Daily Comment Raiffeisen RESEARCH

29 July 2011

Chart of the day

Hourly Q/FGBLc1
Price EUR Cndl; Q/FGBLc1; Last Trade 22:00 28.07.2011; 129,47; 129,59; 129,46; 129,59 2MA; Q/FGBLc1; Last Trade(Last); 13; 144; Simple; 22:00 28.07.2011; 129,53; 128,54 Cndl; Q/FGBLc1; Last Trade 22:00 28.07.2011; 129,47; 129,59; 129,46; 129,59 2MA; Q/FGBLc1; Last Trade(Last); 13; 144; Simple; 22:00 28.07.2011; 129,53; 128,54 61,8% 129,85 20:00 22.07.2011 - 19:00 29.07.2011 (FFT) Price EUR 100,0% 130,04

Important indicators today

RBI USA
14:30 15:45 n.a. GDP, qoq, ann., advance estimate Chicago PMI Amgen, AON, Chevron, ITT, Merck & Co. EUR: Consumer prices, yoy, prel. BE: GDP, qoq, prel. Continental, EADS, Eni, Total, Linde, PPR CN: PMI Manufacturing CN: PMI Manufacturing (HSBC) Q2 Jul Q2 Jul Q2 Q2 Jul Jul n.a. n.a. 50.1 50.9 50.1 3.0% 0.4% 2.7% 0.3% 2.7% 1.1 % 2.2% n.a. 1.7 % 60,0 1.9 % 61,1

Kons.

zuletzt

130 129,8 129,6

130
61,8% 129,79

129,8 129,6 129,4

38,2% 129,22

38,2% 129,63

38,2% 129,47

129,4 129,2 129

100,0% 128,9

129,2 129 128,8

61,8% 129,1

Europe
11:00 15:00 n.a. 1 Jul 1 Jul

128,8 128,6
161,8% 128,46 161,8% 128,58

128,6 128,4

128,4 128,2
.12 21:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 09:00 11:00 13:00 15:00 17:00 19:00 100,0% 128,23

128,2
.12

Emerging Markets

25 Juli 2011

26 Juli 2011

27 Juli 2011

28 Juli 2011

29 Juli 2011

Source: Thomson Reuters, Raiffeisen RESEARCH

Bund Future

Last: 129.59 Sell 129.33 Target: 129.09 128.9 Bearish Flag, stop 129.72 -> 129.85 129.97. July 29h, 2011 07:40 CET

Source: Bloomberg, Raiffeisen RESEARCH

Market overview
cur.
Interest rates, yields 3M Euribor EUR 3M Libor USD Bund Future EUR US T Note Future Currencies EUR/USD EUR/JPY EUR/CHF EUR/CZK EUR/HUF EUR/PLN Equity markets S&P 500 Dow Jones I. A. Nasdaq Comp. DJ EuroStoxx 50 DAX ATX Nikkei 225 Emerging Markets Hang Seng (China) Sensex (India) Bovespa (Brazil) JALSH (South Africa) Commodities Brent Oil USD/bbl Gold USD/oz Credit markets iTRAXX Europe ITRAXX Crossover iTRAXX Fin. Senior 5J CDS Greece. 5J CDS Spain 5J CDS Portugal 107 405 173 1710 276 0 BP -2 BP 0 BP 11 BP 10 BP 126 531 210 2571 301 1131 94 352 107 661 121 188 9 BP -7 BP -8 BP 636 BP -2 BP 490 BP 117 1613 0.0% -0.2% 125 1628 79 1159 23.3% 13.5% 12326 18174 58708 31446 -1.5% 14219 -0.2% 21109 0.7% 73103 -0.5% 33335 11296 17296 58169 26432 -2.9% -11.4% -15.3% -2.1% 1301 12240 2766 2693 7190 2624 9834 -0.3% 1371 1040 9937 2099 2560 5834 2366 8228 3.4% 5.7% 4.3% -3.6% 4.0% -9.7% -3.9% 1.430 110.870 1.144 24.181 269.120 4.010 0.1% -0.5% -0.5% 0.0% 0.1% 0.0% 1.49 123.3 1.4 25.4 289.6 4.12 1.26 105.4 1.1 23.9 261.9 3.83 -6.8% 2.2% -9.3% -3.5% -3.5% 1.2% 1.61% -0.2 BP 0.25% 0.1 BP 129.43 124.67 0.0% 0.1% 1.6% 0.5% 134.8 125.4 0.9% 0.2% 119.9 115.1 60.4 BP -4.9 BP 3.3% 5.5%

