Article / 26 January 2015 at 7:28 GMT

Market Open: Syriza win to weigh on Eurozone markets

TradingFloor.com Team / Saxo Bank
Denmark
  • Anti-austerity Syriza party wins Greek elections
  • Asian markets head lower on EU concerns
  • Ocwen Financial, Altisource Portfolio rebound after Friday close

Forex Overnight: EUR trading weaker
Currencies Intraday

 







Source: Bloomberg

The EUR is trading lower against its major counterparts this morning as the anti-austerity Syriza party won the general election in Greece on Sunday, thereby heightening the possibility of the country’s exit from the Eurozone. 

Later today, market participants will keep a tab on Ifo sentiment indices in Germany, Europe’s largest economy, which are expected to show an improvement in January. Moreover, Eurozone retail sales and UK mortgage approvals data will be keenly eyed. 

In the US, Dallas manufacturing data will attract market attention, especially after weaker-than-expected Markit manufacturing data released in the US on Friday. At 06:00 GMT, the EUR has fallen 0.2% and 0.3% against the USD and the GBP to trade at $1.1187 and GBP 0.7454, respectively.

The JPY has climbed 0.1% and 0.2% against the USD and the EUR, respectively. Meanwhile, data revealed that Japan’s trade deficit narrowed more than expected in December.


UK Stocks: Expected to open in negative territory
FTSE 100

 







Source: Bloomberg

The FTSE 100 is likely to open 67 points in the red.

British Bankers' Association Mortgage Approvals is the key economic indicator scheduled for release today.

SThree (STHR) and Porvair (PRV) are scheduled to release their results.

Zenaida Monsada, the energy undersecretary of the Philippines, indicated that the completion of the refinery upgrade of Royal Dutch Shell's (RDSA) local unit, Pilipinas Shell Petroleum, would be delayed by one quarter due to the port congestion, triggered by a truck ban imposed by Manila in February last year.

The Sunday Telegraph reported that Standard Chartered's (STAN) two largest investors, Temasek and Aberdeen Asset Management, have urged the bank’s chairman, John Peace, to find a replacement for the chief executive officer, Peter Sands, within months.

Sky News reported that International Consolidated Airlines Group SA (IAG) has submitted a third takeover proposal to the board of Aer Lingus Group (AERL) and raised its bid to around EUR 1.3 billion. According to the Financial Times, directors of the Irish airline are expected to recommend the approach.


Asia: Trading mostly lower
Nikkei 225

 







Source: Bloomberg

Asian markets are trading mostly in the red this morning as the victory of Greek leftist party, Syriza, in elections raised concerns over Greece’s future in the Eurozone.

In Japan, Inpex (1605), Japan Drilling (1606) and JX Holdings (5020) plummeted as oil prices fell to the lowest level in almost six years. Honda Motor (7267), Nikon (7731) and Mazda Motor (7261) also fell. 

On the other hand, Bridgestone (5108) rallied, buoyed by a broker upgrade. Japan Display (6740) advanced following a report that Joled Inc. might seek business integration with the company. At 06:00 GMT, the Nikkei 225 index fell 0.4% to trade at 17,436.8.

In South Korea, Samsung Electronics (005930) and Hyundai Motor (005380) lost value. In China, Bank of China (601988) and Industrial & Commercial Bank of China (601398) plunged. Hua Xia Bank (600015) and Founder Securities (601901) also declined. 

However, Shenwan Hongyuan Group (000166) climbed on its debut in Shenzhen. In Hong Kong, PetroChina (857) and CNOOC (883) edged down, tracking a decline in crude oil prices. Zijin Mining Group (2899) tumbled, hurt by a drop in gold prices.


US Stocks: Futures trading lower
S&P 500

 







Source: Bloomberg

At 06:00 GMT, S&P 500 futures were trading 11.9 points weaker.

Dallas Fed Manufacturing Business Index is the key economic indicator scheduled for release today.

Microsoft (MSFT), Texas Instruments (TXN), Norfolk Southern (NSC), Seagate Technology (STX), W. W. Grainger (GWW), D.R. Horton (DHI) and Zions Bancorporation (ZION) are scheduled to release their results.

In the after-hours trading session on Friday, Ocwen Financial (OCN) and Altisource Portfolio Solutions SA (ASPS) soared 27.2% and 18.4%, respectively, rebounding from their regular session losses. 

Energy sector stocks Rex Energy (REXX) and Peabody Energy (BTU) advanced 3% and 1.8%, respectively. On the flipside, Auspex Pharmaceuticals (ASPX) and Rockwell Medical (RMTI) fell 3% and 2.4%, respectively, reversing their regular session gains.

On Friday, the S&P 500 Index fell 0.5% in the regular trading session as weaker-than-expected corporate earnings overshadowed optimism triggered by the European Central Bank's decision on Thursday to further stimulate economic growth in the Eurozone. 

United Parcel Service (UPS) tumbled 9.9% after the company issued a profit warning for the fourth quarter. Kimberly-Clark (KMB) plunged 6.2% after reporting a decline in fourth-quarter results and issuing a weak earnings outlook for 2015. 

