>>> Fitch releases global outlook, forecasts 2015 global GDP +2.4%, 2016 global

Fitch releases global outlook, forecasts 2015 global GDP +2.4%, 2016 global GDP +2.9%, 2017 +2.8% 

The pick-up in 2016 reflects a recovery from recession in Brazil and Russia, albeit a weak one; while the structural slowdown in China is weighing on global growth potential. Meanwhile we forecast growth in major advanced economies (MAEs) at 1.8% in 2015, 2% in 2016 and 1.8% in 2017. Fitch's global growth forecast (which is weighted at market exchange rates) has weakened since March's GEO by 0.3pp for 2015 - due mainly to USrevisions - and is practically unchanged for 2016.

The US Fed will start the global monetary tightening cycle with the first rate increase before the end of 2015, followed by the Bank of England. However, the pace and extent of the tightening will be subdued by historicalnorms. Fitch forecasts the key US policy interest rate to average 1.1% in 2016 and 2.3% in 2017. The ECB and the Bank of Japan will continue their QE programmes. As recent bouts of market volatility highlight communication ofmajor central banks will remain a key determinant of global financial conditions.

Following an unexpectedly weak 1Q15 out turn, Fitch forecasts the US economy will rebound to 2.2% growth in 2015 and 2.5% in 2016-2017, a revision of-0.9pp for 2015 and -0.5pp for 2016 since the March GEO. While improving fundamentals and strong confidence support the recovery, the appreciating USdollar has hurt trade performance and households' propensity to save isconstraining consumption growth. The labour market is strengthening with unemployment down to 5.5% and wage growth finally starting to pick up.

Our baseline forecast is for eurozone GDP growth to strengthen from 0.9% in2014 to around 1.6% in 2015-2017, but the risk of a Greek exit from the eurozone has intensified following the breakdown in talks between Greece andits creditors and the announcement of a referendum on the bailout proposals,to be held on 5 July. This poses a risk to economic recovery. A weaker exchange rate, low oil prices, strengthening confidence, quantitative easingand improved credit conditions support growth. Nevertheless high debt levelsand structural weaknesses will constrain the recovery for a prolonged periodand the growth potential is weak compared with other MAEs.

The combination of a modest pick-up in headline inflation, strengtheningrecovery and stabilisation of longer term inflation expectations have led toa moderation of deflation risks, although inflation will likely remain belowthe ECB's target until 2017 and deflation risks could re-intensify in caseof adverse shocks, such as a disorderly Greek exit.

There is a stark divergence in growth prospects across emerging markets(EM), reflecting differing exposures to commodity prices, external financingneeds and other global macro trends, as well as country specific factors.Among the BRICs, GDP growth will range from 7.8% in India to a contractionof 3% in Russia and 1.5% in Brazil this year. China is in a gradualstructural slowdown and our unchanged growth forecast is 6.8% in 2015, 6.5%in 2016 and 6% in 2017. India's GDP growth will surpass China's this yearfor the first time since 1999, and accelerate to 8% in 2016 and 8.1% in2017. Recovery from the recession in Russia and Brazil will be weak, withgrowth rates of only 1.5% by 2017.

Japan is forecast to return to above-trend growth of 1.2% in 2015 and 1.4%in 2016, supported by currency depreciation and higher real wages after theweakness in 2H14. However, growth will again slow in 2017 based on theassumption of consumption tax increase scheduled for April 2017. The UK economy is at the peak of its economic growth cycle as spare capacityis gradually absorbed. The GDP growth forecast is 2.5% in 2015, 2.3% in 2016and 2.1% in 2017. The labour market duality, strong employment growthaccompanied by subdued wage dynamics, has continued, while inflationdeclined to -0.1%, its lowest rate for more than 50 years.

(Makor) Tech View EUR/USD (1.1213 last) - don't chase the Euro lower, struct

Summary

 

·         Yesterday I have argued against chasing the CCY pair lower and highlighted the longer term setup and several buy signals on the longer term charts which suggest not to chase the CCY pair lower.

·         Followed yesterday gap down not only did the CCY pair fill the gap but also rallied significantly ending in a daily bullish engulfing candle

·         Support now  is the 55dma at 1.1126 (pretty close to today's low) and then the rising channel support at 1.1030

·         Again, the current structure could be a triangle pattern which is, in most cases, a continuation pattern.

