TV

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 / 05 December 2012 at 18:13 GMT

Market Review: Robust US factory orders and service sector growth

SaxoBankUK SaxoBankUK
Saxo Capital Markets UK
United Kingdom

Forex: EUR trading mostly lower
Currencies Intraday
The EUR has fallen from a seven-week high against the USD following a disappointing Spanish bond auction. Additionally, the more than anticipated decline in Eurozone retail sales in October led to further downward pressure on the EUR.
Meanwhile, an unexpected acceleration in the US service sector in November also contributed to dollar strength. The EUR is trading 0.2 percent and 0.1 percent lower against the USD and GBP, respectively, while it is trading 0.5 percent higher against the JPY.

The AUD is trading 0.1 percent lower against the USD after Australian economic growth showed a slowdown for the third quarter of 2012.

UK Stocks: Finished higher
FTSE 100 Intraday
UK stocks ended in positive territory led by gains in mining sector stocks after China’s new leadership implied a supportive economic policy for the country.

The FTSE 100 gained 0.4 percent to close at 5892.1, while the FTSE 250 rose 0.4 percent to end at 12103.1.

Higher metal prices led miners, Kazakhmys, Vedanta Resources and Anglo American to rally between 2.5 percent and 3.7 percent.

Tesco Plc advanced 3.3 percent after it announced that it is considering a sale of its loss-making US division, Fresh & Easy.

HSBC Holdings edged up 1.2 percent after stating it would receive $9.39 billion from the sale of its 15.6 percent stake in Ping An Insurance.

Polymetal International gained 1.3 percent after announcing a special dividend of $191 million.

On the downside, Sage Group dropped 3.5 percent after it reported an annual decline in underlying earnings-per-share for the full year.

US Stocks: Trading higher
Dow Jones Intraday
US markets are mostly trading in positive territory as reports showed US factory orders rose for the second straight month in October, and the service sector expanded at a faster pace than forecast in November.

The Dow Jones has risen 0.5 percent to trade at 13020.6, while the S&P 500 has added 0.2 points and is trading at 1407.2.

Citigroup has gained 5.1 percent after it announced that it would eliminate more than 11,000 jobs to cut costs.

Travelers Cos has rallied 3.6 percent after it stated that the superstorm Sandy would cost the company about $650 million after tax and reinsurance.

Western Digital has jumped 6.2 percent after it announced a dividend of 25 cents to its shareholders.

On the downside, Apple has dropped 3.7 percent following a report that stated the company’s market share in the global tablet market will drop to less than half by 2016 amid increased competition.

Pandora Media has slumped 17.2 percent after it warned about a wider full year loss than predicted earlier.

European Stocks: Markets finished higher
EU Stoxx50
European markets closed in the green after China signalled a wider policy support to boost economic growth.

The DAX gained 0.3 percent to close at 7454.6, while the CAC advanced 0.3 percent to settle at 3590.5.

Nokia Oyj rallied 9.7 percent after it announced the launch of its new Lumia handset in partnership with China Mobile.

Valiant Holding AG climbed 6.0 percent following a report that Berner Kantonalbank AG might acquire the company for about $2.2 billion.

Aker Solutions ASA increased 5.0 percent after the company stated to raise its operating margins and double its revenue by the end of 2017.

European banks, Commerzbank AG, Deutsche Bank AG and BNP Paribas SA gained between 0.6 percent and 1.4 percent after a broker upgraded its rating on European banking sector to “Overweight”.

On the contrary, Swedish Match AB dropped 3.4 percent amid speculation that the European Commission may continue its ban on the export of Swedish snuff.

Asia: Closed in the green
Nikkei 225
Asian markets finished higher following comments by the new Chinese Communist Party Chief, Xi Jinping, to boost the nation’s economy.

In Japan, Daido Steel Company climbed 5.7 percent after a broker initiated coverage on the stock with a “Buy” rating.
Sharp Corporation jumped 4.0 percent amid reports that Qualcomm Inc would invest as much as $121 million in the company. The Nikkei 225 index rose 0.4 percent to close at 9,468.8.

