| | ADVFN III | Morning Euro Markets Bulletin | | | Daily world financial news | Supplied by advfn.com | | | | | | Wednesday 16 Jun 2010 09:39:31 | | | | | | | | Sponsored by: Your Trading Room | Learn how to trade
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| | London Markets Report | | London has made a strong start following last night's 200-point rally on Wall Street.
In company news this morning, Sainsbury's has outdone arch rival Tesco in the growth stakes with a 4.6% increase in like for like sales during the first quarter and is apparently doing a roaring trade in Vuvuzela horns. 'We have made a good start to the financial year in line with our expectations,' said boss Justin King.
BP has made more headlines after last night's address from the Oval Office by President Obama. He demanded that the oil giant hand over control of compensation payments for the Gulf Coast oil spill. Official estimates now put the amount of oil leaking into the Gulf at 60,000 barrels a day compared with initial estimates from BP of just 5,000.
The Times also reports the Brazilian Government raised doubts over BP's $7bn deal to buy deepwater assets in Brazil.
Cairn Energy has received formal approval from the Government of Greenland to start drilling the first two wells of a planned four well exploration programme in the Disko West area, offshore Western Greenland.
Elsewhere, the environment for government and public sector contracts has worsened markedly under the new coalition government, consultant and civil engineer contractor Mouchel warned, with its order pipeline falling since March.
Part-nationalised lender Royal Bank of Scotland has sold another piece of its sprawling empire, getting shot of a Pakistani subsidiary at the second attempt. It has reached agreement for the sale of its 99.37% holding in RBS Pakistan to Faysal Bank Limited for '41m, or about 2.5 rupees per share, a substantial discount to last night's closing price in Karachi.
Speciality plastic and fibre products provider Filtrona continues to trade ahead of expectations. Having cheered its shareholders back in April with news of strong trading the group said that the outperformance has continued for the nine week period to 5 June.
Agricultural products supplier Wynnstay served up a 12% increase in half year profit and said it remained 'very positive about growth prospects, short and long term.' |
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| | UK Event Calendar for today | | INTERIMS
Safestore, Servoca
INTERIM DIVIDEND PAYMENT DATE
Diploma
INTERIM EX-DIVIDEND DATE
Intec Telecom Systems, RWS Holdings
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Building Permits (US) (13:30)
Capacity Utilisation (US) (16:15)
Consumer Price Index (EU) (10:00)
Labour Costs (EU) (10:00)
Crude Oil Inventories (US) (15:30)
Harmonised Index of Consumer Prices (EU) (10:00)
Housing Starts (US) (13:30)
Industrial Production (US) (16:15)
MBA Mortgage Applications (US) (12:00)
Producer Price Index (US) (13:30)
Tertiary Industry Index (JPN)
Bank of Japan Monthly Report (JPN)
Machine Tool Orders (JPN)
GMS
Bright Things, Coventry 6.092% Perm Int Bearing Shares
FINALS
Bango, Liontrust Asset Managament, RPC Group, Trifast
AGMS
Aegis Group, Atlas Estates, Biocompatibles International, China Food, Christie Group, Dexion Equity Alternative, Dexion Trading, Ote ADS, Patagonia Gold, Princess Private Equity Holding Ltd., Sport Media Group, State Bank of India GDR (Reg S), Tarsus Group, Vimetco GDR (Reg S)
TRADING ANNOUNCEMENTS
Sainsbury (J)
UK ECONOMIC ANNOUNCEMENTS
Claimant Count Rate (09:30)
RICS Housing Market Survey (09:30)
Unemployment Rate (09:30)
FINAL DIVIDEND PAYMENT DATE
Cello Group, Centrica, Eurasian Natural Resources, Irish Continental Group Units, Lamprell
FINAL EX-DIVIDEND DATE
Acal, Alliance Pharma, Autoclenz, Brulines, Charles Stanley, China Biodiesel International, China Shoto, Edinburgh Inv Trust, Elektron, Hamworthy, JPMorgan European Fledgling Inv Trust, KCOM Group, Northern 3 VCT, Oxford Technology 3 VCT, Oxford Technology VCT, PayPoint, Prezzo, Severn Trent, Sinosoft Technology, Speedy Hire, Tawa, Tex Holdings, Tribal Group, United Utilities Group, Utilico Emerging Markets Ltd., Value and Income Trust, Walker Crips Group, Workspace Group |
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| | European Markets | | Euro continues to squeeze higher, as risk appetite firms Equity markets made fresh two week highs overnight, breaking above some key resistance levels, as risk appetite continued to return.
The euro has continued its slowly pull away from its recent lows as demand for European government debt helped revive some risk appetite yesterday. Spain's 12 and 18 month bill auction raised €5.2bn, however the yield demanded for these Spanish bonds was still three times what it was in April, highlighting the heavy premium investors are demanding for Spanish paper. Chinese companies meanwhile signed a number of deals with Greek companies yesterday, as the Greece government appear to have successfully sought to attract some new investment into their beleaguered country.
