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.
Friday 20 August 2010
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.
• 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.
• 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.
Tuesday 17 August 2010
Daily News Report
Markets in a Flash
• The EUR is starting to push higher this morning and is gaining against the USD, JPY and GBP.
• US equity futures are higher this morning following the European advance and indicating a rise in equity prices at the bell.
• Oil is trading over +1% higher this morning and is above $86.00. Gold is continuing to rise slowly and is at around $1230.00.
• Asian markets finished mixed overnight. Chinese markets rose while Japanese markets fell.
• European equity markets are up in their morning trading regaining some of the past few days losses.
News Focus
Home Depot Beats Estimates
The US’s largest home improvement store, Home Depot Inc, has reported figures that are better than analysts had expected. The Company reported earnings per share of 72 cents compared with analysts’ expectations of 71 cents, this has been boosted by an increase in sales revenue generated by its well established stores. This better that expected performance may suggest that consumers are spending more on the housing market and may be a sign of an increase in health in the property market.
Potash Corp Rejects Bid
Potash Corp, the world largest fertilizer producer has rejected a takeover bid made by BHP Billiton. The unsolicited bid of $39Bn was turn down by the company as management saw it as undervaluing the company. Investors are speculating that BHP Billiton may return with a higher bid.
0830ET – Housing Starts
Starts - Level – SAAR
Previous 0.549 M
Consensus 0.565 M
Consensus Range 0.550 M to 0.585 M
Actual 0.546 M
This figure of 0.546M has come in less that consensus. It is also slightly less that the figure reported for last month.
0830ET – Producer Price Index
PPI - M/M change
Previous -0.5 %
Consensus 0.2 %
Consensus Range -0.2 % to 0.5 %
Actual 0.2 %
The figure has been reported as 0.2% which is what was expected by the market. This shows that in July there has been a slight rise in producers prices. This should not have much of an effect on the markets as the expected figure will have already been priced in.
Coming up Today
0855ET – Redbook
This weekly indicator is similar to the ICSC-Goldman Store Sales as it shows the health of retail sales but is less consistent.
0915ET – Industrial production
Production - M/M change
Previous 0.1 %
Consensus 0.6 %
Consensus Range 0.3 % to 1.0 %
This month’s figure is expected to show that industrial production rose in July after the previous month’s growth of 0.1 %. The trend for the past year has been of positive monthly growth figures. A further expansion will continue the growth trend. A higher that 0.6% figure will prove bullish for the markets as it will suggest the economy is in better health that expected.
• The EUR is starting to push higher this morning and is gaining against the USD, JPY and GBP.
• US equity futures are higher this morning following the European advance and indicating a rise in equity prices at the bell.
• Oil is trading over +1% higher this morning and is above $86.00. Gold is continuing to rise slowly and is at around $1230.00.
• Asian markets finished mixed overnight. Chinese markets rose while Japanese markets fell.
• European equity markets are up in their morning trading regaining some of the past few days losses.
News Focus
Home Depot Beats Estimates
The US’s largest home improvement store, Home Depot Inc, has reported figures that are better than analysts had expected. The Company reported earnings per share of 72 cents compared with analysts’ expectations of 71 cents, this has been boosted by an increase in sales revenue generated by its well established stores. This better that expected performance may suggest that consumers are spending more on the housing market and may be a sign of an increase in health in the property market.
Potash Corp Rejects Bid
Potash Corp, the world largest fertilizer producer has rejected a takeover bid made by BHP Billiton. The unsolicited bid of $39Bn was turn down by the company as management saw it as undervaluing the company. Investors are speculating that BHP Billiton may return with a higher bid.
0830ET – Housing Starts
Starts - Level – SAAR
Previous 0.549 M
Consensus 0.565 M
Consensus Range 0.550 M to 0.585 M
Actual 0.546 M
This figure of 0.546M has come in less that consensus. It is also slightly less that the figure reported for last month.
0830ET – Producer Price Index
PPI - M/M change
Previous -0.5 %
Consensus 0.2 %
Consensus Range -0.2 % to 0.5 %
Actual 0.2 %
The figure has been reported as 0.2% which is what was expected by the market. This shows that in July there has been a slight rise in producers prices. This should not have much of an effect on the markets as the expected figure will have already been priced in.
Coming up Today
0855ET – Redbook
This weekly indicator is similar to the ICSC-Goldman Store Sales as it shows the health of retail sales but is less consistent.
0915ET – Industrial production
Production - M/M change
Previous 0.1 %
Consensus 0.6 %
Consensus Range 0.3 % to 1.0 %
This month’s figure is expected to show that industrial production rose in July after the previous month’s growth of 0.1 %. The trend for the past year has been of positive monthly growth figures. A further expansion will continue the growth trend. A higher that 0.6% figure will prove bullish for the markets as it will suggest the economy is in better health that expected.
Monday 16 August 2010
Daily News Report
Markets in a Flash
• The USD is looking weak this morning as China see’s problems with US recovery.
• The JPY has started to look slightly stronger in the past few hours and is gaining against the USD and the EUR.
• US equity futures are lower today suggesting the selloff will continue when the markets open.
• Oil is trading just below the $86.00 mark while Gold is pushing higher to around $1225.00.
• Chinese markets were up overnight while Japanese markets fell as investors sold.
• European equity markets started the day positive but have turned negative as trading has continued.
News focus
China set to be world’s second largest economy
GDP data from Japan showed that their economy grew by an annualized rate of only 0.4% in the second quarter of this year. Economists had expected the data released to show a figure of 2.3%. In the second quarter of this year Chinas Gross Domestic Product was 3.8% high than Japans. As China continues to grow rapidly throughout this year it is expected that by the year end China will be official the second largest economy. The news that the Japanese economy has not grown at the rate it was expected too has sent bearish forces through the markets today. Equity markets are lower as investors think the world’s recovery is going to be hindered by a double dip.
