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Lea Jakobiak
On the eve of a keynote speech by the ECB President, Mario Draghi, one leading economist doesn't hold back in the way he believes the Bank has dealt with the eurozone's faltering recovery.
Article / 28 August 2013 at 16:49 GMT

Market Review: Continued Syria concerns weigh on equity markets

SaxoBankUK SaxoBankUK
Saxo Capital Markets UK
United Kingdom

Forex: USD trading higher
Currencies Intraday
Source: Bloomberg

The USD is trading higher against its major peers as investor risk appetite waned, as market participants continue to monitor the geo-political developments in Syria. The GBP is trading lower against the USD after Mark Carney, the Bank of England governor, indicated that the central bank stands ready to step up its monetary stimulus measures, if rising interest rates threaten UK’s economic recovery. The EUR is trading 0.5 percent and 0.4 percent lower against the USD and the GBP, respectively, while it is trading 0.3 percent higher against the JPY.
The AUD is trading 0.4 percent lower against the USD.

UK Stocks: Close in negative territory
FTSE 100  Intraday
Source: Bloomberg

UK stocks ended in the red led by declines in airline stocks amid continued worries about US military intervention in Syria.

The FTSE 100 declined 0.2 percent to close at 6430.1 and the FTSE 250 shed 1 percent to settle at 14625.8.

Airline sector stocks, International Consolidated Airlines Group (IAG) and EasyJet (EZJ) lost 4.5 percent and 1.8 percent, respectively, as a spike in crude oil prices raised concerns over the cost of jet fuel.

Kenmare Resources (KMR) and Polymetal International (POLY) slumped 8.6 percent and 5.8 percent, respectively, as both the companies swung to a net loss in the first half-year.

Meggitt (MGGT) shed 1.1 percent following an agreement to acquire Piezotech LLC for USD 41.2 million in cash.

On the contrary, energy sector stocks, BG Group (BG/), Royal Dutch Shell (RDSA) and Tullow Oil (TLW) climbed between 1.2 percent and 4.8 percent, tracking gains in oil prices.

G4S (GFS) gained 2.9 percent after the company announced that it plans to raise about GBP 600 million by selling off its assets and issuing new shares.

US Stocks: Trading in the green
Dow Jones Intraday
Source: Bloomberg

US stocks are trading higher as gains in energy sector stocks due to higher oil prices overweighed a weaker than expected pending home sales report and ongoing worries over Syria. 

The Dow Jones has added 0.3 percent to trade at 14819.6 and the S&P 500 has climbed 0.4 percent to trade at 1636.3.

Marathon Oil Corporation (MRO) and EOG Resources (EOG) have gained 2.9 percent and 2.8 percent, respectively, tracking the movement in crude oil prices.

Express (EXPR) has rallied 8 percent after the company reported a 6 percent rise in the second quarter that surpassed market expectations.

Guess (GES) has added 1.6 percent as the company is slated to post results after the closing bell.

On the downside, home builders, DR Horton (DHI) and PulteGroup (PHM) have lost 1.5 percent and 1.7 percent, respectively, as data indicated that pending home sales declined in the US for the second straight month in July.

European Stocks: End lower
EU Stoxx50 Intraday
Source: Bloomberg

European markets closed in negative territory as the mounting Syrian crisis fuelled risk aversion amongst investors.

The DAX declined 1 percent to end at 8157.9 and the CAC lost 0.2 percent to close at 3960.5.

A 22 percent drop in its first half-year pre-tax operating profit led Accor SA (AC) to decline 4.4 percent.

Telenor ASA (TEL) and Akzo Nobel NV (AKZA) shed 3 percent and 1.7 percent, respectively, following broker downgrades.

Airline sector stocks, Deutsche Lufthansa AG (LHA) and Air France-KLM (AF) edged 3.2 percent and 2.9 percent lower, respectively, following the sharp rise in crude oil price.

Ryanair Holdings (RYA) shed 0.1 percent. The company stated that it would appeal against a ruling by the UK Competition Commission to cut its 29.8 percent stake in Aer Lingus Group (AERL) to no more than 5 percent. Aer Lingus Group (AERL) fell 4.1 percent.

On the upside, Bouygues SA (EN) jumped 10.5 percent following a better than expected second quarter operating profit.

Statoil ASA (STL) rose 4.2 percent after the company announced that it has made its third oil discovery in the Flemish Pass basin, off the coast of Canada, and following a broker upgrade to buy from neutral.

Asia: Indices end in negative territory
Nikkei 225 Intraday
Source: Bloomberg

Asian markets finished in the red amid mounting concerns over possible US military action in Syria.

In Japan, exporters, Suzuki Motor (7269), Sony (6758), and Toyota Motor (7203) slipped between 2.3 percent and 5.4 percent, after the Japanese yen gained. Nissan Motor (7201) retreated 2.6 percent. The company indicated that it plans to offer self-driving vehicle technology models by 2020. The Nikkei 225 index dropped 1.5 percent to settle at 13338.5.

In Hong Kong, PetroChina (857) and its natural gas distribution arm, Kunlun Energy (135) plummeted 4.4 percent and 13.5 percent, respectively, after they stated that several senior executives at the group were being investigated over alleged corruption. In China, CSR Corporation (601766) and China CNR Corporation (601299) lost 1.7 percent and 0.9 percent, respectively, after both the companies reported a decline in their first half-year net profit. In South Korea, Shinhan Financial Group (055550) and Hana Financial Group (086790) shed 1.6 percent and 1.5 percent, respectively, as risk appetite waned.

