Forex Overnight: USD trading lower
The USD is trading lower against the EUR, after S&P placed the AAA sovereign rating on the US on credit watch, following uncertainty about the raising of the government’s debt ceiling. Voting by the Italian lower house on new austerity measures, and release of the results of European banks stress tests are scheduled today.
The JPY is trading 0.1% lower against the USD.
At 6am, the EUR is trading 0.2% higher against the USD at $1.4174, while the GBP is trading 0.1% higher against the USD at $1.6157. The EUR is trading 0.1% higher against the GBP at £0.8773.
The AUD and CAD are trading 0.1% higher against the USD.
UK Stocks: Likely to open lower
UK markets are likely to open in the red, with the FTSE 100 expected to open 16 to 20 points lower.
Matrix Income & Growth 2 VCT and
Landkom International are expected to report their results later today.
BHP Billiton has announced that it is acquiring US shale gas producer, Petrohawk Energy Corporation, for about $12.1 billion.
According to the Financial Times,
Glencore has decided to discontinue reporting its results every quarter.
According to Reuters, Capital One Financial Corporation and Wells Fargo are among the bidders for
HSBC Holding’s US credit card portfolio.
The Daily Mail & General Trust plans to launch a new mass-market Sunday tabloid to fill the gap in the market caused by the closure of the News of the World tabloid, following the phone hacking scandal.
Asia: Trading mixed
Asian markets are trading mixed this morning.
In Japan, markets are trading marginally higher. Electronic retailers,
Yamada Denki,
Smaller Best Denki Company and
Kojima Company are trading in the green, following news that Japan might revive subsidies designed to promote sales of energy-efficient appliances.
Hitachi has gained, after it stated that it has been named as a strategic investor for the Visaginas Nuclear Power Plant Project planned by Lithuania. At 6 am, the Nikkei is trading 0.1% higher at 9,948.5.
In South Korea, markets are trading in the positive territory, with
LG Electronics and
LG Display trading higher.
Doosan Infracore Company has moved up, amid market speculation that profitability at its Bobcat unit would improve. In Hong Kong, markets are trading in the red, with
China Overseas Land & Investment and
China Resources Land trading lower. In China, markets are trading flat, with property sector stocks declining, after the government indicated that it would expand measures to curb property price gains in smaller cities.
US Stocks: Futures trading lower
US stock index futures are trading lower at 6am, with the S&P 500 Index futures down 0.8 points.
Key economic releases today include Consumer Price Index, NY Empire State Manufacturing Index, Industrial Production, Capacity Utilisation and Reuters/Michigan Consumer Sentiment Index.
In corporate releases,
Citigroup,
First Horizon National Corporation,
Genuine Parts Company,
Mattel,
Valmont Industries and
Webster Financial Corporation are scheduled to announce their results today.
In after hours trade yesterday,
Google surged 12.6%, after it recorded robust second quarter results.
Petrohawk Energy surged 27.4%, following its purchase by BHP Billiton, for $12.1 billion.
Vical soared 11.6%, after it announced that it would receive a $130 million upfront payment from Japan's Astellas Pharma, in a new licensing deal to develop and sell its vaccine, TransVax.
Extreme Networks gained 8.8%, after it declared its plans to cut its world-wide workforce by 16.0%, and raised its fourth-quarter revenue outlook.
Resources Connection advanced 8.7%, following better than expected fourth-quarter profit.
Flir Systems slumped 8.9%, after it guided to worse than expected second-quarter outlook.
Yesterday, the S&P 500 index lost 0.7%, after the Federal Reserve Chairman, Ben S. Bernanke, stated that there were no immediate bond-buying proposals under consideration.
Marriott International declined 6.6%, after providing lower-than-expected earnings forecast.
Akamai Technologies lost 4.3%, after a broker cut its price target. Other technology sector stocks,
Nvidia,
NetApp,
Red Hat and
Micron Technology lost 4.0%, 3.1%, 2.7%, and 2.7%, respectively. Retailers,
Best Buy and
Supervalu lost 5.7% and 2.9%, respectively, after US retail sales, excluding auto sales, failed to register a rise.
JPMorgan Chase gained 1.8%, following better than expected results led by a rise in investment banking profits.
European Stocks: Expected to open lower
European markets are expected to open in the negative territory. The DAX is likely to open 15 to 33 points lower, while the CAC is expected to open 8 to 14 points lower.
Investors await Euro zone’s Bank Stress Tests Summary and Trade Balance.
Aktiebolaget,
Addtech,
Tomra Systems,
Cybercom Group,
Prevas and
Luxonen are scheduled to report their results later today.
Volkswagen has reported that its vehicle sales in China climbed 16.4% in the first half of 2011, to 1.1 million units.
More than 80.0% of
Deutsche Boerse’s shareholders have approved its $9.7 billion takeover offer for NYSE Euronext.