Coming up Today
No important data releases today
• The USD is looking weak this morning as China see’s problems with US recovery.
• The JPY has started to look slightly stronger in the past few hours and is gaining against the USD and the EUR.
• US equity futures are lower today suggesting the selloff will continue when the markets open.
• Oil is trading just below the $86.00 mark while Gold is pushing higher to around $1225.00.
• Chinese markets were up overnight while Japanese markets fell as investors sold.
• European equity markets started the day positive but have turned negative as trading has continued.
News focus
China set to be world’s second largest economy
GDP data from Japan showed that their economy grew by an annualized rate of only 0.4% in the second quarter of this year. Economists had expected the data released to show a figure of 2.3%. In the second quarter of this year Chinas Gross Domestic Product was 3.8% high than Japans. As China continues to grow rapidly throughout this year it is expected that by the year end China will be official the second largest economy. The news that the Japanese economy has not grown at the rate it was expected too has sent bearish forces through the markets today. Equity markets are lower as investors think the world’s recovery is going to be hindered by a double dip.
Coming up Today
No important data releases today
Friday 13 August 2010
Daily News Report
Markets in a Flash
• The USD is starting to look stronger this morning. It is gaining as investors seek less risk.
• The EUR/JPY appears to be trading very close to its monthly lows.
• US equity futures are lower today suggesting the selloff will continue when the markets open.
• Oil is trading just below the $86.00 mark while Gold is pushing higher to around $1200.00.
• Most Asian markets were up over night. The Nikkei posted gains of +0.44%.
• European equity markets started the day positive but have turned negative as trading has continued.
News focus
Eurozone Countries Show Strong Growth
German GDP data released this morning came in ahead of forecast with a 2.2% rise in Q2 compared with the previous quarter. France also reported GDP figures and showed a 0.6% rate of growth compared with a rate of 0.4% expected. These strong figures from two of the Eurozones major economies boosts investors confidence that the economic recovery in Europe is maintainable. The Growth in Germany has been helped along by the countries strong exports, which have been boosted by the weakness in the Euro. Germany’s GDP growth is their fastest since 1990 and is equivalent to 8% annualized.
0830ET – Consumer Price Index
CPI - M/M change
Previous -0.1 %
Consensus 0.3 %
Consensus Range -0.1 % to 0.4 %
Actual 0.3 %
The consumer price index has come in on consensus. This has shown that prices paid by consumers have risen this month after the fall in the previous month. This should not have a great impact on the markets as the consensus figure was probably already priced in.
0830ET - Retail Sales
Retail Sales - M/M change
Previous -0.5 %
Consensus 0.5 %
Consensus Range 0.2 % to 1.0 %
Actual 0.4 %
Consumer spending contributes heavily to GDP, so a rise or fall in retail sales can be a good indicator of what GDP is doing. The data released today shows a rise in retail sales which indicates a potential rise in GDP. This rise has come in slightly below consensus so should be a little bit bearish. This may indicate that the economic recovery is not happening as well as expected.
Coming up Today
0955ET – Consumer Sentiment
Previous 67.8
Consensus 69.0
Consensus Range 67.9 to 71.0
The index measures consumer’s financial positions and attitudes toward the economy. Today’s reading is the first of two due for August 2010. The figure dropped lower than previous last month but today’s data is expected to show a small rise. A reported figure below consensus or below previous will put bearish forces on the dollar and the US equity markets as it is an indication in a reduction in consumer spending.
1000ET – Business Inventories
Previous 0.1 %
Consensus 0.2 %
Consensus Range 0.0 % to 0.5 %
This is the measure of monthly change in the dollar amount of inventories held by companies. The data released today is expected to show a rise in inventory levels. As businesses restock and produce more inventories more labour must be used. This results in more jobs and more spending.
• The USD is starting to look stronger this morning. It is gaining as investors seek less risk.
• The EUR/JPY appears to be trading very close to its monthly lows.
• US equity futures are lower today suggesting the selloff will continue when the markets open.
• Oil is trading just below the $86.00 mark while Gold is pushing higher to around $1200.00.
• Most Asian markets were up over night. The Nikkei posted gains of +0.44%.
• European equity markets started the day positive but have turned negative as trading has continued.
News focus
Eurozone Countries Show Strong Growth
German GDP data released this morning came in ahead of forecast with a 2.2% rise in Q2 compared with the previous quarter. France also reported GDP figures and showed a 0.6% rate of growth compared with a rate of 0.4% expected. These strong figures from two of the Eurozones major economies boosts investors confidence that the economic recovery in Europe is maintainable. The Growth in Germany has been helped along by the countries strong exports, which have been boosted by the weakness in the Euro. Germany’s GDP growth is their fastest since 1990 and is equivalent to 8% annualized.
0830ET – Consumer Price Index
CPI - M/M change
Previous -0.1 %
Consensus 0.3 %
Consensus Range -0.1 % to 0.4 %
Actual 0.3 %
The consumer price index has come in on consensus. This has shown that prices paid by consumers have risen this month after the fall in the previous month. This should not have a great impact on the markets as the consensus figure was probably already priced in.
0830ET - Retail Sales
Retail Sales - M/M change
Previous -0.5 %
Consensus 0.5 %
Consensus Range 0.2 % to 1.0 %
Actual 0.4 %
Consumer spending contributes heavily to GDP, so a rise or fall in retail sales can be a good indicator of what GDP is doing. The data released today shows a rise in retail sales which indicates a potential rise in GDP. This rise has come in slightly below consensus so should be a little bit bearish. This may indicate that the economic recovery is not happening as well as expected.
