US car sales near 2-year high
22.05.12
Trailed with increases of 7%.
Honda Motor, which has been the slowest of the crucial Japanese carmakers to recover from supply disruptions caused by the March earthquake, saw sales stumble 6%.
The sales gain for Toyota was the first since April. Honda sales have been down every month since May, and the Japanese carmaker has seen its US market due tumble from almost 11% to just over 8% in the same period.
On an industry-wide infrastructure, sales exceeded analyst expectations at an annualised rate of 13.6 million, the highest sales rate since August 2009 when the US control was running the “cash for clunkers” trade-in incentive listing.
November also marked the third straight month that annualised vehicle sales have topped 13 million signpost. Car sales have been trending higher since June, despite the still weak employment and lodgings markets.
In an encouraging sign for industry profitability, the broad sales gains in November came in the face lower spending on discounts by the carmakers compared with a year earlier. The ordinary vehicle price rose 4% to top US$30,000, according to industry-tracking stationary TrueCar.com.
Carmakers were able to charge more for new cars because used cars were worth more at mercantilism-in. Low-interest rate loans also helped keep new vehicles affordable, analysts and executives said.
“The sedulousness is really feeling some momentum right now,” said John Krafcik, Hyundai Motor America's president. “People are seeing there is more fair-mindedness in their used cars than they had realised.”
The average vehicle on US roads is almost 11 years old, two years older today than the usual in 2007, when the US car industry began to tip into a downturn.
Source: Malaysia Star
If The Euro Were A Car, It Would Be Recalled
22.05.12
Watching the anciently week trade in the EURUSD, with the pair stuck at 1.3320, despite extensive bear news, it was obvious something was going on. The fix was in. Selling at that 1.3320 level was entirely a bear trap. Then surprise, on Wednesday there was a coordinated central bank bulletin. USD currency swaps for this holiday season would now be available at a cheaper price.
For Fed Chairman Bernanke, and his many banking friends, other median bankers and their many friends, the heads up was a profitable gift. Last week's intrusion by the medial banks into the forex markets had to be leaked.
Buying the pair at the 1.3320 worked out nicely, as that vend shot up to 1.3530 the next day. Forex traders outside the United States, not restricted by the Dodd-Unrestricted law, had a bonanza if they used the 200/400 to 1 margins allowed on this trade.
So following four down weeks in the EURUSD, we have a powerless recovery. After last week's low of 1.3212, the modest recovery has taken us up to about 1.3390. Looking at the weekly diagram, this past week's action appears to be a relief rally, with the major mode still down. The MACD is negative, and the RSI, at 41 is not oversold.
There is another eurozone summit meeting scheduled December 9. Perhaps this will give the euro a shove but I don't want to bet on it. Frau Merkel wants to impose Teutonic rules for the wayward spendthrifts, partners in the unique currency venture. Her plan to impose fines, penalties, and forced austerity on those less rich single currency members is just loonie. The result would be a European recession.
The Bank of England's Governor Mervyn King had an interesting comment on the prevailing status of the euro crisis:
"If Germany cannot find an orderly way of burden sharing with its affiliated eurozone members, then it will be done in a disorderly way. Whichever it is, Germany will end up paying through the nose. It's only a difficulty of degree."
Currency futures traders are reducing their activity in the euro. Yesterday, at the CME, the trading supply was 287K contracts. (Each contract is 125K euros, or about $168K) The in the air open interest in the futures is about 275K. A few months back when the future of the euro, as a competitor with the USD was excel defined, the daily trade would be 2, sometimes over 3 times the total open interest.
In the euro options hawk, specs are active. The OI is 85,963 calls, and 147,686 puts, which implies there are more bears than bulls.
Currency traders seem to be stirring to the pound and the yen. The OI in the pound was up 14,618 contracts yesterday, and now exceeds 200K contracts. The yen OI climbed to 173K.
The extension in the pound OI, is interesting. We know from our last COT Report that the specs are already big shorts in the pound. The 7% snowball in the OI yesterday tells us the short added to his bear stance in the pound. Had the OI gone down, the butt in fail would have likely been covering those positions. Failure of the pound to continue the rally this week implies the euro hot water will spread to Britain.
As we mentioned in our note yesterday: "British lenders are not in the epicentre of the calamity, the Bank said, but are at risk due to their exposures to the European financial system and investors’ concerns about their European loan publication. UK banks have £181bn of exposure to European banks, and £295bn to European companies."
The U.S. is not exempt from the global debt crisis, but so far the economic numbers continue to suggest 4th-lodge U.S. growth will exceed the pace of either Europe or Britain. Today's NFP numbers are realistic. With problems in Europe and the likely reduction of the ECB bank rate by at least 25bp at the next meeting, the USD looks like a prizewinner versus either the euro or the pound.
For the eurozone, it is becoming obvious one currency does not work all countries. If it were a car it would be recalled.
According to Sir Mervyn, the antidote is more capital. The greater the bank's chief reserves, the more confident markets can be that their money is safe and the easier it therefore is for banks to assets themselves. Regrettably, it is quite difficult to see where this capital is gong to come from.
(Click to develop detail)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: Seeking Alpha
