Market Preview - 25 May 2012; German consumer confidence eyed

Forex Overnight: USD trading firmer
The USD is trading higher against the majors this morning ahead of the release of Reuters/Michigan consumer sentiment index due later today which is expected to remain flat for May. Additionally, market sentiment was dented after China indicated that its biggest banks may fall short of loan targets. At 5 am GMT, the EUR is trading almost flat against the USD at $1.2533, while the GBP is trading 0.1 percent lower against the USD at $1.5655.
The JPY has declined 0.2 percent each against the USD and the EUR. Data indicated that annual core consumer price inflation in Japan remained unchanged in April.
The AUD has dropped 0.2 percent against the USD, while the CAD has lost 0.1 percent against the USD.

UK Stocks: Likely to open lower
The FTSE 100 is expected to open 12 to 13 points in the red.
No major economic indicators are scheduled for release today.
Helical Bar is scheduled to announce its results today.
HSBC Holdings Plc’s US unit has indicated that it is laying off 77 employees at its money laundering prevention unit in Buffalo this fall and would be moving the jobs to New York City and Delaware.
Bloomberg has reported that GlaxoSmithKline will today reveal detailed results on an experimental treatment for diabetes.
Citing company executives, Reuters has reported that BG Group plans to spend at least $30.0 billion by 2025 in Brazil to expand its oil and natural gas production in the country.
An Xstrata spokesman has indicated that the company's Tintaya operations in south-central Peru continued normally on Thursday despite demonstrations that have resulted in roads being blocked around the mine.

Asia: Trading mostly lower
Asian markets are trading mostly lower this morning.
In Japan, Japan Tobacco has jumped after it agreed to acquire Belgium-based Gryson NV for about €475.0 million. Tokyu Land, Mitsui Fudosan and Mitsubishi Estate have advanced following a report that Goldman Sachs Group plans to start investing in Japan’s real estate sector for the first time since 2008. On the contrary, Sony Corporation has plummeted after the company announced plans to terminate its large-flat-panel joint venture with Sharp Corporation. At 5 am GMT, the Nikkei 225 index has added 0.1 percent to trade at 8,572.5.
In South Korea, Daewoo Shipbuilding & Marine Engineering and Hyundai Mipo Dockyard have added value. In Hong Kong, Chinese Estates Holdings has tumbled after the company stated that its Chairman and CEO, Joseph Lau, will face prosecution over bribery and money laundering in a land deal in Macau. Exporters, Esprit Holdings and Lenovo Group have dropped amid uncertainty over the European debt crisis. In China, concerns that some of the biggest Chinese banks may fall short of loan targets for the first time in at least seven years has led Bank of China and Industrial & Commercial Bank of China lower.

US Stocks: Futures trading lower
At 5 am GMT, S&P 500 futures are trading 4.2 points in the red.
Reuters/Michigan Consumer Sentiment Index is the key economic indicator scheduled for release today.
Mentor Graphics Corporation and Tsakos Energy Navigation are scheduled to release their results today.
In after hours trading session yesterday VeriFone slumped 9.4 percent after it offered a weak third quarter guidance. Delcath Systems and New York Mortgage Trust plummeted 16.0 percent and 4.2 percent, respectively, following their plans of a share offering. A sharp decline in its first quarter earnings led Semtech Corporation to decline 4.0 percent. On the other hand, Delphi Automotive soared 11.6 percent after it made a binding offer to acquire FCI Group’s motorised vehicles division for about $972.0 million. Better-than-expected third quarter results led Infoblox to surge 7.5 percent.
The S&P 500 index added 0.1 percent in the regular trading session yesterday following encouraging comments by Italian Prime Minister, Mario Monti, on Greece and issuance of Euro bonds. Hewlett-Packard climbed 3.3 percent after it posted robust second quarter results and indicated that it plans to cut about 27,000 jobs to boost savings. Southwest Airlines, the top gainer on the S&P 500 index, surged 4.5 percent after a broker raised its estimates on the industry citing lower jet-fuel prices. Dow Chemical Company climbed 3.4 percent after an arbitration panel indicated that Kuwait must pay $2.2 billion in damages to the company. On the flip side, downbeat first quarter guidance led NetApp to plummet 12.3 percent. Tiffany & Company slumped 6.8 percent after it cut its full year forecast citing weak economic growth in many countries and softness in US operations. Alpha Natural Resources, Cliffs Natural Resources and Range Resources featured amongst other laggards declining 5.1 percent, 4.4 percent and 3.4 percent, respectively.

European Stocks: Expected to open in the red
The DAX and CAC are expected to open 23 to 27 points and 9 to 10 points in the negative territory, respectively.
German GfK Consumer Confidence Index, French Consumer Confidence, Italian Retail sales & Wage Inflation and Spanish Producer Price Index are the key economic indicators scheduled for release today.
Uniqa Versicherungen AG, Schuler AG, Piscines Desjoyaux SA, EquityStory AG, Efore Oyj and Holland Colours NV are scheduled to announce their results today.
A labour representative of Volkswagen has indicated that in June a top German union official will explain to hourly employees at Volkswagen's US plant that the group will not pressure them to join the United Auto Workers union.
Citing sources, Reuters has reported that Bankia will ask the Spanish government for more than €15.0 billion to bail it out when its new management team presents a restructuring plan today.
Moody's has downgraded DNB Bank to “A1/C-” from “Aa3/C”, with stable outlook.
Moody's has downgraded Sparebanken Vest's subordinated debt ratings.
The Italian insurance regulator, ISVAP, has given an initial positive assessment of plans by Unipol to merge with Fondiaria-SAI.
Realdolmen has reported that its revenue for the year ended March 2012 grew 5.9 percent to €258.5 million.
ORCO Germany has reported first quarter revenue of €16.6 million and an EBIT of €6.9 million, a decline from the same quarter of the previous year.

Macro Update
Germany can be convinced on Euro bonds, says Monti
Italian Prime Minister, Mario Monti, has stated that Italy can help persuade Germany to support Euro bonds as a united Europe is in Germany’s interest. He further indicated that Greece will probably remain in the union; however its next government must live up to the bailout pledges.
No need for further easing at present, says Dudley
President of the Federal Reserve Bank of New York, William Dudley, has indicated that as long as the US economy continues to grow sufficiently, there is no need for any additional stimulus. However, he further indicated that a slowdown in the labour market could tilt the support towards more easing measures.
Japan core CPI rises
On an annual basis, Japan’s core consumer price index (CPI) has advanced 0.2 percent in April, higher than market estimates and unchanged from the previous month.
South Korean consumer confidence improves
The consumer sentiment index in South Korea has climbed to a reading of 105.0 in May compared to a reading of 104.0 recorded in the previous month.

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