Daily Comment Raiffeisen RESEARCH

21 July 2011

Chart of the day

Hourly Q/SPc1
Price USD SMA; Q/SPc1; Last Trade(Open); 13; 01:00 21.07.2011; 1.322,17 SMA; Q/SPc1; Last Trade(Open); 13; 01:00 21.07.2011; 1.322,17 Cndl; Q/SPc1; Last Trade 61,8% 1.328,19 01:00 21.07.2011; 1.324,50; 1.325,10; 1.324,50; 1.324,70 SMA; Q/SPc1; Last Trade(Open); 13; 01:00 21.07.2011; 1.322,17 SMA; Q/SPc1; Last Trade(Open); 13; 38,2%01:00 21.07.2011; 1.322,17 1.326,84 Cndl; Q/SPc1; Last Trade 01:00 21.07.2011; 1.324,50; 1.325,10; 1.324,50; 1.324,70 38,2% 1.325,8 38,2% 1.329,25 15:00 19.07.2011 - 03:00 21.07.2011 (CHG) Price USD

Important indicators today

RBI consensus 4.5 54.0 56.1 51.5 53.3 last -7.7 54.6 56.7 52.0 53.7 1.329 1.328 1.327 1.326 1.325 1.324 1.323 1.322

1.329 1.328 1.327 1.326 1.325 1.324 1.323 1.322

USA
16:00 n.a. n.a. Philadelphia Fed Index Jul n.a. 54.5 56.5 51.5 53.5 Microsoft, AMD, Eli Lilly, Morgan Stanley Q2-figures Pepsico, Philip Morris International, AT&T Q2-figures GE: PMI Manufacturing, flash GE: PMI Services, flash EUR: PMI Manufacturing, flash EUR: PMI Services, flash Akzo, Actelion, Ericsson, Nokia, Roche EU-summit on Greece Jul Jul Jul Jul Q2-figures

61,8% 1.321,34

1.321 1.320 1.319 1.318 1.317 1.316 1.315 1.314

.12 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00

1.321 1.320 1.319 1.318 1.317 1.316 1.315 1.314

.12

Europe
09:30 09:30 10:00 10:00 n.a.

19 Juli 2011

20 Juli 2011

21 Juli 2011

Source: Thomson Reuters, Raiffeisen RESEARCH

S&P Future

Events
~ Source: Bloomberg, Raiffeisen RESEARCH

Last: 1324.7 Buy 1326 Target: 1332 1338.35 Breakout from bullish flag, buy 1326-> 1338.25, stop 1319 -> 1312 - 1307. July 21h, 2011 07:47 CET

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 109 -6 BP 126 531 210 2571 301 1131 94 352 107 661 121 184 13 BP 2 BP -2 BP 1299 BP -9 BP 663 BP 118 1602 -0.1% 0.1% 125 1610 79 1157 24.0% 12.7% 12299 18539 59120 32056 -0.7% 14219 0.2% 21109 0.1% 73103 0.0% 33335 11296 17296 58631 26432 -3.1% -9.6% -14.7% -0.2% 1326 12572 2814 2706 7221 2631 10006 -0.1% 1371 1040 9937 2099 2560 5834 2311 8228 5.4% 8.6% 6.1% -3.1% 4.4% -9.4% -2.2% 1.426 112.410 1.171 24.498 268.950 3.993 -0.4% 0.5% 0.6% 0.0% 0.0% -0.1% 1.49 123.3 1.4 25.4 289.6 4.12 1.26 105.4 1.1 23.9 261.9 3.83 -6.5% 3.5% -6.8% -2.1% -3.6% 0.7% 1.60% -0.5 BP 0.25% 0.1 BP 128.14 124.45 -0.7% -0.1% 1.6% 0.5% 134.8 125.4 0.9% 0.2% 119.9 115.1 59.8 BP -5.0 BP 2.3% 5.3%

1T 52W H

52W L

Ytd

-0.1% 12876 -0.4% 1.8% 0.4% 1.2% 2888 3077 7600 3013

0.0% 10892

Established markets: The dominant event today is the EU emergency summit, on which additional aid for Greece will be discussed. The debate gained fresh momentum last night after German Chancellor Merkel and French President Sarkozy after a meeting announced a statement that a joint position on banking sector participation in the second aid package for Greece had been reached. However, no details of the agreement have been disclosed yet. A mutual understanding between Germany and France on this issue is viewed as a key prerequisite for reaching an agreement at todays EU summit. The fact that ECB President Trichet was present at the meeting and that his arguments were listened to suggests that the common position of both countries conforms with the one of the ECB. Yet even if an agreement should be reached today on the subject of Greece, it is unlikely that an agreement will be achieved with respect to measures addressing the fundamental debt problems in the Eurozone. Recent statements by Merkel ahead of the summit that were aimed at dampening such expectations point in this direction. Against the backdrop of the euro debt crisis, todays placement of Spanish bonds with a maturity of 10 and 15 years is likely to be the focus of market attention. Portugal yesterday successfully issued papers with 12- and 18-month maturity. Alongside the dominant events surrounding the euro debt crisis, today will also see the release of the PMI for France, Germany and the Eurozone. Following the recent sharp declines, we look only for a moderate slowdown. In the US, the Philadelphia Fed Index will provide clues about further economic developments on the other side of the Atlantic. Equity markets: The US equity markets closed on a slight loss yesterday evening. Once again the newly published company quarterly figures proved a sound support while nervousness about the approaching deadline for adjusting the US debt ceiling weighed on share prices. Apple shares rose by 2.7% in on-exchange trading following the announcement of more very good quarterly figures, in this way reaching a new all-time record high (!). Finan-

