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.

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