Forex Overnight: EUR trading stronger
The EUR is trading higher against most key currencies, this morning, as an improvement in manufacturing activity in the major global economies, including China and Germany, boosted risk appetite amongst traders. Additionally, markets are keenly awaiting the release of U.S. manufacturing data later today, which is also expected to show an improvement in December. At 6 am, the EUR has gained 0.4 percent and 0.1 percent against the USD and the GBP, to trade at $1.2981 and £0.8350, respectively.
The JPY is trading 0.2 percent higher against the USD, while it has edged 0.2 percent lower against the EUR.
The AUD has advanced 0.6 percent against the USD, amid higher risk appetite.
UK Stocks: Expected to open firmer
The FTSE 100 is likely to open 90 to 99 points in the green.
Manufacturing Purchasing Managers’ Index (PMI) for December is the key economic indicator scheduled for release today.
No major corporate releases are scheduled for today.
Bloomberg has reported that BP is seeking at least $20.0 billion from its contractor, Halliburton, in costs and damages related to the 2010 Gulf of Mexico oil spill.
Rio Tinto Alcan, an aluminum-production unit of Rio Tinto, has stated that it will reduce production by about one-third at its Alma aluminum smelter in the Canadian province of Quebec, after the labour union rejected the company’s latest proposal for a new labour contract.
Codelco has stated that it has exercised its option to acquire a 49.0 percent stake in Anglo American’s south Chile mining assets.
Virgin Money has completed its acquisition of the bailed out UK lender, Northern Rock.
Asia: Trading in positive territory
Asian markets are trading higher this morning, as investor sentiment was buoyed following improved manufacturing data in Germany, China and India.
Japanese and Chinese markets are closed today on account of a holiday.
In South Korea, SK Innovation and S-Oil Corporation have edged higher, following a sharp rise in crude oil prices. Shipbuilding sector stocks have registered gains, with Hyundai Mipo Dockyard, Daewoo Shipbuilding & Marine Engineering and STX Offshore & Shipbuilding trading sharply higher.
In Hong Kong, Cnooc Limited, PetroChina and China Petroleum & Chemical Corporation have added value, amid reports that China may allow refiners, instead of the government, to set oil product prices. China Mengniu Dairy has climbed, after a broker maintained its “Buy” rating on the stock. Exporter, Li & Fung has advanced, as expectations of positive U.S. jobs data scheduled later in the week has raised hopes of higher consumer spending.
US Stocks: Futures trading in the red
On Friday, S&P 500 futures closed 4.8 points lower.
Construction Spending, ISM Manufacturing Index and ISM Prices Paid are the key economic indicators scheduled for release today. Investors also await the release of the minutes from the Federal Reserve’s latest FOMC Meeting.
Progress Software, Team Incorporation, Landec Corporation and Cano Petroleum are scheduled to report their results later today.
In after hours trading session on Friday, MGIC Investment plunged 8.9 percent, after the company stated that it has provided $200.0 million cash infusion to its private mortgage insurance operation, Mortgage Guaranty Insurance Corporation. Amongst other key laggards, Tanzanian Royalty Exploration, Sonus Networks and Vitesse Semiconductor tumbled 8.8 percent, 8.3 percent, 7.6 percent, respectively. Verizon Communications added 0.3 percent, after it announced that it would not charge a $2 fee for online and telephone payments. Web.com Group, Taser International, Exeter Resource and SORL Auto Parts featured amongst other gainers, climbing 5.4 percent, 5.1 percent, 4.8 percent and 4.8 percent, respectively.
On Friday, the S&P 500 index slid 0.4 percent in the regular trading session. Sears Holdings, the top laggard on the S&P 500 index, declined 3.4 percent. Rowan Companies retreated 2.2 percent, after a broker downgraded its rating on the stock to “Accumulate” from “Buy” and lowered its target price. Retailers, Ross Stores, Tiffany & Company and Dollar Tree lost 2.1 percent, 1.6 percent and 1.1 percent, respectively. Receding risk appetite amongst investors led Huntington Bancshares, Citigroup, Fifth Third Bancorp and Regions Financial to edge 2.1 percent, 1.7 percent, 1.5 percent and 1.4 percent lower, respectively. Energy sector stocks, Chesapeake Energy, Noble Energy and Cabot Oil & Gas shed 1.9 percent, 1.7 percent and 1.4 percent, respectively, tracking the movement in crude oil price. On the other hand, MetroPCS Communications jumped 5.3 percent, after a broker stated that the company could be a target for acquisition by bigger competitors.
European Stocks: Likely to open in negative territory
The DAX and CAC are expected to open 19 points and 12 to 14 points lower, respectively.
Key economic indicators scheduled for release today include Swiss SVME PMI, German Unemployment Change and Rate.
Grenkeleasing AG and Trigano SA are scheduled to report their results later today.
In an interview to Suddeutsche Zeitung, Friedrich Eichiner, the CFO of BMW AG, has stated that the company is well prepared to face the consequences of the European crisis, as it has a young product range and a good financial cushion.
The Financial Times Deutschland has reported that external providers of financial products will not be allowed to sell their investment funds, in future, through the consultants of the Deutsche Bank subsidiary, Postbank.
Macro Update
UK’s Lloyds business barometer declines
The Lloyds business barometer in the U.K. has dropped to a reading of -23.0 in December, compared to a reading of -20.0 recorded in November.
Australian manufacturing activity climbs
The Australian Performance of Manufacturing Index has climbed to a reading of 50.2 in December, the highest since June 2011, and compared to a reading of 47.8 recorded in November.
Chinese non-manufacturing PMI rises
Chinese non-manufacturing PMI has jumped to a reading of 56.0 in December, following a reading of 49.7 posted in November.
South Korea’s foreign currency reserves decline
South Korea’s foreign exchange reserves have dropped to $306.4 billion at the end of December, following reserves worth $308.6 billion at the end of November.
Singapore’s economic growth contracts
On a seasonally adjusted sequential basis, Singapore’s Gross Domestic Product declined an annualised 4.9 percent in the fourth quarter of 2011, compared to a downwardly revised 1.5 percent growth recorded in the third quarter.
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