Forex Overnight: EUR trading under pressure
The EUR has declined against the majors, this morning, amid uncertainty ahead of the European Union leaders meeting in Brussels today. Markets are keeping a close eye on Italian bond auctions scheduled for later today, following the nation’s credit rating downgrade by Fitch Ratings (Fitch). At 6 am, the EUR has dropped 0.4 percent against the USD to trade at $1.3169, while it has declined 0.2 percent against the GBP to trade at £0.8387 percent, respectively.
The JPY is trading marginally higher against the USD, while it is trading 0.4 percent firmer against the EUR.
The AUD has weakened 0.8 percent against the USD, while the CAD has lost 0.3 percent against the USD.
UK Stocks: Likely to open in the red
The FTSE 100 is expected to open 13 points weaker.
No major economic indicators are scheduled for release today.
SThree and
Mediwatch are scheduled to announce their results today.
The Sunday Times has reported that
AstraZeneca is set to announce more job cuts after commencing a cost-cutting program in 2010.
Royal Bank of Scotland has indicated that its CEO, Stephen Hester, has decided to waive a bonus worth about $1.6 million, amid political protests in the U.K.
The Financial Times has reported that Antonio Horta-Osorio, the CEO of
Lloyds Banking Group, is set to unleash restructuring plans later this week, which involve simplifying the bank's management structure and providing more power to top executives.
The Independent on Sunday has reported that
G4S is set to replace its advisers Hoare Govett, Deutsche Bank AG and Greenhill this week, citing their failure to acquire ISS A/S, the Danish integrated services company.
Asia: Trading in negative territory
Asian markets are trading in the red this morning, as investors remain cautious ahead of the European summit.
In Japan,
Mitsubishi Electric has plummeted, amid reports that the government has barred it from competitive bidding for state orders.
Nippon Electric Glass has plunged, after it indicated that its profits may fall by more than half in this fiscal year.
Tohoku Electric Power has slumped, after it forecast a wider full year loss. On the upside,
Advantest Corporation has surged, after it indicated that it plans to raise its full year dividend. At 6 am, the Nikkei 225 index has dropped 0.6 percent to trade at 8,785.5.
In South Korea, a sharp decline in its annual profit has led
LG Uplus lower.
STX Offshore & Shipbuilding and
Hyundai Heavy Industries have edged down, amid concerns over the demand outlook. In Hong Kong, financial sector stocks,
China Merchants Bank,
Bank of Communications and
Agricultural Bank of China have declined, as the Chinese Premier, Wen Jiabao, vowed to deal with irregularities in local government debt. In China, homebuilders,
China Vanke and
Poly Real Estate Group have lost value, amid reports that home sales in Beijing dropped during the Chinese New Year holiday.
US Stocks: Futures trading lower
At 6 am, S&P 500 futures are trading 6.6 points in negative territory.
Personal Income & Spending, Core Personal Consumption Expenditure and Dallas Fed Manufacturing Activity Index are the key economic indicators scheduled for release today.
McKesson Corporation,
Plum Creek Timber Co Inc.,
Gannett Co Inc.,
Triumph Group Inc. and
Stancorp Financial Group are scheduled to announce their results today.
Amylin Pharmaceuticals rallied 16.1 percent, in the after hours trading session on Friday, following the U.S. Food and Drug Administration’s approval of its diabetes drug, Bydureon, developed in alliance with
Alkermes. On the contrary,
PharMerica tumbled 9.2 percent, after a U.S. regulatory agency sought to block the hostile takeover of the company by
Omnicare.
The S&P 500 dropped 0.2 percent in the regular trading session on Friday, after data indicated that the U.S. economy expanded less-than-expected in the fourth quarter.
Ford Motor lost 4.2 percent, after its fourth quarter profit trailed market expectations.
Juniper Networks declined 3.0 percent, after it reported lower-than-expected fourth quarter adjusted profit and provided a downbeat first quarter adjusted profit forecast.
Chevron fell 2.5 percent, following a decline in its earnings for the fourth quarter. A substantial drop in its third quarter earnings dragged
Legg Mason lower by 4.8 percent. On the other hand,
First Solar surged 11.2 percent, after
Suntech Power Holdings and
Trina Solar stated that China might double its installations of solar panels this year.
Newell Rubbermaid soared 8.0 percent, following a rise in its fourth quarter profit.
Eastman Chemical rallied 7.0 percent, after it agreed to buy
Solutia Inc. for about $4.7 billion.
European Stocks: Expected to open weak
The DAX and the CAC are likely to open 23 points and 18 points in the red, respectively.
Key economic indicators scheduled for release today include: German Consumer Price Index and Retail Sales, Eurozone Business Climate Indicator and Economic Confidence Index.
Koninklijke Philips Electronics NV,
Portucel Empresa Produtora de Pasta e Papel SA,
KSB AG and
BinckBank NV are scheduled to report their results later today.
Fitch Ratings (Fitch) has downgraded its credit rating of Italy by 2 notches to “A-” from “A+”. Fitch has also reduced its rating of Spanish debt to “A” from “AA-”. Though Ireland was able to retain its “BBB+” rating; Belgium, Cyprus and Slovenia were downgraded by Fitch.
