Market Preview - 23 January 2012

Forex Overnight: EUR trading weak
The EUR is trading lower against major currencies, this morning, amid fears that the Greek government and private sector creditors could struggle to reach an agreement on the debt-swap deal. Investors additionally await results of the European Union (EU) finance ministers meeting to discuss new budget rules and the proposed Greek debt swap. Traders are also keeping a close eye on the German and the French bond auctions, later today. At 6 am, the EUR has slid 0.3 percent and 0.1 percent against the USD and the GBP to trade at $1.2895 and £0.8293, respectively.
The JPY has advanced 0.3 percent against the EUR and has marginally slid against the USD.
The AUD is trading unchanged against the USD. Data indicated that Australian producer price inflation eased to 0.3 percent in the fourth quarter of 2011.

UK Stocks: Expected to open in the green
The FTSE 100 is likely to open 18 to 20 points in positive territory.
No major economic indicators are scheduled for release today.
City of London Investment Group is scheduled to announce its results today.
BHP Billiton has received conditional approval from the Western Australian Environmental Protection Authority for a $10.0 billion expansion of its iron ore export harbour, Port Hedland, in Western Australia to boost supply to Chinese steel mills.
According to the Sunday Times, BP is mulling a bid for Cove Energy, after the latter discovered a gas field off Mozambique.
The Sunday Telegraph has reported that Barclays’ credit card operations, Barclaycard might buy £6.5 billion of MBNA Europe Bank Ltd.’s total £10.0 billion U.K. and Irish credit card portfolio.
The Sunday Times has reported that BAE Systems is considering the closure of its Portsmouth dockyard after a review of its shipbuilding operations.
The Sunday Telegraph has reported that Stelios Haji Ioannou, the founder of EasyJet, would vote against the executive remuneration report at its annual general meeting.

Asia: Trading higher
Today, markets in Hong Kong, South Korea and China are closed on account of Lunar New Year holidays.
At 6 am, the Nikkei 225 index is trading 0.1 percent higher at 8,770.5, ahead of the outcome of Greece’s ongoing negotiations with private-sector creditors.
In Japan, Toshiba Corporation has climbed, following reports that U.S. based contract chip maker, GlobalFoundries Inc. is considering acquisition of the company. Technology sector stocks, Elpida Memory and Casio Computer have also added value. Olympus and Sony have advanced, amid reports that the companies are in the final stages of negotiations to form a capital and business alliance. On the other hand, exporters with considerable exposure to Europe, Canon, Shimano and Honda Motor have retreated. Panasonic has lost value, after Moody’s Investors Service lowered its debt rating on the company.

US Stocks: Futures trading in the red
At 6 am, S&P 500 futures are trading 3.9 points weaker.
No major key economic indicators are scheduled for release today.
Texas Instruments, VMware, CSX Corporation, Western Digital Corporation and Zions Bancorporation are scheduled to announce their results today.
Schlumberger ended flat in after hours trading session on Friday, despite reporting robust fourth quarter earnings. Zynga rose 0.9 percent, after it confirmed reports that it is mulling entering the online gambling market. Home Depot added 0.2 percent, after it agreed to acquire Redbeacon for an undisclosed sum. Amongst other key gainers, Astex Pharmaceuticals, Cogo Group, G-III Apparel Group and Silicon Image advanced 5.0 percent, 3.8 percent, 3.7 percent and 3.0 percent, respectively. Spartech, Great Panther Silver, First Defiance Financial and Corinthian Colleges featured amongst the major laggards, declining 5.0 percent, 5.0 percent, 3.8 percent and 2.7 percent, respectively.
On Friday, the S&P 500 index added 0.1 percent in the regular trading session. Sears Holdings, the top gainer on the S&P 500 index, rallied 13.0 percent. Microsoft Corporation surged 5.7 percent, after its second quarter earnings surpassed market expectations. Better-than-anticipated fourth quarter earnings and upbeat earnings guidance for FY2012 led International Business Machines to soar 4.4 percent. JDS Uniphase gained 4.0 percent, after a broker upgraded its rating on the stock to “Buy” from “Hold”. Intel Corporation advanced 2.9 percent, following robust fourth quarter results. First Horizon National Corporation edged 3.1 percent higher, after its fourth quarter earnings increased more than twofold. On the downside, Google plummeted 8.4 percent, after its fourth quarter earnings lagged market forecast. Capital One Financial slumped 5.6 percent, following a decline in its fourth quarter profit.

European Stocks: Likely to open in the green
The DAX and CAC are expected to open 7 to 15 points and 5 to 7 points higher, respectively.
Eurozone Consumer Confidence, French Production Outlook & Business Confidence Indicator and Swiss M3 Money Supply are the key economic indicators scheduled for release today.
STMicroelectronics NV, Wincor Nixdorf AG and Palfinger AG are scheduled to report their results later today.
In an interview to La Repubblica, Paolo Scaroni, the CEO of Eni SpA, has stated that the company is interested in making new investments after it sells its stake in Snam Rete Gas SpA.
In an interview to Automobilwoche, Thomas Weber, a member of the Board of Management of Daimler AG, has stated that the company plans to save €1.5 billion annually by 2014.
In an interview to NZZ am Sonntag, Nick Hayek, the CEO of Swatch Group AG, has indicated that the company might expand faster than the expected Swiss watch export growth of 5.0 to 10.0 percent in 2012.
The Financial Times has reported that Nokia Siemens Networks, the joint venture between Nokia Oyj and Siemens AG, has raised more than €1.2 billion from a group of 14 European and U.S. banks.

Macro Update
Creditors at limits of “voluntary” Greek deal, says IIF
Institute of International Finance (IIF), the representative body of private creditors in Greece has stated that private creditors have made their “maximum” offer for the losses they are willing to accept and it was now for the EU and the International Monetary Fund to decide on it.
ECB's Draghi and Italian PM back larger ESM
German magazine, Spiegel, has reported that the European Central Bank (ECB) President, Mario Draghi and Italian Prime Minister, Mario Monti, favour the expansion of the European Stability Mechanism (ESM) to deal with the debt crisis.
Germany, France seek relaxation of bank capital rules
The Financial Times has reported that France and Germany are set to call for a relaxation of global bank capital rules, in an attempt to mitigate any “negative effect” on growth.
Australian PPI climbs
On a sequential basis, the Producer Price Index (PPI) in Australia rose 0.3 percent in the fourth quarter of 2011, compared to a 0.6 percent gain posted in the third quarter.
Japan’s corporate loan demand declines
An indicator of corporate loan demand in Japan stood at a reading of -2.0 for the fourth quarter of 2011, following a reading of 0.0 recorded in the third quarter.

Economic Calendar

Note:PPPHigh      PPMedium      PLow


Corporate Calendar