Scalpuman
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 |  Subject: ADVFN Morning Euro Markets Bulletin- April 8th 2010  Thu Apr 08, 2010 8:46 am | |
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Wall St pulls London lower
Market Movers
FTSE 100 5,716.73 -0.79%
techMARK 1,657.76 -0.42%
FTSE 250 10,389.04 -0.30%
London is in a downbeat mood in early dealing following the drop on Wall Street overnight despite better than expected sales figures from the bellwether of the High Street, Marks & Spencer.
M&S enjoyed a strong start to the year with food and non-food like-for-like sales beating expectations in the first quarter. Total sales in the 13 weeks to March 27 were up by 6.2% from the same period the previous year and by 5.1% on a like-for-like basis.
British Airways and Spanish airline Iberia have formally signed a merger agreement that will result in the creation of one of the world’s largest airline groups by the end of the year, BA said, while no-frills airline Easyjet said it carried 13.5% more passengers in March compared with the same month in 2009. Along with BA, only Severn Trent and LSE are in the blue at present.
Vedanta Resources saw a significant uplift in annual production at all its businesses in fiscal 2009/10, with record quarterly production of iron ore and aluminium during the first three months of 2010.
Oil and gas firm BG Group and its joint venture partners have successfully completed drilling a Tupi field appraisal well in the BM-S-11 licence area, Santos Basin pre-salt, offshore Brazil. The appraisal well confirmed the presence of hydrocarbons on the outer limits of the Tupi field.
Plastics group Victrex said the strong start to the year continued into February and March, leading to a 52% rise in sales volumes in the six months to March 31 compared with the same period the previous year.
Asia-focused independent oil and gas exploration and production company Salamander Energy has plugged and abandoned Phu Kheng-1 well in block L27/43, Khorat Basin, onshore north-east Thailand. Salamander owns a 27.2% interest in block L27/43.
British Columbia based aggregates company Pan Pacific has reported strong demand for its products from its Quadling quarry after the new by-pass road for hauling aggregates from the site was opened on 26 March. |
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| | UK Event Calendar for today | INTERIMS
ClearStream Technologies Group, Matchtech
INTERIM DIVIDEND PAYMENT DATE
JPMorgan Mid Cap Inv Trust, Oxford Instruments
QUARTERLY PAYMENT DATE
GlaxoSmithKline
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Credit (US) (20:00)
Continuing Claims (US) (12:30)
ECB Interest Rate (EU) (11:45)
Industrial Production (GER) (11:00)
Initial Jobless Claims (US) (12:30)
Retail Sales (EU) (09:00)
Unemployment Rate (AUS) (00:00)
FINALS
International Public Partnerships Ltd., Rotala
ANNUAL REPORT
Balfour Beatty, Yule Catto
IMSS
Hays, Misys, Robert Walters
AGMS
Low & Bonar, Matrix European Real Estate Investment Trust Ltd., Scottish American Inv Company
TRADING ANNOUNCEMENTS
Balfour Beatty, easyJet, Marks & Spencer Group, Victrex
UK ECONOMIC ANNOUNCEMENTS
BoE Interest Rate Decision (11:00)
Industrial Production (08:30)
Manufacturing Production (08:30)
FINAL DIVIDEND PAYMENT DATE
Thomas Cook Group
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| | European, Currencies Market |
Greece continues to take centre stage as Euro struggles
The Greece story continues to weigh heavily on the Euro which has continued to sink under the weight of the problems in Athens, as well as weak economic data after Euro zone final Q4 GDP was revised down from growth of 0.1% to show stagnation.
Greece CDS spreads continue to break higher, hitting levels of well over 400 basis points, above the levels of Iceland, as the market continues to fret about the possibility of a debt default.
Today’s announcements by the Bank of England and the European Central Bank are likely to be no more than footnotes, with monetary policies likely to be left unchanged, though it will be interesting to note any comments Trichet may have on the ongoing Greece situation.
Risk appetite was also dealt a blow after US consumer credit slumped much more than the market had been expecting, and Fed Governor Bernanke continued to warn about the pressures on the recovery in the US, warning about continued foreclosures and unemployment.
Safe haven buying of Gold against the Euro has sent it to all-time highs in Euro terms moving above €860 an ounce for the first time ever.
Sterling had a rather mixed last 24 hours, continuing to gain against the Euro but remaining relatively stable against the dollar, after purchasing manager data for the services sector came in slightly under expectations at 56.5 against an expectation of 58.
Today’s central bank announcement is unlikely to change that but the market may well look at the release of today’s February manufacturing and industrial production figures for a continued improvement. Expectations are for an increase of around 0.5% for both on a monthly basis.
The pound also received a boost from the OECD yesterday who has forecast that UK growth for 2010 will outstrip many of its peers in Europe, with the exception of France. They have forecast annualised growth for the first quarter of 2%, well above the Chancellor of the Exchequer’s own forecasts of between 1% and 1.5% for 2010 which does seem a touch optimistic.
