finacial sentiment tracker october complete

Currency wars sink dollar sentiment - DAX positivity noticeable – Equities back on agenda – German economic perception booms Media Tenor Financial Sentiment Tracker 2010 with focus on September and October 2010

All Quoted Analysts in WSJ-FT-MINT-Les Echos-Il Sole-Barrons

Media Tenor International AG

Roland Schatz

[email protected]

+41-43 255 1920

mailto:[email protected]

Relative salience and tonality trend for asset classes 2010

Relative salience and tonality trend for currencies 2010

Currency wars sink dollar sentiment – DAX positivity noticeable – Equities back on agenda – German economic perception booms

FINANCIAL SENTIMENT TRACKER – ANALYST CITATIONS IN ELITE BUSINESS PRESS

Zurich 11 October, 2010 Analyst volume on the currency war emerging between China and the US has been mostly at the expense of Chinese sentiment in the past few weeks and a weaker US economic scenario continues to weaken Greenback sentiment. In the Eurozone, DAX companies are shining in terms of positive ratings. The export led profitability being at least one very positive benefit of Chinese ascendancy. The rise in company sentiment has seen Germany stand out as the European economy to lead Europe back from the brink. The signal that risk appetite is returning is apparent in the rise of equities in general on the analyst agenda.

A “currency war” certainly has a ring to it that would interest most economic journalists and currency sentiment in recent weeks has not been too far away from the potential media storm that such a conflict may have. Unfortunately for the US, however, analysts are seeing the possibility that any currency war would only be to the detriment of the dollar. Media Tenor’s research director, Matthias Vollbracht, predicts that the only real result at the moment would be a spread of even more uncertainty. “Analysts have been cited on a broad range of opinions on the effects of any government interventions in currency markets, but the fact is that the underlying fundamentals are so shaky in the US, and the information flow out of China so unstable, that the only real information for investors is the interpretation of the various political positions. That is a potentially powerful thing of course, but not very helpful in the broader sense.” For one player however, there is a clear benefit in the focus on China on the world stage: the Australian dollar sentiment has risen again, and Australian markets are impressing investors keen to cash in on consistent Chinese demand for raw materials.

Reporting on demand from China has also lifted DAX company sentiment. Manufacturers and technology companies who have been able to place strategy messages on the agenda are benefitting from international analyst coverage. The main leaders, Siemens, VW, BMW and even defense contractor EADS from the MDAX are all in positive territory. Media Tenor’s data suggest that the focus on export topics and strategy are positively leaning towards future predictions, indicating that this trend is not a flash in the pan, but that DAX export oriented companies are building a sustainable reputation.


Relative salience and tonality for select economies 2010

The strong rise of equities on the analyst agenda signals a turn in market sentiment trends for 2010. Previously there were comments that equities were not popular due to a lack of risk appetite. However, with company profits back on the agenda, and a sense that other options, such as bond markets, are less than favorable, equities are being heavily discussed. As Vollbracht says, “Talk about dividend returns and long term profitability growth are back, and this is benefitting equities. After all the uncertainty of the Euro crisis, alternatives, such as bond markets, cannot escape talk on inflation and other macro economic factors – which kind of puts them out of favor.”

Finally, Economic reporting on Eurozone countries has generally eased in recent weeks. Spain, Ireland and the Eurozone as a whole have seen modest rises in sentiment, although Greece remains troubled. The real winner is Germany. Recent optimism from that economy, as well as strong communication from its economic research institutes have seen the country’s sentiment rise over 20% in the September period. The internal situation in Germany seems to be showing real improvement with consumer demand on the rise. Vollbracht believes that the current analyst focus on Germany is more than just another bubble. “We can see that optimism in the media is filtering down to consumers in Germany, and this in turn is

convincing analysts that the Germany recovery is sustainable. Add to that the growth in the car and manufacturing sectors which are focused towards Asian exports, and analysts do not have too much to fear in Germany”. He does point out however, that the German economy is still attached to its European context to a large extent, and that the Eurozone crisis is not fully passed. Media Tenor’s financial sentiment tracker will be released weekly at http://www.mediatenor.com.

http://www.mediatenor.com/

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Increased equity discussion a sign of less fear

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Decreasing significance % Analyst agenda increasing significance

The looming currency war is high ont he agenda and the dollar is the main target of skepticism. The Euro is slowly recovering but the real highlight continues to be the commodity driven Australian dollar.

International analyst sentiment confirms the notion that Germany is leading the Eurozone recovery. Export oriented companies are most favored, both in terms of volume and tone. Energy and a small scandal cloud over Siemen‘s virus problems are negatives.

As 2010 rolls on there has been a noticeable return to the viability of equity markets. This is a sea change from the general consensus that risk had left the market. Gold‘s rise and a solid information flow on currency markets have seen those issues higher on the agenda.

