Market Preview - 31 July 2012; EU & German Unemployment Data eyed

Forex Overnight: USD trading under pressure
The USD is trading weak against the major currencies this morning amid speculation that the US Federal Reserve (Fed) policy makers might signal another round of monetary stimulus in its two-day meeting starting today. Moreover, investors await the release of the unemployment data from the Eurozone and Germany due later today. At 5 am GMT, the EUR and the GBP have advanced 0.2 percent and 0.1 percent versus the USD to trade at $1.2278 and $1.5718, respectively.

The JPY has weakened 0.2 percent against the EUR while it has declined marginally against the USD. Data showed that manufacturing activity in Japan further contracted in July.

The AUD has advanced 0.2 percent versus the USD after data showed that the number of building approvals in Australia dropped less-than-expected in June.

UK Stocks: Expected to open in positive territory
The FTSE 100 is likely to open 4 to 5 points in the green.

No major economic indicators are scheduled for release today.

BP, Fresnillo, Weir Group, GKN, Inchcape, Drax Group and Tullett Prebon are scheduled to announce their results today.
Rio Tinto stated that it has spent nearly $1.0 billion in accordance with a deal to participate in the $1.8 billion rights issue of the Canadian miner, Ivanhoe Mines.

ConAgra Foods has announced that it has struck a deal to buy Unilever's North American frozen meal business for about $265.0 million.

Asia: Trading firmer
Asian markets are trading in the green this morning amid optimism that the global central banks might signal actions to stimulate growth.

In Japan, Hokuriku Electric Power Company has soared on the back of a significant jump in its first quarter operating profit. Mitsui O.S.K. Lines has gained after its operating loss for the first quarter narrowed. Canon has climbed after it stated that it would buy back about 1.8 percent of its outstanding shares through 10 September 2012. Hitachi has climbed after its net profit for the first quarter doubled. Panasonic Corporation has surged amid reports it is likely to rebound to profit in the June quarter. At 5 am GMT, the Nikkei 225 index is trading 0.7 percent higher at 8,692.5.

In Hong Kong, HSBC Holdings has climbed after it set aside $2 billion as a provision for possible compensation following a money-laundering probe. Property sector stocks, China Overseas Land & Investment and Hang Lung Properties are trading higher. In China, Kama Company has dropped amid concerns that stricter rules by the exchange might lead to companies being delisted. In South Korea, shipbuilders, STX Offshore & Shipbuilding and Hyundai Heavy Industries have advanced. Samsung Electronics and Hyundai Motor featured amongst other gainers.

US Stocks: Futures trading higher
At 5 am GMT, S&P 500 futures are trading 3.2 points stronger.

Core Personal Consumption Expenditure, Consumer Confidence, Personal Income & Spending, Chicago Purchasing Managers’ Index and S&P/Case-Shiller Home Price Index are the key economic indicators scheduled for release today. Additionally, investors await the two-day Federal Open Market Committee (FOMC) meeting beginning today.

Pfizer, Tyco International, Thomson Reuters, Ecolab, Discovery Communications, Archer-Daniels-Midland, Coach, Cummins, Allstate Corporation, Marathon Petroleum and Edison International are scheduled to announce their results today.
RealD and Seagate Technology slumped 19.8 percent and 7.7 percent, respectively, in after hours trading session on Monday after they reported downbeat quarterly results. Humana tumbled 8.9 percent after it posted lower-than-forecast second quarter results and slashed its full year earnings per share outlook. CafePress plummeted 35.3 percent after its second quarter net loss widened and provided a dismal third quarter revenue and adjusted earnings guidance. On the contrary, Cirrus Logic rallied 19.5 percent after it guided to a better-than-expected third quarter revenue outlook. Narrower second quarter loss led Vertex Pharmaceuticals 6.9 percent higher. Buoyant second quarter adjusted profit led Fiserv to edge 3.8 percent higher.
Yesterday, the S&P 500 index eased 0.7 points in the regular trading session. Citrix Systems slumped 5.9 percent after Oracle’s planned purchase of Xsigo Systems raised the possibility of increased competitive pressure. Loews Corporation declined 5.2 percent after it reported a sharp fall in its second quarter net profit. JPMorgan Chase retreated 2.0 percent after a broker downgraded its rating on the stock to “Hold” from “Buy”. On the contrary, Range Resources, Cabot Oil & Gas, Alpha Natural Resources and Newmont Mining rose 2.6 percent, 2.3 percent, 1.9 percent and 1.7 percent, respectively. Best Buy advanced 1.7 percent amid reports that the founder, Richard Schulze, was pursuing a buyout. Roper Industries gained 1.1 percent after it reported a rise in its second quarter profit.

European Stocks: Likely to open in the green
The DAX and CAC are expected to open 7 to 11 points and 2 to 3 points higher, respectively.

The German, Italian & Eurozone Unemployment Rate, German, Greek & Spanish Retail Sales, Eurozone Consumer Price Index (CPI) Estimate, French Consumer Spending & Producer Prices, Italian CPI, Spanish Current Account Balance and Swiss UBS Consumption Indicator are the key economic indicators scheduled for release today.

Bayer AG, Electricite de France SA, Deutsche Bank AG, Vinci SA, MAN SE, HeidelbergCement AG, Grifols SA, Infineon Technologies AG, Tecnicas Reunidas SA, Abengoa SA and Sacyr Vallehermoso SA are scheduled to report their results later today.

Commerzbank AG has stated that it will sell its Ukrainian unit, Bank Forum, for which it will take a charge of approximately €86.0 million in the second quarter.

SGL Carbon SE has forecast its full year group earnings before interest and tax to be unchanged following weak demand for industrial carbon fibers.

ERG SpA has decided to withdraw from a project with Royal Dutch Shell to build a liquefied natural gas terminal in Sicily due to the impact of the economic crisis.

Macro Update
UK consumer confidence unchanged
The GfK NOP consumer confidence index in the UK stood at a reading of -29.0 in July, unchanged from the reading reported in June.

Obama cautions of economic "headwinds", sees Euro surviving
The US President, Barack Obama has warned that the US economy would face continuing "headwinds" from the European debt crisis over the next few months. However, he stated that the Eurozone and its single currency would remain intact.

Japanese manufacturing sector continues to contract
The seasonally adjusted Nomura/JMMA Manufacturing Purchasing Managers’ Index (PMI) in Japan has declined to a reading of 47.9 in July compared to a reading of 49.9 recorded in the previous month.

Japanese unemployment rate eases
On a seasonally adjusted basis, the unemployment rate in Japan stood at 4.3 percent in June, compared to a 4.4 percent rate posted in the previous month.

Australian building approvals decline
On a monthly basis, building approvals in Australia dropped by a less-than-expected by 2.5 percent in June compared to a 27.0 percent growth posted in the previous month.

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