Article / 28 December 2012 at 7:08 GMT

Market Preview: US pending home sales and budget talks eyed

Saxo Capital Markets UK
United Kingdom

Forex Overnight: USD trading mostly weak
Currencies Intraday
The USD is trading lower against most of the major currencies this morning. Market participants are keeping an eye on developments in the US budget talks as US lawmakers hold a series of meetings in an attempt to avert the “fiscal cliff”. Meanwhile, the final reading of the third quarter French Gross Domestic Product (GDP) and US pending home sales data due later today are expected to garner market attention. At 6 am GMT, the GBP and the EUR have risen 0.2 percent and 0.1 percent versus the USD to trade at USD 1.6120 and USD 1.3243, respectively.

The JPY has declined 0.5 percent and 0.3 percent against the EUR and the USD, respectively, after data showed that consumer prices in Japan declined in November, spurring speculation that the Bank of Japan might resort to further monetary easing measures.

UK Stocks: Likely to open higher

FTSE 100
The FTSE 100 is expected to open 9 to 15 points in the green.

No major economic and corporate releases are slated for today.

Reuters has reported that Royal Bank of Scotland Group (RBS) has won the dismissal of a lawsuit by South Korea’s Woori Bank related to losses from mortgage-related investments.

Asia: Trading in positive territory
Nikkei 225
Asian markets are trading higher this morning buoyed by expectations about an agreement being reached on the US “fiscal cliff” after US lawmakers arranged meetings to discuss the issue.

In Japan, Toshiba Corporation (6502) has climbed after it indicated that it plans to sell its stake in Westinghouse Electric's atomic power unit. Export sector stocks, Toyota Motor (7203), Honda Motor (7267), Nikon (7731) and Canon (7751) are trading higher tracking a weaker yen. On the downside, Tokyo Electric Power (9501) has declined amid reports that the company is being sued by eight US sailors who claim they were exposed to radiation. Nippon Electric Glass (5214) has lost value after it lowered its earnings outlook for the nine month period through December 2012. At 6 am GMT, the Nikkei 225 has advanced 0.9 percent to trade at 10,411.0.

In China, financial sector stocks, Sinolink Securities (600109), Citic Securities (600030) and Haitong Securites (600837) have climbed after the Chinese regulator stated it would soften bond financing for brokerage firms. In South Korea, Korea Electric Power (015760) has edged up amid expectations of a rise in electricity prices. In Hong Kong, Aluminum Corporation of China Limited (2600) and Jiangxi Copper (358) have edged higher.

US Stocks: Futures trading stronger
S&P 500
At 6 am GMT, S&P 500 futures are trading 0.3 points higher.

Key economic indicators slated for release today are Pending Home Sales and Chicago Purchasing Managers' Index (PMI).

No major corporate releases are scheduled for today.

Omeros Corporation (OMER) retreated 9.3 percent in the after hours trading session on Thursday after it stated that it missed few primary goals in phase 3 clinical trials for the treatment of arthroscopic knee surgery.  Amongst the other major losers, M/I Homes (MHO), Kronos Worldwide (KRO), Energy Recovery (ERII) and NGL Energy Partners (NGL) declined 4.4 percent, 3.4 percent, 2.3 percent and 2.2 percent respectively. On the upside, amongst the major gainers, Media General (MEG), Genco Shipping & Trading (GNK), SunPower (SPWR), Digital Generation (DGIT) and Diodes (DIOD) surged 13.9 percent, 6.1 percent, 4.9 percent, 4.2 percent and 4.0 percent respectively.

