European MidSession Review 01/08/12

Timing is everything in trading.

This is something each one of us learned since the first day on a trading floor, from today it's something that European politicians and technocrats will keep well in mind. The reason, this is an extract of the article published on the Bundesbank's website today:

The ECB's independence “requires it to respect and not overstep its own mandate,” Weidmann said. “We are the largest and most important central bank in the Eurosystem and we have a greater say than many other central banks.”

Strange that the article was published just the day before the ECB press conference isn't it? It looks like someone is trying to play down hopes in the ECB “silver bullet”.

Draghi's words were so “bold” to rump up investors' expectations that Weidmann interview was unable to defuse the opinion that the ECB tomorrow will act.

The Stoxx Europe 600 index added 0.25% recovering some ground from yesterday 1% loss.  European indexes were supported by the banking sector, as investors feed their hopes.

On the earning side:

• Standard Chartered Plc was up 3.45% after first-half profit rose 12% to a record level. With strong overall revenue growth outpacing an increase in impairments, the strengthening dollar and weakness in India. The Asia-focused bank's net profit for the six months ended June 30 rose 12% to $2.81 billion from $2.52 billion in the same period in 2011. Revenue increased to $9.51 billion from $8.76 billion a year earlier as the bank continued to gain market share in emerging countries. Bad debt charges ticked up across the group as the bank ramped up unsecured lending.Despite a continued drag from the U.S. dollar's strength against Asian currencies and an increasingly complex regulatory environment, Standard Chartered is on course to deliver on its target of double-digit revenue growth with costs broadly increasing in line with income, Chief Executive Peter Sands said in a statement. In the first half, the group recorded an ROE of 13.3%. Marketwatch reports.
• Societe Generale posted worse than expected second quarter profit as it booked write-downs on assets in the US, but said it's well on track to meet Europe's new capital adequacy ratios despite difficult economic conditions.Societe Generale said net profit in the three months ended June 30. dropped to 433 million euros ($533 million) from EUR747 million a year earlier, well below analyst forecasts of EUR764 million.Revenue fell 3.6% to EUR6.27 billion from EUR6.50 billion a year earlier, as weak capital markets weighed on corporate and investment bank revenue. Corporate and investment banking revenue fell 33% to EUR1.22 billion in the quarter.The bank's core Tier 1 ratio, a key measure of a lender's capital strength made up of only top quality capital such as equity and retained profit, was 9.9% at the end of June under Basel 2.5 rules, up from 9.4% at March end. The stock was up 1.44% to Eur 18.27
• BMW AG's second-quarter profit declined year-on-year due to higher costs and a large one-off that boosted last year's result, but the German car maker kept its full-year outlook amid rising revenue and vehicle sales as demand for luxury cars remained robust despite growing economic headwinds.BMW's net profit declined 28% to EUR1.28 billion in the second quarter, while pretax profit was down 25% at EUR1.98 billion and the closely-watched earnings before interest and tax, or Ebit, was down 19% at EUR2.27 billion.Second-quarter earnings in the previous year were boosted by a EUR464 million one-off gain triggered by the adjustment of residual value and credit risk provisions.The Munich-based firm's revenue increased 7.3% to EUR19.2 billion in the second quarter, driven by a 5.4% sales rise to 475,011 vehicles.The stock fell 4.12% to Eur 58.25.

(Marketwatch reports)

The Eur/$ cross held the 1.2300$ mark, Gold was up 0.19% to 1,617.70$ and Oil(Wti) followed the same path, it rose 0.10% to 88.15$.

The match will be played on the Fed statement today and tomorrow on the ECB press conference. Therefore before loading your gun for the action sake ask yourself why do not wait for the money to be aside to be taken?

Originally posted at www.77sigmatrading.com