Coming up Today
0955ET – Consumer Sentiment
Previous 67.8
Consensus 69.0
Consensus Range 67.9 to 71.0
The index measures consumer’s financial positions and attitudes toward the economy. Today’s reading is the first of two due for August 2010. The figure dropped lower than previous last month but today’s data is expected to show a small rise. A reported figure below consensus or below previous will put bearish forces on the dollar and the US equity markets as it is an indication in a reduction in consumer spending.
1000ET – Business Inventories
Previous 0.1 %
Consensus 0.2 %
Consensus Range 0.0 % to 0.5 %
This is the measure of monthly change in the dollar amount of inventories held by companies. The data released today is expected to show a rise in inventory levels. As businesses restock and produce more inventories more labour must be used. This results in more jobs and more spending.
Thursday 12 August 2010
Daily News Report
Markets in a Flash
• The USD is starting to look stronger today. Against the JPY it is pulling back some of its losses.
• The EUR/JPY appears to be pushing to new monthly lows today. It is trading around the 110.000 level.
• US equity futures are lower today suggesting the selloff will continue when the markets open.
• Oil is falling and Gold is rising as investors become more risk averse. Wheat prices continue to rise as supply fears feed the trend.
• Asian markets fell over night. The Nikkei 225 finished down -0.86% while other indices were also lower.
• European equity markets are fluctuating between rises and falls this morning with no direction being obvious.
News focus
Industrial Output in Europe Falls
Industrial output data for the Eurozone, released this morning, came in worse than expected. The monthly change in the figure was forecast to be +0.7% but when released showed a decline of -0.1%. The figure released today for June shows a decline, this follows last month’s data for May which showed a rise in production of 1.1%. This new information may show that the Eurozone economy is starting to slow its growth rate in line with what appears to be happening across the Atlantic in the US.
GM Seeks IPO
The automaker, General Motors Co, primarily owned by the US government is expected to seek an Initial Public Offering. The IPO is expected to raise somewhere in the region of $12Bn to $16Bn, this will make it the second largest IPO in US history behind 2008’s $19.7Bn offering of Visa inc. The S1 document is expected to be filed with the Securities and Exchange Commission tomorrow or Monday.
Just Released
0830ET - Jobless Claims
New Claims - Level
Previous 479 K
Consensus 460 K
Consensus Range 460 K to 470 K
Actual 484 K
This week’s jobless claims figure came in worse than consensus and worse than previous. This should be bearish for the markets and show that the economy is struggling more than thought. This fits in with the recent trend of employment data being worse than thought. If the labour market in the US is not in good health it is a very bad sign for the wider economy.
Coming up Today
1030ET – 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.
• The USD is starting to look stronger today. Against the JPY it is pulling back some of its losses.
• The EUR/JPY appears to be pushing to new monthly lows today. It is trading around the 110.000 level.
• US equity futures are lower today suggesting the selloff will continue when the markets open.
• Oil is falling and Gold is rising as investors become more risk averse. Wheat prices continue to rise as supply fears feed the trend.
• Asian markets fell over night. The Nikkei 225 finished down -0.86% while other indices were also lower.
• European equity markets are fluctuating between rises and falls this morning with no direction being obvious.
News focus
Industrial Output in Europe Falls
Industrial output data for the Eurozone, released this morning, came in worse than expected. The monthly change in the figure was forecast to be +0.7% but when released showed a decline of -0.1%. The figure released today for June shows a decline, this follows last month’s data for May which showed a rise in production of 1.1%. This new information may show that the Eurozone economy is starting to slow its growth rate in line with what appears to be happening across the Atlantic in the US.
GM Seeks IPO
The automaker, General Motors Co, primarily owned by the US government is expected to seek an Initial Public Offering. The IPO is expected to raise somewhere in the region of $12Bn to $16Bn, this will make it the second largest IPO in US history behind 2008’s $19.7Bn offering of Visa inc. The S1 document is expected to be filed with the Securities and Exchange Commission tomorrow or Monday.
Just Released
0830ET - Jobless Claims
New Claims - Level
Previous 479 K
Consensus 460 K
Consensus Range 460 K to 470 K
Actual 484 K
This week’s jobless claims figure came in worse than consensus and worse than previous. This should be bearish for the markets and show that the economy is struggling more than thought. This fits in with the recent trend of employment data being worse than thought. If the labour market in the US is not in good health it is a very bad sign for the wider economy.
Coming up Today
1030ET – 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 11 August 2010
Daily News Report
Markets in a Flash
• The JPY continues to look strong today. The JPY/USD continues its trend and is making new highs.
• The EUR/USD is trading just above the 1.3000 level. It has bounced of the resistance today and may possible go through as people abandon risk for the greenback.
• US equity futures are lower by over -1.0% this morning following the fall in worldwide markets.
• Commodities are mainly lower today. Oil is back down under the $80.00 mark, while people buy gold and push in up to above $1200.00.
• Asian markets fell over night. The Nikkei 225 finished down -2.70% while other indices were also lower.
• European equity markets are lower this morning. The Stoxx 50 is down -1.81%.
News focus
Fed Acknowledges Slowing Growth
After yesterday’s announcement from the Federal Open Market Committee’s meeting it shows that the slew of economic data suggesting slowing has been acknowledged. The Fed is set to continue using monetary policy as its weapon for stimulating the economy. Policy makers have decided to reinvest the proceeds from maturing debt securities. This will mean the feds balance sheet will remain at its current size instead of reducing.
Just Released
International Trade
Trade Balance Level
Previous $-42.3 B
Consensus $-42.5 B
Consensus Range $-46.2B to $-40.0B
Actual $-49.9 B
The international trade report shows the US’s trade gap. A negative figure shows that more money is leaving the country than is coming in. Today’s figure shows data for June. The figure is worse than expected and shows that the deficit is larger. This indicates that the US is doing worse than expected and is bearish for the US markets.
