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Article / 08 February 2013 at 7:19 GMT

Market Preview: Focus on German and US trade balance data

SaxoBankUK SaxoBankUK
Saxo Capital Markets UK
United Kingdom

Forex Overnight: EUR trading mostly flat
Currency Intraday
The EUR is trading mostly unchanged against major currencies this morning, while markets are keenly awaiting German and the US trade balance data, slated for release later today. Additionally, yesterday's European Union leaders meeting, which aimed to seek an agreement on the 2014-2020 budget, is expected to garner market attention. At 6am GMT, the EUR had strengthened by 0.1 percent against the USD to trade at USD1.3410. It was slightly lower against the GBP, trading at GBP0.8525.
The JPY has advanced 0.2 percent against both the USD and the EUR. Data released earlier indicated that Japan’s current account deficit had widened in December.
The AUD has risen 0.2 percent against the USD despite the Reserve Bank of Australia (RBA) lowering the nation’s economic growth and inflation forecasts for 2013.

UK Stocks: Expected to open in the green

FTSE 100
The FTSE 100 is likely to open 29 points in positive territory.

No major economic releases are slated for today.
Catlin Group (CGL) and Aquarius Platinum (AQP) are scheduled to report their results today.
Royal Dutch Shell (RDSA) has stated that its Nigerian unit, Shell Petroleum Development Company of Nigeria, has declared a force majeure on gas supplies to the local liquefied natural gas export terminal.
IIR Energy has reported that BP (BP/) will delay the restart of its crude distillation unit at its Whiting refinery to July 2013 from its previous target of mid-April 2013.
According to Bloomberg, Barclays (BARC) is set to limit cash bonuses at GBP 65,000.0 for staff at its investment bank while the 2012 bonus for senior managers would be deferred and paid in installments from 2014 to 2016.
Barclays (BARC) has announced that it has appointed 16 new investment representatives at its wealth and investment management division as a part of its expansion plans in the US.

Asia: Trading mostly firmer  
Nikkei 225
Better-than-expected Chinese trade data for January has led Asian markets to trade mostly higher this morning.

In Japan, Sony (6758) has slumped after it posted an unexpected loss for the third quarter. Technology sector stocks, Panasonic (6752), Pioneer Corporation (6773) and Casio Computer (6952) are trading lower. Asahi Glass (5201) has declined after it offered lower-than-expected profit guidance for the full year. However, Fujitsu (6702) has added value after it announced that it would merge its chip business with Panasonic (6752). At 6am GMT, the Nikkei 225 has dropped 1.7 percent to trade at 11,166.5.

In China, SAIC Motor (600104), Chongqing Changan Automobile (000625) and Great Wall Motor (601633) have added value after data indicated that vehicle sales in China jumped in January. Dashang Group (600694) has registered gains amid speculation that consumer spending would increase during the Lunar New Year holiday. In Hong Kong, China Shipping Development (1138) and China Cosco (1919) have advanced following upbeat Chinese exports data. In South Korea, Kumho Tire (073240) surged after it reported an increase in its quarterly profit. However, GS Engineering & Construction (006360) has edged lower after it reported a fourth-quarter loss.

US Stocks: Futures trading stronger
S&P 500
At 6 am GMT, S&P 500 futures are trading 2.6 points higher.

Key economic indicators slated for release today include the trade balance and wholesale inventories.
Entergy (ETR), Moody's Corporation (MCO), Laboratory Corporation of America Holdings (LH), Apollo Global Management LLC (APO), Buckeye Partners LP (BPL), Sirona Dental Systems Inc (SIRO), CBOE Holdings (CBOE), Louisiana-Pacific (LPX), AOL Inc (AOL) and TC Pipelines LP (TCP) are scheduled to announce their results later today.

