Article / 28 March 2013 at 7:06 GMT

Market Preview: German unemployment rate and US GDP in spotlight

Saxo Capital Markets UK
United Kingdom

Forex Overnight: EUR trading mixed
Currency Intraday
The EUR is trading mixed against its major counterparts this morning. Markets are keeping an eye on the reopening of Cypriot banks later today as traders fear a bank run following the bailout deal. Meanwhile, German retail sales and unemployment data along with a raft of economic releases from the US scheduled for release later today are expected to garner market attention. The third estimate of the US Gross Domestic Product (GDP) due later today is likely to show that the nation’s economy expanded at a faster pace in the fourth quarter. At 6:00am GMT, the EUR advanced 0.1 percent against the USD to trade at USD 1.2791 and marginally risen against the GBP to trade at GBP 0.8450.

The JPY has strengthened 0.3 percent against both the USD and the EUR after Haruhiko Kuroda, the governor of the Bank of Japan (BoJ), ruled out buying foreign bonds to ease monetary policy.

UK Stocks: Expected to open lower
FTSE 100
The FTSE 100 is likely to open 15 points in negative territory.

Nationwide House Prices and Index of Services are the key economic indicators scheduled for release today.

Polyus Gold International (PGIL), Alent (ALNT), James Halstead (JHD), Petropavlovsk (POG), Chesnara (CSN), Hilton Food Group (HFG), Laura Ashley Holdings (ALY), Earthport (EPO) and Lonrho (LONR) are scheduled to report their results today.

BP (BP) and its partners, Royal Dutch Shell (RDSA), ConocoPhillips and Chevron, have agreed to drill five appraisal wells at the Clair field west of Scotland’s Shetland Islands that would require an initial investment of more than USD 500 million.

Asia: Trading weak
Nikkei 225
Asian markets are trading in the red this morning.

In Japan, GS Yuasa (6674) has slumped after Mitsubishi Motors (7211) indicated that the former’s lithium-ion battery used in its plug-in hybrid Outlander vehicle overheated last week. Sharp (6753) has slid amid reports that it might search for funding through private equity and sell its shares. Financial sector stocks Mitsubishi UFJ Financial Group (8306), Mizuho Financial Group (8411) and Shinsei Bank (8303) have lost value amid lower risk appetite among investors. At 6:00am GMT, the Nikkei 225 had dropped 1.2 percent to trade at 12,339.7.

In Hong Kong, Aluminum Corporation of China (2600) plunged after it swung to a net loss for the full year. However, Tsingtao Brewery (168) has added value after it reported an increase in its full year net profit. In China, Industrial & Commercial Bank of China (601398) and China Minsheng Banking (600016) are trading lower after the Chinese banking regulator tightened rules on wealth management products. CITIC Securities (600030) retreated after it reported a sharp decline in its full-year net profit. In South Korea, Handsome Company (020000) slipped after a filing indicated that the company acquired the Everone Medical Resort building in southern Seoul for KRW 100 billion.

US Stocks: Futures trading lower
S&P 500
At 6:00am GMT, S&P 500 futures were trading 6.0 points weaker.

GDP, Initial & Continuing Jobless Claims, Gross Domestic Purchases Price Index, Kansas City Federal Reserve’s (Fed) Manufacturing Activity Index and Chicago Purchasing Managers’ Index are the key economic indicators slated for release today.

Accenture (ACN), Mosaic (MOS), Signet Jewelers (SIG), GameStop (GME) and Commercial Metals (CMC) are slated to report their results later today.

In the after-hours trading session on Wednesday, Genworth Financial (GNW) advanced 2.4 percent after it agreed to sell its wealth management business to a joint venture of Aquiline Capital Partners and Genstar Capital for approximately USD 412.5m. Robust fourth-quarter results led Verint Systems (VRNT) to soar 6.1 percent. US Airways Group (LCC) gained 2.8 percent after it received an approval from the US Bankruptcy Court for the merger with American Airlines, a subsidiary of AMR Corporation (AAMRQ). Greenbrier Companies (GBX) climbed 6.7 percent after it announced that it received orders worth USD 575m for the first three months of 2013. On the downside, Red Hat (RHT) retreated 3.7 percent after it reported downbeat fourth-quarter revenue. PVH Corporation (PVH) declined 4.5 percent after it offered a lower-than-expected full-year earnings guidance. A bleak full-year revenue and net profit outlook dragged Five Below (FIVE) 6.8 percent lower.

