RANSQUAWK AUDIO CLOSED FOR TODAY; THE DESK WILL REOPEN MONDAY 0630 (LONDON TIME)

Daily Rumour Wrap

Market talk that McKesson (MCK) have lost a large valued Safeway (SWY) contract – unconfirmed
14:35 – Co. shares moved 0.78% higher over the next 3 minutes following the initial squawk.

Market talk that Boston Scientific (BSX) have been approached by KKR – Unconfirmed
14:55 – Co. shares moved 2.41% higher over the next 6 minutes following the initial squawk.

Market talk that Cobalt International Energy (CIE) is subject to takeover from Exxon Mobil (XOM) with an offer price of USD mid-30’s – Unconfirmed
15:12 – Co. shares moved 2.37% higher over the next 4 minutes following the initial squawk.

Market talk Leap Wireless (LEAP) are subject to takeover – unconfirmed
16:07 – Co. shares moved 2.55% higher over the next 12 minutes following the initial squawk.

‘Market talk’ – Signifies information that has not been formally tested through traditional journalistic channels and therefore is to be treated as unsubstantiated. Any interpretation of the talk is taken at the readers own risk and is a representation of the rumours within the market place and never generated by ourselves.

US EQUITY WRAP

US equities rallied following the strong US economic data, and remained close to their session highs into the close despite dwindling volumes ahead of the weekend. The financials have been strong all week, and were the best performers again today, finishing the day up 2.64%. Investors will be expecting a quiet start to next week as there is no economic data on Monday.

Finally the DJIA finished up 1.22% at12860.57, the S&P 500 finished up 1.45% at and the Nasdaq 100 finished up 1.34% at 2529.17

US NYSE Imbalances - 28/30 on the DJIA on the buy side

Canadian PM says disappointed by latest jobless figures, encouraged by signs of job growth in US

Canadian PM says expects slow but steady growth of the Canadian economy, will stick to plans to cut spending, and sticking to prediction of overall 2012-13 budget deficit despite better than expected monthly budget data

Canadian PM says does not see much evidence Canada will have recession or crisis this year

CFTC's COT report says net EUR short position was USD 25.8bln as of Tuesday 31st Jan, a decrease of 8% for the week

- says net JPY long position was USD 9.3bln as of Tuesday 31st Jan, an increase of 30% for the week
- says net CHF short position was USD 1.5bln as of Tuesday 31st Jan, a decrease of 10% for the week

Option expiries of note for Monday 6th February 2012

EUR/USD – 1.3100/40
EUR/JPY – 100.75
EUR/GBP – 0.8300

CME interest rate products block trade update:

Product: TYFH2 | Price: 131120 | Quantity: 7085 | Time: 14:03:00 CT

EUR/CHF trades in close proximity to its 20DMA line of 1.2080; trades 1.2072 last

US FIXED INCOME WRAP

T-notes settled in negative territory and close to their lows for the session following blockbuster NFP data, beating the consensus by over 100K. This cast doubt on whether the Fed would maintain their pledge to key low rates until 2014, as the 10y note yield had its largest one-day gain in three months. At the pit close, t-notes settled at 131.10, down 27+ ticks.

Brent crude futures settle at USD 114.58 per barrel, up USD 2.51, or 2.24%

For the week, Brent crude futures rise USD 3.12, 2.8%

Canadian PM says Research in Motion (RIMM) is a strong Canadian company, and 'we want to see that company succeed and continue to grow as a Canadian company'

ENERGY WRAP - US Crude futures settle at USD 97.84/BBL, up USD 1.48 or 1.54%

WTI Crude futures had a choppy start to the session and made lows of USD 96.01. But, following strong US non-farm payrolls, unemployment, and ISM non-manufacturing data, they rallied, and had particularly strong finish to the day, closing near their session highs of USD 98.03. This marks the end of the six day decline in the futures.

Brent Crude futures showed similar strength, making session highs of USD 114.69, up USD 2.42 on the day.