Yesterday, the S&P 500 index reversed its sharp declines earlier in the session and edged 0.1 percent lower in the regular trading session after the House of Representatives announced plans to meet on 30 December 2012 to discuss the US “fiscal cliff”. J.C. Penney Company (JCP) retreated 5.9 percent after the Wall Street Journal reported that several retailers might face a challenging 2013. Amazon.com (AMZN) ended 0.1 percent down after the company’s latest technical glitch interrupted service for Netflix (NFLX). Energy sector stocks featured amongst the other major laggards led by Chesapeake Energy (CHK) and Peabody Energy (BTU) declining 1.7 percent and 1.6 percent, respectively. On the flipside, Expedia (EXPE), Chipotle Mexican Grill (CMG), Western Union (WU) and Fossil (FOSL) featured amongst the key gainers, climbing 4.2 percent, 2.2 percent, 2.1 percent and 1.6 percent, respectively.

European Stocks: Expected to open mostly firmer
EU Stoxx 50
The DAX is likely to open 6 to 11 points lower while the CAC is expected to open 2 points lower to 6 points higher.

French GDP and Consumer Spending, Greek and Italian Producer Price Index and Spanish Retail Sales and Current Account Balance are the major economic indicators scheduled for release today.

IBS AG (IBB) is slated to report its results later today.

Reuters has reported that, Porsche Automobil Holding SE (PAH3) has won the dismissal of a New York lawsuit filed by 26 hedge funds accusing the company of quietly buying nearly all freely traded ordinary shares of Volkswagen AG (VOW) in a bid to take control of the company and causing more than USD 1.0 billion of losses.

Macro Update
Japan’s CPI declines
The National Consumer Price Index (CPI) in Japan has dropped 0.2 percent year-on-year in November, in line with market estimates and compared to a 0.4 percent decline posted in the previous month.

Japan’s manufacturing activity further contracts
The Nomura/JMMA manufacturing PMI in Japan has declined to a reading of 45.0 in December compared to a reading of 46.5 recorded in November.

Japan’s jobless rate eases
On a seasonally adjusted basis, the unemployment rate in Japan has declined to 4.1 percent in November compared to a 4.2 percent rate reported in October.

Industrial output in Japan falls more-than-expected
On a seasonally adjusted monthly basis, industrial production in Japan has dropped 1.7 percent in November compared to a 1.6 percent increase recorded in October.

Japan’s retail sales rise more-than-expected
Retail sales in Japan have increased 1.3 percent y-o-y in November, more than market expectations and following a 1.2 percent decline reported in October.

Business sentiment in China weakens
The MNI business sentiment indicator in China has dropped to a reading of 52.2 in December compared to a reading of 53.8 posted last month.

Japan’s labour cash earnings decline
On an annual basis, the average monthly labour cash earnings in Japan have declined more-than-expected by 1.1 percent in November following a downwardly revised 0.4 percent decline posted in October.

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous/
**Previous Est.

Frequency

Japan

1:30

Labour Cash Earnings (YoY) (Nov)

Medium

 -1.10%*

-0.40%

Monthly

China

1:35

MNI Business Sentiment Indicator (Dec)

Low

52.22*

53.78

Monthly

France

7:45

Consumer Spending (MoM) (Nov)

Low

0.00%

-0.20%

Monthly

France

7:45

Gross Domestic Product, Final (YoY) (Q3)

Medium

0.10%

0.20%**

Quarterly

Spain

8:00

Retail Sales (YoY) (Nov)

Low

-10.00%

-9.70%

Monthly

Italy

9:00

Producer Price Index (YoY) (Nov)

Low

2.10%

2.30%

Monthly

Spain

9:00

Current Account (Oct)

Medium

 

 -EUR 400.00 mn

Monthly

Greece

10:00

Producer Price Index (YoY) (Nov)

Low

-

4.00%

Monthly

US

14:45

Chicago Purchasing Managers' Index (Dec)

Low

51.00

50.40

Monthly

US

15:00

Pending Home Sales (YoY) (Nov)

Medium

12.20%

18.00%

Monthly

China

-

Leading Index (Nov)

Medium

-

100.42

Monthly


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


Corporate Calendar

Country

Company Name

Index

Announcement

No key corporate releases scheduled for today.

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