The markets currently appear to be focussing on the positives for now, despite yesterday's unexpected falls in German and Euro zone ZEW economic sentiment numbers. The German figures for June fell from 45.8 to 28.7 in June, while the Euro zone numbers tumbled by 50% from 37.6 to 18.8.
Commodity prices are rebounding strongly against the US dollar, pushing the Reuters CRB to its highest levels in a month.
Sterling has also slipped back slightly from its recent highs, against a basket of currencies after consumer prices came in slightly less than expected at 3.4%.
Today's UK unemployment data is likely to show that claimant count unemployment fell by some 20k in May. This would be down from drops of 27k in April and 33k in March, while the ILO unemployment rate is expected to stay steady at 8%.
In the US today if yesterday's import prices data is anything to go by then today's Producer Price data is expected to be fairly benign, which could cause further slides in the US dollar, and make firmer US rates less likely this year. Month on month prices for May are expected to decline by 0.5% with a fall in the year on year figure to + 4.9%. Industrial production for May is expected to have increased by 0.9% for April.
EURUSD – the Euro has continued its slow squeeze higher as risk appetite returns pushing against this month's high just short of 1.2360. The 1.2135/45 level will remain a pivotal level in the near term but for now the risk remains of a squeeze higher which will delay the move towards the 2005 lows around 1.1650, which may now take a little longer.
The next resistance level if we break above 1.2360 lies at 1.2580, trend line resistance from the 14th April highs at 1.3690. Nothing so far in this up move changes the overall longer term move towards the overall year end objective which remains at 1.1210 which is the 61.8% Fibonacci retracement of the up move from the 2000 lows at 0.8230 and the 2008 peaks at 1.6040.
GBPUSD – the pound has finally managed to poke it's ahead above the 1.4780 peaks of the last two weeks to push on towards 1.4835. We need to hold above the 1.4770/80 area to push on towards 1.4880 and while the recent strength continues we could well see a move towards 1.5000 while support around 1.4510 holds. There is also the trend line support from the 1.4230 lows of the 20th May at 1.4395, which should continue to support in the event we break below 1.4500. The key support level remains down at 1.4230/50.
EURGBP – no real change here despite this week's brief break above 0.8340, the euro should find the air a little thin anywhere near these levels and should remain under pressure against the buoyant pound. The twin lows at 0.8210, remain a key support but the all important 0.8170 area remains the primary objective. This level is the 50% retracement of the up move from the 2007 lows at 0.6537 to the 2008 highs at 0.9801. While the 0.8400 break-out level remains key resistance, then upside still looks likely to remain limited.
USDJPY – the yen continues to trade in its broad range between the highs between 92.10/20 and the support lows around 90.70/80.
The dollar should still find resistance around the 92.20 area, a break of which would then target the 92.80/90 June highs.
A break back below 90.70/80 trend line support has the potential to re-target the 89.30 area. |
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| | US Markets Report | | Dow surges ahead US shares stormed ahead as all of the eurozone-inspired fears that hit sentiment yesterday evaporated and investors hunted for bargains.
The Dow added 213 points to finish the day at 10,404. Nasdaq added 61 at 2,305 while the S&P 500 added 25 at at 1,115.
A rally in the euro sparked the buying, with decent demand for debt auctions in Spain and Belgium helping the upbeat mood.
Even BP picked up despite a downgrade by ratings agency Fitch and another kicking from US politicians over the Gulf of Mexico spill.
On the economic front, a report from the Labor Department showed May import prices fell 0.6%, while New York state manufacturing rose even though employment declined.
Chip supplier shares gained on encouraging news from Taiwan Semiconductor Manufacturing. Advanced Micro Devices, Micron Technology and MEMC Electronic Materials were all higher.
Video games retailer GameStop was one of the worst performers in the S&P along with Best Buy. Electronic goods retailer Best Buy's fiscal first-quarter net income and revenue fell short of expectations but the group reiterated its 2011 forecast. Net income rose 1% to $155m while revenue rose almost 7% to $10.79bn.
Boeing rose 4% after it boosted productioin of its narrow-body 737 planes for the second time in two months, as aircraft demand recovers with the US economy.
News Corp gained as investors were pleased by its offer for full control of BSkyB, the satellite broadcaster.
S&P 500 - Risers
Teradyne Inc. (TER) $11.77 +10.52%
Monster Worldwide Inc. (MWW) $13.89 +9.37%
First Solar Inc. (FSLR) $117.20 +8.99%
MEMC Electronic Materials (WFR) $11.69 +7.84%
N Y Times Class A (NYT) $9.76 +6.78%
S&P 500 - Fallers
Best Buy Co Inc. (BBY) $38.58 -6.02%
Gamestop Corp. (GME) $20.71 -5.35%
Ralph Lauren Polo Corp. (RL) $82.58 -1.89%
Hershey Foods Corp. (HSY) $50.05 -1.63%
Dow Jones I.A - Risers
Microsoft Corp. (MSFT) $26.58 +4.26%
American Express Inc. (AXP) $41.57 +4.21%
Boeing Co. (BA) $67.48 +4.10%
Caterpillar Inc. (CAT) $63.46 +4.03%
Walt Disney Co. (DIS) $34.99 +3.12%
Dow Jones I.A - Fallers |
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| | Wednesday newspaper round-up: | | Halfords, Ted Baker, Nationwide Accident From his desk in the Oval Office, President Obama demanded last night that BP hand over control of compensation payments for the Gulf Coast oil spill and challenged America to break a century of addiction to fossil fuels to ensure that such a disaster never happens again.