Yesterday, the S&P 500 index eased 0.1 percent in the regular trading session. Apple (APPL) retreated 2 percent following downbeat broker comments. Cliffs Natural Resources (CLF) and Best Buy (BBY) declined 13.9 percent and 2.4 percent respectively following broker downgrades. Dollar General (DG) dropped 2.4 percent after it indicated that certain existing shareholders are offering 30 million shares in an underwritten public offering. On the flip side, Amazon.com (AMZN) added 1.9 percent amid speculation that the company might launch a smartphone to complement its range of Kindle tablets. SAIC (SAI) climbed 3.9 percent after it swung to a fourth-quarter profit and declared a special dividend payout. Gilead Sciences (GILD) surged 4.3 percent after the company indicated that it would continue its Phase 3 study of Sofosbuvir, a drug used for the treatment of hepatitis C.

European Stocks: Likely to open almost unchanged
EU Stoxx 50
The DAX is expected to open 6 points in the red, while the CAC is likely to open flat.

Key economic indicators slated for release later today include German Retail Sales and Unemployment Rate, Eurozone M3 Money Supply & Private Loans and Italian Business Confidence Index.

Buzzi Unicem SpA (BZU), Banca Monte dei Paschi di Siena SpA (BMPS), Etablissements Maurel et Prom (MAU), Aurelius AG (AR4) and Conergy AG (CGYK) are scheduled to announce their results later today.

Bloomberg has reported that Deutsche Bank AG’s (DBK) US-based subsidiary, DB Structured Products, is being sued by HSBC Bank USA NA over mortgage-backed securities.

According to Bloomberg, E.ON SE (EOAN) sold a stake in an Indiana wind farm project to an investor group that includes JPMorgan Chase and Wells Fargo for approximately USD 174.9m.

VTB Group has agreed to acquire Tele2 AB’s (TEL2A) Russian operations for a cash consideration of USD 2.4b.

Macro Update
Moody's affirms Portugal’s credit rating
Moody's Investors Service (Moody's) has affirmed Portugal's “Ba3” credit rating. However, the ratings agency has kept it on a “Negative” outlook, citing high government debt and the nation’s vulnerability to shocks emanating from the regional debt crisis.

Business sentiment in the UK remains unchanged
The GfK consumer confidence index in the UK stands at-26.0 in March, unchanged from the previous month.

Fed should continue with its bond buying programme through the end of 2013, indicates Evans
Charles Evans, the President of the Chicago Fed, says the central bank should continue with its monetary stimulus until the end of this year. However, he indicated that if the job outlook registers substantial momentum, the Fed could pare its purchases only if it does not create an impression that the central bank was scaling back too soon from its support.

Industrial profits in China rise
On a yearly basis, profits earned by industrial companies in China have climbed 17.2 percent in the first two months of 2013 compared with a 5.2 percent decline posted in the same period last year.

Japanese retail sales decline more than forecast
On an annual basis, retail sales in Japan have dropped 2.3 percent in February, more than market expectations and compared with a 1.1 percent decline recorded in the preceding month.

BoJ’s Kuroda reiterates policy easing options, but dispels intention of buying foreign bonds
Haruhiko Kuroda, the BoJ governor, has indicated that he does not intend to purchase foreign-currency bonds as a tool to ease monetary policy since there are many different options available for monetary easing. He added that buying foreign bonds could be viewed as currency intervention.

Australia’s private sector credit rises
Private sector credit in Australia has advanced 0.2 percent M-o-M in February, lower than market forecasts and compared with a similar rise reported in January.

Australian consumer price inflation eases, indicates a private survey
According to TD Securities and the Melbourne Institute, the annual consumer price inflation in Australia has eased to 2.1 percent in March compared with a 2.4 percent rate recorded in the previous month.

Building approvals in New Zealand rise less than expected
On a seasonally adjusted monthly basis, building permits in New Zealand have risen 1.9 percent in February compared with a revised 0.2 percent decline posted in the previous month.

Current account surplus in South Korea widens
The current account surplus in South Korea has widened to USD 2.7b in February compared with a revised USD 2.3b surplus reported in the previous month.

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous/
**Previous Est.

