Forex Overnight: EUR trading almost flat
The EUR is trading almost flat against the major currencies, this morning, ahead of the European Central Bank (ECB) President, Mario Draghi’s speech later today. Investors have turned skeptical about the liquidity situation in the European financial system, following the higher-than-expected demand by banks for the first tranche of three year loans provided by the ECB. At 6 am, the EUR is almost unchanged against the USD and the GBP to trade at $1.3045 and £0.8328, respectively.
The JPY is trading almost flat against the USD and the EUR. The Bank of Japan (BoJ) in its monthly report has lowered its economic assessment.
The AUD has weakened 0.2 percent against the USD, on receding risk appetite, following declines in Asian equity markets.
UK Stocks: Expected to open in positive territory
The FTSE 100 is likely to open 10 points in the green.
Gross Domestic Product (GDP), Current Account and Total Business Investment are the key economic indicators scheduled for release today.
No major corporate releases are scheduled for today.
Asciano Limited has stated that it has agreed to a new 10-year deal to haul a combined 8.5 million metric tonnes of coal annually from two mines owned by Rio Tinto in Australia’s Queensland state.
In an interview to Sky News, Sir Philip Hampton, the Chairman of Royal Bank of Scotland, has indicated that he expects a “small country” to leave the Eurozone in 2012.
Asia: Trading lower
Asian markets are trading in the red this morning, as a higher-than-expected borrowing by European banks from the ECB fuelled concerns about the region’s sovereign debt crisis.
In Japan, Tokio Marine Holdings has declined, after it agreed to acquire Delphi Financial Group Inc. for a consideration of $2.7 billion. Advantest Corporation has slumped, following a cut in its rating by a broker to “Under-weight” from “Neutral”. Banking sector stocks, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group have lost value, as risk appetite amongst investors waned. Computerised factory tools manufacturers, Okuma Corporation and Makino Milling Machine have plummeted, after a broker lowered its stance on the sector to “Bearish”. At 6 am, the Nikkei 225 index has dropped 0.8 percent to trade at 8,391.5.
In Hong Kong, Aluminum Corporation of China and China Petroleum & Chemical Corporation have declined, tracking the movement in commodity prices. In China, markets are trading in negative territory, with Yunnan Copper Industry and Shandong Gold Mining recording losses. Despite South Korean markets trading lower, Kia Motors has advanced, after it unveiled its first electric vehicle in the country.
US Stocks: Futures trading weak
At 6 am, S&P 500 futures are trading 3.9 points lower.
Key economic indicators scheduled for release today include GDP, Initial & Continuing Claims, Reuters/Michigan Consumer Sentiment Index, Core Personal Consumption Expenditure, Chicago Federal National Activity Index, Leading Indicators and House Price Index.
Neogen, American Greetings, CalAmp and Christopher & Banks Corporation are scheduled to announce their results today.
In after hours trading session yesterday, Bed Bath & Beyond declined 3.0 percent, after it posted lower-than-expected third quarter sales. Micron Technology ended flat, after falling initially, following wider-than-expected loss in the first quarter. Vivus tumbled 9.6 percent, following downbeat preliminary results for its experimental weight-loss pill, Qnexa. On the other hand, WCA Waste Corporation rallied 29.7 percent, after it agreed to be acquired by Macquarie Infrastructure Partners Inc. for a consideration of about $526.0 million. TIBCO Software jumped 4.1 percent, after it reported upbeat earnings for the fourth quarter.
On Wednesday, the S&P 500 index added 0.2 percent in the regular trading session. Yahoo! surged 5.8 percent, amid reports that it is discussing a plan to reduce its stake in Alibaba Group Holding Limited. Cintas Corporation rallied 9.3 percent, after it reported upbeat second quarter results and issued a buoyant full year earnings outlook. Ford Motor advanced 3.2 percent, after a broker initiated coverage on the stock with a “Buy” rating. Nike rose 2.9 percent, after its second quarter profit surpassed market expectations. Bank of America edged 1.2 percent higher, after it agreed to pay $335.0 million to settle U.S. Justice Department’s allegations that its Countrywide Financial Corporation mortgage unit followed unfair lending practices. On the other hand, Oracle Corporation plummeted 11.6 percent, after its second quarter results trailed market expectations. CarMax declined 5.5 percent, after it reported lower-than-expected third quarter earnings.
European Stocks: Likely to open firmer
The DAX and CAC are likely to open 10 points and 8 points higher, respectively.
No major economic indicators are scheduled for release today.
Hornbach Holding AG and Hornbach Baumarkt AG are scheduled to announce their results today.
Deutsche Bank AG has been sued by Kingate Global Fund Ltd. over allegations that the bank has refused to honour an agreement to buy bankruptcy claims on the estate of the convicted Ponzi-scheme operator, Bernard Madoff.
Societe Generale SA has announced that Michel Peretie, the CEO of its Corporate & Investment Banking unit would be replaced by its CFO, Didier Valet, while Bertrand Badre, the former CFO of Credit Agricole SA, would be appointed as the new CFO, effective 3 January 2012.
In an interview to Die Welt newspaper, Achim Schaible, the head of Renault SA’s German division, has stated that the company wants to become the market leader for electric cars in Germany, aiming for a market share in the range of 10.0 percent to 15.0 percent.
According to Bloomberg, the European Union regulators have told NYSE Euronext and Deutsche Boerse AG that the new concessions they have offered to pacify antitrust concerns in their merger, have fallen short of the regulators’ demands.
Macro Update
US debt burden threatens “AAA” rating, warns Fitch
Fitch Ratings Agency has cautioned that rising U.S. debt burden was detrimental to its “AAA” credit rating. However, it stated that there would likely be no decision on the downgrade before 2013.
S&P lowers Hungary’s debt rating
Standard & Poor’s (S&P) has downgraded its sovereign credit ratings on Hungary to “Junk” status, citing unpredictable policy framework.
IMF almost certain to cut 2012 growth forecast, says Lagarde
Christine Lagarde, the Chief of the International Monetary Fund (IMF), has stated that the agency is almost certain to lower its 2012 world growth forecast, from the previously estimated 4.0 percent, due to the European debt crisis.
New Zealand’s economy expands
On a sequential basis, New Zealand’s GDP rose 0.8 percent in the third quarter, compared to a 0.1 percent growth posted in the previous quarter.
Chinese household inflation expectations ease
According to a survey by People’s Bank of China, the index measuring consumers’ inflation expectations dropped to a reading of 65.4 in the fourth quarter, compared to a reading of 74.8 recorded in the third quarter.
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