State Street (STT) plummeted 6.1% after it projected a decline in net interest revenue on an operating basis for 2015 while Bank of New York Mellon (BK) dropped 4.7%, hurt by disappointing fourth-quarter earnings. Lower-than-expected fourth-quarter revenue led Kansas City Southern (KSU) to fall 5.2%. 

McDonald's (MCD) declined 1.5% after the company posted fourth-quarter revenue and earnings below market expectations, citing stiff competition. On the other hand, Starbucks (SBUX) surged 6.6% after the coffeehouse chain reported first-quarter results in line with analysts' estimates. 

Additionally, Starbucks appointed Kevin Johnson, a former executive of Microsoft (MSFT), as its new president and chief operating officer. General Electric (GE) rose 0.8% after posting a rise in its fourth-quarter earnings. 

Expedia (EXPE) advanced 2% as the company announced that it has acquired Travelocity from its parent company, Sabre (SABR), for around $280 million.


Europe Stocks: Likely to open in the red
EU Stoxx 50

 







Source: Bloomberg

The DAX and the CAC are expected to open 114 points and 48 points lower, respectively.

Key economic indicators scheduled for release today include Eurozone Retail Sales, German Ifo - Business Climate, Expectations and Current Assessment and Spanish Producer Price Index.

De' Longhi (DLG), Caisse Regionale de Credit Agricole Mutuel de Nord de France SC (CNF) and Starrag Group Holding AG (STGN) are scheduled to release their results.

Novartis AG (NOVN) announced that the US Food and Drug Administration (FDA) granted accelerated approval for its vaccine, Bexsero, to prevent meningitis B.

Ulf Schneider, the chief executive officer of Fresenius SE & Co. KGaA (FRE), said in a media interview, that the company plans to raise its dividend in 2015 as it has achieved its financial targets for 2014.

Air Berlin (AB1) announced that it would purchase 14 Airbus A320 planes from Alitalia as a part of a plan by major shareholder Etihad to benefit both loss-making airlines.


Macro Update 

No need for additional stimulus measures now, indicates BoJ minutes

The minutes of the Bank of Japan’s latest monetary policy meeting indicated that board members were of the opinion that no additional monetary easing measures are required now as the current decline in oil prices is likely to boost the nation’s economy in the long term.

Japan’s merchandise trade deficit narrows

The total merchandise trade deficit in Japan has narrowed to JPY 660.7 bn in December compared with a revised merchandise trade deficit of JPY 893.5 bn posted in November.

New Zealand service sector activity improves

The performance of services index in New Zealand has advanced to a reading of 56.5 in December from a revised reading of 54.7 recorded in the preceding month.

New Zealand’s credit card spending drops 

On a seasonally adjusted monthly basis, credit card spending in New Zealand has fallen 0.6% in December compared with a revised rise of 0.4% posted in the previous month.

Economic Calendar


Country

GMT

Economic Indicator

Relevance

Consensus

Previous

Frequency

Spain

8:00

Producer Price Index (MoM) (Dec)

Low

-

-1.10%

Monthly

Spain

8:00

Producer Price Index (YoY) (Dec)

Low

-

-1.50%

Monthly

Germany

9:00

Ifo - Business Climate (Jan)

Medium

106.30

105.50

Monthly

Germany

9:00

Ifo - Current Assessment (Jan)

Medium

110.70

110.00

Monthly

Germany

9:00

Ifo - Expectations (Jan)

Medium

102.50

101.10

Monthly

UK

9:30

BBA Mortgage Approvals (Dec)

Medium

36.50 K

36.72 K

Monthly

Eurozone

10:00

Retail Sales (MoM) (Dec)

Medium

-

0.60%

Monthly

Eurozone

10:00

Retail Sales (YoY) (Dec)

High

-

1.50%

Monthly

US

15:30

Dallas Fed Manufacturing Business Index (Jan)

Low

3.00

4.10

Monthly

Japan

23:50

Corporate Service Price (YoY) (Dec)

Low

-

3.60%

Monthly

Eurozone

-

Eurogroup meeting

Medium

-

-

-


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

Corporate Calendar


Country

Company Name

Index

Announcement

UK

Aveva Group Plc

FTSE All Share

Trading

UK

Cranswick Plc

FTSE All Share

Trading

UK

LondonMetric Property Plc

FTSE All Share

Trading

UK

Petra Diamonds Ltd.

FTSE All Share

Trading

UK

Porvair Plc

FTSE All Share

Final

UK

SThree Plc

FTSE All Share

Final

US

D.R. Horton Inc.

S&P 500

Q1 Earnings Release

US

Martin Marietta Materials Inc.

S&P 500

Q4 Earnings Release

US

Microsoft Corp.

S&P 500

Q2 Earnings Release

US

Norfolk Southern Corp.

S&P 500

Q4 Earnings Release

US

Plum Creek Timber Company Inc.

S&P 500

Q4 Earnings Release

US

Roper Industries Inc.

S&P 500

Q4 Earnings Release

US

Seagate Technology Plc

S&P 500

Q2 Earnings Release

US

Texas Instruments Inc.

S&P 500

Q4 Earnings Release

US

W. W. Grainger Inc.

S&P 500

Q4 Earnings Release

US

Zions Bancorporation

S&P 500

Q4 Earnings Release


-- Edited by Michael McKenna

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