According to the Sunday Times,
Total SA is nearing the deal to secure exploration rights over several oil and gas blocks in the Kurdish region of Iraq.
According to Der Spiegel, the supervisory board of
Volkswagen AG will discuss plans to acquire the remaining 50.1 percent of
Porsche SE's sports car business at an extraordinary meeting on 14 February 2012.
The Wall Street Journal reported that
ABB is close to reach an agreement to acquire Thomas & Betts Corporation for a consideration of about $4.0 billion.
According to Handelsblatt,
ThyssenKrupp AG will resume talks on merging its Inoxum stainless unit with Outokumpu Oyj today.
Macro Update
Fitch downgrades five Eurozone countries
Fitch has cut its credit rating of Italy to “A-” from “A+”, while it has downgraded its rating on Spain to “A” from “AA-”. It has also cut the credit ratings of Belgium, Cyprus and Slovenia, while it maintained Ireland’s “BBB+” rating.
Greece to fulfill its deficit reduction obligations, says Venizelos
Greek Finance Minister, Evangelos Venizelos, has dismissed reports which suggested that an EU commissioner might veto Greek government’s budgets. He further indicated that such a measure was unnecessary.
Fed to do its part to assist US recovery, says Dudley
The Federal Reserve (Fed) Bank of New York President, William Dudley, has indicated that there is work which needs to be done to maximise U.S. employment and stabilise prices, and added that the Fed is committed to its part to support the recovery.
IMF chief wants strong Europe firewall
The chief of the International Monetary Fund (IMF), Christine Lagarde, has urged the Eurozone members to develop a “decent firewall” to stem the sovereign debt crisis.
UK house prices remain unchanged
Hometrack has reported that, on a monthly basis, house prices in the U.K. remained unchanged in January, compared to a 0.2% decline recorded in December.
South Korea’s current account surplus shrinks
South Korea’s current account surplus has narrowed to $3.96 billion in December, compared to a revised surplus of $4.56 billion recorded in November.
Economic Calendar
|
Country
|
GMT
|
Economic Indicator
|
Relevance
|
Consensus/*Actual
|
Previous
|
Frequency
|
|
UK
|
0:01
|
Hometrack Housing Survey (MoM) (Jan)
|
P
|
0.00%*
|
-0.20%
|
Monthly
|
|
UK
|
0:01
|
Hometrack Housing Survey (YoY) (Jan)
|
P
|
-1.60%*
|
-2.10%
|
Monthly
|
|
Germany
|
7:00
|
Retail Sales (MoM) (Dec)
|
PP
|
0.90%
|
-0.90%
|
Monthly
|
|
Eurozone
|
10:00
|
Business Climate Indicator (Jan)
|
PP
|
-0.25
|
-0.31
|
Monthly
|
|
Eurozone
|
10:00
|
Economic Confidence (Jan)
|
PP
|
93.80
|
93.30
|
Monthly
|
|
US
|
13:30
|
Personal Income (MoM) (Dec)
|
PPP
|
0.40%
|
0.10%
|
Monthly
|
|
US
|
13:30
|
Personal Consumption Expenditure Core (MoM) (Dec)
|
PPP
|
0.10%
|
0.10%
|
Monthly
|
|
US
|
15:30
|
Dallas Fed Manufacturing Activity (Jan)
|
P
|
0.00
|
-3.00
|
Monthly
|
|
Japan
|
23:15
|
Nomura/JMMA Manufacturing Purchasing Manager Index (Jan)
|
PP
|
-
|
50.20
|
Monthly
|
|
Japan
|
23:30
|
Household Spending (YoY) (Dec)
|
PP
|
-0.10%
|
-3.20%
|
Monthly
|
|
Japan
|
23:30
|
Jobless Rate (Dec)
|
PP
|
4.50%
|
4.50%
|
Monthly
|
|
Japan
|
23:50
|
Loans & Discounts Corp (YoY) (Dec)
|
P
|
-
|
-0.40%
|
Monthly
|
|
Japan
|
23:50
|
Industrial Production, Prelim (MoM) (Dec)
|
P
|
2.90%
|
-2.70%
|
Monthly
|
|
Germany
|
-
|
Consumer Price Index, Prelim (MoM) (Jan)
|
PPP
|
-0.40%
|
0.70%
|
Monthly
|
|
Germany
|
-
|
Consumer Price Index EU Harmonized (MoM) (Jan)
|
PPP
|
-0.40%
|
0.70%
|
Monthly
|
|
Eurozone
|
-
|
EU Economic Summit
|
PPP
|
-
|
-
|
-
|
Note:PPPHigh PPMedium PLow
Corporate Calendar
|
Country
|
Company Name
|
Index
|
Announcement
|
|
UK
|
SThree Plc
|
FTSE All Share
|
Prelim
|
|
Netherlands
|
Koninklijke Philips Electronics NV
|
EuroStoxx 50
|
Q4 Earnings Release
|
|
US
|
Gannett Co Inc
|
S&P 500
|
Q4 Earnings Release
|
|
US
|
McKesson Corporation
|
S&P 500
|
Q3 Earnings Release
|
|
US
|
Plum Creek Timber Co Inc
|
S&P 500
|
Q4 Earnings Release
|