Market Preview - 17 August 2012; US consumer confidence on tap

Forex Overnight: EUR trading mixed
The EUR is trading mixed against the majors this morning ahead of the release of German producer price index data later in the day which is expected to indicate that annual inflation eased in July. Additionally, the Eurozone current account and trade balance data for June are on tap in today’s trading session. Meanwhile, German Chancellor Angela Merkel has hinted at the nation’s commitment to preserve the Euro. At 5 am GMT, the EUR is trading 0.1 percent lower against the USD at $1.2342, while it is trading 0.1 percent firmer against the GBP at £0.7861.The JPY has climbed 0.1 percent against the EUR while it is trading almost unchanged against the USD. The AUD and the CAD have weakened 0.4 percent and 0.1 percent against the USD, respectively, amid waning risk appetite.

UK Stocks: Likely to open higher
The FTSE 100 is expected to open 10 to 16 points firmer. No major economic indicators are scheduled for release today.
Rank Group is scheduled to announce its results today. Rio Tinto has announced that it has sold $3.0 billion of fixed rate bonds in a three part offering for the second time this year. Barrick Gold Corporation has stated that it is in talks to sell all or a part of its stake in African Barrick Gold subsidiary to China National Gold Group. Lonmin has warned that it is likely to miss its full year production and cost targets amid violent protests near its Marikana platinum mine in South Africa.

Asia: Trading mostly in the green
Asian markets are trading mostly higher this morning mirroring overnight gains on Wall Street. In Japan, Yamaha Motor has edged higher after a broker upgraded its recommendation on the stock to “Out-Perform” from “Neutral”. Tokyo Steel Manufacturing has risen after it raised its steel scrap prices. Toshiba Corporation has advanced amid reports that the company has developed a high-iron concentration samarium-cobalt magnet that does not require a key China sourced rare earth mineral, dysprosium. At 5 am GMT, the Nikkei 225 index has gained 0.8 percent to trade at 9,162.5. In Hong Kong, retailers, Belle International Holdings and Esprit Holdings have registered gains. Aluminum Corporation of China has lost value after it swung to a loss for the first half year. In China, exporters of solar energy products, EGing Photovoltaic Technology Company and Shanghai Chaori Solar Energy Science & Technology have recorded gains following a rise in US building permits and positive comments from the European policy makers. In South Korea, Samsung Electronics has declined amid worries over its patent litigation with Apple Inc. Kumho Tire Company has gained value after its workers agreed to resume work today following a one day strike.

US Stocks: Futures trading in the red
At 5 am GMT, S&P 500 futures are trading 0.8 points lower. Reuters/Michigan Consumer Sentiment Index and Leading Indicator are the key economic indicators scheduled for release today. J. M. Smucker Company, Hibbett Sports, ANN, Kansas City Life Insurance Company, Casual Male Retail Group and Kirkland's are scheduled to announce their results today. Oplink Communications jumped 5.1 percent in the after hours trading session yesterday on the back of upbeat fourth quarter earnings and following a better-than-expected first quarter profit forecast. Gap rose 1.3 percent following a significant rise in its second quarter profit and after it raised its full year earnings outlook. On the downside, Marvell Technology Group and DryShips slumped 9.6 percent and 3.0 percent, respectively, after their second quarter results came in below market expectations. Aeropostale plummeted 7.9 percent after it issued a weak third quarter earnings forecast. America's Car-Mart slumped 6.2 percent tracking downbeat earnings for the first quarter. The S&P 500 index climbed 0.7 percent in the regular trading session yesterday after data indicated that building permits in the US jumped to a four year high in July. Housing sector stocks, PulteGroup rallied 6.4 percent while Masco Corporation and DR Horton climbed 4.5 percent each. Cisco Systems rallied 9.6 percent after its fourth quarter results surpassed market estimates and it raised its first quarter dividend. Sears Holdings Corporation surged 6.5 percent following a narrower-than-expected second quarter loss. On the contrary, Agilent Technologies tumbled 8.2 percent after it lowered its full year earnings forecast. Lower-than-expected second quarter revenue and a dismal full year profit forecast led Wal-Mart Stores to decline 3.1 percent. Dollar Tree fell 1.8 percent after it issued a cautious outlook for the third quarter.

European Stocks: Expected to open mostly higher
The DAX is likely to open 2 points down to 1 point up while the CAC is expected to open 13 to 15 points higher. German Producer Prices and Eurozone Current Account & Trade Balance are the key economic indicators scheduled for release today. Ratos AB, Alpiq Holding AG, Aker ASA, Daetwyler Holding AG and Norway Pelagic ASA are scheduled to report their results later today. Banco Santander SA plans to sell up to 25.0 percent of its Mexican unit through a dual public offering on the Mexican and New York Stock Exchanges. In an interview with Handelsblatt, Axel Weber, the Chairman of UBS AG, has opined that the bank does not help clients to hide their income from German authorities and does not support tax evasion. Additionally, Weber stated that the bank is currently not in settlement talks to end allegations that it was involved in manipulating Libor. According to Reuters, Vivendi SA has hired Rothschild and Deutsche Bank AG to study strategic options for its GVT phone unit in Brazil. Fitch Ratings has affirmed the long term Issuer Default Rating and senior unsecured ratings on Lanxess AG at “BBB”.

Macro Update
Germany committed to preserve the Euro, says Merkel
Angela Merkel, the German Chancellor, has stated that Germany is committed to doing everything it can to maintain the Euro.
Japanese economy to grow 1.7 percent in FY2013-14, indicates government estimate
Japan's Cabinet Office has stated that it expects the nation’s economy to expand 1.7 percent in real terms during FY2013-14 after projecting a 2.2 percent expansion for the current fiscal year.
New Zealand’s output producer prices unexpectedly rise
On a sequential basis, output producer prices in New Zealand have surprisingly climbed 0.3 percent in the second quarter of 2012 compared to a 0.1 percent decline reported in the first quarter of 2012.

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