The National Institute for Health and Clinical Excellence (NICE) has voted against
Novartis’s eye drug, Lucentis, as a treatment for diabetic macular oedema.
A US district judge has stated that she will review lawsuits by the liquidator of Bernard Madoff’s firm against
UBS.
According to Bloomberg, the Ministry of Commerce People's Republic of China (Mofcom) has received application from
Nestle regarding the acquisition of Hsu Fu Chi.
Macro Update
S&P places US credit rating on review for possible downgrade
Standard & Poor's Ratings Services has placed its AAA sovereign rating on the US on creditwatch with negative implications. The agency stated that, given the political impasse, there is there is at least a one-in-two chance that the US long-term rating may be lowered within the next 90 days.
Fed balance sheet expands
The Federal Reserve has stated that its balance sheet grew to a record $2.88 trillion in the week ended 13 July 2011, from a level of $2.87 trillion in the prior week.
Economy faces more downward pressure, indicates BoJ Minutes
The minutes of Bank of Japan's (BoJ) latest meeting indicated that its monetary policy board is of the opinion that the Japanese economy could continue to face downward pressure. The board also stated that the stronger yen is hampering the recovery by affecting exporter sentiment.
FDI in China rises in June
On an annual basis, Foreign Direct Investment (FDI) in China climbed 2.8% to $12.9 billion in June, compared to the 13.4% growth recorded in the previous month.
Chile holds key interest rate
Chile's central bank has retained its benchmark interest rate steady at 5.25%.
Economic Calendar
|
Country
|
BST
|
Economic Indicator
|
Relevance
|
Consensus/*Actual
|
Previous
|
Frequency
|
|
Japan
|
0:50
|
BoJ Monetary Policy Meeting Minutes
|
PPP
|
-
|
-
|
-
|
|
Eurozone
|
7:00
|
EU 25 New Car Registrations (Jun)
|
P
|
-
|
7.10%
|
Monthly
|
|
Eurozone
|
10:00
|
Trade Balance n.s.a. (May)
|
P
|
-
|
€-4.10 bn
|
Monthly
|
|
Eurozone
|
10:00
|
Trade Balance s.a. (May)
|
P
|
€-3.30 bn
|
€-2.90 bn
|
Monthly
|
|
US
|
13:30
|
Consumer Price Index (MoM) (Jun)
|
PPP
|
-0.10%
|
0.20%
|
Monthly
|
|
US
|
13:30
|
Consumer Price Index (YoY) (Jun)
|
PPP
|
3.60%
|
3.60%
|
Monthly
|
|
US
|
13:30
|
Consumer Price Index Excluding Food & Energy (MoM) (Jun)
|
PPP
|
0.20%
|
0.30%
|
Monthly
|
|
US
|
13:30
|
Consumer Price Index Excluding Food & Energy (YoY) (Jun)
|
PPP
|
1.60%
|
1.50%
|
Monthly
|
|
US
|
13:30
|
Consumer Price Index Core Index s.a. (Jun)
|
PPP
|
-
|
224.39
|
Monthly
|
|
US
|
13:30
|
Consumer Price Index n.s.a. (Jun)
|
PPP
|
225.65
|
225.96
|
Monthly
|
|
US
|
13:30
|
NY Empire State Manufacturing Index (Jul)
|
P
|
5
|
-7.79
|
Monthly
|
|
Canada
|
13:30
|
Manufacturing Shipments (MoM) (May)
|
P
|
-0.20%
|
-1.30%
|
Monthly
|
|
US
|
14:15
|
Industrial Production (MoM) (Jun)
|
PP
|
0.30%
|
0.10%
|
Monthly
|
|
US
|
14:15
|
Capacity Utilisation (Jun)
|
P
|
76.90%
|
76.70%
|
Monthly
|
|
US
|
14:55
|
Reuters/Michigan Consumer Sentiment Index (Jul)
|
PPP
|
72.5
|
71.5
|
Monthly
|
|
Eurozone
|
17:00
|
Bank Stress Tests Summary Released
|
PPP
|
-
|
-
|
-
|
Note: PPPHigh PPMedium PLow
Corporate Calendar
|
Country
|
Company Name
|
Index
|
Announcement
|
|
UK
|
Electrocomponents Plc
|
FTSE All Share
|
Trading
|
|
UK
|
Euromoney Institutional Investor Plc
|
FTSE All Share
|
Trading
|
|
UK
|
Experian Plc
|
FTSE All Share
|
Trading
|
|
UK
|
Spectris Plc
|
FTSE All Share
|
Trading
|
|
US
|
Citigroup Inc
|
S&P 500
|
Q2 Earnings Release
|
|
US
|
First Horizon National Corporation
|
S&P 500
|
Q2 Earnings Release
|
|
US
|
Genuine Parts Company
|
S&P 500
|
Q2 Earnings Release
|
|
US
|
Mattel Inc
|
S&P 500
|
Q2 Earnings Release
|