Forex Overnight: EUR trading under pressure
The Euro is trading lower against the majors, this morning, amid investor caution, ahead of the Italian long-dated bond auction worth €8.5 billion today. Moreover, a report released by the European Central Bank (ECB) yesterday, indicating that its balance sheet climbed to a record high level, has continued to weigh on the EUR. At 6 am, the EUR has lost 0.1 percent each against the USD and the GBP to trade at $1.2930 and £0.8363, respectively.
The JPY has advanced 0.2 percent against the USD, while it has gained 0.3 percent against the EUR.
The AUD has weakened marginally against the USD, while the CAD has gained 0.1 percent against the USD.
UK Stocks: Expected to open marginally higher
The FTSE 100 is likely to open 2 points in positive territory.
Nationwide House Price Index is the key economic indicator scheduled for release today.
No major corporate releases are scheduled for today.
The U.S. Justice Department has announced that it reached a settlement with BAE Systems Ship Repair Inc., part of BAE Systems, to settle allegations that one of its subsidiaries had imposed unnecessary and additional documentary requirements on work-authorised non-U.S. citizens when establishing their eligibility to work in the United States.
Scottish bus and coach manufacturer, Alexander Dennis, has requested information from Optare to help it make a decision whether to make a formal offer for the entire issued share capital of Optare.
Asia: Trading mixed
Asian markets are trading mixed this morning.
In Japan, Elpida Memory has tumbled, after a report indicated that the company may seek to delay its debt payments. Sharp Corporation has declined, after the company and other crystal display makers, including Samsung Electronics, agreed to settle antitrust claims for $538.6 million. Exporters to Europe, Honda Motor and Ricoh Company Limited have lost value, after the Euro weakened to a decade low against the Yen. At 6 am, the Nikkei 225 index has dropped 0.5 percent to trade at 8,377.4.
In South Korea, Hyundai Heavy Industrial has lost value, after data indicated that South Korea’s monthly industrial output unexpectedly declined in November. In Hong Kong, BYD Company has declined, after it stated that the China Securities Regulatory Commission had granted it approval to issue domestic corporate bonds worth CNY 6.0 billion. Suning Universal has plunged, after it stated that regulators were investigating the company. In China, SAIC Motor and FAW Car have climbed, amid news that the Chinese government will boost spending on rural road construction. Chongqing Iron & Steel has declined, after it stated that it might post a “substantial” loss in FY2011.
US Stocks: Futures trading higher
At 6 am, S&P 500 futures are trading 5.9 points stronger.
Key economic indicators scheduled for release today include Initial & Continuing Jobless Claims, Chicago Purchasing Managers’ Index, Pending Home Sales and Kansas City Federal Reserve Manufacturing Activity Index.
Dynasil Corporation of America and Bridgeline Digital are scheduled to announce their results today.
Exar Corporation edged 3.8 percent lower in after hours trading session yesterday, after it lowered its revenue and non-GAAP gross margin outlook for the third quarter. China Sky One Medical plummeted 18.8 percent, after it stated that its CFO, Hongyu Pan, has resigned. Mosaic Corporation declined 1.9 percent, after it announced a cut in its phosphate production for the March quarter. Alexion Pharmaceuticals retreated 1.3 percent, after it agreed to acquire Enobia Pharma Corporation in a deal worth around $1.08 billion. On the other hand, HudBay Minerals, MIPS Technologies and Career Education featured amongst key gainers, advancing 4.7 percent, 4.5 percent and 4.4 percent, respectively.
On Wednesday, the S&P 500 index declined 1.2 percent in the regular trading session, following a surge in the ECB’s balance sheet to a record on higher lending to Eurozone banks. Softer metal prices led Cliffs Natural Resources, Freeport-McMoRan Copper & Gold, Alpha Natural Resources and Alcoa to decline 4.6 percent, 4.0 percent, 3.3 percent and 3.1 percent, respectively. Tesoro Corporation, Nabors Industries Limited and Chesapeake Energy dropped 4.2 percent, 4.1 percent and 3.7 percent, respectively, tracking the movement in crude oil prices. Banking sector stocks, Bank of America, Citigroup and Morgan Stanley lost 3.6 percent, 2.9 percent and 2.6 percent, respectively, as risk appetite amongst investors waned. Morgan Stanley shares were under pressure, after it indicated that 580 of its 1,600 layoffs announced earlier this month would impact the New York City area. Computer Sciences Corporation retreated 1.4 percent, after Standard & Poor’s Ratings Services downgraded its long-term rating on the stock to “BBB+” from “A-”.
European Stocks: Likely to open in the green
The DAX and CAC are expected to open 18 points and 8 points higher, respectively.
German Consumer Price Index and Eurozone M3 Money Supply are the key economic indicators scheduled for release today.
Medisana AG is scheduled to report its results later today.
UCB SA has named Michele Antonelli as Managing Director of its French business and stated that its COO, Mark McDade, will take over Antonelli’s current position as head of technical operations.
Petroplus Holdings AG has stated that it may have to start shutting plants if it is not able to reach an agreement with lenders, amid a $1.0 billion credit freeze.
The wind farm project developer, PNE WIND AG is selling its shares in PNE Gode Wind II GmbH to HYSSING Vermögensverwaltungsgesellschaft mbH, which is held by the Danish Brancor Capital Partners APS. The agreed purchase price for all shares of PNE Gode Wind II GmbH is based on a valuation of about €317,000 per MW.
Macro Update
South Korean industrial output climbs
On an annual basis, industrial output in South Korea advanced a less-than-expected 5.6 percent in November, the 29th consecutive monthly rise, and compared to a 6.2 percent gain recorded in October.
South Korea’s current account surplus widens
South Korea posted a current account surplus of $5.05 billion in November, following a $4.23 billion surplus posted in the previous month.
Bank of Korea highlights growth risks
The South Korean government has reiterated its warning about the uncertain economic outlook. Meanwhile, the Bank of Korea has indicated weakness in domestic consumer consumption and highlighted risks from instability in North Korea.
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