Market Preview - 12 July 2012; Japan eases, Aus jobs data misses

UK Stocks: Expected to open lower
The FTSE 100 is likely to open 20 to 25 points in the red following the example set by Asian markets.
No major economic indicators are scheduled for release.
SuperGroup and Samuel Heath and Sons are scheduled to report their results.
Vodafone Group has agreed to acquire Telstra Corporation’s New Zealand unit for a consideration of about $668.0 million.
According to Reuters, US Occupational Safety and Health Administration plan to announce a settlement with BP’s Texas City refinery over safety violations found in 2009.
Rio Tinto has indicated that its CFO, Guy Elliott, will leave the company at the end of next year.
According to Reuters, Rio Tinto has refrained from participating in a planned iron ore project worth over €1.0 billion in Portugal.

Asia: Trading weak
Asian markets are trading under pressure this morning amid persistent concerns over the global economic recovery.
In Japan, Asahi Glass has dropped after it lowered its operating profit outlook for the full year. Tokyo Electric Power has declined amid reports that the company’s reactor cleanup will cost ¥1.0 trillion. Export sector stocks, Sony Corporation, Fanuc, Mazda Motor and Honda Motor have lost value. On the other hand, Yamada Denki has advanced amid reports that the company will increase its stake in Best Denki by over 50.0 percent. At 5 am GMT, the Nikkei 225 index has declined 1.3 percent to trade at 8,732.5.
In South Korea, Hyundai Motor has edged lower after workers at the company voted to stage their first strike in four years following the failure of annual wage talks. In Hong Kong, Sun Hung Kai Properties has slipped after it agreed to pay HK$6.9 billion for a property in Hong Kong, a price much less than the market had expected. Kingway Brewery Holdings has declined after it forecast a significant loss for the first half year. In China, banking sector stocks, China Construction Bank, Bank of Communications and Industrial & Commercial Bank of China have recorded losses.

US Stocks: Futures trading lower
At 5 am GMT, S&P 500 futures are trading 3.4 weaker.
Initial & Continuing Jobless Claims and Import & Export Price Indices are the key economic indicators scheduled for release. Additionally, investors await the monthly budget statement for June.
Fastenal Company, Commerce Bancshares, Bank of Ozarks, Resources Connection, AngioDynamics and Mission West Properties are scheduled to announce their results.
Supervalu plunged 26.3 percent in after hours trading session yesterday after it announced the suspension of its quarterly dividend and withdrew its previously issued forecasts for 2013. Additionally, the company stated that it is reviewing strategic alternatives for its business. Marriott International dropped 2.3 percent tracking weaker-than-expected second quarter sales. A cut to its second quarter revenue and earnings forecast led Calix to slump 22.1 percent. Callaway Golf Company lost 2.8 percent after it announced that it plans to lower its workforce by 12.0 percent and issued a dismal outlook for the full year. On the contrary, Merck & Company climbed 2.6 percent after the company indicated that the trial of its osteoporosis treatment, odanacatib, showed positive results.
Yesterday, the S&P 500 index ended flat in the regular trading session. Investor sentiment was dampened after the minutes of the Federal Reserve’s (Fed) latest monetary policy meeting offered little hint on further additional easing from policymakers. Best Buy Company plunged 8.4 percent after its peer, Hhgregg, lowered its full year guidance. JC Penney Company fell 2.2 percent after S&P cut its credit rating on the company to “B+” from “BB-”. Viacom edged 0.3 percent lower amid reports that DirecTV has cut access to the company’s television channels in a dispute over fees. On the other hand, Abercrombie & Fitch Company climbed 4.1 percent amid reports that the company might be considering a repurchase of its shares and is likely to scale down its European expansion plans. Resource sector stocks, WPX Energy jumped 3.2 percent, while EOG Resources and Anadarko Petroleum Corporation rose 2.8 percent each. JPMorgan Chase rose 1.0 percent following reports that it is planning to reclaim millions of dollars in stock from executives responsible for the London chief investment office trading loss.

European Stocks: Likely to open in negative territory
The DAX and CAC are expected to open 12 to 25 points and 11 to 15 points in the red, respectively.
German Wholesale Price Index, Greek Unemployment Rate and Eurozone’s Industrial Production are the key economic indicators scheduled for release. Additionally, investors await the ECB’s monthly report for July.
Suedzucker Mannheim Ochsenfurt AG, Agrana Beteiligungs AG, Castellum AB, Orexo AB and Norwegian Air Shuttle ASA are scheduled to announce their results today.
Bayer Healthcare, a unit of Bayer AG, would pay $15.0 million as a settlement for a US lawsuit, alleging the company of illegally marketing aspirin mixed with supplements.
According to the Dow Jones Newswires, RWE AG is proceeding with a plan to sell net4gas, a Czech-based long distance gas transmission business, which is anticipated to fetch about €1.4 billion.
According to Reuters, Teliasonera AB has put its Spanish mobile operator, Yoigo, for sale and could be valued over €1.0 billion.

Forex Overnight: EUR unchanged
The EUR is trading almost unchanged against most its major peers early Thursday. At 5 am GMT, the EUR is trading almost flat against the USD and the GBP at $1.2244 and £0.7897, respectively.
The JPY is trading 0.3 percent firmer each against the USD and the EUR. The Bank of Japan (BoJ) kept its benchmark interest rate unchanged at current levels and signaled a moderate economic recovery.
The AUD has dropped 0.6 percent against the USD after data indicated a rise in Australian unemployment rate in June.

Macro Update
Fed minutes indicate little urgency for further stimulus
The minutes of the latest Federal Open Market Committee’s monetary policy meeting provided no hint for a third round of quantitative easing and indicated that the US economy continues to expand at a moderate pace. Meanwhile, some of the Fed officials opined that more asset purchases are warranted, if economic conditions deteriorated.
BoJ keeps benchmark interest rate on hold
The BoJ has maintained its key interest rate in the range of 0.0 to 0.1 percent. Additionally, the central bank increased its asset-purchase fund to ¥45.0 trillion from ¥40.0 trillion.
Australia’s unemployment rate rises
On a seasonally adjusted basis, the unemployment rate in Australia has climbed to 5.2 percent in June compared to a 5.1 percent rate posted in May.
Australian consumer price inflation expectation jumps
The annual consumer price inflation expectation in Australia has climbed to 3.3 percent in July from an expectation of 2.3 percent reported in the previous month.
South Korea unexpectedly lowers interest rate
The Bank of Korea has surprisingly cut its benchmark interest rate by 25 basis points to 3 percent.
New Zealand’s consumer sentiment improves
The consumer confidence index in New Zealand has climbed to a reading of 110.5 in July compared to a reading of 105.8 posted in June.
Manufacturing activity in New Zealand slows
The seasonally adjusted Performance of Manufacturing Index in New Zealand has declined to a reading of 50.2 in June compared to a reading of 55.8 reported in the earlier month.

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