Friday 20 August 2010

News Report

Markets in a Flash

• As European markets opened and fell this morning and a correlating fall has been seen in the EUR/USD currency pair. Today has seen a new 1 month low be made.
• The USD/CAD saw a strong jump north breaking the 1.0500 level as Canadian Core CPI data came in less than expected.
• The GBP looks weak today along with the EUR as European equity markets fell. The JPY and USD seem to be strong against the two.
• Prior to the open of the US equity markets the equity futures markets are lower this suggests that the European downtrend will be followed at the opening bell.
• Most commodities are lower today. Oil is down to $73.00 while gold is holding its gains at just above $1230.00. Sugar is bucking the trend and is nearly +2.5% higher.
• Asian markets finished lower across the board last night. The Main Japanese and Chinese indices were down nearly -2%.
• European equity markets lower this morning. The Stoxx 50 is lower by over -1.0%.

News Focus

0700ET – Canada Core CPI m/m

Previous -0.1%
Consensus 0.1%
Actual -0.1%

Today’s release by Statistics Canada shows that core inflation was less than expected, this was bad for the Canadian dollar and saw it weaken on the news. After recent interest rate rises in the country this flat rate of inflation should be expected. If the figure had come in majorly higher it or does next month it may mean another interest rate rise is on the card, but today’s data shows no indication of this.

China may be interested in Potash

Sinochem, Chinas state owned Chemical producer, has said it is interested in Potash’s overseas investments and is keeping a close eye on BHP Billitons Bid. The Australian miners $130 a share hostile bid for the fertilizer producer is at the moment uncontested. If Sinochem make a counter offer it may mean a much high bid price. Potash’s CEO is set to benefit hugely from a takeover of the company as in a takeover situation his company options become excersisable and very valuable.

Intel set to buy McAfee for $7.7Bn

The takeover of the software security company is set to boost Intel strategy in the mobile wireless technology world. The chip producer may be able to integrate the security abilities of McAfee directly into its computer chips, this will enhance security capabilities into the future as computing devices become widely connected and more susceptible to viruses.

News Coming Up

Australian General Election

The Australian general election date was set for 21st August by Julia Gillard, Prime Minister. The controlling Labour party lead by Mrs Gillard, who took over from her predecessor only 3 weeks ago, is predicted to win by opinion polls in the country. A win will secure the party a further 3 year term. Gillard says she is committed to moving forward with budget surpluses and the economy. The result of the election may have effects on the strength of the Australian Dollar and the Countries large miners.

Thursday 19 August 2010

Daily Report

Markets in a Flash

• The Pound strengthened suddenly this morning when UK data came in better than expected. The EUR/GBP is moving back towards its monthly lows
• The USD/JPY has started trending down towards its lows in the past few hours.
• US equity futures are higher this morning suggesting a continuation in the rise in equity markets from yesterday’s session.
• Oil and Gold are not doing much in today’s session at around $75.50 and $1230.00 respectively. Wheat futures are pushing higher and are up nearly 3%.
• Asian markets finished higher across the board overnight. The Nikkei 225 in Japan was up +1.32%.
• European equity markets are higher this morning after going negative for a short while after the open. Europe has been made more bullish by the strong UK data.

News Focus

0430ET – UK Retail Sales

Retail Sales m/m

Previous 0.7%
Consensus 0.4%
Actual 1.1%

This month’s UK retail sales were reported early this morning and came in well ahead of consensus. The monthly change was reported as a rise of 1.1% compared with the markets expectation of 0.4%. This FTSE100 jumped higher on this news. Along with this news it was reported that the UK’s net public borrowing rose less than expected.

0830ET – US Jobless Claims

Previous 484 K
Consensus 480 K
Consensus Range 465 K to 495 K
Actual 500 K

Today’s Jobless claims data of 500K is worse than expected and worse that last weeks. This shows that the labour market in the US is worse than economists and investors had thought. This is bearish for the markets and shows a continuation in the rising trend.

German central bank raises growth forecasts

After the German economy expanded in the second quarter at its fastest pace in the past two decades the German central bank has increased its forecast growth rate. It has raised its forecast of GDP growth to 3% for 2010 from the 1.9% prediction in June.

General Motors confirms Initial Offering

The US car producer, General Motors Co, which is 61% owned by the US taxpayer is set to be brought to market. The company may face trouble with its IPO as it continues to lose market share and struggles to return to profit.

Coming up Today

1000ET – US Philadelphia Fed Index

General Business Conditions Index - Level

Previous 5.1
Consensus 7.0
Consensus Range -0.6 to 10.0

This index is similar to the ISM Manufacturing Index and tends to correlated with it. It is an index of manufacturing conditions in the Philadelphia Federal reserve District. The index has dropped in the past few months from being around 20 to last month’s reading of 5.1. It is expected to show a small rise today to 7.

1030ET – US Natural Gas Report

The weekly report by the Energy Information Administration provides data on US natural gas stocks. A report showing a drop in natural gas stocks may signal increasing demand in the economy and see an increase in the price of the commodity.

Wednesday 18 August 2010

US Morning Report

Markets in a Flash

• The Dollar has started to weaken in the past few hours against other major currencies. China continues to shift the world’s largest FX reserves out of Dollars.
• The USD/JPY is trading very close to its lows, further weakness in the USD may see the pair making new ground.
• US equity futures are sitting around level today, with no clear direction to the direction of equity markets at 0930ET.
• Oil is trading nearly -1.0% lower in today’s session and is at $75.00. Gold is holding on to its recent gains at $1225.00.
• Asian markets finished mixed again overnight. In reverse to yesterday Chinese and Hong Kong markets fell while Japanese markets rose.
• European equity markets are lower this morning as the US markets fell slightly from the level they were at when Europe closed yesterday.

News Focus
BHP Billiton makes Hostile Bid for Potash

After Potash Corp rejected BHP Billiton’s unsolicited bid of $39Bn, the world’s largest miner has returned with a hostile bid. BHP Billiton has launched a fully funded cash hostile takeover bid for Potash, the world’s largest fertilizer producer. Potash’s share price jumped nearly 30% yesterday as BHP’s share price fell a couple of percent. The offer of $39Bn is roughly 20% higher than the company was valued at on the 11th Aug, but it is expected that BHP Billiton may have tpo increase its bid if it is going to be successful.

0700ET – MBA Purchase Applications

Composite Index - W/W Change

Previous 0.6 %
Actual 13.0 %

The new purchase index for applications fell -3.4% this week but the composite index was pulled higher by the refinancing index. The refinancing index jumped 17.1% this week to its highest level since May 2009.

Coming up Today

1030ET – Petroleum Status Report

The weekly report by the Energy Information Administration provides data on US petroleum stocks. A reduction in stocks will show an increase in the demand for petroleum and may be taken as an indicator of an increase in spending. A low figure may put bullish pressure on oil prices and oil companies.