Article / 06 February 2015 at 7:24 GMT

Market Open: US nonfarm payrolls in spotlight

TradingFloor.com Team / Saxo Bank
Denmark
  • Outlook for Eurozone hiked, lowered for Australia
  • US NFP data seen to increase at slower rate
  • Asian markets trading mostly weaker


Forex Overnight: USD trading mixed
Currencies Intraday

 







Source: Bloomberg

The USD is trading mixed against its major counterparts this morning. Later today, investors will keep a tab on nonfarm payrolls data in the US, which is expected to show an increase at a slower pace for January. Moreover, the US unemployment rate as well as a report on consumer credit will be keenly eyed. Traders will also focus on German industrial production data along with the French trade and budget balance reports for further direction. 

Yesterday, the European Commission hiked its growth outlook for the Eurozone to 1.3% in 2015 and to 1.9% in 2016 from the initial estimates of 1.1% and 1.7%, respectively. At 06:00 GMT, the EUR has fallen 0.1% against the USD to trade at $1.1468, while the GBP has risen 0.1% against the USD to trade at $1.5338.


The AUD has climbed 0.5% against the USD. The Reserve Bank of Australia, in its quarterly monetary policy statement, lowered the country’s growth and inflation forecasts for 2015 and 2016.


UK Stocks: Expected to open in negative territory
FTSE 100

 







Source: Bloomberg

The FTSE 100 is likely to open 14 to 16 points in the red.

Total and Visible Trade Balance are the key economic indicators scheduled for release today.

Holders Technology (HDT) is scheduled to report its results.

The United Steelworkers union announced that local unions, complying with the USW’s request, have rejected a sixth contract offer made by Royal Dutch Shell (RDSA) to US refinery workers.

The parliamentary Public Accounts Committee accused PricewaterhouseCoopers (PwC) of misleading the Parliament about its operations to help firms such as Shire Plc (SHP) evade millions of pounds in tax and urged the government to tighten regulation of corporate tax advisers to curb the practice.


Asia: Trading mostly lower
Nikkei 225

 







Source: Bloomberg

Asian markets are trading mostly weaker this morning.

In Japan, Takata (7312) rallied despite reporting a net loss for the nine months ended December. Nisshin Steel (5413) surged after raising its full-year profit forecast. Sony (6758) and Mazda Motor (7261) also featured amongst the gainers. However, Suzuki Motor (7269) and Nikon (7731) plunged as they lowered their net profit outlook for the full year. At 06:00 GMT, the Nikkei 225 index rose 0.8% to trade at 17,639.7.

In South Korea, Hyundai Motor (005380) tumbled after the Hyundai Motor Group’s chairman and his son sold a 13% stake worth $1.1 billion in shipping affiliate Hyundai Glovis (086280). In China, markets are trading in negative territory after an official of the People's Bank of China stated that this week's cut in the bank reserve requirement ratio does not signal the start of strong stimulus. Bank of China (601988), China Construction Bank (601939) and China CITIC Bank (601998) edged down. In Hong Kong, China Mobile (941) and China Overseas Land & Investment (688) plummeted. However, CNOOC (883) advanced, tracking a rebound in crude oil prices.


US Stocks: Futures trading lower
S&P 500

 







Source: Bloomberg

At 06:00 GMT, S&P 500 futures were trading 0.4 points weaker.

Key economic indicators scheduled for release today include Change in Nonfarm Payrolls, Change in Private Payrolls, Unemployment Rate, Consumer Credit Change, Underemployment Rate, Average Hourly Earnings All Employees and Average Weekly Hours All Employees.

Dominion Resources (D), Marsh & McLennan Companies (MMC), Aon Plc (AON) and Moody's Corporation (MCO) are scheduled to report their results.

