International Market Report 3rd September 2010
FTSEurofirst 300 index dropped 0.1% to close at 1,054.9. German DAX Xetra 30 edged down marginally to 6,083.9. French CAC-40 rose 0.1% to settle at 5,371.0. DJIA gained 0.5% to 10,320.1. NASDAQ climbed 1.1% to 2,200.0. S&P 500 index closed 0.9% higher, at 1,090.1. Nikkei 225 index is trading 0.2% higher, at 9,081.9. Hang Seng index is up at, 20,877.1, while the Kospi index is trading 0.1% higher, at 1,778.0.
Yesterday, other European markets finished mixed as gains were almost pared after investors decided to wait on the sidelines, ahead of release of the US nonfarm payrolls data for August. Construction stocks, Lafarge, CRH and Saint-Gobain, increased between 0.7% and 1.0%, after US pending home sales for July rose 5.2%. Carmakers, Renault and BMW, added 1.2% and 1.6% respectively, after Ziarul Financiar reported that Dacia unit of the former has planned to sell its Duster sport-utility vehicle in Britain, Russia, Brazil and India, while the latter rose after its namesake brand’s August US sales gained 1.6%. On the otherhand, German industrial stocks, Siemens and Schneider Electric, fell 0.3% and 1.1%, after Deutsche Bank downgraded both the stocks due to declining industrial activity in Europe. Deutsche Bank dropped 3.2%, after Bank of America Merrill Lynch added it to its list of “least preferred” stocks. Yesterday, US markets closed higher due to concerns of a slowdown in global economy eased, after US reported upbeat economic data. Housing related stocks, DR Horton, Home Depot and Lowe’s, increased between 2.5% and 3.3%, due to pending July home sales unexpectedly rising to 5.2%. Technology stocks, Hewlett-Packard and Dell, gained 1.2% and 2.0% respectively, after the former raised its bid for 3Par to $33 per share, while the latter stepped back from the bid.
Burger King jumped 25%, after agreeing for the acquisition by 3G Capital. Anadarko Petroleum rose 3.0%, after an Australian newspaper reported that BHP Billiton might acquire the company. Asian markets are trading higher this morning, taking hint from overnight gains on the Wall Street. In Japan, auto makers, Toyota Motor and Mazda Motor paced gains, after the former posted a rise in August car sales in China. Exporters, Elpida Memory and Canon rose, as the yen weakened against the dollar. In Hong Kong, Jiangxi Copper rose, due to commodity prices advancing. Ping An Insurance climbed, after declaring it would merge its bank unit into Shenzhen Development Bank. In South Korea, technology stocks, LG Electronics, Hynix Semiconductor and LG Display gained values, tracking gains in their US peers.
Due for release today is the GBP Services PMI, USD Non-Farm Employment Change, USD Unemployment Rate and ISM Non-Manufacturing PMI.
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International Market Report 1st September 2010
FTSEurofirst 300 index gained 0.1% to 1,026.3. German DAX Xetra 30 climbed 0.2% to 5,925.2. French CAC-40 shifted up 0.1% to close at 3,490.8. DJIA gained 0.1% to 10,014.7. NASDAQ dropped 0.3% to 2,114.0. S&P 500 index closed marginally higher, at 1,049.3. Nikkei 225 index traded 1.0% higher, at 8,914.4. Hang Seng index is up 0.4%, at 20,617.5, while the Kospi index is trading 1.2% higher, at 1,764.0
Yesterday, European markets finished higher, as worries of a potential slowdown in the global economy eased, after US reported upbeat data on consumer confidence and home prices. MAN and BMW, gained 0.9% and 1.1%, amongst hopes of an increase in home demand, following jobs addition in the country. Metal stocks, Kloeckner & Co. and Rheinmetall, edged up 1.4% and 2.1% respectively, benefiting from broker upgrades. Bayer rose 2.4%, after results from its trial of anti-clotting drug Xarelto revealed that it was equally safe and effective to the standard therapy. Camaieu and Entrepose Contracting rose 2.2% and 5.6% respectively, after their first-half net income rose 4.8% to €32.7 million and 56% to €21.2 million, respectively.