Frequency

UK

0:01

GfK Consumer Confidence (Mar)

Medium

-26.00*

-26.00

Monthly

Japan

1:00

BoJ Governor Kuroda to Speak at Parliament

Medium

-

-

-

China

1:30

Industrial Profits (YTD) (YoY) (Feb)

Medium

17.20%*

5.30%

Monthly

UK

7:00

Nationwide House Prices n.s.a. (YoY) (Mar)

Medium

0.90%

0.00%

Monthly

Germany

7:00

Retail Sales (YoY) (Feb)

Medium

1.20%

2.40%

Monthly

Germany

8:55

Unemployment Rate s.a. (Mar)

Medium

6.90%

6.90%

Monthly

Germany

8:55

Unemployment Change (Mar)

High

-2.00 K

-3.00 K

Monthly

Eurozone

9:00

M3 Money Supply (YoY) (Feb)

Low

3.20%

3.50%

Monthly

Eurozone

9:00

Private Loans (YoY) (Feb)

Low

-0.90%

-0.90%

Monthly

Italy

9:00

Business Confidence (Mar)

Low

88.00

88.50

Monthly

UK

9:30

Index of Services (MoM) (Jan)

Low

0.30%

-0.40%

Monthly

UK

9:30

BoE Credit Conditions Survey

Low

-

-

-

US

10:00

OECD Publishes Economic Outlook for G-7 Economies

Low

-

-

-

Canada

12:30

Raw Material Price Index (Feb)

Low

1.50%

3.80%

Monthly

US

12:30

Continuing Jobless Claims (15-Mar)

Low

3041.00 K

3053.00 K

Weekly

US

12:30

Personal Consumption (QoQ) (Q4)

Medium

2.10%

2.10%**

Quarterly

US

12:30

Initial Jobless Claims (22-Mar)

Medium

340.00 K

336.00 K

Weekly

US

12:30

Personal Consumption Expenditure Core (QoQ) (Q4)

Low

0.90%

0.90%**

Quarterly

US

12:30

Gross Domestic Purchases Price Index (Q4)

High

0.90%

0.90%**

Quarterly

US

12:30

Gross Domestic Product Annualised (Q4)

High

0.50%

0.10%**

Quarterly

Canada

12:30

Industrial Product Price (MoM) (Feb)

Low

0.50%

0.00%

Monthly

Canada

12:30

Gross Domestic Product (YoY) (Jan)

High

0.90%

0.80%

Monthly

US

13:45

Chicago PMI (Mar)

Low

56.50

56.80

Monthly

US

15:00

Kansas City Fed Manufacturing Activity (Mar)

Low

-3.00

-10.00

Monthly

Japan

23:15

Nomura/ JMMA Manufacturing PMI (Mar)

Medium

-

48.50

Monthly

Japan

23:30

Unemployment Rate (Feb)

Medium

4.20%

4.20%

Monthly

Japan

23:30

National Consumer Price Index (YoY) (Feb)

Medium

-0.70%

-0.30%

Monthly

Japan

23:30

Job-To-Applicant Ratio (Feb)

Low

0.86

0.85

Monthly

Japan

23:30

Household Spending (YoY) (Feb)

Medium

0.10%

2.40%

Monthly

Japan

23:50

Industrial Production (MoM) (Feb) (P)

Low

2.50%

0.30%

Monthly


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

Corporate Calendar

Country

Company Name

Index

Announcement

UK

Alent Plc

FTSE All Share

Final

UK

Bilfinger Berger Global Infrastructure Sicav SA

FTSE All Share

Final

UK

Chesnara Plc

FTSE All Share

Final

UK

Electrocomponents Plc

FTSE All Share

Trading

UK

Hilton Food Group Ltd

FTSE All Share

Final

UK

Laura Ashley Holdings Plc

FTSE All Share

Final

UK

London Stock Exchange Group Plc

FTSE All Share

Trading

UK

Lonrho Plc

FTSE All Share

Final

UK

Petropavlovsk Plc

FTSE All Share

Final

UK

QinetiQ Group Plc

FTSE All Share

Trading

UK

Tate & Lyle Plc

FTSE All Share

Trading

US

Accenture Plc

S&P 500

Q2 Earnings Release

US

GameStop Corp.

S&P 500

Q4 Earnings Release

US

Mosaic Co.

S&P 500

Q3 Earnings Release

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