In after-hours trading on Thursday, Activision Blizzard (ATVI) surged 5.2 percent after it reported upbeat fourth quarter results. LinkedIn (LNKD) jumped 9.5 percent after it posted buoyant fourth quarter results and offered a better-than-expected first-quarter revenue outlook. Robust third quarter results and a strong fourth quarter guidance led Microchip Technology (MCHP) to climb 6.4 percent. On the downside, Nuance Communications (NUAN) tumbled 15.3 percent after it swung to a loss in the first quarter and lowered its 2013 guidance. Coinstar (CSTR) slumped 8.7 percent after it posted lower-than-expected fourth quarter revenue and offered a dismal first quarter forecast. A sharp decline in its fourth quarter profit dragged Riverbed Technology (RVBD) 8.5 percent lower.

The S&P 500 index yesterday declined 0.2 percent following downbeat comments from the ECB president over the recent strengthening of the EUR. Moreover, data indicated that US jobless claims dropped less-than-expected last week. Akamai Technologies (AKAM) tumbled 15.2 percent after it posted dismal fourth quarter revenue and provided a lower-than-anticipated first quarter revenue outlook. Teradata (TDC) plunged 7.1 percent despite reporting better-than-expected fourth quarter results. Sprint Nextel (S) edged 0.5 percent lower following a wider-than-expected fourth quarter loss. On the upside, Apple (APPL) climbed 2.4 percent after it stated that it is in “active discussions” about returning additional cash to shareholders. Yahoo! (YHOO) climbed 2.4 percent after a broker upgraded its rating on the stock to “Buy” from “Hold”. CBRE Group (CBG) jumped 9 percent after it posted upbeat fourth quarter results and provided a strong 2013 earnings per share outlook.

European Stocks: Likely to open higher
EU Stoxx 50

The DAX and the CAC are expected to open 19 to 30 points and 13 to 14 points in the green, respectively.

The German Trade Balance & Current Account Balance, French Business Sentiment Index & Budget Balance, Swiss
Unemployment Rate & Real Retail Sales, Italian Industrial Production and Greek Consumer Price Index & Industrial Production are the key economic indicators scheduled for release today.

MAN SE (MAN), Edison SpA (EDNR), EMS-Chemie Holding AG (EMSN), Securitas AB (SECUB), Buzzi Unicem SpA (BZU), Cofinimmo SA (FOEB), Cramo Oyj (CRA1V), Finnair Oyj (FIA1S), Renewable Energy Corp ASA (REC) and Stonesoft Oyj (SFT1V) are scheduled to report their results later today.

Bloomberg has reported that Deutsche Bank AG (DBK) has laid off 10 to 12 power and gas traders in London, in a move to reduce the workforce in physical commodities trading.

The Economic Times has reported that Temasek Holdings and Barings Bank are among the shortlisted buyers for a stake in Lafarge SA’s (LG) Indian arm, Lafarge India.

Software AG (SOW) has indicated that its board has authorised a share buyback programme of about EUR 180 million by December 31, 2013.

Reuters has reported that Peugeot SA (UG) is expected to announce a EUR 4.1 billion writedown on its non-performing assets.

Macro Update

Trade surplus in China shrinks
The merchandise trade surplus in China stood at USD29.2bn in January, less than market estimates and compared with a USD31.6bn surplus posted in the previous month. Meanwhile, on an annual basis, both imports and exports have risen by a more-than-expected 28.8 percent and 25 percent, respectively, in January.

Consumer price inflation in China cools
China's annual consumer price inflation eased to 2 percent in January, in line with market estimates and compared with a 2.5 percent rate in December. Meanwhile, producer prices in China have declined 1.6 percent in January compared with December's 1.9 percent drop.

RBA cuts its growth forecasts
The RBA has lowered the nation’s economic growth and near-term inflation forecasts for 2013, citing a slightly weaker outlook for both mining and non-mining investments, a softer labour market and persistent high currency value. The central bank has cut its 2013 economic growth estimate to 2.5 percent compared with an earlier forecast of a 2.75 percent growth, while it has indicated that consumer prices might increase 3 percent this year compared with a previous forecast of 3.25 percent.

Consumer credit in the US rises more than expected

Consumer credit in the US has advanced by USD14.6bn in December, more than market expectations and compared with a revised USD15.9bn increase reported in the previous month.

