Article / 09 July 2014 at 6:32 GMT

Market Preview: Fed minutes in view as markets expected to open up

Saxo Capital Markets UK
United Kingdom
  • US Fed minutes main item on agenda
  • Asia markets trading lower mirroring overnight Wall Street losses
  • FTSE to open down, DAX, CAC likely to be in the black

Forex Overnight: USD trading mixed
Currencies Intraday








Source: Bloomberg

The USD is trading mixed against its major counterparts this morning. Later today, traders will keenly track the minutes of the Federal Reserve’s (Fed) latest policy meeting to get further hints on the timing of an interest rate hike in the US. In Europe, traders will keep a tab on speeches from several European Central Bank officials along with Greek consumer price inflation data due later in the day. At 05:00 GMT, the EUR had advanced 0.1 percent against the USD to trade at USD 1.3619 while the GBP was unchanged against the USD to trade at USD 1.7131.

The AUD has declined marginally versus the USD. Data released earlier today indicated that China’s consumer price inflation eased in June.

The JPY has declined marginally against the USD while it has dropped 0.1 percent against the EUR.


UK Stocks: Expected to open lower
FTSE 100








Source: Bloomberg

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

RICS Housing Price Balance and Halifax House Prices are the key economic indicators scheduled for release today.

RusHydro JSC (HYDR) is scheduled to report its results today.

According to media reports, Barclays (BARC) has named Gary Posternack as the global head of mergers and acquisitions and appointed Reid Marsh as the co-head of its investment banking business in Asia-Pacific. The bank also indicated that Mark Warham, the head of mergers and acquisitions in the Europe, Middle East and Africa region, would leave and that his position would be filled by Matthew Ponsonby.

Bloomberg has reported that Barclays (BARC) has appointed an adviser to sell its natural resource focused private-equity unit, Barclays Natural Resource Investments.


Asia: Trading in the red
Nikkei 225








Source: Bloomberg

Asian markets are trading lower this morning, mirroring overnight losses on Wall Street.

In Japan, Nomura Holdings (8604) dropped, extending its previous session’s losses. Minebea (6479) declined. A report indicated that the company would accelerate its mergers and acquisitions activities amid expectations of an increase in its cash flows through the year ended March 2015. However, Nisshin Steel (5413) advanced after a broker raised its price target on the stock. At 05:00 GMT, the Nikkei 225 index had declined 0.5 percent to trade at 15,243.9.

In South Korea, index heavyweights, Posco (005490) and LG Electronics (066570) declined. Daewoo Shipbuilding & Marine Engineering (042660) eased even as the company bagged a KRW 2.9 trillion contract to build liquefied natural gas carriers. In China, data showed that Chinese consumer inflation eased in June. Banking sector stocks, Industrial & Commercial Bank of China (601398) and China Merchants Bank (600036) lost value. In Hong Kong, casino sector stocks, Wynn Macau (1128), Sands China (1928) and Galaxy Entertainment Group (27) declined following a broker downgrade. China Resources Land (1109) fell, pacing losses among property sector stocks.


US Stocks: Futures trading firmer
S&P 500








Source: Bloomberg

At 05:00 GMT, S&P 500 futures were trading 0.1 point higher.

MBA Mortgage Applications is the economic indicator scheduled for release today. Meanwhile, investors will keep a close tab on the minutes of the Federal Reserve’s latest policy meeting.

MSC Industrial Direct Company (MSM), Helen of Troy (HELE), WD-40 Company (WDFC), Synergy Resources (SYRG), API Technologies (ATNY), DragonWave (DRWI), Emmis Communications (EMMS) and Hipcricket (HIPP) are scheduled to announce results today.

In the after-hours trading session yesterday, better-than-expected second-quarter results led Alcoa (AA) to advance 1.1 percent. AeroVironment (AVAV) gained 6.4 percent after reporting fourth-quarter profit above market estimates. However, Gigamon (GIMO) and Silicon Image (SIMG) plunged 27.5 percent and 13.8 percent, respectively, after they slashed their second-quarter revenue outlook. Container Store Group (TCS) declined 17.8 percent after the company lowered its full-year guidance. Bob Evans Farms (BOBE) fell 1 percent after the company posted a drop in its fourth-quarter profit and trimmed its earnings outlook for the current year.

Yesterday, the S&P 500 index declined 0.7 percent in the regular trading session as market participants remained cautious ahead of the start of the earnings season. Among internet sector stocks, TripAdvisor (TRIP) slid 5.6 percent and emerged as the biggest loser on the index while Facebook (FB) and Google (GOOG) slipped 3.9 percent and 1.9 percent, respectively. First Solar (FSLR) shed 4.9 percent after a report revealed that the Chinese government plans to cut its 2014 solar installation targets. Wynn Resorts (WYNN) declined 3.1 percent amid reports that slowing Chinese economic growth could hurt businesses in the Macau gambling region. 

Biotechnology sector stocks, Celgene Corporation (CELG), Biogen Idec (BIIB) and Gilead Sciences (GILD) dropped 3.5 percent, 2.5 percent and 0.1 percent, respectively. On the upside, utility sector stocks, NRG Energy (NRG) and Public Service Enterprise Group (PEG) advanced 1.3 percent and 0.3 percent, respectively. Apartment Investment Management (AIV) rose 1.1 percent after a broker upgraded its rating on the stock to “Buy” from “Neutral.”


Europe Stocks: Likely to open in positive territory
EU Stoxx 50








Source: Bloomberg

The DAX and the CAC are expected to open 21 to 23 points and nine to 13 points firmer, respectively.

Greek Consumer Price Index is the key economic indicator scheduled for release today.