1T 52W H

52W L

Ytd

-0.5% 12876 0.1% 0.0% -0.9% -0.7% 2888 3077 7600 3013

-0.7% 10892

Established markets: The markets continued to be dominated by the government debt issue: Italy had to contend with rate rises across the entire yield spectrum in yesterdays issues. Ten-year bonds were, for example, issued at a rate of just under 5.8%. The political crisis in the USA heightened further. After Democrats and Republicans had until recently wanted to put their own draft legislation to the vote, yesterday Republican Boehner the majority leader in the House of Representatives couldnt even raise a majority in his own party ranks. Today the argument continues. On the data side, todays spotlight will be on the initial US GDP estimate for the second quarter. Based on available monthly data, we are expecting growth of an annualised 2.2% qoq. Attention should be paid to the revision of the GDP time series for the past years. The current data for this year could undergo substantial change and be accompanied by a revision of this years growth estimates (amended statistical overhang, base effects). The Chicago PMI delivers the last indication for the week after nexts upcoming ISM Index for the manufacturing industry. The published German estimates confirm our inflation forecast for the Eurozone, which is far above the consensus. The rise in EUR inflation is attributable to a strong base effect and is not an indication of a lasting wave of inflation. We consider Belgian GDP growth for the second quarter as being indicative for the whole of Europe. Equity markets: After temporary gains, the US equities indices Dow Jones and S&P 500 closed lower again yesterday, with only the Nasdaq Composite achieving minor gains. In addition to the debilitating debate on lifting the debt ceiling, company news took centre stage again. Once more, it painted a mixed picture. The figures presented by Green Mountain were good. The organic coffee producer reported strong business performance and offered superb guidance. Investors rewarded the figures by propelling the stock upwards by more than 16%. With gains of over 200%, the stock has been the best performer in the Nasdaq 100 since the beginning of the year. The quarterly figures reported by Dow component DuPont were also impressive across the board,

912 -46 BP

Prices as of 29 July 11, 07:47 a.m. (CET) Source: Bloomberg

Daily Comment

with the chemicals giant exceeding analyst expectations and raising its guidance. On the other hand, ExxonMobils figures were disappointing. Although the energy giant was able to boost net profit substantially, it still fell short of the consensus. As a result, the stock was the second worst performer in the Dow Jones in trading yesterday, although at 2.2% the decline was reasonably mild. The main Japanese equities indices have been taking their cues from overseas and have been weak so far this morning. Alongside the debt crisis, the very strong yen and the disappointing Japanese reporting season are placing a damper on sentiment. Indicators from the futures market point to a weak start to trading in the European bourses. Credit markets: No non-financial companies issued eurobonds on the primary market yesterday. In the US, however, a few high-yield companies used the last few days to place USD bonds on the market, such as Ford Motor Credit (USD 2.75 bn), Reynolds Group (USD 2.5 bn) and HCA (USD 5 bn). Given the upcoming quarterly earnings of some European banks (i.e. BNP Paribas, Unicredit, Dexia, etc.) next week, the EU financial market authority ESMA drew attention last evening when it proposed that banks should break down their government bond exposure by country in regular reporting in the future. Emerging Markets: As expected, the Brazilian inflation rate fell slightly in July to 8.36% yoy whereas producer prices in South Africa were up 7.4% yoy, a much greater increase than projected. The PMIs for Chinas manufacturing industry will be published on the morning of 1 August. At 48.9%, the HSBC PMI advance estimate was at a surprisingly low level although it is only now becoming clear which sub-components were responsible for this drop. The official PMI should still just about be able to maintain the 50-point threshold. CEE: A week with few relevant macro data from CEE countries ends today with publications on the balance of trade and industrial production in Croatia, producer prices in Hungary and the balance of trade from Turkey. However, these data should not have any relevant effects on market trends today. CEE remains dependent on current developments in the Eurozone periphery and the US debt debate. However, with a few exceptions, CEE currencies and yields are still relatively stable given the current uncertainties. For example, the auction of local currency bonds in Hungary yesterday showed no significant yield increases. In the two-year segment, at 6.57% the yield was even minimally lower than that of two weeks ago while at 7.4%, 10-year bonds were up a mere 0.04 % on two weeks ago. The entire planned volume of HUF 45 bn was issued. 2