As official estimates of the oil being spilled rose to 60,000 barrels a day - twelve times the original figure - Mr Obama vowed that BP would pay for its "recklessness" and promised that 90% of the oil pouring from the ruptured well would be captured "in the coming weeks", the Times reports.
BP's credibility as an international oil firm was under further threat last night after the Brazilian Government raised doubts over its $7 billion deal to buy deepwater assets in Brazil. The Times has learnt that the Brazilian oil industry regulator is reviewing the BP deal with Devon Energy announced on March 11 — six weeks before the Deepwater Horizon blast that killed 11 people and sent hundreds of thousands of barrels of oil spewing into the Gulf of Mexico. Top Brazilian officials are being sent to Texas to question BP about the catastrophe.
George Osborne will use the chancellor's annual Mansion House speech to warn big banks that they will have to pay for the damage they inflicted on the British economy and could be broken up. Mr Osborne will confirm his plans to introduce a bank levy and faces pressure from his Liberal Democrat partners in the coalition to raise a substantial amount from the tax in next week's Budget The chancellor has also approached Sir John Vickers, former head of the Office of Fair Trading, to lead a review into whether Britain's biggest banks should be forced to split their retail and investment banking arms, the FT reports.
House buyers could be refused mortgages under new Bank of England powers to be unveiled by George Osborne.The Chancellor will announce that he will hand a host of new controls to the Bank to prevent another financial crisis. The powers will mean that, for the first time in the modern era, the Bank could impose restrictions on the amount banks can lend, reports the Telegraph.
Taxpayers should poise themselves for as much as an extra £10bn of tax increases in next week's emergency Budget as the coalition Government takes drastic action to bring the public finances back into order, economists said. This week's Office for Budget Responsibility (OBR) report has paved the way for £20bn of extra fiscal tightening next Tuesday, half of which may take the form of tax increases, according to Morgan Stanley, the Telegraph reports.
Spain has upped the ante in a high-stakes poker game with Germany, pushing for the release of EU stress test results for major banks in a move that risks precipitiating a dramatic escalation of Europe's financial crisis. "We're not afraid of transparency," said the Spanish Banking Association (AEB), saying the full truth would put an end to rumours battering Spain's instutitions, the Telegraph reports.
The FT adds that Spanish banks are borrowing record amounts from the European Central Bank as the country's financial institutions struggle to gain funding from the international capital markets. Spanish banks borrowed €85.6bn ($105.7bn) from the ECB last month. This was double the amount lent to them before the collapse of Lehman Brothers in September 2008 and 16.5% of net eurozone loans offered by the central bank.
A sell-off of Greek government debt is threatened after Barclays Capital and Citigroup removed the country's sovereign bonds from their indices. The banks' move followed Moody's decision to relegate Greek credit to junk status on Monday. Moody's downgrade of Greek debt to below investment grade will force some index-tracking investors to sell it and may force the European Central Bank to step in, purchasing Greek bonds, in order to avoid a sharp sell-off, the Times reports.
Greece's debt-ridden economy has received unexpected endorsement from China as the two countries announced multibillion euro accords to boost cooperation in fields as diverse as shipping, tourism and telecommunications, reports the Guardian.
Queues outside cinemas to see Takers, a new film starring Matt Dillon, will attract more than the usual amount of interest on Wall Street and in Washington when it opens on August 20. The movie is expected to be the first to test the market for box-office futures, after the Commodity Futures Trading Commission approved the new market this week, despite protests from lawmakers and film studios, the Times reports.
Research in Motion (RIM), which makes BlackBerry smartphones, is thought to be trialling a portable device to compete with Apple's iPad, possibly one of a series of tablet computers coming to market this year. Talk has emerged in the US that the Canadian company is in the early stages of developing a tablet-style device that would use its BlackBerry smartphones to connect to the internet, the Independent reports.
The Libyan government is backing a new London hedge fund with hundreds of millions of dollars, as the Arab state seeks to diversify its economy away from oil and train a generation of investment professionals in the ways of the financial markets. FM Capital Partners has been hiring staff at its offices in Knightsbridge, has applied for registration with the Financial Services Authority and plans to launch later in the summer, the Independent reports.
The fund manager Jupiter is set to sell shares in its initial public offering (IPO) towards the bottom of its guidance, showing that investors are still cautious amid weak markets, a source close to the deal said. Jupiter's offer to sell 122m new shares and the sale of up to 59m sold by the current owners was covered at 160p to 170p per share. The new guidance values the company at up to £748m. The offer began on 2 June with an original price range set at 150p to 210p, the Independent reports. | | | | ADVFN Services |
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