US markets closed mixed yesterday, due better-than-expected data on consumer confidence and home prices were affected by concerns due to a decline in the Chicago manufacturing activity, and on fears that the Fed might rule out large scale asset purchases. Hopes of a takeover offer buoyed both Saks and Dean Foods, while Rex Energy rallied 10.2%, after Sumitomo agreed to pay the company $140.4 million for rights to Marcellus Shale assets in Pennsylvania. However, gains were almost erased, as minutes from the recent Federal Reserve meeting indicated that QE is possible only if the outlook for the economy weakened “appreciably”. Monsanto eased 5.8%, after it lowered its earnings estimates and gave a dismal full year outlook. 3M fell 1.4%, after stating that it would acquire Israel-based, Attenti Holdings. This morning, Asian markets are trading higher amongst hopes of a revival in global economy. In Japan, housing stocks, Mitsui Fudosan and Mitsubishi Estate paced increase, after Japan’s housing starts in July rose 4.3% on an annual basis. Nippon Yusen rose, after Morgan Stanley raised its price estimates for the stock. In Hong Kong, rises in HSBC Holdings and Industrial & Commercial Bank of China led the Hang Seng index higher. In South Korea, Kia Motors led auto stocks higher, after it prevented a possible strike by inking a wage increase agreement with its labour union.
Due for release today is the CNY Manufacturing PMI, AUD GDP q/q, USD ADP Non-Farm Employment Change and the USD ISM Manufacturing PMI.
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Aug 10
31
BOJ eases policy as yen climbs
International Market Report 31st August 2010
The benchmark Nikkei dropped 277.40 points to close at 8,871.86, the Topix lost 2.6% to close at 807.46. The Dow Jones was 164 points higher at 10,150, whilst the Nasdaq gained 34 points to 2,153. The S&P 500 added 17 points at 1,064.
Yesterday, the BOJ boosted its cheap loan scheme, bowing to government pressure for action to protect a fragile recovery by curbing the yen’s rise, on the other hand cabinet ministers signaled they may intervene to weaken the currency. The yen surged more than 1% against the dollar after the central bank beefed up the supply of fixed-rate loans to banks, a move investors saw as a symbolic gesture that will do little to halt a climb in the currency. Government officials who were increasingly alarmed by the yen’s rise that took it to a 15-year high against the dollar last week, have tried to talk down the currency while leaning on the central bank to help by further easing its policy. Yesterday, US stocks accelerated declines after comments from US President Barack Obama did little to soothe investors anxious over the slowing pace of the recovery. Obama has stated that he and his economic team discussed additional steps to promote economic growth, including looking at tax cuts for businesses. Stocks had been trading lower prior to the comments and the losses picked up steam.
The Dow Jones industrial average dropped 140.92 points, or 1.39 per cent, to around 10,009.73. The American president also said the US economy was not expanding quickly enough and there was no magic solution to fix its problems. Gloomy reports on GDP and housing have raised fears the fragile economy could slip back into a recession or face a lengthy period of growth that is too slow to make significant a dent in the 9.5% unemployment rate.
Due for release today is the AUD Building Approvals m/m, AUD Retail Sales M/m, CAD GDP m/m, USD CB Consumer Confidence and USD FOMC Meeting Minutes.
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International Market Report 27th August 2010
The Nikkei climbed 0.5% or 48.35 points to 8,954.55, climbing further away from a 16-month low that it hit on Wednesday. The Topix gained 0.6% to close at 816.22. The Dow shed 74 points to close at 9,985, on the other hand the Nasdaq lost 22 points to close at 2,118. The S&P 500 was also down 8 points at 1,047.
Yesterday, Greece’s government took a step toward offloading its stakes in ATEbank and Hellenic Postbank when it named Deutsche Bank, HSBC and Lazard as its advisers. In a statement it was said that the three investment banks would explore and assess the Greek state’s strategic options, then evaluate its holdings in the banking sector, so it can assess the consequences of such options. Between 2011 and 2013 Athens needs to raise at least €1bn (£817m) each year as a condition of its European Union bailout in May. In the next 3 years state-owned energy, infrastructure and utilities companies are also expected to be handed over to the private sector.