410 -19 BP 174 -14 BP 2373 -105 BP 269 -15 BP 1085 -21 BP

Prices as of 21 July 11, 07:56 a.m. (CET) Source: Bloomberg

Daily Comment

cials were strong across the board at close of trading. On the Japanese equity market the Nikkei 225 Index was largely unchanged this morning. Here too financials in particular picked up. Similar trends can be expected at start of trading in Europe. There is a whole raft of reports of quarterly figures on the agenda on both sides of the Atlantic. However, the principle factor influencing these is likely to be news of European and US efforts to reach convincing longterm decisions on the respective debt problems Credit markets: A number of interesting developments can be seen on the regulatory front. The EU Internal Market Commissioner Michel Barnier has brought forward a packet of bills for implementing the new Basel III rules. One other initiative also affects banks: The Bank for International Settlements (BIS) has published a consultative document listing assessment methodology for systemically important banks. Russias steel producer Serverstal issued a eurobond with a volume of USD 500 million (5-year term, 6.25% coupon) which we feel is an attractive investment opportunity (as published in our Short Note on 19 July 2011). Emerging Markets: The central bank of South Africa will meet to discuss the interest rate today. The consensus expects the key rate to remain unchanged at 5.5% p.a. Although the inflation rate has risen significantly over the last few months in June it accelerated to 5.0% p.a. it is still comfortably in the target range (of 3-6% p.a. annual inflation) of the central bank. The unemployment rate in Mexico is expected to drop in June to 5.1%. The central bank of Mexico will also publish the results of its meeting on interest rates today. As anticipated, the key rates in Brazil were lifted yesterday by 25bp to 12.5% p.a. The central bank states that further hikes are now unlikely. CEE: The better sentiment in the European equity markets also propelled some CEE currencies upwards against the euro to some extent yesterday, with EUR/ PLN breaking through the 4.0 mark and EUR/HUF appreciating to under 270 following on from the volatility and heightened risk aversion which had been caused by uncertainty surrounding the euro zone periphery. Given further uncertainty concerning the solution to the problem facing the euro zone periphery, however, we expect further volatility. In Turkey, the central banks July monetary policy meeting is taking place today; neither we nor the consensus expect any increase in the base rate. However, we do think that there will be interest rate hikes of 100bp by the end of 2011, resulting in a base rate of 7.25%. In other news, Poland is issuing a 10-year government bond with a volume of PLN 1-3 bn today. We assume that it will be placed without any problems.

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 98.4 978.0 1006.5 12.6 40.1 1780.5 798.1 591.0 2536.0 9755.0 0.0% 0.0% 0.2% 4.8% 0.2% 0.4% 0.3% -0.7% -0.5% 115.6 1064.5 n.a. 15.8 49.8 862.3 609.0 76.9 614.5 n.a. 13.2 17.3 444.5 450.0 4.3% 28.3% 27.4% -10.7% 29.8% 0.6% -0.5% 7.8% 2.7% 1.6% 61637 2189 2693 5351 1701 735 1194 21504 -0.3% -0.5% 0.5% 0.0% 0.0% 1.0% 0.7% 0.7% 71777 57655 2338 2942 6099 1865 829 1278 1773 2373 4801 1328 600 1107 -6.6% 3.7% -1.9% 1.6% 0.8% 12.8% -2.5% 0.8% 0.8 4.6 6.1 3.9 5.8 7.4 0.0 BP 1.0 BP 0.0 BP -1.6 BP -4.6 BP -1.0 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% -4 BP 76 BP 24 BP -1 BP -23 BP -59 BP 1.30% 1.93% 2.77% 0.38% 1.49% 2.95% 6.0 BP 8.2 BP 8.9 BP 0.0 BP 1.6 BP 2.0 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% 43.7 BP 9.5 BP -19.6 BP -21.4 BP -51.8 BP -34.6 BP 0.882 7.471 4.240 9.126 39.853 11.404 2.362 2.225 9.198 9.791 0.3% 0.0% 0.0% -0.5% 0.2% 0.2% 0.6% 0.5% 0.3% 0.1% 0.9 7.5 4.3 9.5 43.9 11.9 2.4 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 2.8% 1.2% -1.0% 1.5% -2.4% 6.5% 12.5% 0.2% 4.1% 9.4% 1.20% -26.7 BP 1.45% 1.60% 1.81% 2.17% 1.98% 2.16% 2.61% 3.27% -1.8 BP -0.5 BP -0.3 BP 0.1 BP 0.1 BP -0.2 BP 0.7 BP 0.1 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% 38.3 BP 67.0 BP 59.8 BP 58.3 BP 66.3 BP 42.0 BP 27.3 BP 12.2 BP -5.8 BP

1T 52W H 52W L

Ytd

24531 20147

1886.5 1489.0

2803.0 1969.3

-0.9% 10190.0 6612.0

Prices as of 21 July 11, 07:56 a.m. (CET) Source: Bloomberg

Daily Comment
This report was completed on 21 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), Ingo Jungwirth (2139), 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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