Market Preview - 26 January 2012

Forex Overnight: EUR trading firmer
The EUR is trading higher against most of the major currencies, this morning, ahead of the resumption of Greek debt talks, and the scheduled release of consumer confidence data in Germany and France later today. Yesterday, the high yield currencies gained, after the Federal Reserve (Fed) indicated that it would maintain exceptionally low interest rates at least through late 2014. At 6 am, the EUR has advanced 0.1 percent each against the USD and the GBP, to trade at $1.3124 and £0.8378 percent, respectively.
The JPY has climbed 0.2 percent and 0.1 percent against the USD and the EUR, respectively. Data indicated that the corporate service prices index in Japan climbed in December.
The AUD has advanced 0.4 percent against the USD.

UK Stocks: Expected to open in positive territory
The FTSE 100 is likely to open 30 points in the green.
CBI Reported Sales is the key economic indicator scheduled for release today.
Misys, Safestore Holdings, Angle and ATH Resources are scheduled to report their results later today.
Bloomberg has reported that Royal Bank of Scotland Group is close to finalise an agreement to sell its Hoare Govett corporate broking division to Jefferies Group.
Eric Daniels, the former CEO of Lloyds Banking Group, has joined as a principal and senior adviser at StormHarbour Partners LP, the markets and financial-advisory firm.

Asia: Trading mostly higher
Asian markets are trading mostly higher, this morning, mirroring overnight gains on Wall Street.
In Japan, Nippon Electric Glass and Asahi Glass have slumped, after their U.S. peer, Corning Inc, reported a sharp decline in its fourth quarter profit. Fuji Electric is trading lower, after it posted a net loss for the nine months ended in December, and lowered its full year profit forecast. Elpida Memory has lost value, amid reports that it aims to reach an agreement for a capital infusion from Micron Technology as early as next month. On the other hand, Tokyo Electric has gained, following reports that it would accept a ¥1.0 trillion public fund infusion. At 6 am, the Nikkei 225 index is trading 0.4 percent lower at 8,845.5. 
In Hong Kong, Cnooc, China Coal Energy and Yanzhou Coal Mining are trading higher, tracking firmer commodity prices. On the contrary, HSBC Holdings has dropped, amid reports that the lender is under a U.S. Senate panel investigation for an alleged involvement in money laundering. In South Korea, financial sector stocks, Hana Financial Group and Shinhan Financial Group are trading higher. SK Telecom has risen, following reports that it has gained an approval on a request to buy secondary shares in Hynix Semiconductor at a discounted rate as part of its acquisition.

US Stocks: Futures trading weak
At 6 am, S&P 500 futures are trading 0.4 points in the red.
Initial & Continuing Jobless Claims, Leading Indicators, Chicago & Kansas City Fed Manufacturing Activity Index, New Home Sales and Durable Goods Orders are the key economic indicators scheduled for release today.
AT&T, Caterpillar, Amgen, Bristol-Myers Squibb, Colgate-Palmolive, Time Warner Cable, Starbucks Corporation, Juniper Networks, Motorola Mobility Holdings, KLA-Tencor Corporation and EQT Corporation are scheduled to announce their results today.
Netflix and United Rentals rallied 15.9 percent and 5.2 percent, respectively, in after hours trading session yesterday, after their fourth quarter results exceeded market forecast. LSI Corporation surged 6.9 percent, after it issued an upbeat revenue outlook for the first quarter. Brocade Communications Systems edged 0.4 percent higher, after Standard & Poor’s upgraded its credit rating on the company to “BB+” from “BB”. On the downside, SanDisk Corporation plummeted 8.5 percent, after its fourth quarter profit declined sharply. Covance dropped 4.6 percent, after it provided a lower-than-expected earnings outlook for FY2012. Varian Medical Systems lost 4.3 percent, after its first quarter revenue trailed market consensus.
On Wednesday, the S&P 500 index rose 0.9 percent in the regular trading session, after the Fed indicated that it plans to maintain low interest rates through at least late 2014. Textron rallied 14.6 percent after it forecast higher-than-estimated earnings for FY2012. CA Incorporation soared 9.7 percent, after it reported upbeat third quarter earnings and hiked its adjusted earnings per share growth forecast for the full year. Apple surged 6.2 percent, after its first quarter results surpassed market expectation. The company offered better-than-expected sales guidance and earnings outlook for the second quarter. Better-than-anticipated fourth quarter revenue led Bemis to climb 6.0 percent. United States Steel Corporation, Newmont Mining, Freeport-McMoRan Copper & Gold and Range Resources Corporation jumped 5.0 percent, 4.8 percent, 4.8 percent and 4.7 percent, respectively. St. Jude Medical rose 4.5 percent, after it reported slightly better-than-forecast fourth quarter results. Watson Pharmaceuticals gained 3.1 percent, after a broker upgraded its rating on the stock to “Over-weight” from “Equal-weight”. On the contrary, Xerox Corporation tumbled 9.9 percent, after it issued a bleak earnings forecast for FY2012.

European Stocks: Likely to open in the green
The DAX and CAC are expected to open 35 points and 21 points in positive territory, respectively.
German GfK Consumer Confidence Index and French Business Survey - Overall Demand & Consumer Confidence Index are the key economic indicators scheduled for release today.
Nokia Oyj, Banco De Sabadell SA, Exmar NV, Banque Cantonale du Jura SA, Navios Maritime Partners LP and Vistaprint NV are scheduled to announce their results today.
Mexican state-owned oil company, Petroleos Mexicanos and Spain’s Repsol-YPF SA have entered into an alliance, which would lead to the former holding a 5.0 percent to 10.0 percent stake in the latter.
According to Reuters, German labour representatives have met officials of Outokumpu Oyj and ThyssenKrupp AG to strike a deal that would secure German jobs in the event of a merger of the stainless steel businesses of the two companies.

Macro Update
Fed anticipates low rates through 2014
The Fed has stated that it expects short-term interest rates to remain near zero levels at least through late 2014 due to sluggish economy and subdued levels of inflation. The central bank also set its inflation target at 2.0 percent for the first time.
Merkel rejects calls for bigger Eurozone firewall
German Chancellor, Angela Merkel, has rejected to increase the Eurozone's rescue fund and stated that closer European integration would eventually lead to a solution for the debt crisis.
Japan corporate service prices rise
On an annual basis, the corporate service prices index in Japan rose 0.1 percent in December, compared to a revised 0.1 percent decline posted in the previous month.
South Korean economic growth slows
On a sequential basis, the gross domestic product in South Korea climbed 0.4 percent in the fourth quarter, the slowest pace in two years, and compared to a 0.8 percent growth posted in the previous quarter.

Economic Calendar

Note:PPPHigh      PPMedium      PLow


Corporate Calendar