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.
1400ET – Treasury Budget
Previous $-68.4 B
Consensus $-170.0 B
Consensus Range $-180.0 B to $-165.0 B
The monthly report shows the federal government’s fiscal deficit or surplus. This gives an indicator of how government spending is compared with government revenues. The result for July, released today, is expected to show that the fiscal deficit is increasing. A figure below consensus will show that either tax revenues are not as high as expected or spending is higher than expected, this would be bearish for the markets.
• The JPY continues to look strong today. The JPY/USD continues its trend and is making new highs.
• The EUR/USD is trading just above the 1.3000 level. It has bounced of the resistance today and may possible go through as people abandon risk for the greenback.
• US equity futures are lower by over -1.0% this morning following the fall in worldwide markets.
• Commodities are mainly lower today. Oil is back down under the $80.00 mark, while people buy gold and push in up to above $1200.00.
• Asian markets fell over night. The Nikkei 225 finished down -2.70% while other indices were also lower.
• European equity markets are lower this morning. The Stoxx 50 is down -1.81%.
News focus
Fed Acknowledges Slowing Growth
After yesterday’s announcement from the Federal Open Market Committee’s meeting it shows that the slew of economic data suggesting slowing has been acknowledged. The Fed is set to continue using monetary policy as its weapon for stimulating the economy. Policy makers have decided to reinvest the proceeds from maturing debt securities. This will mean the feds balance sheet will remain at its current size instead of reducing.
Just Released
International Trade
Trade Balance Level
Previous $-42.3 B
Consensus $-42.5 B
Consensus Range $-46.2B to $-40.0B
Actual $-49.9 B
The international trade report shows the US’s trade gap. A negative figure shows that more money is leaving the country than is coming in. Today’s figure shows data for June. The figure is worse than expected and shows that the deficit is larger. This indicates that the US is doing worse than expected and is bearish for the US markets.
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.
1400ET – Treasury Budget
Previous $-68.4 B
Consensus $-170.0 B
Consensus Range $-180.0 B to $-165.0 B
The monthly report shows the federal government’s fiscal deficit or surplus. This gives an indicator of how government spending is compared with government revenues. The result for July, released today, is expected to show that the fiscal deficit is increasing. A figure below consensus will show that either tax revenues are not as high as expected or spending is higher than expected, this would be bearish for the markets.
Monday 9 August 2010
Daily News Report
Markets in a Flash
• The USD seems to be regaining ground against the JPY after the currency pair showed the JPY rising.
• The GBP/USD is trading just below the 1.600 level, near to its 6 month highs. A break though this level may be significant.
• US equity futures are higher this morning indicating the equity markets will open higher at the bell.
• Most commodities are higher today. Oil is trading nearly +1% higher above $82.00. Gold is trading above the $1200.00 mark.
• Wheat has fallen today as investors take profits after the rise on the Russian ban.
• Asian markets mainly pushed higher over night. The Nikkei 225 finished down -0.72% while other indices pushed higher.
• European equity markets are pushing higher this morning. The Stoxx 50 is up +1.58%.
News focus
Whistle blowers will be rewarded by the US
The US Frank Dodd financial reform act is to offer incentives to people who blow the whistle on illegal activities in the financial world. It is expected that there will be a surge in allegations as it becomes possible for people to net multimillion dollar payoffs if information that they provide is original and leads to a conviction.
Fed meeting tomorrow
Tomorrow’s meeting of the Federal Open Market Committee is what the markets are anticipating today. As there is no large data releases today Tuesday’s meeting is the next indicator of direction. Ahead of this the markets appear to be showing bullish signs, this may indicate that investors are expecting the Fed to loosen monetary policy to spur growth after the slew of economic data suggesting growth is slowing.
Coming up Today
No important releases today
• The USD seems to be regaining ground against the JPY after the currency pair showed the JPY rising.
• The GBP/USD is trading just below the 1.600 level, near to its 6 month highs. A break though this level may be significant.
• US equity futures are higher this morning indicating the equity markets will open higher at the bell.
• Most commodities are higher today. Oil is trading nearly +1% higher above $82.00. Gold is trading above the $1200.00 mark.
• Wheat has fallen today as investors take profits after the rise on the Russian ban.
• Asian markets mainly pushed higher over night. The Nikkei 225 finished down -0.72% while other indices pushed higher.
• European equity markets are pushing higher this morning. The Stoxx 50 is up +1.58%.
News focus
Whistle blowers will be rewarded by the US
The US Frank Dodd financial reform act is to offer incentives to people who blow the whistle on illegal activities in the financial world. It is expected that there will be a surge in allegations as it becomes possible for people to net multimillion dollar payoffs if information that they provide is original and leads to a conviction.
Fed meeting tomorrow
Tomorrow’s meeting of the Federal Open Market Committee is what the markets are anticipating today. As there is no large data releases today Tuesday’s meeting is the next indicator of direction. Ahead of this the markets appear to be showing bullish signs, this may indicate that investors are expecting the Fed to loosen monetary policy to spur growth after the slew of economic data suggesting growth is slowing.
Coming up Today
No important releases today
Friday 6 August 2010
Daily News Report
Markets in a Flash
• The JPY has started to look strong over the past few hours gaining against the USD and other currencies.
• The USD is also looking strong against other currencies, this may as investor buy the greenback before the US’s employment report.
• US equity futures have been fluctuating this morning but are currently posting slight gains ahead of the US session.
• Most commodities are lower today ahead of the US employment data.