Yesterday, the Dow Jones closed below the psychologically-crucial 10,000 level as investors shrugged off better than expected US jobs figures to focus on an expected downgrade for US GDP today. The US blue chip index fell 0.7% to 9986.81 which was its lowest level since 6th July ahead of today’s GDP growth for Q2 which analysts are predicting could be almost halved from the preliminary forecast of 2.4% to just 1.4%. Today there are also fears of what Fed chairman Ben Bernanke’s speech on the economy will reveal.
Due for release today is the GBP Revised GDP q/q, CHF KOF Economic Barometer, USD Prelim GDOP q/q and the USD Fed Chairman Bernanke Speaks.
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International Market Report 26th August 2010
The Nikkei edged up 0.3% or 27.13 points to 8,872.52. The Topix was flat at 807.61. The Dow finished 19 points higher at 10,060. The Nasdaq added 17 points at 2,141. The S&P 500 gained 3 points to reach 1,055.
In the US Fast-food chains are rolling out more expensive premium products after two years of relentless focus on lower priced meals, this is in the hope of recouping profit margins surrendered during the recession of 2008 /2009. According to people close to the situation, Dubai World has informed lenders that it could raise up to $19.4bn from selling its assets, in a bid to repay $14.4bn of the holding company’s debt. In late July, the company set out its debt restructuring plan and included a time frame over which it would consider selling assets to raise funds to repay lenders. On Wednesday, top auto makers said, that Russia’s car market is rebounding faster than expected, buoyed by a return of cheap credit and a successful government scrappage scheme. For the first time in 7 months of the year, car sales in the country are up 9% compared to the same period in 2009.
Due for release today is the AUD Private Capital Expenditure q/q and the USD Unemployment Claims.
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International Market Report 25th August 2010
The Nikkei dropped 1.7% or 149.75 points to close at 8,845.39. The Topix dropped 1.3% to to close at 807.31. The Dow closed dropped 133 points to 10,040 while Nasdaq dropped 35 points to 2,213. The S&P 500 ended 15 points lower at 1,051.
Yesterday, the ECB called for bids to drain €60.5bn (£50bn) from Eurozone money markets to offset recent bond purchases. The operation will be a variable rate tender with a maximum payout of 1% interest. Banks have been limited to just two bids in the operation and the deposits they park can be used as collateral to reborrow from the ECB in its lending operations. The ECB has already stated that it will repeat the sterilisation process next week. The ECB carries out the sterilisation operations to balance out the cash it puts into the financial system whenever it buys bonds. Yesterday, Japanese equities tumbled as an ever-strengthening yen sparked a heavy sell-off of exporters such as Sony and Nikon. The Nikkei Stock Average dropped to a 15-month low below 9,000. Data showed yesterday, that during the month of June Eurozone industrial new orders rose more than expected during the month of June.
Yesterday, European Union statistics office Eurostat said that Industrial orders in the 16-nation currency zone increased 2.5 per cent month-on-month taking the annual gain to 22.6 per cent. Eurostat also revised May industrial orders upwards to 4.1 per cent month-on-month and 23 per cent annually. It said that the annual gain in May was the biggest for a decade.
Due for release today is the EUR German Ifo Business Climate, USD Core Durable Goods Orders, USD New Home Sales and AUD Private Capital Expenditure.
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Aug 10
24
Fed loses the bank disclosure appeal
International Market Report 24th Augst 2010
The Nikkei lost 1.3% or 121.55 points to close at 8,995.15, which was its lowest close since May 2009. The Topix dropped 0.9% to close at 817.73. The Dow dropped 39 points to close at 10,174. The Nasdaq fell 20 points to 2,159. The S&P 500 dropped 4 points to close at 1,067.