In the after-hours trading session yesterday, Twitter (TWTR) and LinkedIn (LNKD) soared 9.1% and 7.7%, respectively, after their fourth-quarter results surpassed analysts’ estimates. On the flipside, Expedia (EXPE) tumbled 8% as the company’s fourth-quarter results trailed market expectations. Yelp Incorporation (YELP) plummeted 10.4% despite posting better-than-expected fourth-quarter revenue and earnings.

Yesterday, the S&P 500 Index rose 1% in the regular trading session amid strength in energy sector stocks and M&A activity. Additionally, US labour market data showed that weekly jobless claims rose less than expected last week. 

Denbury Resources (DNR) and Spectra Energy (SE) climbed 8.6% and 4.4%, respectively, following a rebound in oil prices. Hospira (HSP) surged 35.3% after Pfizer (PFE) acquired the company for around $17 billion. Pfizer advanced 2.9%. Ball Corporation (BLL) soared 8.9% as the company announced that it is in discussions relating to a possible acquisition of the UK consumer packaging company, Rexam Plc. Google (GOOGL) edged up 0.7% following reports that the technology giant reached an agreement with Twitter (TWTR) to make tweets searchable on its platform. Frontier Communications (FTR) gained 5.8% amid reports that it was nearing a deal to buy Verizon Communications’ (VZ) landline assets for about $10 billion. Estee Lauder Companies (EL) advanced 8.1%, buoyed by upbeat second-quarter results. On the other hand, Teradata (TDC) plunged 10.2% after the company reported weaker-than-expected fourth-quarter revenue and issued a tepid revenue and earnings guidance for 2015. Michael Kors Holdings (KORS) declined 2.3% following a slowdown in its third-quarter comparable store sales and as the luxury retailer issued a weaker-than-expected fourth-quarter earnings outlook.


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

 







Source: Bloomberg

The DAX and the CAC are expected to open 18-19 points and 11-13 points lower, respectively.

Key economic indicators scheduled for release today include German and Spanish Industrial Production, French Trade and Budget Balance and Swiss Real Retail Sales and Foreign Currency Reserves.

Fagron NV (FAGR), Alcatel Lucent SA (ALU), Banque Profil De Gestion SA (BPDG) and Betsson AB (BETSB) are scheduled to report their results.

Airbus Group NV (AIR) has won a $10.6 billion provisional order for 100 Airbus A320neo family aircrafts from Avianca Holdings SA.

According to German newspaper Handelsblatt, Bilfinger SE (GBF) has selected Per Utnegaard, the chief executive officer of Swissport, to be chief executive of the group.


Macro Update

Japan’s foreign exchange reserves climb

Foreign exchange reserves in Japan have increased to $1,261.1 billion in January from $1,260.5 bn recorded in the preceding month.

RBA lowers growth and inflation forecasts

The Reserve Bank of Australia, in its quarterly monetary policy statement, cut its economic growth outlook for Australia in 2015 to a range of 1.75%-2.75% from 2%-3% estimated in November. Further, the RBA also lowered its forecast for headline consumer price inflation growth in the year through June to 1.25%. The RBA also projected a further increase in the unemployment rate, compared with its previous forecast of around 6.5%.

Australia’s construction sector activity improves, indicated AiG

The Australian Industry Group reported that the performance of construction index in Australia has risen to a reading of 45.9 in January from a reading of 44.4 posted in the previous month.


Economic Calendar


Country

GMT

Economic Indicator

Relevance

Consensus/*Actual

Previous

Frequency

Japan

5:00

Coincident Index (Dec) (P)

Low

110.70*

109.20

Monthly

Japan

5:00

Leading Economic Index (Dec) (P)

Medium

105.20*

103.90

Monthly

Germany

7:00

Industrial Production n.s.a. and w.d.a. (YoY) (Dec)

Medium

-0.30%

-0.50%

Monthly

Germany

7:00

Industrial Production s.a. (MoM) (Dec)

Low

0.40%

-0.10%

Monthly

France

7:45

Budget Balance (Dec)

Low

-

-EUR90.80 bn

Monthly

France

7:45

Exports (Dec)

