August 14, 2012 Financial Market Summary

Macroeconomic Snapshot

The Royal Institution of Chartered Surveyors (RICS) reported that the house price balance index in the UK fell to a reading of -24.0 in July, compared to a reading of -22.0 posted in June.

Wholesale price inflation in Germany rose more-than-expected to 2.0% in July, from 1.1% recorded in June.

The current account deficit in France widened to €4.9 billion in June, from a revised deficit of €4.0 billion recorded in May.

On a seasonally adjusted monthly basis, the tertiary industry index in Japan rose 0.1% in June, following a 0.7% rise reported in May.

The minutes of the Bank of Japan’s (BoJ) latest policy meeting revealed that a few board members are of the view that the central bank should not rule out any options in advance and stand ready to act, if substantial risks emerge from the European debt crisis.

Financial Market Snapshot

At 0500 BST today, DJIA futures are trading 10.0 points higher.

Nikkei 225 index is 0.5% higher at 8,931.2.

At 0500 BST today, FTSE 100 futures are trading 6.0 points higher.

At 0500 BST today, German DAX Xetra 30 futures are trading 8.6 points higher, while French CAC-40 futures are trading 4.3 points higher.

In Asia, crude oil for September delivery is trading 0.1% or $0.09 higher at $92.82 per arrel.

At 0400 BST today, the GBP is trading 0.1% higher against the USD at $1.5689, 0.1% lower against the EUR at €1.2708, and 0.2% higher against the JPY at ¥123.06.

US Market Snapshot

At 0500 BST today, DJIA futures are trading 10.0 points higher.

Yesterday, DJIA edged down 0.3% to close at 13,169.4. NASDAQ inched 0.1% higher at 3,022.5. S&P 500 ticked down 0.1% to end at 1,404.1.

US markets closed mostly lower yesterday, as disappointing Japanese second quarter economic growth data dented market sentiment, compounding worries over a global slowdown.

Bank of America lost 0.3%, as Swiss private bank Julius Baer mulled to acquire Merrill Lynch international wealth-management businesses. JC Penney slipped 3.1%, after a broker cut its rating on the stock to “Neutral” from “Overweight”.

First Solar slid 4.4%, after its German-peer, Solarworld, swung to a second-quarter loss and reduced its outlook.

However, Google gained 2.8%, as it unveiled its lay-off plans and mulled to cut a fifth of Motorola Mobility's work force.

In after-hours trading, Groupon plunged 19.7%, as it forecasted third quarter revenue below market estimates. Monster Beverage gained 1.8%, as it boosted its share repurchase plan by $250 million.

Asian Market Snapshot

Asian markets are trading higher this morning, after Bank of Japan minutes showed policy makers did not rule out steps to boost the economy and ahead of the release of US retail sales data, which is expected to show a rebound in July.

In Japan, online gaming company Gree climbed, after peer DeNA posted robust quarterly revenue. Keisei Electric Railway gained after Nomura raised its target price.

In Hong-Kong, Aluminum Corp. of China, China Coal Energy and China Resources Power Holdings paced gains.

In South Korea, Daewoo Engineering & Construction is trading higher after the company bagged a contract worth $124 million to construct government buildings in Algeria.

Nikkei 225 index is 0.5% higher at 8,931.2. Hang Seng index is trading 0.2% higher at 20,122.6. Kospi index is trading 0.7% lower at 1,945.3.

UK Market Snapshot

At 0500 BST today, FTSE 100 futures are trading 6.0 points higher.

Pfizer has agreed to pay about $250 million to acquire over-the-counter global rights of drugmaker AstraZeneca’s heartburn drug Nexium. Pfizer would also pay milestone and royalty payments to the company based on product launches and sales. As a consequence the company has raised its core EPS target for 2012 to the range $6.00 to $6.30.

Royal Dutch Shell reported a fire at its Martinez refinery on Pacheco Boulevard, which was later extinguished but resulted in the emissions of sulfur dioxide. The fire broke out in the light oil processing area, and was extinguished within 10 minutes.

European Market Snapshot

At 0500 BST today, German DAX Xetra 30 futures are trading 8.6 points higher, while French CAC-40 futures are trading 4.3 points higher.

Gagfah is seeking bids for 38,000 apartments in Dresden. Germany’s second largest property company aims to sell the property for at least their book value of €1.8 billion.

Societe Internationale de Plantations d'Heveas reported a 9.4% rise in first-half sales. Revenue for the period stood at €183.2 million.

Commodities

In Asia, crude oil for September delivery is trading 0.1% or $0.09 higher at $92.82 per barrel.

Yesterday, crude oil for September delivery fell 0.2% or $0.14 to $92.73 per barrel, tracking a decline in US equity markets and as weaker than estimated Japan’s GDP data raised worries over demand outlook.

However, earlier in the session, oil prices had advanced on news that Israel had indicated a rising possibility of military intervention in Iran, fuelling concerns over supply disruption from the Middle East region.

Gold for immediate delivery is trading 0.1% higher today, at $1,612.55 per ounce.

Gold for December delivery settled down 0.6% or $10.20 at $1,612.60 per ounce yesterday, tracking losses in other commodity prices and amid fading hopes for additional stimulus by global central banks.

Yesterday, copper 3-month futures rose marginally to close at $7,445.00 /MT. Aluminium 3-month futures gained 0.3% or $5.0, to close at $1,770.00 /MT.

Currencies

At 0400 BST today, the GBP is trading 0.1% higher against the USD at $1.5689, 0.1% lower against the EUR at €1.2708, and 0.2% higher against the JPY at ¥123.06. Earlier in the session, reports indicated that UK house prices fell further in July and UK business sentiment reached its lowest level this year in July.

The EUR is trading 0.2% higher against the USD at $1.2346. The EUR is trading 0.3% higher against the JPY at ¥96.84. Investors await eurozone second-quarter GDP data due later in the day which is expected to show a contraction and is likely to increase pressure on the ECB to take further monetary easing steps to boost economic growth.

Yesterday, the GBP ended lower against the EUR, after Bank of England Governor Mervyn King stated that the eurozone debt crisis is still weighing on Britain’s economy and ahead of a report this week which is expected to show UK consumer price inflation slowed in July.

The EUR ended higher against the USD, following successful debt auction in Italy and after a report revealed that German wholesale price inflation accelerated more-than-expected in July. The EUR also rose, following better-than-estimated Greece’s GDP data for the second-quarter.

The JPY ended lower against the USD, after data showed Japan’s GDP grew less-than-expected in the second quarter of 2012, boosting speculation that the Bank of Japan might renew stimulus policies to boost its economy.

Source: www.etxcapital.com