EURUSD – the Euro has continued to be weighed down by negative sentiment as a result of the ongoing problems in Greece. The key level on the topside remains around the resistance level at 1.3530/40 from the highs at 1.5145. While below this level the risk remains for further weakness, while a break above could well target the March highs around 1.3800.
The immediate risk is for a break below the recent lows of 1.3270 and further declines towards 1.3000.
GBPUSD – unlike the Euro the pound seems to be on slightly firmer ground but we do still seem to be trading in a broad range between the 1.5370/80 highs in March and the intraday support at 1.5120 as well as the broader lows below 1.5000. The 50 day moving average at 1.5345 should also act as some resistance as well. A break above these highs could act as a catalyst for further gains towards the 8th February lows at 1.5530. While below 1.5370/80 the broader 1.4800/1.5300 range remains intact with support around 1.5120.
EURGBP – The euro continues to remain under pressure after breaking the 200 day moving average at 0.8875 a few days ago. This should continue to cap the Euro and push the cross lower, and the euro now looks as if it could well test towards the February lows at 0.8660 initially while the January lows at 0.8602 in the longer term.
USDJPY – the dollar continues to struggle to maintain upward momentum, and as such we could see a deeper decline towards 92.80, and even 92.30 which would be a 38.2% pullback of the up move from the lows at 88.10 to the peaks this week at 94.78.
The 7 month high this week at 94.78 as well as 95.10, remain key resistance levels and are the barriers to further gains. |
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| | US Market |
Rate rise fears unsettle markets
US equities shifted into reverse gear as concerns about Greek’s debt problems continued to grow, while sentiment was also soured by US consumer credit data, which showed US households preferred to pay down debt in February rather than give their credit cards a work-out.
Greek banks have been asking the embattled country’s central bank for more financial support according to the finance minister George Papaconstantinou, demonstrating the gravity of Greece’s economic worries.
On the US economic front, total consumer credit outstanding fell by $11.51bn in $2,450bn in February, after rising $10.64bn in January. The news did not sit well with shareholders of American Express.
Investors were also spooked by a speech by Federal Reserve Chairman Ben Bernanke which conspicuously omitted any mention of holding interest rates unchanged for an extended period, though he did opine that the US economy still faces significant headwinds.
Kansas City Federal Reserve President Thomas Hoenig also fuelled fears of an end to low interest rates by suggesting that keeping interest rates too low for an extended period could promote risky behaviour.
On the bright side, the Business Roundtable’s economic outlook index – a measure of company bosses’ optimism – rose to 88.9 in the first quarter of 2009, the highest level since the second quarter of 2006.
The Dow-Jones 30-share index dived 72 points to 10,897 while the broader based S&P 500 fell 7 points to 1,182. The tech-heavy NASDAQ Composite index held up somewhat better, easing 5 points to 2,431.
General Motors posted a $4.3bn net loss for the three months to December. That included a $2.6bn settlement loss related to the UAW retiree medical plan and a $1.3bn foreign currency re-measurement loss.
“As the results for 2009 show there is still significant work to be done. However, I continue to believe we have a chance of achieving profitability in 2010,” said vice-chairman Chris Liddell.
Houston-based EOG Resources said that its oil and gas output will rise by 19% in 2011 thanks to new on-shore discoveries.
Discount retailer Family Dollar Stores was boosted by better than expected second quarter earnings.
Massey Energy, the owner of the Upper Big Branch coal mine in West Virginia which was hit by an explosion yesterday, continued to decline. In addition to 25 deaths, four miners are still missing.
Bid speculation boosted the share price of Palm, once the king of the personal digital assistant (PDA) market but now an also-ran in the smartphone market. Market rumours suggested that Lenovo, the Chinese technology company best known for buying IBM’s laptop business, is interested in acquiring the company.
Merger rumours were also swirling around airlines UAL and US Airways Group, with the New York Times reporting that the two are considering teaming up.
JA Solar Holdings provided a ray of sunshine to the solar cell sector, including First Solar, when it said its expects first quarter shipments to be in excess of 265 megawatts, topping the upper end of its guidance range of 215 to 225 megawatts.
