Market Preview - 19 January 2012

Forex Overnight: EUR trading weaker
The EUR is trading lower against the majors, this morning, ahead of the second day of talks between Greece and private bondholders on a debt-swap plan, and French and Spanish bond auctions scheduled later today. Additionally, market participants are keeping a close eye on a number of economic releases in the U.S. scheduled later today, including consumer price inflation, housing starts and initial jobless claims. At 6 am, the EUR has dropped 0.1 percent against the USD to trade at $1.2852, while it has lost marginally against the GBP to trade at £0.8329.
The AUD has weakened 0.5 percent against the USD, after data indicated that the number of employed people unexpectedly dropped in December.

UK Stocks: Likely to open higher
The FTSE 100 is expected to open 10 to 12 points firmer.
No major economic indicators are scheduled for release today.
NCC Group is scheduled to announce its results today.
BHP Billiton has stated that it is mulling a dedicated rail line that would take coking coal from its Goonyella mine in Queensland to a proposed export terminal at Abbot Point.
Ivanhoe Mines, the owner of Mongolia's Oyu Tolgoi project, has stated that it would scrap its shareholder rights plan, thus clearing way for Rio Tinto to take over the project.

Asia: Trading in positive territory
Asian markets are trading in the green this morning, following yesterday’s reports that the International Monetary Fund (IMF) may boost its lending resources to tackle the European debt crisis.
In Japan, Sumco Corporation and Advantest have rallied, after their European peer, ASML Holding NV, forecast higher orders for chip-making equipment for the first quarter. Companies with large exposure to China, Hitachi Construction Machinery and TDK Corporation, have gained value, amid speculation that capital requirements for Chinese lenders may be eased. Nomura Holdings, Mizuho Financial Group and Mitsubishi UFJ Financial Group have edged higher, following better-than-expected fourth quarter earnings from their U.S. peer, Goldman Sachs. At 6 am, the Nikkei 225 index has gained 1.0 percent to trade at 8,640.5.
In South Korea, KEPCO Engineering & Construction has surged, amid reports that Hyundai Heavy Industries has bought a 5.0 percent stake in the company for a consideration of around KRW 150.0 billion. Shinsegae has advanced, after it reported robust full year sales and profit. In Hong Kong, Cnooc Limited has retreated, after it provided a lower-than-expected 2012 oil and gas production estimate. In China, airline sector stocks are trading in positive territory, with Air China Limited, China Southern Airlines and Hainan Airlines trading higher.

US Stocks: Futures trading marginally higher
At 6 am, S&P 500 futures are trading 0.3 points in the green.
Consumer Price Index, Building Permits, Housing Starts, Philadelphia Fed Manufacturing Index and Initial & Continuing Jobless Claims are the key economic indicators scheduled for release today.
Microsoft Corporation, International Business Machines, Google, Bank of America, American Express, Freeport-McMoRan Copper & Gold, Morgan Stanley and Advanced Micro Devices are scheduled to announce their results today.
Xilinx surged 7.2 percent in the after hours trading session yesterday, after it issued better-than-expected fourth quarter revenue guidance. Robust first quarter results and an upbeat outlook for the second quarter led F5 Networks to soar 7.0 percent. eBay Inc. rose 2.4 percent, after its fourth quarter results surpassed market expectations. WebMD Health jumped 3.0 percent, after a regulatory filing indicated that billionaire investor, Carl Icahn, has raised his stake in the company. On the other hand, Sealy reported a fourth quarter loss which led its shares to plunge 13.6 percent. Sanmina-SCI declined 6.3 percent, after it issued a downbeat adjusted earnings outlook for the second quarter.
The S&P 500 index climbed 1.1 percent, in the regular trading session yesterday, amid reports that the Interantional Monetray Fund may increase its resources to safeguard the global economy. Additionally, upbeat U.S. homebuilder confidence and industrial production data boosted investor sentiment. Goldman Sachs Group rallied 6.8 percent, on the back of better-than-expected fourth quarter earnings. Other financial sector stocks, Morgan Stanley, JPMorgan Chase and Bank of America soared 6.8 percent, 4.9 percent and 4.7 percent, respectively. Linear Technology surged 11.6 percent, following better-than-expected revenue guidance for the third quarter. Amphenol soared 11.0 percent, after its fourth quarter results exceeded market expectation. Among other stocks, Apollo Group and DeVry dropped 6.4 percent and 3.2 percent, respectively, following downbeat comments from a broker.

European Stocks: Expected to open firmer
The DAX and CAC are likely to open 36 to 46 points and 24 to 25 points higher, respectively.
The Eurozone's Current Account Balance is the key economic indicator scheduled for release today. Investors also await the release of the European Central Bank’s Monthly Report for January.
Novozymes A/S, Bankinter SA and Aurubis AG are scheduled to report their results later today.
A research study has shown that the use of Roche Holding AG’s melanoma drug, Zelboraf, develops another type of skin cancer, known as cutaneous squamous-cell carcinoma.
NuGeneration Limited, the joint venture between GDF Suez SA and Iberdrola SA, has applied to Ofgem, the U.K. regulator for electricity and downstream natural gas markets, for a license to generate electricity.
ArcelorMittal SA has stated that it will extend the closure of its long carbon steel production plant in Madrid for an indefinite period due to continued weakness in demand.
Metro AG has signed a €1.0 billion credit line to refinance an existing facility and fund its business.
The U.S. Securities and Exchange Commission has approved the proposed merger of NYSE Euronext and Deutsche Boerse AG.

Macro Update
UK consumer confidence falls
The Nationwide Building Society has indicated that the consumer confidence index in the U.K. has declined to a reading of 38.0 in December, compared to a reading of 40.0 recorded in November.
Monti calls for better Eurozone governance
Mario Monti, the Prime Minister of Italy, has urged for more effective governance of the European Union and the Eurozone to handle the sovereign debt crisis.
House rejects debt-limit increase
The House of Representatives has rejected the request of the U.S. President, Barack Obama, to raise the Federal debt limit by $1.2 trillion.
China’s leading index climbs
The Conference Board’s leading economic index in China has advanced 0.7 percent M-o-M in December, compared to a 0.5 percent rise recorded in November.
Australian employment unexpectedly falls
The number of employed people in Australia unexpectedly fell by 29,300 in December, following a revised 7,500 decline recorded in November. Additionally, the unemployment rate in Australia has remained stable at 5.2 percent in December, compared to a similar reading recorded in November.

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