• Sugar has pushed higher along with some other soft commodities because of the drought in Russia.
• Overnight stocks in China closed higher, a strong session left the Shanghai index closed up +1.44%.
• The Hong Kong Hang Seng index closed its session posting gains of +0.59%
• European equity markets are pushing higher this morning. The Stoxx 600 is up and has posted a new high since April 26.
News focus
Focused on Jobs data
The main news focus for today’s trading session is the Employment data just released. This should be guiding the US equity markets and the strength of the USD in the FX markets.
AIG reports a quarterly loss
AIG, American International Group, which is almost 80% owned by the US taxpayer has reported that it has made a $2.7Bn net loss in Q2 of this year. This large loss can be mainly put down to the company having a $3.3Bn goodwill impairment. The company reported an adjusted profit figure which is up from last year and has seen the share price rise 5.3% in pre-market trading.
Just Released
0830ET – Employment Data
Nonfarm Payrolls - M/M change
Previous -125,000
Consensus Range -150,000 to 0
Consensus -70,000
Actual -131,000
Unemployment Rate – Level
Previous 9.5 %
Consensus Range 9.3 % to 9.7%
Consensus 9.6 %
Actual 9.5 %
Non-farm payrolls came in worse than consensus suggested with a larger drop than was reported last month. This drop in non-farm payrolls of -131,000 shows that the US labour market is in worse health than previously thought, this may show that the economic recovery is struggling in the worlds largest economy. This is very bearish for the markets today and should send the equity markets negative.
Coming up Today
1500ET – Consumer Credit - M/M change
Previous $-9.1Bn
Consensus $-5.0Bn
Consensus Range $-10.0Bn to $7.0Bn
Consumer credit is a measure of how much debt consumers have. A rising level of debt may be fine if economic conditions are improving as consumers will be able to repay their debt, but if the economy is declining then servicing debt may become harder. The figure last showed a $-9.1Bn decrease in consumer credit for May which is expected to be followed with a further decrease for June.
• The JPY has started to look strong over the past few hours gaining against the USD and other currencies.
• The USD is also looking strong against other currencies, this may as investor buy the greenback before the US’s employment report.
• US equity futures have been fluctuating this morning but are currently posting slight gains ahead of the US session.
• Most commodities are lower today ahead of the US employment data.
• Sugar has pushed higher along with some other soft commodities because of the drought in Russia.
• Overnight stocks in China closed higher, a strong session left the Shanghai index closed up +1.44%.
• The Hong Kong Hang Seng index closed its session posting gains of +0.59%
• European equity markets are pushing higher this morning. The Stoxx 600 is up and has posted a new high since April 26.
News focus
Focused on Jobs data
The main news focus for today’s trading session is the Employment data just released. This should be guiding the US equity markets and the strength of the USD in the FX markets.
AIG reports a quarterly loss
AIG, American International Group, which is almost 80% owned by the US taxpayer has reported that it has made a $2.7Bn net loss in Q2 of this year. This large loss can be mainly put down to the company having a $3.3Bn goodwill impairment. The company reported an adjusted profit figure which is up from last year and has seen the share price rise 5.3% in pre-market trading.
Just Released
0830ET – Employment Data
Nonfarm Payrolls - M/M change
Previous -125,000
Consensus Range -150,000 to 0
Consensus -70,000
Actual -131,000
Unemployment Rate – Level
Previous 9.5 %
Consensus Range 9.3 % to 9.7%
Consensus 9.6 %
Actual 9.5 %
Non-farm payrolls came in worse than consensus suggested with a larger drop than was reported last month. This drop in non-farm payrolls of -131,000 shows that the US labour market is in worse health than previously thought, this may show that the economic recovery is struggling in the worlds largest economy. This is very bearish for the markets today and should send the equity markets negative.
Coming up Today
1500ET – Consumer Credit - M/M change
Previous $-9.1Bn
Consensus $-5.0Bn
Consensus Range $-10.0Bn to $7.0Bn
Consumer credit is a measure of how much debt consumers have. A rising level of debt may be fine if economic conditions are improving as consumers will be able to repay their debt, but if the economy is declining then servicing debt may become harder. The figure last showed a $-9.1Bn decrease in consumer credit for May which is expected to be followed with a further decrease for June.
Thursday 5 August 2010
Daily News Report
Markets in a Flash
• Overnight Japanese markets closed higher, reversing yesterday’s losses. The Nikkei 225 was up +1.73%.
• Equity markets in China finished lower overnight. The Shanghai index was down -0.67%, while the Hong Knog Hang Seng finished flat at +0.01%.
• European equity markets are pushing higher this morning. The Stoxx 50 is up +0.55% after it opened flat this morning.
• Commodities are having a mixed session today. Grain prices are pushing higher on the news of a Russian export ban. Oil is trading just above $82.00 while Gold is still at the $1200.00 level.
• The EUR/USD is pushing higher and is close to its 3 month high from a few day back.
• The USD seems to be looking slightly weak today, most currencies seem to have made an advance against it in the past few hours.
• US equity futures are very slightly higher this morning, about an hour before the opening bell.
News focus
German industry continues to look strong
Germany’s industrial orders data came in to show June’s orders 3.2% higher than the previous month. This was a stronger than expected figure and shows that Europe’s largest economy is still recovering strongly. The strength in orders has been coming from the East in particular China, but this recent data has seen orders from within Europe increase by 11.3%. This may suggest that the health of the Eurozone is better than expected.
Russia bans grain exports
Vladimir Putin, Prime Minister of Russia has announced that a temporary ban on the export of grain from the country will take effect from the 15 August. The export ban has been implemented after Russia’s crops have been decimated by a drought in the country. The ban has been put in place to protect the country against an increase in the domestic price of the commodity. This news has sent the price of grain on the worldwide exchanges higher, in Chicago the price of wheat is up nearly 80% in about a month.
