Forex Overnight: EUR trading higher
The EUR and the GBP have strengthened against the USD, this morning, as risk appetite amongst traders improved, following largely positive economic data released in the U.S. yesterday. Additionally, market expectations that the U.S. consumer spending and new home sales figures scheduled later today will show an improvement have further cemented gains in high yield currencies. Adding to optimism, the Italian Senate gave a final approval to the nation’s austerity measures. At 6 am, the EUR has gained 0.1 percent against the USD to trade at $1.3069, while the GBP has advanced marginally against the USD to trade at $1.5682.
The AUD has climbed 0.3 percent against the USD, following gains in Asian equity markets.
UK Stocks: Likely to open in the green
The FTSE 100 is expected to open 33 points firmer.
BBA Loans for House Purchase and Index of Services are the key economic indicators scheduled for release today.
No corporate releases are scheduled for today.
BP has stated that it would continue with its proposed A$923.0 million solar project in Australia, after deciding to exit the business globally.
Rio Tinto has extended its takeover offer for the Canadian uranium miner, Hathor Exploration Ltd., until 6 January 2012, to allow remaining shareholders of the latter to sell their shares.
Asia: Trading higher
Asian markets are trading in positive territory this morning, taking cues from overnight gains on Wall Street.
In Japan, markets are closed on account of a holiday for Emperor’s birthday.
In South Korea, Hynix Semiconductor has advanced, amid hopes for new investment in the company, following the $3.0 billion stake purchase by SK Telecom last month. Kumho Industrial has gained value, after reports indicated that the firm would sell assets worth KRW 1.0 trillion. GS Retail has climbed on its trading debut. In Hong Kong, Yanzhou Coal Mining has soared, after Australia’s Gloucester Coal Limited stated that its major shareholder, Noble Group Limited, has approved its sale to the Chinese coal company. Cnooc and PetroChina have registered gains, following firmer crude oil prices. HSBC Holdings has advanced, tracking yesterday’s gains in European financial sector stocks. In China, banking sector stocks, Bank of Communications and China Merchants Bank are trading in positive territory.
US Stocks: Futures trading firmer
At 6 am, S&P 500 futures are trading 6.6 points stronger.
Key economic indicators scheduled for release today include Durable Goods Orders, Personal Income & Spending, Personal Consumption Expenditure, Capital Goods Orders and New Home Sales.
No major corporate releases are scheduled for today.
Eastman Kodak rallied 19.1 percent in after hours trading session on Thursday, after its Board appointed general counsel, Laura Quatela, as the second President alongside Philip Faraci, with effect from 1 January 2012. Momenta Pharmaceuticals jumped 5.8 percent, after it entered into a global collaboration with Baxter International to develop and commercialise biosimilars. Rambus soared 12.6 percent, following the announcement of its patent license agreement with Broadcom Corporation. On the other hand, Christopher & Banks retreated 2.6 percent, after its third quarter loss widened, compared to the same period last year. Exide Technologies, Allied Nevada Gold and EchoStar also featured amongst the laggards, losing 5.7 percent, 4.5 percent and 3.9 percent, respectively.
Yesterday, the S&P 500 index added 0.8 percent in the regular trading session, as investor sentiment was boosted by better-than-expected jobless claims and consumer confidence in the U.S. Akamai Technologies rallied 18.6 percent, after it agreed to buy Cotendo for a cash consideration of $268.0 million. Micron Technology surged 15.9 percent, after a broker upgraded its rating on the stock to “Out-Perform” from “Neutral”. First Solar soared 7.4 percent, following speculation that the company may receive a takeover offer from General Electric or Siemens AG. Morgan Stanley, Citigroup, Bank of America and Suntrust Banks climbed 6.5 percent, 5.9 percent, 4.6 percent and 4.1 percent, respectively, as risk appetite improved. On the other hand, Bed Bath & Beyond slumped 6.3 percent, after it posted lower-than-expected third quarter sales.
European Stocks: Expected to open in positive territory
The DAX and CAC are likely to open 54 points and 30 points higher, respectively.
French Gross Domestic Product and Producer Prices are the key economic indicators scheduled for release today.
No major corporate releases are scheduled for today.
Repsol YPF SA has stated that it has signed a $1.0 billion deal to buy stakes in SandRidge Energy Inc.’s oil and natural gas fields in Kansas and Oklahoma.
China’s Three Gorges Corporation has stated that it has won the bidding for the Portuguese government’s 21.35 percent stake in EDP-Energias de Portugal SA with an offer of €2.69 billion.
The U.S. Department of Justice has cleared NYSE Euronext’s acquisition by Deutsche Boerse AG.
Macro Update
Moody’s downgrades Slovenia by one notch
Moody’s Investors Service has lowered Slovenia’s credit rating by one notch to “A1” from “Aa3”, with a “Negative” outlook, citing increasing pressure on the government’s balance sheet arising from a potential need to support the nation’s banking system.
Italian Senators back austerity measures
Italian Senators have granted a final approval to the Prime Minister, Mario Monti’s austerity package which includes tax increases and pension reforms.
QE appropriate if there is deflation, says ECB’s Bini Smaghi
In an interview to Financial Times, the European Central Bank (ECB) executive board member, Lorenzo Bini Smaghi, has stated that central banks should not hesitate to use quantitative easing (QE), if the economic outlook deteriorated and there is a risk of deflation.
Next Fed meeting good time for rate forecasts, says Plosser
Philadelphia Federal Reserve Bank (Fed) President, Charles Plosser, has stated that the central bank’s upcoming meeting in late January will provide a good opportunity for the Fed to begin offering interest rate forecasts.
IMF urges members to boost funding under 2010 plan
Christine Lagarde, the Chief of International Monetary Fund (IMF), has urged its members to speed up the sign up on the 2010 agreement to double IMF resources and give under-represented nations greater voting power.
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