Tomorrow, German Ministers will put their weight behind a levy on bank assets designed to raise €1bn (£820m) a year. This announcement is part of a pact between the UK, German and French authorities to introduce parallel taxes which will start in 2011. The German levy, which will enter a fund used in the event of future bailouts and will only apply to banks headquartered in Germany. It is not immediately clear how this will fit with legislation announced by chancellor George Osborne in June, which will apply a tax on the balance sheets of banks trading in the UK. This could potentially leave banks open to double taxation.The FED will have to appeal to the Supreme Court if it wants to avoid having to disclose details of its emergency lending programmes to banks bailed out with taxpayer money during the financial crisis. On Friday the US Court of Appeals denied the Fed’s motion to rehear the case in which Bloomberg, the parent of Bloomberg News, and News Corp’s Fox News Network sought information on the US central bank’s emergency lending programmes that began in late 2007.
Due for release today is the NZD Inflation Expectations q/q, CAD Core Retail Sales m/m and Existing Home Sales.
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International Market Report 23rd August 2010
Japan’s Nikkei average inched down 0.4 percent on Monday as investors waited to see if Bank of Japan Governor Masaaki Shirakawa and Prime Minister Naoto Kan hold a meeting later in the day. The Dow Jones industrial average slipped 57.59 points to 10,213.62. The Standard & Poor’s 500 Index .SPX was off 3.94 points to 1,071.69. The Nasdaq Composite Index added 0.81 points to 2,179.76.
FRANCE has cut its forecast for economic growth next year after an emergency meeting between the president and senior finance ministers. It now thinks the economy will grow by two per cent next year. The previous forecast was 2.5 per cent. This year it will be 1.4 per cent, the government said. President Nicolas Sarkozy ordered ministers to interrupt their summer holidays to discuss how France is going to cut its deficit. They met at his official retreat, Fort de Bregancon, amid fears that in the long term the country faced the possibility of having its AAA credit rating downgraded by ratings agency Moody’s. The president said that the reduction of the government deficit in 2011 was a priority. Public expenditure would be reduced, the president said. He also repeated his pledge not to increase VAT, income tax or tax on companies. But he also said 10 billion euros of tax breaks would be abolished in the autumn.
The Dubai government, which is restructuring $23.5bn (£15.1bn) in debt, will launch a roadshow for fixed-income investors in Asia starting on 26 August, a statement said. The plan follows a similar program for European investors in June, as part of the government’s strategy for “providing regular updates to both existing and prospective fixed income investors around the world.”
S&P/ASX 200: 1.900 (-0.043%)
The AUD and NZD were bearish on Friday as concerns about the US economy coupled with the prospect of an Australian ‘hung parliament’ loomed.
RBC expects the incumbent Labor party will retain government albeit with reduced lead while the Greens party would have the balance of power in the upper house.
Australia’s Reserve Banks Deputy Governor, Ric Battellino said that economic reforms over the past three decades have made Australia a ‘world beating economy’, as it has only experienced three quarters without economic growth since 1991, and annual growth has always been positive since the end of the early ’90s recession.
No Major News due for release today
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International Market Report 20th August 2010
The Nikkei dropped 1.7% or 162.69 points to 9,199.99, while the broader Topix dropped 1.6% to 830.65. The Dow dropped 144 points to close at 10,271, however the S&P 500 dropped 18 points to close at 1,075. The NASDAQ fell 36 points to close at 2,178.
Wheat prices rose to $7 a bushel due to worsening prospects over Russia’s harvest this fall and beyond. It is likely that Russia will boost its grain imports amid a persistent drought that has forced it to ban exports. Last year, the country was one of the world’s largest wheat exporters, the usual trickle of imports could turn into a flood to make up for the anticipated shortfall in this year’s harvest. Yesterday, Deutsche Bundesbank raised its forecast for German economic growth in 2010, becoming the first official body to upgrade its outlook after the data released last week. In its monthly report, the Bundesbank lifted its 2010 forecast. The European Commission has approved the next €9bn (£7.4bn) tranche of loans for Greece, the underlying economy continues to deteriorate as Greek banks suffer a record loss of deposits. A report by HSBC stated that banks lost 8% of their entire deposit base in the 5 months to May.
