Article / 22 January 2015 at 7:06 GMT

Market Open: Markets brace for ECB decision

TradingFloor.com Team / Saxo Bank
Denmark

Forex Overnight: EUR trading mostly weaker

Currencies Intraday
 








Source: Bloomberg

The EUR is trading lower against most of its major counterparts this morning as traders are on tenterhooks ahead of the outcome of the European Central Bank monetary policy meeting today. 

According to a media report yesterday, the ECB’s executive board has recommended asset purchases of EUR 50 billion each month through 2016 to revive the European economy. Market participants also await Eurozone consumer confidence data which is expected to post a marginal improvement in January. 

Moreover, reports on Italian retail sales and industrial orders along with UK public finances and the Confederation of British Industry industrial trends survey data will attract market attention. 

Across the Atlantic, investors will focus on US weekly jobless claims and Kansas City manufacturing activity data for further direction. At 06:00 GMT, the EUR has fallen 0.2% and 0.1% against the USD and the GBP to trade at $1.1593 and at GBP 0.7661, respectively.

 

UK Stocks: Expected to open marginally higher

FTSE 100
 








Source: Bloomberg

The FTSE 100 is likely to open one to four points in the green.

Key economic indicators scheduled for release today include Public Finances, Public Sector Net Borrowing, Confederation of British Industry Industrial Trends - Selling Prices, Orders and Business Optimism.

Safestore Holdings (SAFE), Chemring Group (CHG), Ilika (IKA) and NCC Group (NCC) are scheduled to release their results.

Eric Schneiderman, the New York State attorney general, moved to expand his lawsuit against Barclays (BARC) over its “dark pool” trading platform. He uncovered new evidence that several top executives knew how the bank misrepresented its trading platform to investors and claimed that the bank has refused to cooperate in his investigation.

Sky News reported that Balfour Beatty (BBY) would announce today the outcome of an independent probe into its UK construction unit, wherein the company is expected to reveal a huge new loss on the division potentially more than GBP 100 million.

 

Asia: Trading mostly firmer

Nikkei 225
 








Source: Bloomberg

Asian markets are trading mostly in positive territory this morning.

In Japan, Fujitsu (6702) and Hitachi (6501) tumbled. Toyota Motor (7203) fell after the company projected lower vehicle sales for 2015. NTT DOCOMO (9437) also declined after Standard & Poor's cut the credit ratings for DoCoMo and parent Nippon Telegraph & Telephone (9432), citing increased competition in the wireless arena. 

However, SoftBank (9984) rose amid reports that Google is poised to sell wireless service directly to consumers through the former’s US unit, Sprint, as well as via T-Mobile US. At 06:00 GMT, the Nikkei 225 index fell 0.1% to trade at 17,262.2.

In South Korea, Hyundai Motor (005380) lost value after its labour union said that it would appeal against a recent court ruling unfavorable to the automaker's employees. However, POSCO (005490) edged up. 

In China, China Life Insurance (601628) and China Pacific Insurance Group (601601) paced gains. However, Ping An Insurance Group Company of China (601318) declined. 

In Hong Kong, Bank of China (3988), China Merchants Bank (3968) and Agricultural Bank of China (1288) rallied after the People's Bank of China injected an additional JPY 50 billion worth of short-term loans into banks to boost growth. Tencent Holdings (700) and China Mobile (941) also advanced.

 

US Stocks: Futures trading higher

S&P 500
 








Source: Bloomberg

At 06:00 GMT, S&P 500 futures were trading 2.9 points stronger.

Key economic indicators scheduled for release today include Initial and Continuing Jobless Claims, House Price Index and Kansas City Fed Manufacturing Activity.

Verizon Communications (VZ), Union Pacific (UNP), Starbucks (SBUX), Covidien (COV) and Capital One Financial (COF) are scheduled to release their results.

In the after-hours trading session yesterday, eBay (EBAY) advanced 3.5%, buoyed by better-than-expected fourth-quarter earnings and after the company announced plans to cut 2,400 jobs. Additionally, the company reached a standstill agreement with Carl Icahn, an activist investor, over corporate governance. 

On the flipside, SanDisk (SNDK) slid 7.1%, hurt by a decline in fourth-quarter profit. American Express (AXP) fell 1.9% despite reporting better-than-expected fourth-quarter results.

Yesterday, the S&P 500 Index rose 0.5% in the regular trading session amid strength in energy sector stocks and amid growing expectations that the European Central Bank might announce additional stimulus at its monetary policy meeting today. 

