Forex Overnight: EUR trading higher
The EUR has advanced against most of the major currencies, this morning, amid optimism ahead of today’s meeting between the German Chancellor, Angela Merkel and the International Monetary Fund’s Managing Director, Christine Lagarde. In remarks following yesterday’s meeting, Merkel and Sarkozy indicated that they have made progress on an agreement to implement new budget rules for the Eurozone.
At 6 am, the EUR has advanced 0.2 percent against the USD to trade at $1.2786, while it has gained marginally against the GBP to trade at £0.8260.
The AUD has strengthened 0.7 percent against the USD, following a rise in Australian construction approvals in November.
UK Stocks: Expected to open in positive territory
The FTSE 100 is likely to open 36 to 49 points in the green.
No key economic indicators are scheduled for release today.
No major corporate releases are scheduled for today.
Barclays has announced that it has closed its wealth management office in Buenos Aires, Argentina and has shifted responsibility for that business to the U.S. and Europe.
The Financial Times has reported that the Royal Bank of Scotland is determined to move ahead with its potential £4.4 million bonus for the head of its investment-banking unit, despite opposition from the Financial Services Authority.
JD Sports Fashion has acquired all the assets and trading business of Blacks Leisure for £20.0 million, in a move to get a foothold in the lucrative outdoor clothing market.
Asia: Trading in the green
Asian markets are trading higher this morning, taking cues from overnight gains on Wall Street.
In Japan, export sector stocks, Honda Motor and Funai Electronic have risen, after data indicated that U.S. consumer credit climbed in November. Olympus Corporation has rallied, amid news that the company is likely to remain listed on the Tokyo Stock Exchange. On the other hand, Mitsui OSK Lines, Kawasaki Kisen Kaisha and Nippon Yusen KK have lost value, after cargo rates for large vessels declined to a five-month low. At 6 am, the Nikkei 225 index has gained 0.3 percent to trade at 8,415.5.
In South Korea, SK Telecom has registered gains, following positive broker comments. LG Uplus Corporation has advanced, after a broker increased its target price on the stock. In Hong Kong, Aluminum Corporation of China has climbed, after its U.S. peer, Alcoa, reported better-than-expected fourth quarter revenues and forecast higher aluminum demand. Esprit Holdings has surged, following the appointment of Melody Harris-Jensbach, a former Puma AG executive, as its Chief Product and Design Officer. In China, China Shenhua Energy and China Petroleum & Chemical have edged higher, after their parent companies raised stakes in them.
US Stocks: Futures trading higher
At 6 am, S&P 500 futures are trading 5.9 points stronger.
Wholesale Inventories, NFIB Small Business Optimism, JOLTs Job Openings and IBD/TIPP Economic Optimism are the key economic indicators scheduled for release today.
Synnex Corporation, Rocky Mountain Chocolate Factory and RF Monolithics are scheduled to announce their results today.
Alcoa advanced 0.8 percent in after hours trading session on Monday, after its revenue for the fourth quarter surpassed market estimates, and it forecast a 7.0 percent increase in 2012 global aluminum demand. Emulex surged 10.0 percent, after it raised its earnings guidance for the second quarter. Amongst other gainers, China Lodging Group, Titan Machinery and GeoEye climbed 10.2 percent, 5.0 percent and 4.1 percent, respectively. On the other hand, Juniper Networks retreated 2.1 percent, after it offered a downbeat outlook for its fourth quarter results. Liz Claiborne slumped 12.9 percent, after it lowered its adjusted EBITDA guidance for FY2012, and stated that Andrew Warren, its CFO, will quit the company, with effect from 16 March 2012. Lower-than-expected third quarter results and a bleak earnings outlook for the fourth quarter led Standard Microsystems to tumble 7.9 percent.
On Monday, the S&P 500 index added 0.2 percent. Netflix rallied 13.8 percent, amid news that the company could be a takeover target, and after it launched its video services in the U.K. and Ireland. Polo Ralph Lauren jumped 4.0 percent, after a broker upgraded its rating on the stock to “Conviction Buy” from “Neutral”. Broadcom Corporation, Jabil Circuit and Analog Devices rose 2.5 percent, 2.2 percent and 2.0 percent, respectively, after a broker raised its recommendation on the sector to “Over-weight” from “Equal-weight”. Alcoa advanced 2.9 percent, ahead of its fourth quarter results due after market close. On the other hand, CareFusion Corporation plummeted 8.6 percent, after its second quarter profit trailed market expectation, and after it lowered the bottom end of its full year profit estimate. GameStop Corporation declined 3.5 percent, after it slashed its fourth quarter and full year comparable sales guidance. Costco Wholesale Corporation slid 2.6 percent, after a broker downgraded its rating on the stock to “Under-Perform” from “Market-Perform”.
European Stocks: Likely to open firmer
The DAX and CAC are expected to open 37 to 69 points and 23 to 28 points higher, respectively.
Key economic indicators scheduled for release today include French Business Sentiment, Manufacturing and Industrial Production.
Beneteau SA, Mittel SpA and Geci Aviation SA are scheduled to report their results later today.
The Financial Times Deutschland has reported that Deutsche Telekom AG will co-operate with Groupon Inc. to start several projects in Europe in the coming months.
Matthias Mueller, the CEO of Porsche Automobil Holding SE’s core sportscar unit, has stated that he expects the new model of its flagship 911 sportscar to boost sales in 2012.
Carlos Ghosn, the CEO of Renault SA and Nissan Motor Company, has stated that the companies might consider adding further production capacity in the U.S., as their two car plants in the U.S. were nearing full capacity.
Sergio Marchionne, the head of Fiat SpA and Chrysler Group LLC, has stated that he was open “in principle” to doing another merger.
Macro Update
UK retail sales improves
The British Retail Consortium has reported that on a like-for-like basis retail sales in the U.K. climbed 2.2 percent Y-o-Y in December, compared to a 1.6 percent decline posted in the previous month.
House prices in the UK decline
The seasonally adjusted house price balance, as measured by the Royal Institution of Chartered Surveyors, stood at -16.0 in December, compared to a reading of -17.0 recorded in November.
US consumer credit climbs
Consumer credit in the U.S. advanced $20.4 billion in November, higher than market consensus, and compared to a revised $6.0 billion increase posted in the previous month.
Chinese trade surplus widens
Chinese trade surplus widened unexpectedly to $16.5 billion in December, compared to a $14.5 billion surplus reported in the previous month.
Australian construction approvals rise
On a seasonally adjusted monthly basis, construction approvals in Australia advanced 8.4 percent in November, following a 10.0 percent drop recorded in October.
SaxoBankUK