In China, Sany Heavy Industry and Anhui Conch Cement Company surged 10.0 percent and 4.9 percent, respectively, amid speculation that the Chinese government might provide a boost to urbanisation projects. In Hong Kong, insurer, New China Life Insurance rallied 8.3 percent after the China Insurance Regulatory Commission abolished a regulation on insurance companies’ investment limits in commercial banks. In South Korea, nTels Co soared 14.9 percent on news that SoftBank has invested KRW 1.6 billion in the company.

Commodities: Trading lower

Gold for December delivery is trading 0.3 percent lower at $1,690.1 per ounce as market participants kept a watchful eye on the ongoing US budget negotiations

Brent crude futures is trading 0.7 percent lower at $109.0 per barrel after the Energy Information Administration reported a bigger-than-expected increase in US gasoline supplies. Downbeat US employment data and disappointing Eurozone retail sales also led crude oil prices lower.

Macro Update

  • UK service sector expansion surprisingly slows to a twenty-three month low in November
  • Eurozone and German service sector growth upwardly revised in November
  • Eurozone retail sales plunge in October
  • French services Purchasing Managers’ Index (PMI) drops in November
  • US private sector employment increased less-than-expected in November
  • US non-manufacturing PMI rose unexpectedly in November, indicates ISM

Economic Calendar

Country

GMT

Economic Indicator

Relevance

Consensus/
*Actual

Previous/
**Previous Est.

Frequency

UK

-

New Car Registrations (YoY) (Nov)

Low

-

12.10%

Monthly

Japan

2:00

Tokyo Average Office Vacancies (Nov)

Low

8.74%

Monthly

Monthly

France

6:30

ILO Unemployment (Q3)

Low

-

10.20%

Quarterly

Switzerland

6:45

Unemployment Rate s.a. (Nov)

Medium

3.00%

3.00%

Monthly

Switzerland

8:15

Consumer Price Index (YoY) (Nov)

Medium

-0.10%

-0.20%

Monthly

UK

9:30

Visible Trade Balance (Oct)

Medium

 -GBP 8.80 bn

 -GBP 8.37 bn

Monthly

UK

9:30

Total Trade Balance (Oct)

Low

 -GBP 3.00 bn

 -GBP 2.70 bn

Monthly

Eurozone

10:00

Gross Domestic Product s.a (QoQ) (Q3)

High

-0.10%

 -0.10%**

Quarterly

Eurozone

10:00

Government Expenditure (QoQ) (Q3)

Low

0.00%

0.10%**

Quarterly

Eurozone

10:00

Gross Fixed Capital (QoQ) (Q3)

Low

-0.80%

-0.80%**

Quarterly

Eurozone

10:00

Household Consumption (QoQ) (Q3)

Low

-0.20%

-0.20%**

Quarterly

Germany

11:00

Factory Orders s.a. (MoM) (Oct)

Low

1.00%

-3.30%

Monthly

UK

12:00

Bank of England Rate Decision (Dec 6)

High

0.50%

0.50%

-

UK

12:00

Bank of England Asset Purchase Target (Dec)

High

GBP 375.00 bn

GBP 375.00 bn

-

Eurozone

12:45

European Central Bank Rate Decision (Dec 6)

High

0.75%

0.75%

-

Eurozone

12:45

European Central Bank Deposit Facility Rate (Dec 6)

Medium

0.00%

0.00%

-

Eurozone

13:30

European Central Bank Monetary policy statement and press conference

High

-

-

-

US

13:30

Initial Jobless Claims (Dec 1)

Medium

380.00 K

393.00 K

Weekly

US

13:30

Continuing Claims (Nov 24)

Low

3275.00 K

3287.00 K

Weekly

Canada

13:30

Building Permits (MoM) (Oct)

Low

2.60%

-13.20%

Monthly

Canada

15:00

Ivey Purchasing Managers' Index s.a. (Nov)

Medium

58.60

58.30

Monthly

Canada

15:30

Bank of Canada Releases Financial System Review

High

-

-

-


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