Newfield Exploration (NFX), Nabors Industries (NBR) and Noble Corporation (NE) advanced 6.9%, 6.3% and 6.2%, respectively, following a rise in crude oil prices. Netflix (NFLX) surged 17.3% after reporting better-than-expected fourth-quarter earnings and strong subscriber growth. Moreover, the company announced that it would complete its global expansion within the next two years. 

Upbeat fourth-quarter results and a positive outlook for 2015 led UnitedHealth Group (UNH) to gain 3.5%. Bank of America (BAC) rose 1% as Brian Moynihan, the bank’s chief executive officer and chairman, said that the bank is willing to do what it takes to protect the firm and its customers from Cyberhacks. 

CVS Health (CVS) advanced 1.2%, buoyed by a broker upgrade. On the other hand, International Business Machines (IBM) declined 3.1% after posting disappointing fourth-quarter revenue and as the company warned of weaker-than-expected earnings in 2015. 

Fifth Third Bancorp (FITB) shed 3% after reporting a decline in fourth-quarter revenue. CA Incorporation (CA) tumbled 5.5%, hurt by a drop in third-quarter sales and after issuing a tepid revenue forecast for 2015.

 

Europe Stocks: Likely to open in the green

EU Stoxx 50
 








Source: Bloomberg

The DAX and the CAC are expected to open 26 to 33 points and six to eight points higher, respectively.

Key economic indicators scheduled for release today include Eurozone Consumer Confidence, Italian Retail Sales, Industrial Orders and Sales, Spanish Unemployment Rate and Portuguese Current Account Balance. Moreover, traders will keenly track the European Central Bank’s interest rate decision and monetary policy statement.

Kaufman & Broad SA (KOF), Bankinter SA (BKT), Deutsche Beteiligungs AG (DBAN), Logitech international SA (LOGN) and Sligro Food Group NV (SLIGR) are scheduled to release their results.

Bloomberg reported that Telefonica SA (TEF) had held discussions with Qatar’s sovereign-wealth fund end of last year over selling a stake in itself to the country through a multi-billion-euro capital increase in order to reduce debt.

According to Bloomberg, Commerzbank AG (CBK) intends to cut around 100 jobs in London and relocate another 340 jobs to support the larger foreign exchange and interest rate teams in Frankfurt.

DMG MORI SEIKI COMPANY, a Japanese firm, stated that it wants to increase its holding in DMG MORI SEIKI AG (GIL) to more than 50% and has offered as much as EUR 1.6 billion.

 

Macro Update

Japan’s economy continues to recover moderately, indicates BoJ’s monthly report

The Bank of Japan, in its latest monthly report, has indicated that the nation’s economy has continued to recover at a moderate pace. Further, the central bank stated that the effects of the decline in demand following the sales tax hike have been gradually fading on the whole.

Chinese MNI business sentiment deteriorates

The MNI business sentiment index in China dropped to a reading of 53.7 in January from a reading of 56.2 posted in the previous month.

Australia’s consumer inflation expectations decline

The consumer inflation expectations in Australia have dropped to 3.2% in January from 3.4% posted in the previous month.

Australia’s new home sales rise, indicates HIA

The Housing Industry Association has indicated that, on a monthly basis, new home sales in Australia have advanced 2.2% in November compared with a rise of 3.0% recorded in the preceding month.

Consumer confidence in New Zealand improves

The consumer confidence index in New Zealand has climbed to a reading of 128.9 in January from a reading of 126.5 posted in the previous month.

New Zealand manufacturing PMI advances

The seasonally adjusted Business NZ manufacturing purchasing managers’ index in New Zealand has risen to a reading of 57.7 in December compared with a revised reading of 55.6 recorded in November.

Economic Calendar


Country

GMT

Economic Indicator

Relevance

Consensus/*Actual

Previous

Frequency

China

1:45

MNI Business Sentiment Survey (Jan)

Low

53.70*

56.20

Monthly

Japan

5:00

Bank of Japan Monthly Economic Survey (Jan)

High

-

-

Monthly

Spain

8:00

Unemployment Rate (Survey) (Q4)

Low

23.50%

23.67%

Quarterly

Italy

9:00

Industrial Sales n.s.a. (YoY) (Nov)

Low

-

-0.70%

Monthly

Italy

9:00

Industrial Sales s.a. (MoM) (Nov)

Low

-

0.40%

Monthly

UK

9:00

BoE's Miles Speaks in Edinburgh

Low

-

-

-

Italy

9:00

Industrial Orders n.s.a (YoY) (Nov)