S&P 500 - Risers
American International Group Inc. (AIG) $39.69 +10.53%
Eog Resources Inc. (EOG) $103.74 +6.53%
Forest Labs Class A (FRX) $32.46 +6.50%
First Solar Inc. (FSLR) $126.78 +5.19%
International Paper (IP) $27.01 +4.25%
S&P 500 - Fallers
Massey Energy Co (MEE) $45.22 -6.67%
D R Horton Inc. (DHI) $11.93 -4.71%
Prologis Sbi (PLD) $13.65 -4.34%
Simon Property Group Inc. (SPG) $84.53 -3.63%
Tesoro Corp. (TSO) $13.30 -3.62%
Dow Jones I.A - Risers
Bank Of America Corp. (BAC) $18.61 +0.65%
Pfizer Inc. (PFE) $17.06 +0.59%
Dow Jones I.A - Fallers
Verizon Communications Inc. (VZ) $30.24 -3.08%
AT&T Inc. (T) $25.66 -2.47%
Alcoa Inc. (AA) $14.74 -1.93%
American Express Inc. (AXP) $42.37 -1.74%
Nasdaq 100 - Risers
Fastenal Company (FAST) $52.01 +3.85%
Staples Inc. (SPLS) $24.40 +1.62%
Starbucks Corp. (SBUX) $24.93 +1.34%
Apollo Group Inc. (APOL) $64.59 +1.30%
Nasdaq 100 - Fallers
Dish Network Corp. (DISH) $21.19 -3.74%
Intuitive Surgical Inc. (ISRG) $333.37 -2.89%
Virgin Media Inc. (VMED) $17.32 -2.81%
Hologic Inc. (HOLX) $17.56 -2.61% |
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| | Thursday paper round-up: |
Reckitt Benckiser, Citigroup, AA
Britain’s corporate pay league reached new heights yesterday when it was disclosed that Bart Becht earned a £93m pay packet as chief executive of Reckitt Benckiser last year.
The bumper payout came only days after the CBI Director-General said that executives risked being viewed as aliens from a different galaxy because of their enormous pay. Richard Lambert made his remarks after the disclosure that Frank Chapman had received a £28 million package as BG Group chief executive, while Irene Rosenfeld of Kraft saw her pay rise by 41 per cent to $26.3 million after the Cadbury takeover, the Times reports.
Britain will need "drastic" austerity measures to prevent public debt exploding out of control, the Bank for International Settlements (BIS), has declared. Interest payments on the UK's public debt will double from 5pc of GDP to 10pc within a decade under the bank's "baseline scenario" before spiralling upwards to 27pc by 2040 – by far the highest among the OECD club of developed countries. Greece fares better, while Britain's interest burden is far worse than Italy's, the Telegraph reports.
A former Citigroup manager warned risk managers at the troubled bank as early as 2006 that his division was selling billions of dollars worth of rotten loans to investors. At the height of America’s property boom Citigroup was buying about $50 billion of mortgages a year, which it sold on to investors with a guarantee that the mortgages would not default. Richard Bowen, a former underwriter at CitiMortgage, told the Financial Crisis Inquiry Commission yesterday that in 2006 the bank started to relax its rules on the type of mortgage that it was willing to buy, the Times reports.
Seaprately, Citigroup’s disastrous foray into complex securities before the financial crisis was partly based on the recommendation of outside consultants hired to advise the bank’s leaders, a former senior manager revealed. In testimony on Wednesday to an inquiry into the turmoil, Thomas Maheras, a former co-head of Citi’s investment bank, lifted the lid on a move that led to more than $50bn in losses and forced the US government to bail out the company, the FT reports.
Meanwhile, Alan Greenspan was accused of failing to prevent the financial crisis as he attempted to defend his leadership of the Federal Reserve and set out new rules to stop it from happening again. Mr Greenspan, who chaired America's central bank from 1987-2006, was on Wednesday lambasted for failing to implement capital rules that would have stopped banks' from over-stretching themselves, the Telegraph reports.
Guy Hands, the billionaire tax exile, launched an attack on the Governments handling of the economy yesterday, warning that the UK could end up as “one of the weakest states in Europe”. Mr Hands, who runs the private equity firm Terra Firma, quit Britain for the tax haven of Guernsey last year, saying at the time that his move was partly in protest at the Government’s 50% tax rate on high-earners, the Times reports.
The majority of the flagship reforms envisaged in the government’s much-vaunted Digital Britain initiative to “reboot” the British economy have been abandoned as ministers turn their attention to fighting the general election. The government was preparing on Wednesday night to ditch proposals to fund regional television news in its digital economy bill, which was supposed to implement much of the initiative, the FT reports.
AA patrolmen have voted to stage the first strike in the vehicle breakdown recovery service’s 105-year history, in protest at the company’s plans to restructure its final salary pension scheme. The Independent Democratic Union said 57 per cent of the ballots received from 87 per cent of its 2,400 AA members by the deadline were in favour of striking. It said a decision about whether to strike would depend on the company’s response, the FT reports.
The number of cars on Britain's roads has seen the first peacetime decline since records began in 1904, according to figures published yesterday. Although the last decade has seen a slight flattening of the growth curve, the UK's total car fleet – or "parc" – has registered annual growth continuously for the 64 years since the end of the Second World War. But that all changed in 2009. The UK parc came in at 31,035,791 last year, a 0.7% fall compared with 2008. the Independent reports.
Rupert Murdoch launched a renewed attack on Google, calling on rival newspaper publishers to "stand up" to the internet search giant and block it from showing their content online for free. The statement is the latest salvo in a long-running battle between Mr Murdoch's News Corporation and the California-based technology group, the Independent reports. |
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