Just Released
0830ET - Jobless Claims
Previous 457 K
Consensus 455 K
Consensus Range 444 K to 465 K
Actual 479 K
This week’s jobless claims figure came in far worse than consensus and worse than previous. This shows that considerable more people than expected and more than last week have claimed for jobless insurance in the US. This indicates that the employment situation in the US is worse than expected and is not a good sign ahead of tomorrows non-farm payrolls data.
Coming up Today
1030ET – 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.
• Overnight Japanese markets closed higher, reversing yesterday’s losses. The Nikkei 225 was up +1.73%.
• Equity markets in China finished lower overnight. The Shanghai index was down -0.67%, while the Hong Knog Hang Seng finished flat at +0.01%.
• European equity markets are pushing higher this morning. The Stoxx 50 is up +0.55% after it opened flat this morning.
• Commodities are having a mixed session today. Grain prices are pushing higher on the news of a Russian export ban. Oil is trading just above $82.00 while Gold is still at the $1200.00 level.
• The EUR/USD is pushing higher and is close to its 3 month high from a few day back.
• The USD seems to be looking slightly weak today, most currencies seem to have made an advance against it in the past few hours.
• US equity futures are very slightly higher this morning, about an hour before the opening bell.
News focus
German industry continues to look strong
Germany’s industrial orders data came in to show June’s orders 3.2% higher than the previous month. This was a stronger than expected figure and shows that Europe’s largest economy is still recovering strongly. The strength in orders has been coming from the East in particular China, but this recent data has seen orders from within Europe increase by 11.3%. This may suggest that the health of the Eurozone is better than expected.
Russia bans grain exports
Vladimir Putin, Prime Minister of Russia has announced that a temporary ban on the export of grain from the country will take effect from the 15 August. The export ban has been implemented after Russia’s crops have been decimated by a drought in the country. The ban has been put in place to protect the country against an increase in the domestic price of the commodity. This news has sent the price of grain on the worldwide exchanges higher, in Chicago the price of wheat is up nearly 80% in about a month.
Just Released
0830ET - Jobless Claims
Previous 457 K
Consensus 455 K
Consensus Range 444 K to 465 K
Actual 479 K
This week’s jobless claims figure came in far worse than consensus and worse than previous. This shows that considerable more people than expected and more than last week have claimed for jobless insurance in the US. This indicates that the employment situation in the US is worse than expected and is not a good sign ahead of tomorrows non-farm payrolls data.
Coming up Today
1030ET – 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 4 August 2010
Daily News Report
Markets in a Flash
• Overnight Japanese markets closed lower. This may be as the JPY appreciated investors see exporters getting hurt. The Nikkei 225 was down -2.11%.
• Equity markets in China and Hong Kong finished higher overnight. The Hang Seng index was up +0.43%, while the Shanghai index was up +0.44%.
• European equity markets are down today but as trading continues they are starting to regain their losses. The Stoxx 50 is down less than -0.50%
• Commodities are having a mixed session today. Oil is trading slightly lower but is still above $82. Gold is gaining and is at the $1200 level.
• The JPY is looking strong. The USD/JPY has continued to push lower today. It is now making new lows and is trading around 85.500.
• The USD/CHF is trading at its 6 month low and is testing resistance on the lower side.
• US equity futures are slightly lower this morning suggesting a slight drop at the open.
News Focus
BP succeeds in blocking leak
BP today said that it operations to stop the flow from the leak in the Gulf of Mexico had appeared to have succeeded. The Static Kill operation that started on Tuesday, pumped mud back down the well into the reservoir to block the path of the oil escaping. If BP is found liable under the US’s Clean Water Act they could face fines of over $20Bn. Estimates have confirmed that the oil spill in the Gulf of Mexico is the largest of its kind.
Time Warner beats analyst’s estimates
Time Warner reported earnings of 50cents a share compared with average analysts expectations of 46cents a share. This comes as the company see’s sales of advertising in magazine and cable television and movie box office receipts rise. The company raised its full year earnings forecast, and it is expected that earnings for 2010 will grow by around 20%.
Just Released
0700ET – MBA Purchase Applications
Purchase Index - W/W Change
Previous 2.0 %
Actual 1.5 %
This data shows a further rise in the number of mortgage applications for the US property market. This data shows that the demand in the housing markets has risen. This is the third week in a row that the index has risen. This should prove bullish for the markets as it shows that the housing market may be picking up.
0815ET - ADP Employment Report
Previous 13,000
Actual 42,000
The ADP report shows employment figures representative of the US private sector. The report can be an indicator to the non-farm payrolls figure released next month. Today’s figure representative of June shows a considerable rise in the number over last month.
Coming up Today
1000ET – ISM Non-Manufacturing Index
Previous 53.8
Consensus 53.0
Consensus Range 52.8 to 54.0
The result of 53.8 for June was lower than the previous three months. The rising trend was broken last month as the last time the index had dropped was in November 2009. Today’s figure is expected to show that the index has fallen further. A strong figure today with put bullish pressure on the US equity markets and should bode well for the dollar.
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.
• Overnight Japanese markets closed lower. This may be as the JPY appreciated investors see exporters getting hurt. The Nikkei 225 was down -2.11%.
• Equity markets in China and Hong Kong finished higher overnight. The Hang Seng index was up +0.43%, while the Shanghai index was up +0.44%.
• European equity markets are down today but as trading continues they are starting to regain their losses. The Stoxx 50 is down less than -0.50%
• Commodities are having a mixed session today. Oil is trading slightly lower but is still above $82. Gold is gaining and is at the $1200 level.