Low

-

EUR37.17 bn

Monthly

France

7:45

Imports (Dec)

Low

-

EUR40.41 bn

Monthly

France

7:45

Trade Balance (Dec)

Low

-EUR3.30 bn

-EUR3.24 bn

Monthly

Switzerland

8:00

Foreign Currency Reserves (Jan)

Low

-

CHF495.10 bn

Monthly

Spain

8:00

Industrial Production (YoY) (Dec)

Medium

-

-0.10%

Monthly

Spain

8:00

Industrial Output Cal Adjusted (YoY) (Dec)

Medium

0.30%

0.00%

Monthly

Switzerland

8:15

Real Retail Sales (YoY) (Dec)

Medium

-

-1.20%

Monthly

Eurozone

8:30

ECB's Nouy & Italian Finance Minister Speak at Rome Event

Low

-

-

-

UK

9:30

Exports (Dec)

Medium

-

GBP24384.00 mn

Monthly

UK

9:30

Imports (Dec)

Medium

-

GBP33232.00 mn

Monthly

UK

9:30

Total Trade Balance (Dec)

Medium

-GBP1.70 bn

-GBP1.41 bn

Monthly

UK

9:30

Trade Balance; non-EU (Dec)

Low

-GBP3.00 bn

-GBP2.65 bn

Monthly

UK

9:30

Visible Trade Balance (Dec)

Medium

-GBP9.10 bn

-GBP8.85 bn

Monthly

Canada

13:30

Full Time Employment Change (Jan)

Medium

-

53.50 K

Monthly

Canada

13:30

Part Time Employment Change (Jan)

Medium

-

-57.70 K

Monthly

US

13:30

Change in Household Employment (Jan)

Low

-

111.00 K

Monthly

US

13:30

Underemployment Rate (Jan)

Medium

-

11.20%

Monthly

Canada

13:30

Net Change in Employment (Jan)

High

5.00 K

-4.30 K

Monthly

Canada

13:30

Participation Rate (Jan)

Low

65.70%

65.90%

Monthly

Canada

13:30

Unemployment Rate (Jan)

High

6.70%

6.60%

Monthly

Canada

13:30

Building Permits (MoM) (Dec)

Low

5.00%

-13.80%

Monthly

US

13:30

Average Hourly Earnings All Employees (MoM) (Jan)

Medium

0.30%

-0.20%

Monthly

US

13:30

Average Hourly Earnings All Employees (YoY) (Jan)

Medium

1.90%

1.70%

Monthly

US

13:30

Average Weekly Hours All Employees (Jan)

Low

34.60

34.60

Monthly

US

13:30

Change in Manufacturing Payrolls (Jan)

Low

12.00 K

17.00 K

Monthly

US

13:30

Change in Nonfarm Payrolls (Jan)

High

230.00 K

252.00 K

Monthly

US

13:30

Unemployment Rate (Jan)

High

5.60%

5.60%

Monthly

US

13:30

Change in Private Payrolls (Jan)

Medium

223.00 K

240.00 K

Monthly

US

17:45

Fed's Lockhart Speaks on U.S. Economy in Florida

Low

-

-

-

US

20:00

Consumer Credit Change (Dec)

Medium

$15.00 bn

$14.08 bn

Monthly





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




Corporate Calendar


Country

Company Name

Index

Announcement

France

Alcatel-Lucent SA

CAC 40

Q4 Earnings Release

US

Aon Plc

S&P 500

Q4 Earnings Release

US

Dominion Resources Inc.

S&P 500

Q4 Earnings Release

US

FLIR Systems Inc.

S&P 500

Q4 Earnings Release

US

Harris Corp.

S&P 500

Q2 Earnings Release

US

Marsh & McLennan Companies Inc.

S&P 500

Q4 Earnings Release

US

Moody's Corp.

S&P 500

Q4 Earnings Release


– Edited by Clemens Bomsdorf

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