·         The top of the triangle is around 1.1440 and a re-test of this level seems likely

·         Referring to the long term setups, similar structures on the longer term charts exist also on AUD/USD & GBP/USD which again warn against chasing the USD

 

 

From: Barry Lyss
Sent: Monday, June 29, 2015 9:49 AM
Subject: Tech View EUR/USD (1.1077 last) - don't chase the Euro lower, structure still looks corrective

 

                Summary

 

·         Only a daily close below 1.1030 would be bearish and argue for a move lower, this level represents the rising channel support and while above it a move higher is likely

·         It is possible that the CCY pair is forming a triangle consolidation pattern, since this consolidation comes after a move higher it is by definition a continuation pattern and therefore is bullish

·         Worth noting, the CCY pair also has several other buy signal on the weekly & monthly charts (demark buy signal) and therefor chasing the CCY lower at this point seems to have a poor risk/reward

 

Daily chart

 

Weekly chart

 

(Makor) Tech View S&P 500 and VIX (2,057 & 18.85 last) - breakdown on the S&

S&P 500 Index – sell rallies to 2,067-2,080 (previous lows and bearish H&S neckline)

 

·         The Index broke down below the neckline of the bearish H&S pattern, the neckline stands at 2,080 and the target of the pattern is 2,025

·         The Index also broke the path of higher lows established on the chart since October 2014, yesterday move below 2,067 negated this path and argues for a correction

·         Given these developments selling rallies to 2,080 with a 2,025 target makes sense

·         On a longer term perspective the monthly chart below highlights the time between the 2000 & the 2007 high compared to the 2007 & the 2015 high = they are both exactly the same. In 2000 & 2007 these tops were followed by an impulsive correction and the main question here is if history is about to repeat it-self. In this context it is worth noting that a monthly close below 2,087 would implement a monthly bearish engulfing candle and this would increase the odds for a move lower in the weeks/months ahead.

 

Strategy: Short 2 units from 2,119, target 2,025 & 1,885 with a stop loss on a close above 2,140  

 

Daily chart

 

Monthly chart

 

 

                Vix Index – buy dips to 14.91-15.82 (open gap zone)

 

·         The VIX broke out yesterday from a bullish wedge pattern – based on the hieght of this pattern the targets is 24.80-25.20

·         The fact that the breakout from this pattern was established in a gap gives further confirmation to this breakout and validility

·         Furthermore, this breakout accurs parilel to the breakdown in the S&P (broke below 2,067)

 

Daily

 

 

(APW) Lawyer: Lufthansa Makes Germanwings Compensation Offer

Lawyer: Lufthansa Makes Germanwings Compensation Offer
2015-06-30 12:54:09.625 GMT


Berlin (AP) -- A lawyer for relatives of people killed in
the Germanwings crash in March says parent company Lufthansa has
made a compensation offer.
Elmar Giemulla said in an emailed statement Tuesday that
the company is offering 25,000 euros ($27,740) in compensation
per passenger, plus payments of 10,000 euros each to immediate
relatives. He described that as "completely inadequate."
Prosecutors believe the Airbus A320 was intentionally
crashed into a French mountain by co-pilot Andreas Lubitz on
March 24, killing all 150 people on board Flight 9525 from
Barcelona to Duesseldorf.
Immediately after the crash, Lufthansa offered aid of up to
50,000 euros ($56,000) per passenger to their relatives,
independent of any eventual compensation payments.

-0- Jun/30/2015 12:54 GMT

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: CAG +2.5%,

M&A news: WSH +7% (Willis Group and Towers Watson to combine in merger of equals), GLW +1.5% (acquires the pharmaceutical glass tubing business of Gerresheimer AG for EUR 196 mln), GE +0.8% (confirms Sumitomo Mitsui Banking (SMFG) has made an agreed offer to acquire GE's European Sponsor Finance business for ~$2.2 bln)

Select China related names showing strength; Shanghai +5.5% overnight: SFUN +4.6%, JMEI +4.3%, DANG +3.2%, QIHU +1.9%, BABA +1.5%