In September and the first week of October the German sentiment increase is a remarkable feature of the world’s economic agenda. The US is at a stable low level, and the Peripheral Euro countries are perceived as slowly recovering.

Yen discussion quietens – Real Estate markets – BRIC’s go from strength to Strength – Food sentiment a worry in US Media Tenor Financial Sentiment Tracker 2010 with focus 1-15 October 2010



Roland Schatz

[email protected]

+41-43 255 1920



Relative salience and tonality trend for currencies 2010

Yen discussion quieting – Real Estate markets – BRIC’s go from strength to Strength – Food sentiment a worry in US


Zurich 18 October: The looming “currency war”has meant that the more in depth discussion over the Bank of Japan’s role in intervening in the rising Yen has been moved off the agenda.

A “currency war” certainly has a ring to it that would interest most economic journalists and currency sentiment in recent weeks has not been too far away from the potential media storm that such a conflict may have. Unfortunately for the US, however, analysts are seeing the possibility that any currency war would only be to the detriment of the dollar. Media Tenor’s research director, Matthias Vollbracht, predicts that the only real result at the moment would be a spread of even more uncertainty. “Analysts have been cited on a broad range of opinions on the effects of any government interventions in currency markets, but the fact is that the underlying fundamentals are so shaky in the US, and the information flow out of China so unstable, that the only real information for investors is the interpretation of the various political positions. That is a potentially powerful thing of course, but not very helpful in the broader sense.” For one player however, there is a clear benefit in the focus on China on the world stage: the Australian dollar sentiment has risen again, and Australian markets are impressing investors keen to cash in on consistent Chinese demand for raw materials.

Reporting on demand from China has also lifted DAX company sentiment. Manufacturers and technology companies who have been able to place strategy messages on the agenda are benefitting from international analyst coverage. The main leaders, Siemens, VW, BMW and even defense contractor EADS from the MDAX are all in positive territory. Media Tenor’s data suggest that the focus on export topics and strategy are positively leaning towards future predictions, indicating that this trend is not a flash in the pan, but that DAX export oriented companies are building a sustainable reputation.


Relative salience and tonality for select economies 2010

The strong rise of equities on the analyst agenda signals a turn in market sentiment trends for 2010. Previously there were comments that equities were not popular due to a lack of risk appetite. However, with company profits back on the agenda, and a sense that other options, such as bond markets, are less than favorable, equities are being heavily discussed. As Vollbracht says, “Talk about dividend returns and long term profitability growth are back, and this is benefitting equities. After all the uncertainty of the Euro crisis, alternatives, such as bond markets, cannot escape talk on inflation and other macro economic factors – which kind of puts them out of favor.”

Finally, Economic reporting on Eurozone countries has generally eased in recent weeks. Spain, Ireland and the Eurozone as a whole have seen modest rises in sentiment, although Greece remains troubled. The real winner is Germany. Recent optimism from that economy, as well as strong communication from its economic research institutes have seen the country’s sentiment rise over 20% in the September period. The internal situation in Germany seems to be showing real improvement with consumer demand on the rise. Vollbracht believes that the current analyst focus on Germany is more than just another bubble. “We can see that optimism in the media is filtering down to consumers in Germany, and this in turn is

convincing analysts that the Germany recovery is sustainable. Add to that the growth in the car and manufacturing sectors which are focused towards Asian exports, and analysts do not have too much to fear in Germany”. He does point out however, that the German economy is still attached to its European context to a large extent, and that the Eurozone crisis is not fully passed. Media Tenor’s financial sentiment tracker will be released weekly at http://www.mediatenor.com.


It seems that everyone is winning in the „currency war“. Renmimbi sentiment has hit its yearly ratings high in the first two weeks of October, the Euro is again popular and the Aussie continues its commodity fuelled high. The media seems to have forgotten the Yen‘s recent mini-crisis.

The trend for increasing optimism toward BRIC economies continues unabated in the cited analyst quotations. Stronger company strategy messages, especially around IPO‘s in China are boosting sentiment.

Real estate markets have not benefitted from a rise in sentiment in Q3. Uncertainty around joblessness and a double dip have recalled market fears in the US. Europe and China have moved slightly negative, but Mumbai‘s property sentiment is still upward.

Following the large noise over the Russian wheat crop disaster and the fun and games around Cocoa in Q3, the discussion has moved to the US corn crop, where the price of corn is viewed for its potential negative impact on meat products

Gold sentiment softens – Dollar plummets – Indonesia at a high – Indian companies flex international muscle Media Tenor Financial Sentiment Tracker 2010 with focus 1-22 October 2010



Roland Schatz

[email protected]

+41-43 255 1920


Media Tenor International has been analyzing opinion-leading since 1994. This analysis is based on, 124, 441 statements by citied analysts in select business media: Financial Times, Les Echos, Expansion,Il Sole 24 ore, WSJ, Barron‘s, Mint, Financial News, Economist, Forbes. Media Tenor has evaluated more than 500 000 news stories in international TV news. Among its specialized analyses are political coverage, economic coverage, social values, technology and financial sentiment data.

