Market Preview - 25 January 2012

Forex Overnight: USD trading mostly firmer
The USD has strengthened against most of the major currencies, this morning, ahead of the conclusion of a two-day interest rate meeting of the Federal Open Market Committee (FOMC) today, wherein the Federal Reserve (Fed) will release forecasts for benchmark U.S. interest rate for the first time. Additionally, markets are keeping an eye on data scheduled for release later today, which is expected to indicate that German business confidence climbed to a five-month high in January. At 6 am, the EUR and the GBP have lost 0.1 percent each against the USD, to trade at $1.3024 and $1.5607, respectively.
The JPY has declined 0.4 percent and 0.3 percent against the USD and the EUR, respectively, after Japan recorded its first annual trade deficit since 1980. 
The AUD has climbed 0.3 percent against the USD, after data indicated that Australian core consumer price inflation accelerated more-than-estimated in the fourth quarter.

UK Stocks: Likely to open in positive territory
The FTSE 100 is expected to open 15 points firmer.
Gross Domestic Product, BBA Loans for House Purchase, Index of Services and CBI Business Optimism are the key economic indicators scheduled for release today. Additionally, investors await the minutes of the Bank of England's (BoE) latest rate setting meeting.
Renishaw, Aberforth Smaller Companies Trust and Ebiquity are scheduled to announce their results.
MarketWatch has reported that BHP Billiton Ltd. could be hit by strikes across a number of its metallurgical coal operations across eastern Australia, as employment negotiations with labour unions have stalled.
According to Bloomberg, HSBC Holdings is seeking buyers for its Japanese consumer banking unit, HSBC Premier, four years after the commencement of the business.
AstraZeneca has donated $3.8 million worth of prescription medicines to AmeriCares for chronically ill Americans who rely on safety net clinics for their medical care.

Asia: Trading higher
Asian markets are trading in positive territory, this morning.
In Japan, export sector stocks, Sony, Canon and Toshiba are trading higher, as the Yen weakened against the major currencies. Honda Motor, Toyota Motor and Mazda Motor have climbed, amid reports that Nippon Steel would lower steel prices for Toyota by 4.0 percent. Shipping sector stocks, Nippon Yusen K.K., Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha are trading higher, after a broker stated that shipping rates are unlikely to decline significantly despite the prevalent uncertainty. Murata Manufacturing has added value, after a broker raised its price target on the stock. On the other hand, Hitachi Medical has dropped, after it lowered its full year net income forecast. At 6 am, the Nikkei 225 index is trading 1.1 percent higher at 8,885.5.
In South Korea, technology sector stocks, Hynix Semiconductor and Samsung Electronics have gained, after Apple reported robust first quarter results and provided a buoyant outlook for the second quarter. Joongang Construction and Samsung Engineering have registered gains among construction sector stocks.  Markets in Hong Kong and China remain closed on account of Lunar New Year Holiday.

US Stocks: Futures trading in the green
At 6 am, S&P 500 futures are trading 4.3 points stronger.
Pending Home Sales, MBA Mortgage Applications and House Price Index are the key economic indicators scheduled for release today. Investors also await the interest rate decision from the FOMC.
ConocoPhillips, Abbott Laboratories, United Technologies Corporation, Boeing, WellPoint, Motorola Solutions, Symantec, SanDisk, Xerox, Netflix and E*Trade Financial Corporation are scheduled to announce their results today.
Apple surged 7.3 percent in the after hours trading session on Tuesday, after its first quarter results exceeded market forecasts. The company has issued a better-than-expected sales guidance and earnings outlook for the second quarter. CA Inc. rallied 15.0 percent, after it reported buoyant third quarter earnings and raised its adjusted earnings per share growth forecast for the full year. On the contrary, lower-than-expected fourth quarter revenue led Advanced Micro Devices and Yahoo! Inc. to slide 2.9 percent and 0.9 percent, respectively. Altera Corporation eased 1.7 percent, following a sharp decline in its fourth quarter profit. Downbeat fourth quarter revenue led Norfolk Southern 2.6 percent lower.
In the regular trading session yesterday, the S&P 500 index slid 0.1 percent, amid a deadlock between European finance ministers and Greek bondholders over the solution to the nation’s debt crisis. Zions Bancorp., the top laggard on the S&P 500 index, slumped 7.6 percent, after a broker downgraded its rating on the stock to “Hold” from “Buy”. Verizon Communications eased 1.6 percent, after it swung to a fourth quarter loss. McDonald’s Corporation retreated 2.2 percent, after it stated that foreign-currency fluctuations might lower its FY2012 profit. Travelers Companies shed 3.8 percent, following a decline in its fourth quarter profit. Downbeat fourth quarter results led CSX Corporation to decline 3.7 percent. Lower-than-expected first quarter revenue led Air Products & Chemicals to edge 2.6 percent lower. On the other hand, Harley-Davidson advanced 3.5 percent, after it swung to a fourth quarter profit. Quest Diagnostics rallied 7.5 percent, after its fourth quarter results surpassed market expectations.

European Stocks: Expected to open firmer
The DAX and CAC are likely to open 30 to 34 points and 11 to 17 points higher, respectively.
German IFO - Business Climate, Current Assessment & Expectation Indicators and French Total Jobseekers are the key economic indicators scheduled for release today.
Novartis AG, SAP AG, Telefon AB L M Ericsson, Beiersdorf AG and Naturex SA are scheduled to report their results later today.
Roche Holding AG has stated that it has proposed to acquire all outstanding shares of the U.S. based firm, Illunina Inc, for approximately $5.7 billion in cash or $44.50 per share.
E.ON AG has stated that it has reached an agreement with two German trade unions on job cuts, in an attempt to reduce staff by 6,000 in Germany.
Capital Research & Management Company has raised its stake in UniCredit SpA to 5.4 percent from about 2.5 percent.

Macro Update
IMF cuts global growth forecast
The International Monetary Fund (IMF) has lowered its 2012 global economic growth forecast to 3.3 percent, from a previous estimate for 4.0 percent growth. The IMF further cautioned that the Euro region might enter a “mild recession” in 2012.
Lower inflation gives room for additional easing if needed, says King
Bank of England (BoE) Governor Mervyn King has stated that easing inflation gives the central bank scope to provide another stimulus if needed, to aid the U.K. economy and guard against a “renewed severe downturn”.
Japan records annual trade deficit
Japan’s trade deficit stood at ¥2.49 trillion in 2011, the first annual deficit since 1980. Moreover, the merchandise trade deficit narrowed to ¥496.5 billion in December, compared to a revised ¥687.6 billion deficit recorded in November.
Australian CPI unchanged
On a sequential basis, the Consumer Price Index (CPI) in Australia was unchanged in the fourth quarter of 2011, missing market consensus of a 0.2 percent increase.
Australian leading index climbs
The Westpac Bank and the Melbourne Institute has reported that the leading Index in Australia rose at an annualised rate of 1.5 percent in November, compared to the 2.3 percent increase posted in the previous month.

Economic Calendar

Note:PPPHigh      PPMedium      PLow


Corporate Calendar