Market Preview - 1 February 2012

Forex Overnight: USD trading higher
The USD has strengthened against its major counterparts, this morning, as markets remain cautious ahead of the outcome of the Portuguese bond auction scheduled later today. Market participants are keeping a close eye on the ongoing debt swap negotiations between Greece and its private sector creditors. At 6 am, the EUR and the GBP have lost 0.1 percent each against the USD to trade at $1.3070 and $1.5751, respectively.
The JPY has advanced 0.2 percent and 0.1 percent against the EUR and the USD, respectively. Jun Azumi, the Finance Minister of Japan, has reiterated his stance to take “bold” steps to limit the Yen’s advance, if necessary.
The AUD has lost 0.1 percent against the USD, after data indicated that Australian new home sales declined in December.

UK Stocks: Expected to open in positive territory
The FTSE 100 is likely to open around 20 points in the green.
Manufacturing Purchasing Managers’ Index (PMI) and Nationwide House Price Index are the key economic indicators scheduled for release today.
Throgmorton Trust and Synairgen are scheduled to report their results later today.
An article in The Australian reported that BHP Billiton has started the restructuring of its struggling nickel operations in Western Australia, which is likely to affect around 155 workers and contractors.
Bloomberg reported that DZ Bank AG has sued JPMorgan Chase and HSBC Holdings, accusing the banks of making false and misleading statements in connection with the sale of residential mortgage-backed securities.
A U.S. Federal Judge has stated that BP must cover some of the eventual claims against Halliburton Company related to the 2010 Gulf of Mexico oil spill.
Moody’s Investors Service has downgraded its corporate family rating on Eurasian Natural Resources Corporation to “Ba3” from “Ba2” and cut its outlook to “Negative” from “Stable”.

Asia: Trading mixed
Asian markets are trading mixed this morning.
In Japan, banking sector stocks, Sumitomo Mitsui Trust Holdings and Mitsubishi UFJ Financial Group have advanced, amid improved risk appetite amongst investors. Nippon Yusen K.K. has added value, after a broker upgraded its rating on the stock to “Buy” from “Hold”, while Mitsui O.S.K. is trading higher, after the same broker raised its price target on the stock. All Nippon Airways has edged higher, after it raised its full year operating profit forecast. Unicharm has climbed, amid reports that it would build a second factory in India this year. At 6 am, the Nikkei 225 index is trading 0.1 percent higher at 8,810.5. 
In Hong Kong, property sector stocks, Cheung Kong Holdings and Hang Lung Properties are trading lower, ahead of the budget announcement from the Hong Kong government. In South Korea, LG Chem has advanced, after it yesterday announced that it has posted a record KRW22.7 trillion sales in 2011. Hi-mart Company has added value, amid reports that Shinsegae was mulling a bid for the company. In China, Industrial and Commercial Bank of China and China Merchants Bank have retreated.

US Stocks: Futures trading lower
At 6 am, S&P 500 futures are trading 2.1 points weaker.
Key economic indicators scheduled for release today include ADP Employment Change, MBA Mortgage Applications, ISM Manufacturing, Construction Spending and Domestic Vehicle Sales.
Qualcomm, Marathon Oil Corporation, Aetna, Allstate Corporation, Hershey, Chipotle Mexican Grill, BMC Software, Whirlpool Corporation and JDS Uniphase Corporation are scheduled to announce their results today.
Amazon.com plummeted 8.7 percent in the after hours trading session on Tuesday, after its fourth quarter revenue trailed market consensus, and offered a lower-than-expected first quarter revenue outlook. Downbeat fourth quarter results led C.H. Robinson to slump 6.3 percent. JDA Software tumbled 9.7 percent, after it swung to a loss in the fourth quarter, and amid worries over a potential investigation by the U.S. Securities and Exchange Commission. On the other hand, Broadcom Corporation climbed 1.9 percent, after it reported better-than-anticipated fourth quarter results and offered a buoyant first quarter sales guidance. Key Tronic rallied 28.3 percent, following a significant rise in its second quarter profit. Upbeat quarterly results led Aspen Technology and Fortinet to soar 11.1 percent and 9.0 percent, respectively.
On Tuesday, the S&P 500 index lost 0.6 points. Exxon Mobil retreated 2.1 percent, after it reported downbeat fourth quarter sales. Best Buy, the top laggard on the S&P 500 index, slumped 5.6 percent, after its competitor, RadioShack, forecast lower-than-expected fourth quarter profit. Avery Dennison declined 5.4 percent, after its fourth quarter results fell short of market estimates and offered weaker-than-expected earnings guidance for FY2012. Archer-Daniels-Midland dropped 3.6 percent, after its second quarter profit trailed market forecast. Homebuilders, Lennar Corporation, PulteGroup and DR Horton shed 2.9 percent, 2.4 percent and 1.1 percent, respectively, after data indicated that the S&P/Case-Shiller home price index declined in November. On the other hand, United States Steel Corporation jumped 5.1 percent, after it reported better-than-expected fourth quarter revenues and indicated that it expects a “significant improvement” in its operating results in the first quarter.

European Stocks: Likely to open firmer
The DAX and CAC are expected to open 27 points and 19 points higher, respectively.
German and French Manufacturing PMI, Eurozone Manufacturing PMI & Consumer Price Index and Swiss Retail Sales & SVME PMI are the key economic indicators scheduled for release today.
Fortum Oyj, Unibail Rodamco SE, Fiat Industrial SpA, Infineon Technologies AG, Banco Popular Espanol SA and Outokumpu Oyj are scheduled to announce their results today.
According to Bloomberg, Macquarie Group Ltd., the Australian investment bank, is competing with at least three companies to buy asset-management divisions from Deutsche Bank AG.
Thyssenkrupp AG has stated that its supervisory board has approved the sale of its stainless steel business, Inoxum, to Outokumpu Oyj in a deal valued at about €2.7 billion.
The U.S. Food and Drug Administration has granted approval for Novartis AG's cancer drug, Gleevec, for expanded use in adult patients with rare gastrointestinal cancer.
Roche Holding AG has nominated four candidates for election to Illumina Inc.’s board of directors at the latter’s annual meeting this year.

Macro Update
Chinese official manufacturing PMI rises
The official Chinese manufacturing PMI climbed to a reading of 50.5 in January, compared to a reading of 50.3 posted in the previous month. Meanwhile, the HSBC PMI stood at a reading of 48.8 in January, unchanged from the preliminary estimate and following a reading of 48.7 recorded in December.
Australian house prices decline
On a sequential basis, house prices in Australia dropped 1.0 percent in the fourth quarter, compared to a revised 1.9 percent decline posted in the previous quarter.
Australian new home sales decline
The Housing Industry Association (HIA) has reported that on a monthly basis, new home sales in Australia dropped 4.9 percent in December, compared to a revised 4.4 percent decline posted in the previous month.
South Korea’s trade balance swings to deficit
The merchandise trade deficit in South Korea stood at $1.96 billion in January, a deficit for the first time in two years, and compared to a $3.41 billion surplus recorded in the previous month.
South Korean consumer price inflation eases
The annual consumer price inflation in South Korea eased to 3.4 percent in January, compared to a 4.2 percent rate recorded in December.

Economic Calendar

Note:PPPHigh      PPMedium      PLow


Corporate Calendar