Other news: JUNO +33.3% (Juno Therapeutics and Celgene announce a collaboration on CAR-T and TCR cancer technologies; collaboration includes a $1 bln Celgene payment and acquisition of ~9.1 mln shares of Juno stock), CGIX +11.8% (awarded a multimillion dollar clinical trial in hematological cancers by a leading biotech company), NBG +11% (cont volatility in Greece),CLLS +9.7% (JUNO peer), PRAN +8.7% (announces the safety outcomes of the IMAGINE Extension study in patients with Alzheimer's disease), CYAD +7.5% (rebounding following yday decline), KITE +6.9% (following JUNO news), BLCM +6.2% (following JUNO news), ZIOP +5.7% (following JUNO news), PNR +4.9% (WSJ details news that Trian wants Pentair (PNR) to consider purchase of competitors in the space), AMCN +4.4% (Herman Man Guo (Chairman, CEO) discloses 17.16% active stake in 13D filing; as previously announced, Guo has made an offer to acquire all outstanding shares at $6 per ADS), MNGA +4.2% (reports the successful demonstration of its fuel to several utilities, and requests for additional follow-up demonstrations),AMD +3.8% (seeing reports that Microsoft (MSFT) approached the company regarding an acquisition several months ago), CMCM +3.8% (obtains increased annual fee caps from Tencent (TCEHY)), PTNR +3.7% (creates a new framework for relationship with Orange (ORAN)), SSYS +3.4% (cont volatility, large call option volume yday), FIT +3% (Blue Ridge Capital discloses 8.32% passive stake in 13G filing ), TASR +2.8% (receives an order for 300 Axon body-worn cameras and a five year subsciption to Evidence.com, from the Fresno Police Dept; order shipped in Q2), FCAU +2.7% (completes the syndication of its committed revolving credit facility; increasing its size to EUR 5 bln from EUR 4.8 bln, to be used for working capital and general purposes), BLUE +2% (following JUNO news), ABIO +2% (Growth Equity Opportunities discloses 21.3% active stake in 13D filing), FEYE +2% (cont vol), FGP +1.7% (Jamex, LLC discloses 9.5% passive stake in 13G filing), JKS +1.6% (amends it credit agreement, raising the limit to $40 mln from $20 mln), GIII +1.5% (favorable commentary on Monday's Mad Money), CYCC+1.3% (cont strength)

Analyst comments: ING +3.3% (upgraded to Buy from Neutral at BofA/Merrill), FIT +3.1% (initiated with a Outperform at RBC Capital Mkts), SRPT +1.8% (positive note from Oppenheimer), PBR +1.3% (upgraded to Hold from Reduce at HSBC)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: APOL -12.2%, HELI -6.4%

M&A news: TW -1.3% (Willis Group and Towers Watson to combine in merger of equals)

Select metals/mining stocks trading lower: HMY -4.3%, AU -1.8%, GOLD -1.2%, BHP -0.9%, GG -0.6%


Other news: ETRM -9.3% ( prices its offering of ~40.23 mln units of common stock and warrants at $0.87/unit), SNE -6.1% (to issue new shares, commence secondary offering and issue convertible bonds), VGGL -3.8% (priced offering of ~2.05 mln shares of common stock at $2.05 per share), MGM -1% (still checking), ISSI -0.9% (stockholders approved acquisition by Uphill Investment for $23 per share in cash)

Analyst comments: MLHR -2.8% (downgraded to Neutral from Buy at Longbow), TCB -1.0% (downgraded to Hold at Sandler O'Neill
)

(BI) A team of Greek lawmakers is reportedly preparing the groundwork for a retu

An opposition lawmaker in Greece touched a nerve on Tuesday when he told parliament the left-wing government had a team preparing the ground for a return to the drachma, a prospect many Greeks fear would bring chaos.

The government of Prime Minister Alexis Tsipras angrily dismissed the claim as "fantasy".

But there are a growing number of warnings from Greece's European partners that a 'No' vote in a referendum on Sunday on the terms of a bailout deal would lead to a Greek exit from Europe's common currency.

"There's already a team within the prime minister's office, with staff from the general accounting office, right now working on the drachma," Haris Theoharis of the centrist opposition party To Potami told the chamber.

"You have a plan to take us back to the drachma," said Theoharis, who headed the government's revenue service in a previous conservative-led coalition.

The claim adds to a climate of fear and uncertainty in Greece, where banks are closed for the week and Greeks have been rationed to cash withdrawals of 60 euros per day after the collapse of negotiations at the weekend on extending a bailout program to keep the country liquid.

Tsipras said he would put the aid deal, which includes yet more austerity for a country going through one of the worst economic crises of modern times, to a popular plebiscite, and is urging a 'No' vote.

He insists rejection would not mean a Greek exit from the euro, but European leaders say the referendum amounts to 'Yes' or 'No' on whether to stay with the currency.

In parliament Deputy Labour Minister Dimitris Stratoulis accused Theoharis of trying to "terrorise" voters. A government spokesman said in a statement: "Apart from being a fantasy scenario, the statement of Mr Theoharis is the height of irresponsibility. Shame!"

Officials at the general accounting office could not immediately be reached for comment.

Poised to default on a 1.6 billion euro loan repayment to the International Monetary Fund on Tuesday, Athens faces running out of cash to pay pensions and wages without a new credit line.

Munich-based banknote printer Giesecke & Devrient said that, logistically, it would take over a year to produce a new currency. "As a rule, it takes at least one to one and a half years to set up a currency from scratch," a spokeswoman said.