Market Preview - 13 January 2012

Forex Overnight: EUR trading stronger
Market optimism ahead of the Italian bond auction later today has strengthened the EUR against the majors, this morning. Moreover, yesterday’s comment from the European Central Bank President, Mario Draghi, that a massive injection of cash into the financial system has aided the stabilisation of the banking system and the European economy, has further improved the trading sentiment in the Euro. At 6 am, the EUR has gained 0.2 percent against the USD to trade at $1.2841, while it has advanced 0.1 percent against the GBP to trade at £0.8365.
The JPY is trading marginally lower against the USD, while it is trading 0.2 percent lower against the EUR.
The AUD has declined marginally against the USD.

UK Stocks: Expected to open firmer
The FTSE 100 is likely to open around 24 points in the green.
Producer Price Index - Input & Output are the key economic indicators scheduled for release today.
Henderson Smaller Companies Investment Trust is scheduled to report its results later today.
Sagittarius Mines Inc., the Philippine joint venture between Xstrata and Indophil Resources NL, has stated that the government has denied its application for an environmental compliance certificate for the $5.9 billion Tampakan project.
Tesco has indicated that it plans to source products worth £370.0 million from India for the 12 months ending February 2013, higher than the previous year.
InterContinental Hotels Group has indicated that it expects higher sales in the U.S., after teaming up with five of its rivals to launch an online hotel search website, Room Key.

Asia: Trading mostly in positive territory 
Asian markets are trading mostly higher this morning.
In Japan, Inpex Corporation has risen, after it stated that the company along with Total SA would proceed with their $34.0 billion liquefied natural gas project in Australia. Pacific Metals and Bridgestone Corporation have gained value, following positive broker comments. Export sector stocks, Honda Motor, Canon and Nippon Sheet Glass have also edged higher. At 6 am, the Nikkei 225 index has advanced 1.4 percent to trade at 8,501.5.
In South Korea, KCC Corporation has surged, after it announced a $602.0 million stake sale in Hyundai Heavy Industries. Hyundai Home Shopping Network has climbed, after it announced that it has acquired a controlling stake in Handsome Company for KRW 420.0 billion. In Hong Kong, Belle International Holdings has plummeted, after it reported slower same-store sales growth for the quarter ended 31 December 2011. Moreover, a broker downgraded its rating on the stock to “Neutral” from “Buy”. Aluminum Corporation of China and PetroChina have advanced, following higher commodity prices. In China, Gemdale Corporation and Poly Real Estate Group have lost value, amid news that Beijing will restrict property  purchases. CSR Corporation and China CNR Corporation have recorded losses, amid news that the railway ministry may reduce its spending on new locomotives.

US Stocks: Futures trading in the green
At 6 am, S&P 500 futures are trading 1.2 points higher.
Reuters/Michigan Consumer Sentiment Index, Import Price Index and Trade Balance are the key economic indicators scheduled for release today.
JPMorgan Chase & Company and Onstream Media Corporation are scheduled to announce their results today.
Metabolix tumbled 37.6 percent, in after hours trading session yesterday, after it announced the termination of its Telles joint venture with Archer Daniels Midland. Diamond Foods plunged 11.1 percent, amid reports that the company is in focus for a criminal probe from the Federal prosecutors for alleged involvement in a fraud over payments to walnut farmers. Shutterfly dropped 5.9 percent, after it stated that its CEO, Mark Rubash, would leave the company on 24 February 2012. On the other hand, HomeAway, Keynote Systems and Monolithic Power Systems have gained 5.6 percent, 5.2 percent and 4.1 percent, respectively.
The S&P 500 index gained 0.2 percent, in the regular trading session yesterday, as a decline in yields at the Italian and Spanish bond auctions overshadowed downbeat U.S. jobless claims and retail sales data. CA Inc. advanced 4.2 percent, after the hedge fund, Taconic Capital Advisors, accumulated a 5.1 percent stake in the company. Dow Chemical Company jumped 3.6 percent, after the European Union withdrew tariffs against the U.S. on usage of a chemical in paints and paper coatings. Sears Holdings climbed 3.3 percent, after filings indicated that its Chairman, Edward Lampert, had increased his personal stake in the company. Target Corporation added 1.6 percent, following announcement that it would repurchase as much as $5.0 billion of its shares. Among other stocks, Chevron Corporation dropped 2.6 percent, after it stated that its fourth quarter earnings would be “significantly below” the previous period level. Wynn Resorts fell 1.9 percent, after its Vice-Chairman, Kazuo Okada, sued the company, alleging that it acted improperly in his effort to expand in Macau.

European Stocks: Likely to open in positive territory
The DAX and CAC are expected to open 42 points and 18 points firmer, respectively.
Eurozone’s Trade Balance is the key economic indicator scheduled for release today.
Trilogiq SA and Hypothekarbank Lenzburg AG are scheduled to announce their results today.
Banco Santander SA has disclosed plans to issue 193.7 million new shares as a dividend payment from last year’s earnings.
According to Bloomberg, Nestle SA and Danone SA have made first round bids for Pfizer Inc.’s baby-formula unit.
Deutsche Bank AG has rejected the allegation over breaching an agreement to buy bankruptcy claims, in its dispute with Kingate Global Fund Ltd and Kingate Euro Fund Ltd.
The consortium led by Bouygues SA has been named as the preferred bidder for Nimes-Montpellier rail bypass project in France worth about €1.3 billion.
Air France-KLM has announced a pay freeze at its French unit and reductions in its fleet, as part of a three year turnaround plan.

Macro Update
“Tangible steps” needed by Hungary, says IMF’s Lagarde
Christine Lagarde, the Managing Director of the International Monetary Fund (IMF), has asked Hungary to take “tangible steps” on policies required to stabilise the nation’s economy before starting any negotiations for external financial aid.
Obama seeks debt limit increase
Barack Obama, the U.S. President, has asked Congress to raise the government’s debt limit by a further $1.2 trillion to $16.4 trillion.
Japan’s M2 money supply climbs
On a year-on-year basis, Japan’s M2 money supply has climbed more-than-expected by 3.1 percent in December, following a 3.0 percent rise recorded in November.
Bank of Korea holds key interest rate
The Bank of Korea has kept its key interest rate on hold at 3.25 percent for a seventh consecutive month, in line with market expectation.

Economic Calendar

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Corporate Calendar