Market Preview - 6 February 2012; Eyes on Greek politicians

Forex Overnight: EUR trading weaker
The EUR is trading lower against the major currencies early Monday, ahead of the Greek political party leaders’ response to demands by international creditors on economic measures later today. Market participants are also awaiting the outcome of French bond auction worth as much as €8.5 billion. At 6 am, the EUR has retreated 0.6 percent and 0.3 percent against the USD and the GBP, to trade at $1.3086 and £0.8297, respectively.
The JPY has dropped 0.2 percent against the USD. Masaaki Shirakawa, the Governor of the Bank of Japan, has stated that Japan’s economic condition is “severe” because of deflation and a strong Yen.
The AUD has declined 0.4 percent against the USD, after data indicated that Australian retail sales unexpectedly declined in December.

UK Stocks: Likely to open flat
The FTSE 100 is expected to open flat.
Halifax House Price index is the key economic indicator scheduled for release today.
Randgold Resources, RM and Allocate Software are scheduled to announce their results today.
According to the Financial Times, Vodafone is set to abandon attempts to merge its Greek business with Wind Hellas, amid concerns over the deal not being approved by the European regulators.
The Financial Times has reported that Glencore International has offered 2.8 shares of Glencore for every share of Xstrata, representing an 8.0 percent premium to Xstrata share price, to seal the merger deal worth about $88.0 billion. The terms of the deal are likely to be revealed on Tuesday.
The Sunday Telegraph has reported that Robert Diamond, the CEO of Barclays, is set to receive bonus in the range of £2.5 million to £3.0 million.
The Sunday Telegraph has reported that the Reckitt Benckiser Group might abandon quarterly profit reports, replacing it with sales updates.

Asia: Trading mostly higher
Asian markets are trading mostly in positive territory, mirroring Friday’s gains on Wall Street.
In Japan, Nikon has surged, after it raised its full year operating profit outlook. Panasonic has jumped, after it stated that its financial performance in the year beginning 1 April 2012 may rebound. Mitsubishi Corporation is trading higher, after it announced plans to almost double its copper output in 2012. On the other hand, Tokyo Electron has dropped, after it posted a significant decline in its net income for the nine months ended 31 December 2011. At 6 am, the Nikkei 225 index is trading 1.1 percent higher at 8,925.5. 
In Hong Kong, HSBC Holdings, Industrial & Commercial Bank of China and China Construction Bank are trading higher. In South Korea, brokerage firms, Woori Investment & Securities and Samsung Securities have gained. On the contrary, Hanwha has tumbled, after it indicated that its Chairman was being targeted in an investigation over alleged misappropriation of corporate funds. Posco has lost value, after it reported a slower-than-expected growth in its fourth quarter earnings. In China, China Shenhua Energy and Yanzhou Coal Mining have advanced, after a broker indicated that coal prices in China may rebound. On the other hand, China Vanke is trading lower, after it posted a decline in its January sales.

US Stocks: Futures trading weak
At 6 am, S&P 500 futures are trading 4.6 points lower.
No major economic indicators are scheduled for release today.
Anadarko Petroleum Corporation, Yum! Brands, Sysco Corporation, Loews Corporation, Humana, Pioneer Natural Resources, Hasbro and Dun & Bradstreet Corporation are scheduled to announce their results today.
Micron Technology retreated 2.1 percent in after hours trading session on Friday, following the announcement that its CEO and Chairman, Steve Appleton, died in a plane crash. Zogenix slumped 12.1 percent, after it filed a plan to sell securities worth as much as $75.0 million. Royal Caribbean Cruises, HCA Holdings and RAM Energy Resources featured amongst the major laggards, declining 6.2 percent, 4.5 percent and 4.5 percent, respectively. On the other hand, Depomed jumped 4.8 percent, after it stated that it will receive “modest, single-digit royalties” on net product sales of Merck & Co.’s type 2 diabetes drug, Janumet XR. Aeropostale added 0.8 percent, after it appointed Karin Hirtler-Garvey as its Chairman. Amongst other key gainers, Astex Pharmaceuticals, General Growth Properties, Crocs and Post Holdings Wi climbed 3.2 percent, 3.1 percent, 2.8 percent and 2.4 percent, respectively.
On Friday, the S&P 500 index rose 1.5 percent in the regular trading session, after data indicated that the U.S. economy added more-than-expected jobs in January. Genworth Financial, the top gainer on the S&P 500 index, soared 14.1 percent, after it swung to a profit in the fourth quarter. Gilead Sciences rallied 10.9 percent, after it reported a rise in its fourth quarter net income and revealed positive clinical trial results for its hepatitis C treatment. Homebuilders, Lennar Corporation and PulteGroup soared 7.4 percent and 7.1 percent, respectively. PerkinElmer surged 6.2 percent, after it guided to upbeat earnings guidance for FY2012. Bank of America jumped 5.2 percent, after it increased the maximum consideration payable in its debt tender offer to $3.5 billion from $1.5 billion. Tyson Foods gained 4.1 percent, after its first quarter earnings surpassed market consensus. On the downside, Wynn Resorts slumped 4.8 percent, after its fourth quarter revenue fell short of market estimate.

European Stocks: Expected to open in the red
The DAX and CAC are likely to open 12 to 13 points and 15 to 17 points in negative territory, respectively.
German Factory Orders, Eurozone Sentix Investor Confidence and Swiss Foreign Currency Reserves are the key economic indicators scheduled for release today.
Julius Baer Gruppe AG, GEA Group AG and Aperam SA are scheduled to report their results later today.
In an interview to Euro am Sonntag, Michael Suess, the Head of Siemens AG’s energy unit, has stated that the company is expecting stable order numbers and a “light” gain in sales in 2012.
Automobilewoche, the weekly newsletter, has reported that Daimler AG, Volkswagen AG and Renault SA are considering collaboration on the production of cargo vans.
Der Spiegel has reported that Deutsche Telekom AG will bid on its own for broadcast rights for matches in Germany Bundesliga soccer games.
Hans Peter Ring, the CEO of European Aeronautic, Defence & Space, has stated that the company will increase earnings and airplane deliveries in 2012.
In an interview to Berlingske, Bent Carlsen, the Chairman of Vestas Wind System A/S, has stated that he has no plans to step down or change the management at the company.

Macro Update
Greek political leaders agree on spending cuts, says Papademos
Greek Prime Minister, Lucas Papademos, has stated that the nation’s leaders’ have agreed to spending cuts worth about 1.5 percent of Gross Domestic Product (GDP) in 2012.
Greek debt talks going “relatively well”, confirms French Finance Minister
French Finance Minister, Francois Baroin, has indicated the Greek talks were progressing “relatively well” on the private sector portion of a bailout. However, he stated that discussions to lower its debt level to 120.0 percent of GDP by 2020 were difficult.
Spanish economy ‘to shrink 1.5 percent in 2012’, says Guindos
Spanish Economy Minister, Luis de Guindos, has stated that the nation’s economy would shrink by around 1.5 percent in 2012, following a deepening contraction that began last quarter.
Australian retail sales drops
On a monthly basis, retail sales in Australia edged 0.1 percent lower in December, the first decline in six months, and compared to a revised 0.1 percent rise recorded in November.
Australian inflation slows
TD Securities has reported that on an annual basis, consumer price inflation in Australia slowed to 2.2 percent in January, compared to a 2.4 percent rate posted in December.
China has stake in helping Europe, indicates Wen
Chinese Premier, Wen Jiabao, has stated that the nation has a stake in helping Eurozone countries to tackle their debt crisis, due to their importance as a market for the Chinese exporters.

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