Market Preview - 20 January 2012

Forex Overnight: USD trading higher
The USD has strengthened against the majors, this morning, ahead of US existing home sales data scheduled later today, which is expected to indicate that sales rose in December. Meanwhile, Greece’s Finance Minister, Evangelos Venizelos, has stated that there has been progress in debt-swap talks with private bondholders and discussions will continue today. At 6 am, the EUR has dropped 0.1 percent against the USD to trade at $1.2963, while the GBP has declined marginally against the USD to trade at $1.5487.
The JPY is trading 0.1 percent weaker against the USD.
The AUD has declined 0.1 percent against the USD, after data indicated that Chinese manufacturing activity contracted for the third straight month in January.

UK Stocks: Expected to open in the red
The FTSE 100 is likely to open 1 point higher to 5 points lower.
Retail Sales for December is the key economic indicator scheduled for release today.
No major corporate releases are scheduled for today.
According to Bloomberg, AXA SA and Ace Limited are among final bidders for HSBC Holdings’s non-life insurance operations.
The Telegraph has reported that Royal Bank of Scotland borrowed £5.0 billion from the European Central Bank’s long-term refinancing operation scheme in December.
The Financial Times has reported that Barbican Insurance has made a fresh indicative takeover bid for Omega Insurance Holdings.

Asia: Trading in positive territory
Asian markets are trading higher this morning, mirroring overnight gains on Wall Street.
In Japan, Mitsubishi UFJ Financial Group, Nomura Holdings, Mizuho Financial Group and Sumitomo Mitsui Financial Group have registered gains, after their U.S. peers, Bank of America and Morgan Stanley, reported upbeat results for the fourth quarter. Real estate companies have advanced, with NTT Urban Development, Nomura Real Estate Holdings and Daibiru Corporation trading higher, after Fuji Media Holdings offered to buy Sankei Building Company at a significant premium compared to yesterday’s closing price. Export sector stocks have gained, with Panasonic, Toyota Motor and Sharp Corporation trading in positive territory. At 6 am, the Nikkei 225 index has gained 1.6 percent to trade at 8,780.5.
In South Korea, Hyundai Engineering & Construction and Hyundai Corporation have gained value, amid reports that they have bagged a contract worth $300.0 million to construct a coal-fired power plant in Columbia. In China, Huaxia Bank has edged higher, after it forecast a more than 50.0 percent rise in its full year profit. In Hong Kong, financial sector stocks, HSBC Holdings, The Bank of East Asia, China Life Insurance and Hang Seng Bank are trading in the green. PetroChina and Jiangxi Copper have risen, following higher commodity prices.

US Stocks: Futures trading marginally lower
At 6 am, S&P 500 futures are trading 0.1 points in the red.
Existing home sales is the key economic indicator scheduled for release today.
General Electric, Parker Hannifin, Fifth Third Bancorp, Suntrust Banks, Comerica and First Horizon National are scheduled to announce their results today.
Google slumped 9.0 percent, in after hours trading yesterday, after its fourth quarter earnings trailed market expectations. Lower-than-expected fourth quarter revenue led American Express 2.1 percent lower. On the other hand, International Business Machines advanced 2.7 percent, after its 2012 earnings guidance surpassed market consensus. A better-than-expected second quarter earnings per share led Microsoft Corporation 2.4 percent higher. Intel climbed 0.7 percent, following strong fourth quarter results.
The S&P 500 index edged 0.5 percent higher, in the regular trading session yesterday, amid upbeat corporate earnings and after data indicated that initial jobless claims in the U.S. dropped to the lowest level in almost four years. Morgan Stanley and Bank of America jumped 5.4 percent and 2.4 percent, respectively, after their fourth quarter results surpassed market expectation. F5 Networks surged 10.6 percent, after it forecast a strong start to 2012. Sears Holdings soared 9.8 percent, following reports that CIT Group Inc. will approve financing for the former’s vendors. NetApp rallied 8.3 percent, amid market speculation that it could receive takeover offers. On the contrary, Johnson Controls slumped 8.8 percent, after it lowered its full year earnings guidance. Bristol-Myers Squibb lost 3.0 percent, after the U.S. Food and Drug Administration declined the approval of an experimental diabetes drug developed by it in collaboration with AstraZeneca.

European Stocks: Likely to open weak
The DAX is expected to open 2 points higher to 3 points lower, while the CAC is expected to open 2 to 5 points in negative territory.
The German Producer Price Index is the key economic indicator scheduled for release today.
I Grandi Viaggi SpA is scheduled to announce its results today.
According to Bloomberg, the Italian government plans to force Eni SpA to sell its €5.9 billion stake in the natural-gas distribution network, Snam Rete Gas SpA, to boost competition.
The Federal Reserve Bank of New York has stated that it has sold $7.01 billion worth of mortgage securities assumed in the rescue of American International Group Inc. to Credit Suisse Group AG.
Accor SA has announced the official take-over of Hotel Nikko Jakarta and has branded it under the Pullman name. The company further stated that it will open 12 more five-star Pullman hotels during the next five years in big Indonesian cities.

Macro Update
Moody’s expects to put banks under review for downgrade
Moody’s Investors Service has warned that it may place the ratings of a number of global investment banks and European banks under review for downgrade during the first quarter of 2012.
IMF to lower global growth forecast, indicates report
The Daily Telegraph has reported that the International Monetary Fund (IMF) is likely to slash its 2012 global growth forecast to 3.3 percent from 4.0 percent estimated earlier.
HSBC flash manufacturing PMI in China rises
The HSBC flash manufacturing Purchasing Managers’ Index (PMI) in China has marginally climbed to a reading of 48.8 in January, compared to a final reading of 48.7 recorded in December.
Australian import price index climbs
On a sequential basis, the import price index in Australia has advanced 2.5 percent in the fourth quarter of 2011, higher than market consensus, and compared to a flat reading recorded in the third quarter of 2011.

Economic Calendar

Note:PPPHigh      PPMedium      PLow


Corporate Calendar