente do subcomité permanente de investigações do comité de segurança nacional do Senado norte-americano.
EUA Goldman Sachs tinha plano para faturar com a crise imobiliária Senado - Expresso.pt

Goldman Sachs, EUA,

Powered by ScribeFire.

Stock futures signal pause after sell-off

Stock futures signal pause after sell-off

Stock index futures pointed to a flat to slightly higher open on Wall Street on Wednesday following the previous session's sell-off, which was triggered by the downgrade of Greece and Portugal credit ratings, while investors awaited the Federal Reserve's interest rate decision and statement on the economy.

Stock futures signal pause after sell-off | Reuters

Stock futures, Greece, Portugal, economy

Powered by ScribeFire.

PSI-20: Bolsa de Lisboa continua a afundar-se

Bolsa de Lisboa continua a afundar-se

Com todos os títulos no vermelho, a bolsa de Lisboa tem vindo a afundar-se cada vez mais desde a abertura do mercado. Já perde quase 6 por cento (3,25 ás 11:00h).

Na edição online, o Diário Económico falava mesmo numa situação de pânico entre os investidores e a Agência Financeira dizia que o mercado entrou em colapso.

Todos os títulos negoceiam no vermelho e arrastam o PSI-20 para uma queda de 5,77 por cento.

O sector financeiro é dos que mais penaliza o índice nacional. O BCP, o BPI e o BES resgistam quedas entre os 6 e os 8 por cento.

Também a GALP perde cerca de 5 por cento. A EDP e a Portugal Telecom afundam mais de 4 por cento.

A pressão é semelhante nos principais mercados europeus. Madrid perde cerca de 3 por cento. Londres, Frankfurt e Paris desvalorizam quase 2 por cento.

PSI-20 perde quase 6% - TSF

PSI-20, BCP, BPI, BES, Portugal

Powered by ScribeFire.

Cimpor/OPA: CMVM suspende negociação das acções da cimenteira

Cimpor/OPA CMVM suspende negociação das ações da cimenteira - Expresso.pt

Cimpor/OPA: CMVM suspende negociação das acções da cimenteira

Lisboa, 12 fev (Lusa) - A Comissão do Mercado de Valores Mobiliários (CMVM) anunciou hoje que suspendeu a negociação da ações da Cimpor até a divulgação de informação por parte da cimenteira.

Antes de serem suspensas, as ações da Cimpor seguiam a perder 2,43 para 5,36 euros na Euronext Lisboa.

Powered by ScribeFire.

UE protege a Grécia mas põe a sua economia sob tutela

UE protege a Grécia mas põe a sua economia sob tutela - Mundo - PUBLICO.PT

UE protege a Grécia mas põe a sua economia sob tutela

Cimeira em Bruxelas

  A Grécia foi ontem colocada sob uma vigilância orçamental particularmente apertada em troca da afirmação de solidariedade dos seus pares da União Europeia (UE) e da promessa de uma acção comum, se necessário, para evitar a sua falência.

O apoio a Atenas foi expresso numa declaração política aprovada pelos líderes da UE durante uma cimeira informal que se viu obrigada, pela primeira vez desde a criação da moeda única europeia, a conceber uma estratégia de salvamento financeiro de um dos seus membros.

"Os estados da zona euro tomarão as medidas determinadas e coordenadas se necessário para preservar a estabilidade financeira" da eurolândia, afirma a declaração dos Vinte e Sete. Essa estabilidade tem sido posta em risco pelos ataques especulativos que se têm abatido sobre a Grécia por causa da sua derrapagem orçamental e elevado nível de endividamento. [...]

Powered by ScribeFire.