• The JPY is looking strong. The USD/JPY has continued to push lower today. It is now making new lows and is trading around 85.500.
• The USD/CHF is trading at its 6 month low and is testing resistance on the lower side.
• US equity futures are slightly lower this morning suggesting a slight drop at the open.
News Focus
BP succeeds in blocking leak
BP today said that it operations to stop the flow from the leak in the Gulf of Mexico had appeared to have succeeded. The Static Kill operation that started on Tuesday, pumped mud back down the well into the reservoir to block the path of the oil escaping. If BP is found liable under the US’s Clean Water Act they could face fines of over $20Bn. Estimates have confirmed that the oil spill in the Gulf of Mexico is the largest of its kind.
Time Warner beats analyst’s estimates
Time Warner reported earnings of 50cents a share compared with average analysts expectations of 46cents a share. This comes as the company see’s sales of advertising in magazine and cable television and movie box office receipts rise. The company raised its full year earnings forecast, and it is expected that earnings for 2010 will grow by around 20%.
Just Released
0700ET – MBA Purchase Applications
Purchase Index - W/W Change
Previous 2.0 %
Actual 1.5 %
This data shows a further rise in the number of mortgage applications for the US property market. This data shows that the demand in the housing markets has risen. This is the third week in a row that the index has risen. This should prove bullish for the markets as it shows that the housing market may be picking up.
0815ET - ADP Employment Report
Previous 13,000
Actual 42,000
The ADP report shows employment figures representative of the US private sector. The report can be an indicator to the non-farm payrolls figure released next month. Today’s figure representative of June shows a considerable rise in the number over last month.
Coming up Today
1000ET – ISM Non-Manufacturing Index
Previous 53.8
Consensus 53.0
Consensus Range 52.8 to 54.0
The result of 53.8 for June was lower than the previous three months. The rising trend was broken last month as the last time the index had dropped was in November 2009. Today’s figure is expected to show that the index has fallen further. A strong figure today with put bullish pressure on the US equity markets and should bode well for the dollar.
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.
Tuesday 3 August 2010
Daily News Report
Markets in a Flash
• Asian equity markets continued their rise last night. The Nikkei finished up +1.29%, while the Hang Seng finished up +0.21%.
• European equity markets are slightly down this morning. This is after yesterday strong rise took them to new recent highs.
• Commodities are looking strong today and are pushing to fresh 3 month highs. Oil is trading above the $81.00 level. Wheat prices fell after their recent gains as Russia calmed fears of export problems.
• The USD/JPY has broken its Nov 2009 low and is now trading below 86.00.
• The GBP and EUR are continuing to push higher against the USD and are trading in line with their trends from the past couple of months.
• US equity futures are slightly lower this morning suggesting a slight drop at the open retracing the rises of yesterday.
News Focus
More Stimulus may be avoided as economic recovery continues
Ben Bernanke, Chairman of the Federal Reserve, expects that consumer spending will pick up as a moderate recovery continues. He said this is likely to happen while talking to lawmakers in South Carolina yesterday. It is expected that Federal Reserve policy makers will pass on providing more economic stimulus at their August 10th meeting. They are expected to wait and see if the recovery in the US economy continues unassisted.
Just Released
0830ET – Personal Income and Outlays
Personal Income - M/M change
Previous 0.4 % Consensus Range -0.1 % to 0.3 %
Consensus 0.1 % Actual 0.0 %
Consumer Spending - M/M change
Previous 0.2 % Consensus Range -0.3 % to 0.3 %
Consensus 0.1 % Actual 0.0 %
After personal income posted a 0.4% and a 0.5% increase in the past 2 months a figure of 0.0% has been reported for June. These under consensus figures should be bearish on the markets as it shows worse than expected economic data. This suggests that people are earning and spending less that was initially expected.
Coming up Today
1000ET – Factory Orders
Previous -1.4 % Consensus -0.5 %
Consensus Range -1.0 % to 0.1 %
The figure released today is expected to show that factory orders fell in June, this follows the -1.4% drop in May. This expectation that factory orders has reduced correlates with the economic data of recent times which suggests that economic growth is slowing.
1000ET – Pending Home Sales Index
The pending home sales index is a leading indicator of sales of existing homes. The index shows the health of the housing market, and also gives an indication to the health of the wider economy. A higher than consensus figure will be a bullish sigh for the economy and the markets. An increase in health of the housing market will suggest an increase in spending in other areas of the economy. This is an important figure and has the potential to move the markets.
• Asian equity markets continued their rise last night. The Nikkei finished up +1.29%, while the Hang Seng finished up +0.21%.
• European equity markets are slightly down this morning. This is after yesterday strong rise took them to new recent highs.
• Commodities are looking strong today and are pushing to fresh 3 month highs. Oil is trading above the $81.00 level. Wheat prices fell after their recent gains as Russia calmed fears of export problems.
• The USD/JPY has broken its Nov 2009 low and is now trading below 86.00.
• The GBP and EUR are continuing to push higher against the USD and are trading in line with their trends from the past couple of months.
• US equity futures are slightly lower this morning suggesting a slight drop at the open retracing the rises of yesterday.
News Focus
More Stimulus may be avoided as economic recovery continues
Ben Bernanke, Chairman of the Federal Reserve, expects that consumer spending will pick up as a moderate recovery continues. He said this is likely to happen while talking to lawmakers in South Carolina yesterday. It is expected that Federal Reserve policy makers will pass on providing more economic stimulus at their August 10th meeting. They are expected to wait and see if the recovery in the US economy continues unassisted.