Axis AB (AXIS) and Investment AB Oresund (ORES) are scheduled to report their results today.

Sanofi SA (SAN) has filed a patent infringement lawsuit against Eli Lilly & Company related to insulin and devices used to deliver it.

L'Oreal SA (OR) has agreed to buy back an 8 percent of its common stock owned by Nestle SA (NESN). The French cosmetic giant also indicated that it completed the sale of its 50 percent stake in Galderma to Nestle SA.

According to the Financial Times, the UK Serious Fraud Office has arrested and questioned staff members of Airbus Group NV’s (AIR) subsidiary in connection to a long-standing investigation alleging corruption charges on the company in Saudi Arabia.


Macro Update

Recent firmer inflation data likely to be temporary, indicates Fed’s Kocherlakota

The Federal Reserve (Fed) president of the Minneapolis, Narayana Kocherlakota, has indicated that recent firmer inflation data may be temporary and he does not see the recent fall in US unemployment to be sustained in coming months. Additionally, Kocherlakota has stated that the nation’s economic growth may not breach the 2.5 percent target in 2014.

US consumer credit rises less than anticipated

Consumer credit in the US has increased less than expected by USD 19.6 billion in May compared to a revised rise of USD 26.1 billion recorded in the previous month.

Shop prices in the UK decline at a faster pace, indicates BRC

The British Retail Consortium (BRC) has reported that on an annual basis, the shop price index in the UK has declined 1.8 percent in June compared to a 1.4 percent fall recorded in the previous month.

Japan’s M3 money supply rises less than expected

On an annual basis, M3 money supply in Japan has increased less than expected by 2.4 percent in June compared to a 2.6 percent rise in the previous month.

China’s consumer price inflation slows

On an annual basis, the consumer price inflation in China has dropped more than expected to 2.3 percent in June from a rate of 2.5 percent recorded in the previous month.

Australia’s consumer confidence improves

The Westpac consumer confidence index in Australia has advanced to a reading of 94.9 in July from a reading of 93.2 posted in the previous month.

New Zealand’s electronic card retail sales remains flat

On a monthly basis, electronic card retail sales in New Zealand have remained unchanged in June compared to a revised 1.2 percent rise in the previous month.


Economic Calendar


Country

GMT

Economic Indicator

Relevance

Consensus/*Actual

Previous

Frequency

China

01:30

Producer Price Index (YoY) (Jun)

High

-1.10%*

-1.40%

Monthly

China

01:30

Consumer Price Index (YoY) (Jun)

High

2.30%*

2.50%

Monthly

China

01:30

Consumer Price Index (MoM) (Jun)

Medium

-0.10%*

0.10%

Monthly

Japan

06:00

Machine Tool Orders (YoY) (Jun) (P)

Medium

-

24.10%

Monthly

Eurozone

06:10

ECB's Coeure Speaks in Athens

Low

-

-

-

Eurozone

07:00

ECB's Praet Speaks in Paris

Low

-

-

-

Germany

07:00

Bundesbank's Dombret Speaks in Frankfurt

Low

-

-

-

UK

07:00

Halifax House Prices (MoM) (Jun)

Low

-0.30%

3.90%

Monthly

UK

07:00

Halifax House Prices (3m/YoY) (Jun)

Low

8.90%

8.70%

Monthly

Eurozone

08:00

SSM's Walter Speaks in Frankfurt

Low

-

-

-

Italy

08:30

Bank of Italy's Intelligence Unit Presents 2013 Report

Low

-

-

-

Greece

09:00

Consumer Price Index - Harmonised (YoY) (Jun)

Low

-1.80%

-2.10%

Monthly

Greece

09:00

Consumer Price Index (YoY) (Jun)

Low

-1.50%

-2.00%

Monthly

US

11:00

MBA Mortgage Applications (04-Jul)

Low

-

-0.20%

Weekly

Eurozone

12:00

SSM's Nouy Speaks in Frankfurt

Low

-

-

-

Canada

12:15

Housing Starts s.a (Jun)

Medium

190.00 K

198.30 K

Monthly

Germany

15:00

Bundesbank's Dombret Speaks in Frankfurt

Low

-

-

-

US

18:00

Fed Releases Minutes of FOMC Meeting

High

-

-

-

UK

23:01

RICS Housing Price Balance (Jun)

Medium

55.00%

57.00%

Monthly

Japan

23:50

Machinery Orders (MoM) (May)

Low

0.70%

-9.10%

Monthly

Japan

23:50

Machinery Orders (YoY) (May)

Medium

10.10%

17.60%

Monthly

Japan

23:50

Tertiary Industry Index (MoM) (May)

Medium

1.70%

-5.40%

Monthly

Japan

23:50

Domestic Corporate Goods Price Index (MoM) (Jun)

Low

0.10%

0.30%

Monthly

Japan

23:50

Domestic Corporate Goods Price Index (YoY) (Jun)

Low

4.50%

4.40%

Monthly


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


Corporate Calendar


Country

Company Name

Index

Announcement

UK

Booker Group Plc

FTSE All Share

Trading

UK

Galliford Try Plc

FTSE All Share

Trading

UK

Interserve Plc

FTSE All Share

Trading

UK

J D Wetherspoon Plc

FTSE All Share

Trading

UK

UK Mail Group Plc

FTSE All Share

Trading


Ex-Dividend Calendar

Country

Company Name

Index

Announcement

UK

Coca-Cola HBC AG

FTSE 100

Final Ex-Dividend

UK

Next Plc

FTSE 100

Final Ex-Dividend


-- Edited by Martin O'Rourke


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