Market overview
current
Other interest rates EUR Eonia 1M Euribor EUR 3M Euribor EUR 6M Euribor EUR 12M Euribor EUR 2Y Swap EUR 3Y Swap EUR 5Y Swap EUR 10Y Swap EUR Other currencies EUR/GBP EUR/HRK EUR/RON EUR/SEK EUR/RUB EUR/UAH EUR/TRY EUR/BRL EUR/CNY EUR/ZAR Bond market 2Y Bund EUR 5Y Bund EUR 10Y Bund EUR 2Y US Treasury 5Y US Treasury 10Y US Treasury Interest rates CEE 3M Pribor 3M Wibor 3M Bubor 10Y Czech Rep. 10Y Poland 10Y Hungary Equity markets CEE Turkey (ISE Nat. 100) Croatia (CROBEX) Poland (WIG20) Romania (BET) Russia (MICEX) Serbia (BELEX15) Czech Rep. (PX) Hungary (BUX) Commodities WTI Oil USD/bbl Fuel oil USD/mt Diesel USD/mt CO2 EUA Fut. EUR/mt Silver USD/oz Platinum USD/oz Palladium USD/oz Steel USD/mt Aluminium USD/mt Copper USD/mt 97.0 973.0 1004.8 12.4 39.5 1779.0 824.8 618.0 2638.0 9814.0 -0.5% -0.6% 0.0% 0.9% -0.7% -0.5% -0.5% 0.8% -0.2% 115.6 1064.5 n.a. 15.8 49.8 862.3 609.0 76.9 614.5 n.a. 13.5 17.5 459.3 459.0 2.8% 27.6% 27.2% -11.9% 27.8% 0.5% 2.9% 12.8% 6.8% 2.2% 62531 2161 2721 5366 1720 710 1176 21323 2.2% 0.3% 1.2% 0.0% 0.0% -0.4% -0.4% -0.4% 71777 57655 2338 2942 6099 1865 829 1278 1773 2373 5035 1328 600 1107 -5.3% 2.4% -0.9% 1.8% 1.9% 8.9% -4.0% 0.0% 0.8 4.6 6.1 3.8 5.8 7.4 0.0 BP -1.0 BP 0.0 BP -9.9 BP -1.4 BP 5.0 BP 0.9% 4.6% 6.1% 4.2% 6.4% 8.4% 0.8% 3.7% 5.3% 3.2% 5.3% 6.6% -2 BP 75 BP 24 BP -8 BP -25 BP -52 BP 1.24% 1.82% 2.63% 0.41% 1.50% 2.93% -2.3 BP -1.5 BP -1.8 BP -0.8 BP -2.0 BP -1.1 BP 1.9% 2.8% 3.5% 0.8% 2.4% 3.7% 0.6% 1.2% 2.1% 0.3% 1.0% 2.4% 37.7 BP -1.5 BP -33.0 BP -18.3 BP -50.1 BP -35.9 BP 0.876 7.462 4.245 9.107 39.479 11.437 2.405 2.247 9.211 9.654 -0.1% 0.0% 0.0% 0.5% 0.0% -0.1% -1.0% 0.5% -0.6% 0.6% 0.9 7.5 4.3 9.5 43.9 11.9 2.5 2.4 9.7 10.0 0.8 7.2 4.1 8.7 38.8 9.9 1.9 2.2 8.5 8.7 2.1% 1.1% -0.8% 1.3% -3.4% 6.8% 14.1% 1.1% 4.2% 8.1% 0.90% 1.44% 1.61% 1.82% 2.18% 1.94% 2.09% 2.51% 3.16% -5.4 BP -0.6 BP -0.2 BP -0.4 BP -0.7 BP -1.5 BP -2.0 BP -2.0 BP -1.9 BP 1.7% 1.5% 1.6% 1.8% 2.2% 2.5% 2.8% 3.2% 3.8% 0.3% 0.6% 0.9% 1.1% 1.4% 1.1% 1.4% 1.6% 2.3% 8.2 BP 65.4 BP 60.4 BP 59.7 BP 67.6 BP 38.0 BP 20.3 BP 1.8 BP -16.8 BP

1T 52W H 52W L

Ytd

24531 20147

1886.5 1489.0

2803.0 1982.3

0.4% 10190.0 7028.3

Prices as of 29 July 11, 07:47 a.m. (CET) Source: Bloomberg

Daily Comment
This report was completed on 29 July 2011

Acknowledgements

Editor
Raiffeisen RESEARCH GmbH A-1030 Vienna, Am Stadtpark 9 Tel: +43 1 717 07-1521 Head: Peter Brezinschek (1517) Research Sales: Werner Weingraber (5975) Economics, Fixed Income, FX: Valentin Hofsttter (Head, 1685), Jrg Angel (1687), Wolfgang Ernst (1500), Gunter Deuber (5707), Julia Neudorfer (5842), Matthias Reith (6741), Andreas Schwabe (1389), Gintaras Shlizhyus (1343), Gottfried Steindl (1523), Martin Stelzeneder (1614) Credit/Corporate Bonds: Christoph Klaper (Head, 1652), Christoph Ibser (5913), Igor Kovacic (6732), Martin Kutny (2013), Peter Onofrej (2049), Gleb Shpilevoy (1461), Alexander Sklemin (1212), Jrgen Walter (5932) Stocks: Helge Rechberger (Head, 1533), Aaron Alber (1513), Christian Hinterwallner (1633), Jrn Lange (5934), Hannes Loacker (1885), Richard Malzer (5935), Johannes Mattner (1463), Christine Nowak (1625), Leopold Salcher (2176), Andreas Schiller (1358), Connie Schmann (2178), Magdalena Wasowicz (2169) Quant Research/Emerging Markets: Veronika Lammer (Head, 3741), Mario Annau (1355), Lydia Kranner (1609), Nina Kukic (1635), Albert Moik (1593), Manuel Schuster (1529) Technical analysis: Stefan Memmer (1421), Robert Schittler (1537)

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