Just Released
0830ET – Personal Income and Outlays
Personal Income - M/M change
Previous 0.4 % Consensus Range -0.1 % to 0.3 %
Consensus 0.1 % Actual 0.0 %
Consumer Spending - M/M change
Previous 0.2 % Consensus Range -0.3 % to 0.3 %
Consensus 0.1 % Actual 0.0 %
After personal income posted a 0.4% and a 0.5% increase in the past 2 months a figure of 0.0% has been reported for June. These under consensus figures should be bearish on the markets as it shows worse than expected economic data. This suggests that people are earning and spending less that was initially expected.
Coming up Today
1000ET – Factory Orders
Previous -1.4 % Consensus -0.5 %
Consensus Range -1.0 % to 0.1 %
The figure released today is expected to show that factory orders fell in June, this follows the -1.4% drop in May. This expectation that factory orders has reduced correlates with the economic data of recent times which suggests that economic growth is slowing.
1000ET – Pending Home Sales Index
The pending home sales index is a leading indicator of sales of existing homes. The index shows the health of the housing market, and also gives an indication to the health of the wider economy. A higher than consensus figure will be a bullish sigh for the economy and the markets. An increase in health of the housing market will suggest an increase in spending in other areas of the economy. This is an important figure and has the potential to move the markets.
Monday 2 August 2010
Daily News Report
Markets in a Flash
• Asian equity markets closed higher this morning. The Hang Seng Index was higher by +1.82%, while the Japanese Nikkei 225 was higher by +0.35%.
• European equity markets have retraced Fridays losses and all higher. The FTSE 100 is up by +1.89% at lunchtime in London.
• Commodities are pushing higher at the start of the weak as investor look for more risk. Oil has broken above $79.50. Gold is falling as investors avoid its safety, and it is now below $1180.
• The EUR/USD is trading near its 3month highs as its lacks real direction in today’s session.
• The GBP is looking strong today, against the dollar it is pushing to new 5 month highs.
• US equity futures are higher by over +1%. This indicates a rise in the equity markets at the opening bell.
News Focus
HSBC Profits Hit $11.1Bn
HSBC has posted profits of almost double for the first half of the year. Profits have been boosted as the company’s bad debt has fallen to the lowest level since before the financial crisis. Pre-Tax profits of $11.1Bn have risen from $5.02Bn for the same period last year. HSBC profits came in ahead of expectations and pushed the share price higher, but the increase in profit was boosted by write downs of bad debt which disguised the fact that the company did not do as well with revenue.
Investors Ignore Asian Data
Data released in Asia for the purchasing managers indices of China, South Korea and Taiwan all suggested that the economies were slowing. The figures from the three countries were all at multi month lows. Data released over the weekend from China also showed that the economy is slowing, the Chinese PMI fell to its lowest level since February 2009. This data did not make investors bearish as Asian and European markets have risen today.
Coming up Today
1000ET – ISM Manufacturing Index
Previous 56.2 Consensus 54.0
Consensus Range 52.5 to 55.5
After the figure slipped lower last month to 56.2, this month is expected to follow suit and post an even lower reading. As the level of the index falls it shows that manufacturing growth in the economy is slowing, this would follow the recent trending in other economic indicators. A strong figure today with put bullish pressure on the US equity markets and should bode well for the dollar.
1000ET – Construction Spending
M/M change
Previous -0.2 % Consensus -0.5 %
Consensus Range -0.9 % to -0.3 %
This measure of new spending on construction across the country gives an indication to the health of the housing markets. It also shows a wider picture of the economy as construction spending creates strong cash flows through the rest of the economy. If the figure is positive it shows that the amount spent on construction is increasing.
• Asian equity markets closed higher this morning. The Hang Seng Index was higher by +1.82%, while the Japanese Nikkei 225 was higher by +0.35%.
• European equity markets have retraced Fridays losses and all higher. The FTSE 100 is up by +1.89% at lunchtime in London.
• Commodities are pushing higher at the start of the weak as investor look for more risk. Oil has broken above $79.50. Gold is falling as investors avoid its safety, and it is now below $1180.
• The EUR/USD is trading near its 3month highs as its lacks real direction in today’s session.
• The GBP is looking strong today, against the dollar it is pushing to new 5 month highs.
• US equity futures are higher by over +1%. This indicates a rise in the equity markets at the opening bell.
News Focus
HSBC Profits Hit $11.1Bn
HSBC has posted profits of almost double for the first half of the year. Profits have been boosted as the company’s bad debt has fallen to the lowest level since before the financial crisis. Pre-Tax profits of $11.1Bn have risen from $5.02Bn for the same period last year. HSBC profits came in ahead of expectations and pushed the share price higher, but the increase in profit was boosted by write downs of bad debt which disguised the fact that the company did not do as well with revenue.
Investors Ignore Asian Data
Data released in Asia for the purchasing managers indices of China, South Korea and Taiwan all suggested that the economies were slowing. The figures from the three countries were all at multi month lows. Data released over the weekend from China also showed that the economy is slowing, the Chinese PMI fell to its lowest level since February 2009. This data did not make investors bearish as Asian and European markets have risen today.
Coming up Today
1000ET – ISM Manufacturing Index
Previous 56.2 Consensus 54.0
Consensus Range 52.5 to 55.5
After the figure slipped lower last month to 56.2, this month is expected to follow suit and post an even lower reading. As the level of the index falls it shows that manufacturing growth in the economy is slowing, this would follow the recent trending in other economic indicators. A strong figure today with put bullish pressure on the US equity markets and should bode well for the dollar.
1000ET – Construction Spending
M/M change
Previous -0.2 % Consensus -0.5 %
Consensus Range -0.9 % to -0.3 %
This measure of new spending on construction across the country gives an indication to the health of the housing markets. It also shows a wider picture of the economy as construction spending creates strong cash flows through the rest of the economy. If the figure is positive it shows that the amount spent on construction is increasing.
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