Market Preview - 9 December 2011

Forex Overnight: EUR trading under pressure
The EUR is trading lower against the majors, this morning, amid market speculation that European leaders may fail to provide a quick solution to contain the region’s sovereign debt crisis at the meeting in Brussels. Additionally, the EUR is under pressure, after the European Central Bank (ECB) dented hopes of additional purchases of government bonds. At 6 am, the EUR has lost 0.1 percent against the USD to trade at $1.3321, while it has declined marginally against the GBP to trade at £0.8534.
The JPY has gained 0.2 percent against the EUR, amid receding risk appetite.
The AUD and the CAD have declined 0.5 percent and 0.1 percent, against the USD, respectively, following downbeat news flow from the ongoing European Union (EU) summit.

UK Stocks: Expected to open in negative territory
The FTSE 100 is likely to open 43 to 45 points in the red.
Producer Price Index and Trade Balance are the key economic indicators scheduled for today.
Polar Capital Holdings, Ishaan Real Estate and MBL Group are scheduled to announce their results today.
According to Bloomberg, Royal Bank of Scotland Group, Barclays and HSBC Holdings have reduced their investments in Greek, Italian, Irish, Portuguese and Spanish sovereign debt by a total of about $15.2 billion.
Tom Albanese, the CEO of Rio Tinto, has stated that the company may export iron ore from its Simandou project in Guinea before its 2015 target, using trucks for transportation.
Tullow Oil has stated that it expects to reach plateau production of 120,000 barrels per day from its Jubilee oil field in Ghana by "early next year".

Asia: Trading in the red
Asian markets are trading in negative territory, amid reports of discord amongst members at the EU summit.
In Japan, markets are trading lower, after data showed that the nation’s economy grew less-than-estimated in the third quarter. Mitsubishi UFJ Financial Group has declined, after it acquired a 15.0 percent stake in the Australian investment management firm, AMP Limited, for A$425.0 million. Industrial majors, Fanuc Corporation and Hitachi Construction Machinery have lost value, amid worries over demand prospects. On the other hand, Teijin has added value, amid reports that it has signed an agreement with General Motors Company to jointly develop carbon fibre automobile parts. At 6 am, the Nikkei 225 index has declined 1.5 percent to trade at 8,536.5.
In Hong Kong, Bank of China and HSBC Holdings have declined, as risk appetite amongst investors waned. Resources sector stocks, Cnooc, Aluminum Corporation of China and Angang Steel Company have retreated, tracking weak metal prices. In South Korea, Hynix Semiconductor has dropped, after U.S. chip makers, Texas Instruments and Altera Corporation, issued weak quarterly revenue guidance. In China, property sector stocks, Agile Property Holdings and China Overseas Land & Investment have dropped.

US Stocks: Futures trading marginally lower
At 6 am, S&P 500 futures are trading 0.4 points weaker.
Reuters/Michigan Consumer Confidence Index and Trade Balance are the key economic indicators scheduled for release today.
Ferrellgas Partners, Comverse Technology, Titan Machinery, KMG Chemicals and Ocean Power Technologies are scheduled to announce their results today.
Altera Corporation and Texas Instruments declined 6.1 percent and 5.8 percent, respectively, in after hours trading session yesterday, after they lowered their fourth quarter revenue guidance. Esterline Technologies slid 2.9 percent, after it guided to lower-than-expected revenue guidance for FY2011-12. On the other hand, a significant rise in its second quarter revenue led Flow International to rally 27.3 percent. Cooper Companies jumped 6.8 percent, after it reported upbeat fourth quarter earnings and issued buoyant earnings guidance for FY2011-12. Pall Corporation climbed 3.8 percent, after it reported better-than-expected first quarter results.
In the regular trading session on Thursday, the S&P 500 index declined 2.1 percent, after Mario Draghi, the President of the ECB, dampened market speculation of additional bond purchases by the central bank. Morgan Stanley, Citigroup and JPMorgan Chase slumped 8.4 percent, 7.0 percent and 5.2 percent, respectively, as risk appetite amongst investors’ waned. Hartford Financial Services plunged 8.2 percent, after it stated that it would look to slash additional costs due to the “fragile economic recovery”. Alpha Natural Resources, United States Steel Corporation, Cliffs Natural Resources and Freeport-McMoRan Copper & Gold dropped 8.4 percent, 6.1 percent, 5.2 percent and 5.1 percent, respectively, tracking lower metal prices. Lower-than-expected first quarter profit led Costco Wholesale Corporation to shed 2.0 percent. International Business Machines lost 1.3 percent, after it agreed to acquire DemandTec Inc. for a consideration of $440.0 million.

European Stocks: Likely to open weak
The DAX and CAC are expected to open 58 to 60 points and 23 points lower, respectively.
Key economic indicators scheduled for release today include German Wholesale Price Index, Consumer Price Index, Current Account & Trade Balance and French Industrial & Manufacturing Production and Central Government Balance. Investors also await the release of ECB’s Monthly Report for December and the outcome of the EU summit.
Centralschweizerische Kraftwerke AG and Club Mediterranee SA are scheduled to report their results later today.
Shanghai Electric Group has stated that it, along with Siemens AG, will invest €169.1 million to form two wind-power equipment joint ventures.
In an interview to the Financial Times, Gerard Mestrallet, the CEO of GDF Suez, has stated that the company is set to spend up to €55.0 billion globally over the next five years, in an attempt to increase its presence substantially in Asia and reduce its dependence on Europe.
Suez Environnement SA stated that it has agreed to sell its German water services and sanitation unit, Eurawasser, to Redmondis Group for €95.0 million.
Wacker Chemie AG has stated that its plans to shut down its semiconductor wafer plant in Hikari, Japan, by the middle of 2012 and that it will shift production from the site to locations in Singapore and the U.S.

Macro Update
EU fails to secure full treaty backing, reports Reuters
Reuters has reported that the EU has failed to secure backing from all 27 members on treaty changes to more closely coordinate fiscal policy within the bloc.
Cameron demands safeguards on the proposed EU treaty change, reports Reuters
According to Reuters, U.K. Prime Minister, David Cameron, has urged for safeguards on the proposed EU treaty change to prevent the new EU financial watchdogs from overruling country authorities.
Chinese inflation eases
The annual inflation in China fell to 4.2 percent in November, the slowest pace in the last 14 months, following a rate of 5.5 percent rate posted in the previous month.
Chinese industrial production growth slows, retail sales robust
On an annual basis, industrial production in China grew less-than-expected, by 12.4 percent in November, while retail sales rose higher-than-expected, by 17.3 percent during the same period.
Japanese GDP revised down
On an annual basis, Japan’s Gross Domestic Product (GDP) rose 5.6 percent in the third quarter, compared to a previously estimated 6.0 percent growth.
Japanese money supply climbs 2.5 percent Y-o-Y in November
Bank of Korea lowers nation’s 2012 economic growth and inflation forecast
Hong Kong needs immediate stimulus if European crisis intensifies, warns IMF

Economic Calendar