Commodities: Trading mixed

The Gold futures contract is trading is trading 0.2 percent lower at USD 1417.9 per ounce, amid some profit booking following the recent gains and as the US dollar strengthened against most of its major counterparts.

The Brent crude one-month futures contract is trading 1.1 percent higher at USD 115.6 per barrel amid continued worries that a possible military strike by the US against Syria could disrupt Middle Eastern crude oil supplies and after Société Générale forecast that crude oil futures could rise to USD 150 a barrel in case of a significant supply disruption in the Middle East.

Macro Update

  • US pending home sales decline for the second straight month in July
  • Bank of England ready to add stimulus if needed, says Mark Carney

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous/
**Previous Est.

Frequency

Japan

23:50

Large Retailer's Sales (Jul)

Medium

-0.50%

3.50%

Monthly

Japan

23:50

Retail Trade (YoY) (Jul)

Medium

0.10%

1.60%

Monthly

Japan

23:50

Retail Trade s.a (MoM) (Jul)

Low

-1.00%

-0.20%

Monthly

Japan

23:50

Loans & Discounts Corp (YoY) (Jul)

Low

-

1.67%

Monthly

Japan

23:50

Foreign Buying Japan Bonds (23-Aug)

Low

-

JPY 38.70bn

Weekly

Japan

23:50

Japan Buying Foreign Stocks (23-Aug)

Low

-

-JPY 3.00bn

Weekly

Japan

23:50

Foreign Buying Japan Stocks (23-Aug)

Low

-

JPY 47.90bn

Weekly

Japan

23:50

Japan Buying Foreign Bonds (23-Aug)

Low

-

-JPY 903.80bn

Weekly

Japan

1:30

BoJ Board Member Morimoto Speech

Low

-

-

-

France

6:45

Business Climate (Aug)

Low

96.00

95.00

Monthly

Spain

7:00

HICP (YoY) (Jul) Preliminary

Medium

1.80%

1.90%

Monthly

Spain

7:00

Gross Domestic Product Final (QoQ) (Q2)

Low

0.10%

-0.10%**

Quarterly

Spain

7:00

Gross Domestic Product Final (YoY) (Q2)

Low

-1.70%

-1.70%**

Quarterly

Eurozone

7:15

ECB's Nowotny Speaks on Panel "Central Bank Crisis Management"

Low

-

-

-

Switzerland

7:15

Employment Level (Q2)

Medium

4.17mn

4.15mn

Quarterly

Germany

7:55

Unemployment Change (Aug)

High

-5.00K

-7.00K

Monthly

Germany

7:55

Unemployment Rate s.a. (Aug)

Medium

6.80%

6.80%

Monthly

Italy

8:00

Consumer Confidence (Aug)

Low

98.00

97.30

Monthly

UK

8:30

Lloyds Business Barometer (Aug)

Low

-

41.00

Monthly

Greece

9:00

Producer Price Index (YoY) (Jul)

Low

-

0.60%

Monthly

Italy

9:00

Business Confidence (Aug)

Low

-

91.70

Monthly

Portugal

9:00

Consumer Confidence (Aug)

Low

-

-52.70

Monthly

Portugal

9:00

Business Confidence (Aug)

Low

-

-2.60

Monthly

Italy

10:00

Wage Inflation (YoY) (Jul)

Low

-

1.50%

Monthly

Italy

10:00

Wage Inflation (MoM) (Jul)

Low

-

0.20%

Monthly

Germany

12:00

Harmonised Index of Consumer Prices Preliminary (YoY) (Aug)

High

1.70%

1.90%

Monthly

Germany

12:00

Harmonised Index of Consumer Prices Preliminary (MoM) (Aug)

Medium

0.10%

0.40%

Monthly

Germany

12:00

Consumer Price Index Preliminary (YoY) (Aug)

Medium

1.70%

1.90%

Monthly

Germany

12:00

Consumer Price Index Preliminary (MoM) (Aug)

Medium

0.10%

0.50%

Monthly

Eurozone

12:00

ECB's Mersch Gives Keynote Speech in Alpbach

Low

-

-

-

US

12:30

Gross Domestic Product Annualised Second Estimate (QoQ) (Q2)

High

2.20%

1.70%**

Quarterly

US

12:30

Gross Domestic Purchases Price Index Second Estimate (Q2)

High

0.70%

0.70%**

Quarterly

US

12:30

Personal Consumption Second Estimate (QoQ) (Q2)

Medium

1.70%

1.80%**

Quarterly

US

12:30

Personal Consumption Expenditure Core Second Estimate (QoQ) (Q2)

Low

0.80%

0.80%**

Quarterly

US

12:30

Initial Jobless Claims (24-Aug)

Medium

331.00K

336.00K

Weekly

US

12:30

Continuing Jobless Claims (17-Aug)

Low

2988.00K

2999.00K

Weekly

Canada

12:30

Current Account (Q2)

Medium

-CAD 14.80bn

-CAD 14.09bn

Quarterly

Canada

12:30

Raw Material Price Index (Jul)

Low

0.80%

0.30%

Monthly

Canada

12:30

Industrial Product Price (MoM) (Jul)

Low

0.30%

0.30%

Monthly

US

12:50

Fed's Bullard to Speak to Leadership Memphis

Low

-

-

-

Eurozone

16:00

Bundesbank's Weidmann Speaks in Hamburg

Low

-

-

-

For more events see TradingFloor.com's real-time financial calendar.



 

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