Fed's Bullard says unemployment may decline to 7% by the end of 2013

Fed's Bullard says Fed may need to raise interest rates before 2014

Fed's Bullard says recent economic data 'surprising on the upside'

Fed's Bullard says surprising US strength weakens case for QE

Fed's Bullard says US unemployment likely to fall to 7.8% this year

RANsquawk ' Weekly Wrap ': Video now available on RANsquawk website

Portuguese PM Coelho reiterates Portugal will comply with aid programme

Greek government official says talks with Troika going well

Iraq's oil exports from Basra fall to 480,000 BPD on Friday from 1.728mln BPD on Thursday due to bad weather, according to a shipping source

CME interest rate products block trade update

Product: EDH4:EDZ4 | Price: -10 | Quantity: 1500 | Time: 13:04:00 CT

Portuguese PM Coelho says Portugal external deficit to substantially improve in 2012-13, but making progress on external and budget deficits

Portuguese PM Coelho says Portugal will emerge stronger from crisis

Micron's (MU) CEO died in small plane accident, shares were halted earlier in the session

EU's Barroso says is convinced Portugal will overcome its difficulties

Mastercard's (MA) outlook changed to positive by S&P

US MID-SESSION UPDATE - 03/02/12

Risk appetite has remained high throughout the session so far following a much higher than expected non-farm payrolls, which came in at 243K vs. the expected 140K; the lowest unemployment figure since February 2009, coming in at 8.3% vs. the expected 8.5%; and also a higher than expected ISM non-manufacturing index, which came in at 56.8 vs. the 53.2 forecast. There were also some positive comments from the S&P’s managing director of sovereign ratings, John Chambers, who said that signs of US growth were encouraging, but that the country’s growth is still below its potential. However, he did add that he didn’t see an outlook change before the election later this year, and that normally it takes nine years to recover an ‘AAA’ rating.

Volumes have been thinning out though as we head into the final few hours of the US cash market. However, as it stands, there looks to be some solid gains for the day and week.

WTI Crude futures have had a much choppier trading session, making session lows of USD 96.01 and highs of USD 97.47.

Senator Reid says Democratic leaders preparing back-up payroll tax plan

Allegheny Technologies' (ATI) outlook has been revised to positive from stable by S&P

EU's Barroso says Portugal's efforts are being recognised internationally

USD/CAD trades near its session low at 0.9927; trades 0.9936 last (-56 pips)

EU's Barroso says EU must consolidate single market to bolster jobs

EU's Barroso says single currency market needs to be reinforced

Credit Suisse's chief investment strategist says modest overweight in equities

EU's Barroso says there is a crisis of confidence in Europe

Netflix (NFLX) CEO says no plans to get into sports content, says focus will be exclusively movies and TV shows, and no plans to get into gaming

International Financing Review writes: Portugal pressed to restructure

Portugal has been discreetly sounding out advisers on options to restructure its debt. Although the government has yet to formally appoint any firm, IFR has learnt that ministers have been watching developments in Greece closely with a view to replicating elements of any final agreement.

Some of those consulted are understood to have advised Portugal to follow a similar path to Greece’s private sector involvement (PSI) plan, to persuade private sector bondholders to take a voluntary haircut on their bonds, if the latter proves successful over the next six weeks.

full article: http://www.ifre.com/portugal-pressed-to-restructure/20046599.article

Netflix (NFLX) says UK and Ireland release is going great

Leap Wireless (LEAP) spokesperson would not respond to earlier takeover chatter or discussions with AT&T (T)

Sonoco (SON) reports compressor lost power at Girard point on Thursday, and power was restored before the unit was shut down at the refinery

US Baker Hughes Rig Count (Feb 3) W/W 1997 vs. Prev. 2008

Rapid imposition imposition of sanctions on Iran might obviate any need to decide on strike according to Israeli deputy foreign minister

Iran will blink in nuclear row if sanctions imposed rapidly according to Israeli deputy foreign minister

Bashir says south Sudan shut down oil production to try to provoke the collapse of Sudan's government

- says Sudan wants 74,000 BPD of oil from south Sudan

FT writes: Greece’s leaders oppose new austerity measures

All three party leaders in Greece’s teetering national unity government have opposed new austerity measures demanded by international lenders, forcing eurozone finance ministers to postpone approval of a new €130bn bail-out and moving the country closer to a full-blown default.

Representatives of the so-called “troika” – the European Commission, European Central Bank and International Monetary Fund – have demanded further cuts in government jobs and severe reductions in Greek salaries, including an immediate 25 per cent cut in the EUR 750 minimum monthly wage, before agreeing the new rescue.

full article: http://www.ft.com/cms/s/0/76b31dcc-4e88-11e1-ada2-00144feabdc0.html#axzz1lLHj5ZuK

GBP/CHF trades in close proximity to its 50DMA line of 1.4537; trades 1.4536 last