Market Preview - 8 November 2011

Forex Overnight: EUR trading weaker
The Euro is trading under pressure against its major counterparts, on concerns about surging borrowing costs for Italy, and amid uncertainty, ahead of Italian Prime Minister, Silvio Berlusconi’s budget vote later today. Additionally, market expectation that a report scheduled for release today would show a decline in German exports in September, is also weighing on the currency. At 6 am, the EUR has declined 0.2 percent and 0.1 percent against the USD and the GBP, to trade at $1.3747 and £0.8570, respectively.
The JPY has gained marginally against the USD.
The AUD has dropped 0.6 percent against the USD, after data showed that the Australian trade surplus narrowed more-than-expected in September.

UK Stocks: Likely to open in positive territory
The FTSE 100 is expected to open 33 points in the green.
NIESR Gross Domestic Product Estimate and Industrial & Manufacturing Production are the key economic indicators scheduled for release today.
Vodafone Group, Prudential, Associated British Foods, Marks & Spencer Group, InterContinental Hotels Group and Babcock International Group are scheduled to report their results later today.
Colgate-Palmolive and GlaxoSmithKline have stated that they have reached a confidential settlement of lawsuit over who has the right to depict a “nurdle”, a wave-shaped toothpaste blob that sits atop a toothbrush head.
According to the Financial Times, the Financial Services Authority will fine Royal Bank of Scotland’s Coutts & Co. unit with around £6.0 million, for alleged mis-selling of a bond fund overseen by American International Group Inc.

Asia: Trading mixed
Asian markets are trading mixed this morning.
In Japan, Olympus Corporation has declined sharply, after it stated that a third party panel found that funds related to acquisition were used to cover losses on securities investments dating back to the 1990s. Toyota Motor has retreated, ahead of its quarterly results scheduled to be released after the market close today. Dainippon Screen Manufacturing has lost value, after it slashed its full year net income outlook. However, Tokai Carbon has advanced, following a rise in its operating profit for the nine months ended September 2011. At 6 am, the Nikkei 225 index has declined 1.2 percent to trade at 8,659.5.
In Hong Kong, markets are trading in the green. Angang Steel and Maanshan Iron & Steel have soared, on market speculation of consolidation in the sector. In China, markets are trading in positive territory, with Datang International Power Generation and Huaneng Power International trading higher, following broker upgrades. Zijin Mining Group has gained value, after it stated that it would pay more than $200.0 million to Jinchuan Group Ltd. for a 45.0 percent stake in a copper and gold mine in Tibet. In South Korea, SK Holdings has declined, following an investigation by prosecutors over supposed misappropriation of company funds by the Group’s Chairman.

US Stocks: Futures trading in the red
At 6 am, S&P 500 futures are trading 5.8 points weaker.
Key economic indicators scheduled for release today include NFIB Small Business Optimism Index, IBD/TIPP Economic Optimism Index and JOLTs Job Openings.
Activision Blizzard, Rockwell Automation, Fossil, Ralcorp Holdings and Genesis Energy are scheduled to announce their results later today.
Priceline.com gained 2.7 percent in after hours trading session on Monday, after its third quarter results surpassed market expectations. Better-than-expected third quarter results and upbeat earnings guidance for the full year led DealerTrack Holdings to rally 10.9 percent. LSB Industries, WMS Industries and Urban Outfitters plummeted 11.1 percent, 8.9 percent and 4.5 percent, respectively, following downbeat quarterly results. Pioneer Natural Resources retreated 3.2 percent, after it announced that it has agreed to sell 5.50 million common shares in an underwritten public offering.
Yesterday, the S&P 500 index added 0.6 percent in the regular trading session, after Juergen Stark, the European Central Bank policy maker, stated that Eurozone’s debt crisis will be under control in the next two years. Additionally, investor sentiment was boosted, amid speculation that Greece is close to forming a new government. The top gainer on the S&P 500 index, Amgen, climbed 5.9 percent, after it stated that it plans to buy back shares worth as much as $5.0 billion. Nabors Industries and Marathon Petroleum advanced 4.0 percent and 3.3 percent, respectively, tracking higher crude oil price. General Dynamics rose 1.2 percent, after it agreed to buy Force Protection in a deal worth around $360.0 million. Netflix edged 0.9 percent higher, after it announced a subscription-streaming service deal with Metro-Goldwyn-Mayer Studios in the U.K. and Ireland. On the other hand, First Solar retreated 3.7 percent, after two Chinese solar companies lowered their full year forecasts for shipments. Best Buy shed 3.1 percent, after it agreed to buy Carphone Warehouse Group’s stake in its U.S. and Canadian mobile business in a deal worth $1.3 billion.

European Stocks: Expected to open firmer
The DAX and CAC are likely to open 62 and 23 points, in positive territory, respectively.
German and French Trade Balance and Swiss SECO Consumer Confidence Index are the key economic indicators scheduled for release today. Additionally, EcoFin Meeting is also scheduled for today.
Endesa SA, Societe Generale SA, Gas Natural SDG SA and Adecco SA are scheduled to release their results today.
Repsol YPF SA has announced that its Argentine YPF SA unit, in its biggest ever discovery, struck about 927 million barrels equivalent of shale oil at the Loma La Lata field in northern Patagonia.
The U.S. Food and Drug Administration has approved the expanded use of Merck KGaA’s cancer drug, Erbitux, which can now be used in combination with the chemotherapy treatment of Head and neck cancer at advanced stage.
Stephane Boissel, the CFO of Transgene SA, has indicated that the company’s drug, TG4040, to treat chronic hepatitis C, has attracted the interest of many companies for helping to develop the product.

Macro Update
Eurozone urges Greece to commit to bailout terms
Jean-Claude Juncker, the head of the European Union, has asked Greece to provide a written acceptance to the bailout terms, in order to secure a €8.0 billion loan installment by the end of November 2011 to avert default.
UK retail sales remain weak
On an annual basis, like-for-like retail sales in the U.K., as measured by the British Retail Consortium, edged 0.6 percent lower in October, compared to a 0.3 percent rise recorded in September.
UK house price index declines
The house price balance index in the U.K., as measured by the Royal Institution of Chartered Surveyors, fell to a reading of -24.0 in October, compared to a level of -23.0 recorded in September.
Australian trade surplus narrows
On a seasonally adjusted basis, Australia’s trade surplus dropped to A$2.56 billion in September, compared to A$2.95 billion surplus posted in the previous month.
US consumer credit rises
Consumer credit in the U.S. climbed by $7.4 billion in September, compared to a $9.7 billion decline posted in August.
Fed's Fisher still against additional easing
Dallas Federal Reserve Bank (Fed) President, Richard Fisher, has stated that his support for the central bank’s decision last week, to continue efforts to bring down borrowing costs, does not indicate that he backs additional quantitative easing.

Economic Calendar

Note: PPPHigh           PPMedium           PLow

Corporate Calendar