Market Preview - 11 January 2012

Forex Overnight: EUR trading lower
The EUR is trading under pressure against its major counterparts, this morning, ahead of today’s German five-year notes auction worth €4.0 billion. Additionally, market speculation that Eurozone industrial production, scheduled for release tomorrow, might show a decline for a third consecutive month in November, weighed on the Euro. At 6 am, the EUR has lost 0.3 percent and  0.1 percent against the USD and the GBP, to trade at $1.2744 and £0.8244, respectively.
The JPY has risen 0.2 percent against the EUR, while it has slid 0.1 percent against the USD.
The AUD has lost 0.2 percent against the USD, following a drop in Australian job vacancies in November.

UK Stocks: Expected to open in the red
The FTSE 100 is likely to open 13 to 16 points in negative territory.
Total and Visible Trade Balance are the key economic indicators scheduled for release today.
No major corporate releases are scheduled for today.
BP and Sempra Energy have announced that they plan to make a joint investment of more than $1.0 billion to develop wind farms in Pennsylvania and Kansas.
HSBC Holdings has announced the appointment of Jean Beunardeau as the CEO of HSBC France with immediate effect, replacing Christophe de Backer.
Rio Tinto and Fortescue Metals Group have suspended iron ore loading operations in Australia, amid a cyclone threat on the western Australian coast.
LogiCamms has bagged two design contracts for the upgrade of electrical infrastructure at Rio Tinto’s iron ore ports in the Pilbara region.
Tesco has announced that it will close 12 stores at its Fresh & Easy chain in the U.S.

Asia: Trading mixed
Asian markets are trading mixed this morning.
In Japan, Nomura Holdings is trading higher, following expectations of a revamp, after the resignation of its wholesale banking head, Jesse Bhattal. Semiconductor sector stocks, Elpida Memory, Sharp Corporation and Toshiba Corporation are trading higher. On the other hand, Bridgestone Corporation has slid, after its U.S. peer, Goodyear Tire & Rubber Company, indicated that it faces soft global demand. At 6 am, the Nikkei 225 index is trading 0.2 percent higher at 8,435.5.
In China, property sector stocks, China Vanke, Poly Real Estate Group and China Merchants Property Development have retreated, after a broker stated that the central bank might raise interest rate in 2012 to combat inflation. On the other hand, Angang Steel Company has advanced, after a broker upgraded the steel sector to “Over-weight” and named the company as its “Top Chinese steel pick”. In Hong Kong, China Coal Energy has climbed, after it reported a significant rise in its 2011 profit. In South Korea, technology sector stocks, LG Electronics and Samsung Electronics are trading under pressure. Among other stocks, Hyundai Motor has edged higher, after its labour union indicated that it plans to resume all engine production at the company’s biggest local production base, Ulsan.

US Stocks: Futures trading weak
At 6 am, S&P 500 futures are trading 2.5 points lower.
MBA Mortgage Applications is the key economic indicator scheduled for release today. Investors also await the Federal Reserve’s (Fed) Beige Book report.
Lennar Corporation, Supervalu Inc., 99 Cents Only Stores, Richardson Electronics and Seanergy Maritime Holdings are scheduled to announce their results today.
Crocs surged 5.6 percent in after hours trading session yesterday, after it issued an upbeat outlook for its fourth quarter revenue. Eastman Kodak climbed 5.0 percent, after it stated that it is suing Apple Inc. and HTC Corporation for an alleged infringement of certain patents related to digital imaging technology. Better-than-expected fourth quarter earnings and a buoyant outlook for the first quarter led Synnex Corporation to advance 4.1 percent. On the other hand, Urban Outfitters plunged 15.2 percent, after it announced that its CEO, Glen Senk, has resigned with immediate effect. Among other stocks, HCA Holdings, PVH Corporation and Omnicell lost 6.1 percent, 3.2 percent and 2.9 percent, respectively.
The S&P 500 index rose 0.9 percent in the regular trading session yesterday. BorgWarner Inc. soared 12.3 percent, after it issued a better-than-expected full year profit guidance. Life Technologies gained 8.3 percent, after it announced that it is taking orders for the new bench top Ion Proton Sequencer. Financial sector stocks, Genworth Financial, Hartford Financial Services Group and Bank of America climbed 7.4 percent, 5.8 percent and 5.7 percent, respectively, on the back of improved risk appetite among investors. NYSE Euronext jumped 4.6 percent, following reports that European regulators are likely to block its merger with Deutsche Boerse. On the contrary, lowering its full year earnings forecast led Tiffany to tumble 10.5 percent. Goodyear Tire & Rubber plunged 8.3 percent, after it indicated that it is experiencing softness in global demand. Energy sector stocks took a hit, with Southwestern Energy, Cabot Oil & Gas and Consol Energy declining 1.7 percent, 1.6 percent and 1.3 percent, respectively.

European Stocks: Likely to open in negative territory
The DAX and the CAC are expected to open 27 to 28 points and 9 to 10 points lower, respectively.
German Public Finances Balance-GDP Ratio & Real GDP Growth rate and Eurozone’s Gross Domestic Product are the key economic indicators scheduled for release today.
Cropenergies AG and CHR Hansen Holding A/S are scheduled to announce their results today.
According to the Financial Times, Everything Everywhere, the combined U.K. operations of France Telecom SA and Deutsche Telekom AG, plans to begin an auction of wavelength spectrum next month.
Deutsche Bank AG and Deutsche Postbank AG have announced that they would begin negotiations on a domination and profit-and-loss transfer agreement.
Repsol YPF SA has announced that it is set to begin a private placement of 61.04 million of its shares, offloading half of the stake it had acquired from Sacyr Vallehermoso SA last month.
The Financial Times has reported that European competition officials have recommended blocking the proposed merger between Deutsche Boerse AG and NYSE Euronext.

Macro Update
UK shop price inflation eases
The British Retail Consortium has indicated that the annual shop price inflation in the U.K. eased to 1.7 percent in December, its lowest reading in 16 months, and compared to a rate of 2.0 percent recorded in November.
Policy makers need to consider instability risk, says Fed’s George
Esther George, the President of the Kansas City Fed, has stated that the central bank policy makers must consider whether they are increasing the odds of instability in the financial system when considering further action to boost growth.
‘Structural reforms’ needed, says Shirakawa
Masaaki Shirakawa, the Bank of Japan Governor, has stated that there are limitations to what monetary policy can achieve and it is essential that governments implement “necessary” reforms to help the global economy recover.
Japan’s foreign reserves fall
Japan’s official foreign exchange reserves have declined to $1.296 trillion at the end of December, compared to a record high of $1.305 trillion in reserves recorded at the end of November.
Australian job vacancies decline
The Australian Bureau of Statistics, in its quarterly survey, has indicated that, on a seasonally adjusted basis, job vacancies in Australia have dropped to 181,000 in November, compared to 187,100 vacancies recorded in August.

Economic Calendar

Note: PPPHigh     PPMedium     PLow


Corporate Calendar