Japan’s trade deficit narrows
The trade deficit in Japan came in at JPY567.6bn in December, down from the JPY847.5bn deficit recorded in November.

Japanese current account deficit widens
The current account balance in Japan has posted a deficit of JPY264.1bn in December compared with a deficit of JPY222.4bn posted in the previous month.

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous

Frequency

US

1:00

Fed's Evans Speech

Low

-

-

-

China

1:00

Trade Balance (Jan)

Medium

USD 29.20 bn*

USD 31.62 bn

Monthly

Japan

4:30

Bankruptcies (YoY) (Jan)

Medium

-5.20%*

-13.80%

Monthly

Japan

5:00

Eco Watchers Survey: Current (Jan)

Medium

49.50*

45.80

Monthly

Japan

5:00

Eco Watchers Survey: Outlook (Jan)

Medium

56.50*

51.00

Monthly

China

5:30

Consumer Price Index (YoY) (Jan)

High

2.00%*

2.50%

Monthly

China

5:30

Producer Price Index (YoY) (Jan)

Medium

-1.60%*

-1.90%

Monthly

Switzerland

6:45

Unemployment Rate s.a. (Jan)

Medium

3.10%

3.00%

Monthly

Germany

7:00

Trade Balance s.a. (Dec)

Medium

 EUR 15.00 bn

EUR 17.00 bn

Monthly

Germany

7:00

Current Account n.s.a. (Dec)

Low

EUR 17.50 bn

EUR 15.30 bn

Monthly

France

7:30

Bank of France Business Sentiment (Jan)

Medium

93.00

95.00

Monthly

France

7:45

Budget Balance (Dec)

Low

-

 -EUR 103.40 bn

Monthly

Switzerland

8:15

Real Retail Sales (YoY) (Dec)

Medium

3.20%

2.90%

Monthly

Italy

9:00

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

Low

0.30%

-1.00%

Monthly

Italy

9:00

Industrial Production w.d.a. (YoY) (Dec)

Low

6.90%

-7.60%

Monthly

Greece

10:00

Consumer Price Index (YoY) (Jan)

Low

-

0.80%

Monthly

Greece

10:00

Industrial Production (YoY) (Dec)

Low

-

-2.90%

Monthly

Canada

13:15

Housing Starts s.a. (Jan)

Medium

195.00 K

198.00 K

Monthly

US

13:30

Trade Balance (Dec)

Medium

 -USD 46.00 bn

 -USD 48.70 bn

Monthly

Canada

13:30

Net Change in Employment (Jan)

High

5.00 K

31.20 K

Monthly

Canada

13:30

Unemployment Rate s.a. (Jan)

High

7.20%

7.10%

Monthly

Canada

13:30

Full Time Employment Change (Jan)

Medium

-

41.20 K

Monthly

Canada

13:30

Part Time Employment Change (Jan)

Medium

-

 -1.40 K

Monthly

Canada

13:30

Participation Rate (Jan)

Medium

-

66.80%

Monthly

Canada

13:30

International Merchandise Trade (Dec)

Low

 -CAD 1.45 bn

 -CAD 1.96 bn

Monthly

US

15:00

Wholesale Inventories (Dec)

Low

0.40%

0.60%

Monthly

Eurozone

-

European Council Meeting

Medium

-

-

-

China

-

Money Supply - M2 (YoY) (Jan)

Medium

14.00%

13.80%

Monthly


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

Corporate Calendar

Country

Company Name

Index

Announcement

UK

Aquarius Platinum Ltd.

FTSE All Share

Interim

UK

Cable & Wireless Communications Plc

FTSE All Share

Trading

UK

Catlin Group Ltd.

FTSE All Share

Final

UK

Shaftesbury Plc

FTSE All Share

Trading

UK

Workspace Group Plc

FTSE All Share

Trading

US

Entergy Corp.

S&P 500

Q4 Earnings Release

US

Laboratory Corporation of America Holdings

S&P 500

Q4 Earnings Release

US

Moody's Corp.

S&P 500

Q4 Earnings Release

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