Relative salience and tonality trend for currency Oct 2010

Relative salience and tone for select commodities Oct 2010

Gold sentiment softens – Dollar plummets – Indonesia at a high – Indian companies even out


Zurich 22 October: Gold sentiment has shown its first consistent fall in 2010 as cited analysts are beginning to discuss the possible downside of the metal’s haven status. Sentiment towards the US Dollar has been severely tested by the coverage of the October currency war, however, the implications to the broader global trade balance and the economies of countries affected by commodity prices have come onto the agenda. Indonesia has had a strong month and is the clear leader among non-BRIC developing countries and reporting on Tata Motor’s ability to perform in its UK expansion plans has highlighted the international impact of India’s corporate giants.

Gold sentiment has shown a negative trend on the aggregated international level in the third week of October. This represents a major shift after the consistently positive trend. Unlike previous dips, this result appears but part of a sustained trend. According to Media Tenor research director, Matthias Vollbracht, the sentiment shift is not a surprise, but rather an overdue discussion on the possibility of a Gold bubble. “The fact that there is a higher level of negativity towards the Gold price indicates that analysts are being cited in a broader debate than before it started to stand out as an anomaly – journalists have twigged to the bubble claims.“ However, the discussion is still favourable when it comes to Gold’s status as a flight to safety, and so the psychological driver to the current price is still there – at least for a while.

The dollar has slumped deeper into negative territory as the currency war story continues through October. It has also been far and away the main focus of the currency debate. “The coverage is tending to be less about what the dollar is doing against any one currency in the short term, but more how commodity markets and international trade are affected by the adjustment of the global currency picture,” says Vollbracht. Analysts have noted the fact that the export led Euro recovery may hit the skids with a stronger Euro, and there have been grumblings from Australian food exporters that the high Aussie dollar is leading to problems when it comes to fending off competition from South American food suppliers doing business in Asia. “The trade/competition aspects have so far

been a little understated in analyst citations,” notes Vollbracht, “but the consequences of the very low dollar will definitely become a hot topic in the next few weeks.”


Relative salience and tonality trend for economies Oct 2010

Relative salience and tonality of top 5 Indian Blue Chips Oct 2010

The Indonesian economy leads the non-BRIC developing country analysis in October. Excellent growth prospects are being highlighted by analysts. The trend in this area, however, is no longer as unanimously positive as in the past. Singapore and Mexico are both clearly lower, reflecting a general trend among the less present economies. “It is no longer a case that any country outside Europe or the US is an opportunity,” says Vollbracht, “there are concerns about key fundamentals and social conditions, as well as the impact on the overall global trend on individual economies – the euphoria is gone.” The large increase in the Indonesian volume also highlights the phenomenon of individual countries becoming popular based on a

key fundamental - only to disappear again. This echoes the high ratings of Ivory Coast or Ghana a few months ago, who have not yet turned up in the sample media set for October. Finally, Indian companies continue their excellent run in the media, with the leading five Indian companies in terms of visibility all well into positive sentiment territory. The agenda for India is no longer completely dominated by Reliance. October’s visibility leader so far, Tata Motors, is slightly down on its yearly average despite growth plans announced in the UK around Jaguar Land Rover. This international expansions topic is shared by Infosys’s push in the US and Japan. “The international aspect of Tata’s story is particularly important as it shows a shift in Indian company perception,” says Vollbracht, “in the case of Tata, the strong focus on its ability to create jobs in the UK reflects the growing confidence the media is showing in Indian companies to flex their international muscle. Media Tenor’s financial sentiment tracker will be released weekly at http://www.mediatenor.com.



Gold‘s bubble may not have burst, but there is a significant negative voice among analysts who see that Gold may not be the universal flight to safety that drove its price rise in 2010.

Indian companies are remarkable in their positivity at the moment. This is being largely driven by the impact they are having on the international scene, for example Infosys’s US and Japanese presence, or Tata’s UK job creation.

Societe General analysts were quoted on the “destruction” of the dollar (FT 15/10). However, this poetic overstatement overlooks the broader discussion on the effects of the currency war – such as US export prospects, and threats to Australia from overly strong currencies.

Analysts were very favorable on Indonesia‘s political stability and commodity driven economic prospects in October. However, the drop of major countries, such as Singapore, suggests that developing country sentiment is losing its unanimous positivity.

finacial sentiment tracker october complete

Documents

currency sentiment

dax company sentiment

greenback sentiment

australian dollar sentiment

expense of chinese sentiment

currency wars

currency markets

tonality trend