Due for release today is the CAD Core CPI m/m.
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Sep 10
2
Upbeat manufacturing data from US and China
International Market Report 2nd September 2010
FTSEurofirst 300 index gained 2.9% to close at 1,055.7. The German DAX Xetra 30 rose 2.7% to 6,083.9. French CAC-40 edged up 3.8% to settle at 3,623.8. DJIA jumped 2.5% to close at 10,269.5. The Nasdaq climbed 3.0% to 2,176.8. The S&P 500 index closed 3.0% higher, at 1,080.3. Nikkei 225 index is trading 1.2% higher, at 9,035.7. Hang Seng index is up 1.2%, at 20,875.9, whilst on the other hand the Kospi index is trading 0.3% higher, at 1,769.2. All Ords is up 36.2 or 0.8% at 4563.
A powerful finish to the financial year has put rate rises back on to the Reserve Bank’s agenda as consumers spend on cars and holidays. The economy grew by 1.2 per cent in the June quarter, the best result in three years, and has now averaged an annual growth rate of 4 per cent since the last three months of 2009. The treasury’s costing of the Coalition’s election promises have found a $7 billion hole in the opposition’s claim that its election promises and proposals would save $11.5bn over the next four years. Treasury added that if some of the assumptions that the Coalition had used to come up with the figure did not hold up, the net benefit of its policies could be as low as $500 million.
Yesterday, other European markets finished sharply higher as concerns of a slowdown in the global economy were eased by upbeat corporate results and better-than-forecasted economic data from US and China. Banks, Societe Generale and BNP Paribas, rose 5.7% and 5.9%, respectively. Vivendi, is up 5.0%, which led telecom and entertainment stocks higher, as the company raised its full-year targets after its first-half profit rose 4% to €1.53 billion. Henkel, Metro and Daimler paced gains, were benefiting from broker upgrades. Virbac and Vinci both climbed 4.3% and 4.8% respectively, after posting strong first-half results. Yesterday, US markets rallied, as buoyant manufacturing data from US and China eased fears of a double dip recession. Industrial stocks, Boeing, General Electric and Caterpillar, increased between 1.9% and 4.6%, after US manufacturing index surprisingly rose to 56.3 in August from 55.5 in July. As the base metal prices rose metal stocks, Alcoa and Freeport-McMoRan Copper & Gold, added 3.0% and 5.8% respectively. Energy stocks, Exxon Mobil and Chevron, rose 3.1% and 3.6% respectively, as the crude oil prices increased. Banks, JPMorgan, Citigroup and Bank of America, climbed between 3.8% and 6.1%, as the risk appetite gained among investors. Apple edged up 3.0%, after introducing a new version of Apple TV and a new line of iPods. Asian markets are trading higher this morning, taking cues from a strong overnight rally on the Wall Street, after a higher-than-expected expansion from the US and Chinese manufacturing activity in August. In Japan, exporters, Sony, Nissan Motor and Canon rose, as the yen weakened against the euro. Mitsui & Co. Trading price rose, as base metal prices advanced. Showa Shell Sekiyu gained, after Citigroup raised the ratings on the stock. In Hong Kong, Cnooc rose, as the crude oil prices increased. Bank of Communications advanced, tracking the gains in its US peers. Ping An Insurance rose, after stating that it would merge its bank unit into Shenzhen Development Bank. In South Korea, technology stocks, LG Display and Hynix Semiconductor paced increase, reversing their recent declines. After bagging a $1.46 billion desalinisation plant construction order, Doosan Heavy rose. The Nikkei 225 index was trading 1.2% higher, at 9,035.7.
Due for release today is the AUD Trade Balance, GBP Nationwide HPI m/m, CHF Retail Sales y/y, EUR Minimum Bid Rate, EUR ECB Press Conference, USD Unemployment Claims, USD Fed Chairman Bernanke Testifies and USD Pending Home Sales.
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