Low

-0.60%

-0.20%

Monthly

Italy

9:00

Industrial Orders s.a (MoM) (Nov)

Low

0.40%

0.10%

Monthly

UK

9:25

BoE's Fisher Speaks in London

Low

-

-

-

UK

9:30

Public Finances (PSNCR) (Dec)

Medium

-

GBP6.70 bn

Monthly

UK

9:30

PSNB ex Interventions (Dec)

Low

GBP9.70 bn

GBP14.10 bn

Monthly

UK

9:30

Public Sector Net Borrowing (Dec)

Medium

GBP9.00 bn

GBP13.40 bn

Monthly

Eurozone

10:00

Euro Area Third Quarter Government Debt

Low

-

-

-

Italy

10:00

Retail Sales n.s.a (YoY) (Nov)

Low

-0.90%

-0.80%

Monthly

Italy

10:00

Retail Sales s.a. (MoM) (Nov)

Low

0.10%

0.00%

Monthly

UK

11:00

CBI Trends Selling Prices (Jan)

Medium

-

7.00

Monthly

UK

11:00

CBI Business Optimism (Jan)

Low

-

8.00

Quarterly

UK

11:00

CBI Industrial Trends Survey - Orders (Jan)

Low

5.00

5.00

Monthly

Eurozone

12:45

ECB Interest Rate Decision

High

0.05%

0.05%

-

Eurozone

13:30

ECB Monetary Policy Statement and Press Conference

High

-

-

-

US

13:30

Continuing Jobless Claims (10-Jan)

Low

2400.00 K

2424.00 K

Weekly

US

13:30

Initial Jobless Claims (17-Jan)

Medium

300.00 K

316.00 K

Weekly

US

14:00

House Price Index (SA) (Nov)

Medium

-

215.39

Monthly

US

14:00

Housing Price Index (MoM) (Nov)

Low

0.30%

0.60%

Monthly

Eurozone

15:00

Consumer Confidence (Jan) (P)

Medium

-10.50

-10.90

Monthly

US

16:00

Kansas City Fed Manufacturing Activity (Jan)

Low

8.00

8.00

Monthly

WORLD

-

World Economic Forum - Davos

Medium

-

-

-

Portugal

-

Current Account Balance (Nov)

Low

-

EUR0.51 bn

Monthly


See today's events updated in real-time in our Financial Calendar on TradingFloor.com


Corporate Calendar


Country

Company Name

Index

Announcement

UK

Chemring Group Plc

FTSE All Share

Final

UK

Countrywide Plc

FTSE All Share

Trading

UK

Findel Plc

FTSE All Share

Trading

UK

NCC Group Plc

FTSE All Share

Interim

UK

Paragon Group Of Companies Plc

FTSE All Share

Trading

UK

Royal Mail Plc

FTSE All Share

Trading

UK

Safestore Holdings Plc

FTSE All Share

Final

UK

St James's Place Plc

FTSE All Share

Trading

UK

Workspace Group Plc

FTSE All Share

Trading

US

Altera Corp.

S&P 500

Q4 Earnings Release

US

BB&T Corp.

S&P 500

Q4 Earnings Release

US

Capital One Financial Corp.

S&P 500

Q4 Earnings Release

US

Covidien Plc

S&P 500

Q1 Earnings Release

US

E*TRADE Financial Corp.

S&P 500

Q4 Earnings Release

US

Huntington Bancshares Inc.

S&P 500

Q4 Earnings Release

US

Intuitive Surgical Inc.

S&P 500

Q4 Earnings Release

US

Johnson Controls Inc.

S&P 500

Q1 Earnings Release

US

KeyCorp.

S&P 500

Q4 Earnings Release

US

KLA-Tencor Corp.

S&P 500

Q2 Earnings Release

US

Precision Castparts Corp.

S&P 500

Q3 Earnings Release

US

Southwest Airlines Co.

S&P 500

Q4 Earnings Release

US

Starbucks Corp.

S&P 500

Q1 Earnings Release

US

Travelers Companies Inc.

S&P 500

Q4 Earnings Release

US

Union Pacific Corp.

S&P 500

Q4 Earnings Release

US

Verizon Communications Inc.

S&P 500

Q4 Earnings Release

 

Ex-Dividend Calendar


Country

Company Name

Index

Announcement

UK

Compass Group Plc

FTSE100

Final Ex-Dividend

UK

SSE Plc

FTSE100

Interim Ex-Dividend


-- Edited by Michael McKenna

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail