U.K. Stocks Advance for Second Day, Led by Wolseley and Ashtead

By Alexis Xydias

Dec. 9 (Bloomberg) -- The U.K.’s FTSE 100 Index rose for a second day, led by companies with most sales in the U.S., on expectations president-elect Barack Obama will kick-start economic growth.

Wolseley Plc, the world’s biggest distributor of plumbing gear, and Ashtead Group Plc, the second-largest equipment-rental company in the U.S., climbed more than 9 percent.

The FTSE 100 Index rose 57.19, or 1.3 percent, to 4,357.25 as of 11:23 a.m. in London, after earlier falling as much as 1.6 percent. The FTSE All-Share Index added 1.5 percent and Ireland’s ISEQ Index gained 2.1 percent.

“People are still riding this wave of speculating what Obama plans to do,” said David Jones, chief market strategist at IG Index in London. “There is hope he will be able to put a cap on how bad things can get.”

The FTSE 100 yesterday rose 6.2 percent, the most in two weeks, as investors speculated Obama’s largest infrastructure- spending package since the 1950s will limit the global economic slowdown. The stock index is trading at a monthly average of 7.77 times its members’ reported earnings, according to Bloomberg data. That is the lowest since at least 1993.

Wolseley, which gets half its sales from North America, added 9.7 percent to 380.75. Ashtead increased 14 percent, to 35.25. The company plans to cut jobs and reduce operations ahead of an expected drop in demand next year.

The following stocks also rose or fell in U.K. markets. Stock symbols are in parenthesis.

Ferrexpo Plc (FXPO LN) declined 3.25 pence, or 8.7 percent, to 34. Deutsche Bank AG downgraded shares of the producer of iron ore to “sell” from “hold.”

Imperial Energy Plc (IEC LN) climbed 100 pence, or 12 percent, to 950. Oil & Natural Gas Corp., India’s biggest exploration company, received approval from a cabinet committee to make a formal bid for Imperial Energy, a government official familiar with the offer said.

Micro Focus International Plc (MCRO LN) increased 4 pence, or 1.5 percent, to 264. The U.K. business software maker whose clients include Tesco Plc and Boeing Co. said first-half profit increased 39 percent on acquisitions and software sales.

PZ Cussons Plc (PZC LN) added 9.25 pence, or 6.5 percent, to 151. The U.K. maker of Imperial Leather soap said first-half sales and profitability met managers’ forecasts and rose from a year earlier.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

Read more...

Most Stocks in Europe, Asian Shares Advance; U.S. Futures Drop

By Sarah Jones

Dec. 9 (Bloomberg) -- Most stocks in Europe and Asian shares rose, extending a global rally, as optimism that stimulus plans will boost the economy lifted retailers and automakers, while German investor confidence improved. U.S. index futures fell.

PPR SA, owner of the Gucci luxury-goods brand, and Daimler AG, the world’s second-largest maker of luxury cars, jumped more than 5 percent. China Cosco Holdings Co., the biggest operator of iron-ore and coal ships, surged 12 percent in Hong Kong after bulk-shipping rates climbed for the first time in 14 days.

Europe’s Dow Jones Stoxx 600 Index added 0.1 percent to 202.77 at 1:53 p.m. in London as 12 of 19 industry groups advanced. The MSCI Asia Pacific Index increased 0.8 percent. Standard & Poor’s 500 Index futures expiring this month declined 0.5 percent.

“The downside risk on equity markets is now quite low and the technical rally we have had over the past few days could extend into January,” said Bob Parker, vice chairman of Credit Suisse Asset Management in London, which oversees about $600 billion. “Very low interest rates and expectations of lower interest rates are driving investors, who are cash rich, back into equities,” he told Bloomberg Television.

The MSCI World Index has climbed 16 percent since Nov. 20 as governments from the U.S. to India announced stimulus plans to buoy the global economy and prevent earnings from tumbling. President-elect Barack Obama is planning the biggest public-works spending package since the 1950s. The S&P 500’s 3.8 percent rally yesterday extended a rebound to 21 percent from last month, marking a technical end to the 13-month bear market.

German Investor Confidence

Germany’s ZEW Center for European Economic Research said its index of investor and analyst expectations for Europe’s largest economy rose to minus 45.2 this month from minus 53.5 in November. Economists in a Bloomberg News survey expected a drop to minus 57.

Technology shares led earlier declines in Europe after forecasts from Texas Instruments Inc. and National Semiconductor Corp. disappointed investors. Q-Cells SE sank 23 percent as the world’s largest maker of solar cells reduced its profit forecasts for this year and 2009.

The Stoxx 600 Index has slumped 44 percent this year as more than $31 trillion has been erased from the value of global equities and credit-related losses and writedowns at banks and insurers approach $1 trillion.

PPR led retail shares higher today, rallying 9 percent to 39.97 euros. Home Retail Group Plc, owner of Britain’s Argos stores, jumped 4.8 percent to 238.5 pence. Carrefour SA, Europe’s biggest retailer, added 3.2 percent to 29.89 euros.

Stock Options

LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, jumped 5.3 percent to 48.22 euros. Chairman Bernard Arnault purchased 1 million stock options in main shareholder Christian Dior SA. Arnault, the biggest investor in LVMH and Dior, bought the Dior options for 5.11 euros each on Nov. 28, according to a statement from France’s market regulator.

Daimler rose 5 percent to 25.83 euros, pacing gains among automakers. Renault SA, France’s second-largest carmaker, increased 2.6 percent to 18.33 euros. Fiat SpA, Italy’s biggest, climbed 4.2 percent to 5.59 euros.

In Asia, China Cosco surged 12 percent to HK$6.01. Nippon Yusen K.K. jumped 6 percent to 496 yen after saying it will reduce its fleet expansion plan.

The Baltic Dry Index, a measure of shipping costs for commodities, climbed 1.2 percent yesterday from a 22-year low.

Texas Instruments dropped 2.5 percent to $14.45 in early New York trading. Fourth-quarter profit will fall to as little as 10 cents a share, compared with a previous estimate of at least 30 cents. Sales will be $2.3 billion to $2.5 billion, down from a previous estimate of as much as $3.07 billion.

Earnings Estimates

National Semiconductor, maker of chips for the five largest mobile-phone makers, forecast third-quarter sales that trailed analysts’ estimates. Sony Corp. said it plans to eliminate 16,000 jobs in the largest reduction announced by a Japanese company since the credit crunch drove the world into a recession.

Analysts expect full-year earnings at companies in the Stoxx 600 to fall 13 percent this year, compared with 11 percent growth predicted in January, according to Bloomberg data. Profits in the S&P 500 may drop 9.5 percent on average in 2008.

Q-Cells sank 23 percent to 21.13 euros. The solar company said net income for 2008 will be 185 million euros ($237 million) as weakening demand caused customers to postpone deliveries. That’s down from an earlier prediction of 215 million euros. Sales will amount to 1.225 billion euros, lower than a previous forecast of 1.35 billion euros.

Renewable Energy Corp. ASA, the largest producer of polysilicon used in solar panels, tumbled 11 percent to 59.5 kroner.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Read more...

Uptick Rule May Fail to Lift Stocks, Curb Volatility

By Edgar Ortega and Jesse Westbrook

Dec. 9 (Bloomberg) -- Resurrecting the “uptick rule,” the 70-year-old restriction on short sellers, would probably fail to curb bets against equities or damp price swings, according to brokers that trade about 25 percent of U.S. stocks.

Members of Congress, T. Rowe Price Group Inc. and the head of NYSE Euronext blame the Securities and Exchange Commission’s 2007 decision to eliminate the regulation for contributing to the worst year for stocks since 1937. New York-based Morgan Stanley, Citigroup Inc. and Lehman Brothers Holdings Inc. blamed short sellers, who profit from declining stock prices, for spreading rumors that drove their shares to their lowest this decade.

Executives at UBS AG, Deutsche Bank AG and Knight Capital Group Inc. say bringing back the rule, which prevented traders from making bets against stocks when they were falling, is unlikely to reduce volatility. Ever since computers started trading millions of shares in seconds and exchanges began quoting stocks in penny increments in 2000, the regulation has become obsolete, they said.

“It was a good rule back when trading was manual, but now that trading is much more automated, I don’t see it as a viable solution,” said C. Thomas Richardson, global head of transaction services for New York-based brokerage Nyfix Inc.

The guideline barred traders at the New York Stock Exchange from driving down prices by shorting a stock unless its price had increased, or remained unchanged in the preceding trade.

Plunging Stocks

The Standard & Poor’s 500 Index tumbled 37 percent since July 6, 2007, when the SEC eliminated the rule, erasing about $5.7 trillion from the value of stocks in the gauge. Volatility, as measured by the average daily change in the index during the past 50 days, flared to a record 79 percent last week amid the worst financial crisis since the Great Depression.

Policymakers from Washington to London and Tokyo have boosted oversight of short selling, which involves the sale of borrowed shares in the hope of profiting by buying them back later for a lower price.

Five members of the House Financial Services Committee are sponsoring a bill that would force the SEC to reinstate the uptick rule. NYSE Euronext CEO Duncan Niederauer also wants it back, an opinion shared by 85 percent of NYSE-listed companies, according to an October survey commissioned by the exchange.

Reinstating the uptick rule will help restore investor confidence, wrote Charles Schwab, founder of San Francisco-based brokerage Charles Schwab Corp., in an editorial today in the Wall Street Journal.

‘Nouveau’ Shorts

“If they brought back the uptick rule, you would see some of the nouveau short sellers and the weaker players close their doors,” said Thomas Sowanick, chief investment officer of Princeton, New Jersey-based Clearbrook Financial LLC, which manages $20 billion and invests in hedge funds that short stocks.

SEC spokesman John Nester declined to comment.

When the uptick rule was first in force, stocks changed hands at minimum intervals of 12.5 cents. Now, they trade in tenths of a penny. Trading has accelerated to speeds more than 10 times faster than the blink of an eye, forcing Nasdaq OMX Group Inc. to start reporting orders last month in nanosecond intervals.

“A lot of views about how the markets work are circa 1960s, when things moved manually and more slowly,” said Ingrid Werner, a professor at Ohio State University in Columbus who was a visiting economist at the NYSE and Nasdaq.

More Competition

Regulators would have to grapple with increased competition among exchanges, and brokers may take months to comply with the rule. The uptick rule only applied to the NYSE, whose market share of trading of the companies it lists dropped to about 25 percent last month from 52 percent in June 2007.

“From an operational and technology perspective, it may be a much bigger undertaking than people may think,” said Leonard Amoruso, general counsel of Jersey City, New Jersey-based Knight Capital. “This is not just dusting off old software and dropping it back into your servers.”

Trading data show so-called bear raids that the rule was supposed to stop are infrequent. As stocks plunged in September, fewer than 8 percent of trades for companies in the S&P 500 Financials Index were done on consecutive downticks, according to data compiled by Deutsche Bank.

“There doesn’t seem to be an incredible downward momentum across the financial services industry that the uptick rule would have solved,” said Robert Flatley, global head of the Frankfurt- based bank’s Autobahn electronic stock-trading unit.

Downticks

When Citigroup plunged 26 percent on Nov. 20, the steepest drop on record for the New York-based bank, downticks represented 7.1 percent of trades, according to exchange data compiled by Bloomberg. On Oct. 9, as both Morgan Stanley and Merrill Lynch & Co. shares had record declines, trades on a downtick represented 16 percent and 11 percent of transactions, respectively.

“That suggests that the price is collapsing not so much because sellers are hitting progressively lower bids, but because there are effectively no bids,” said Frank Hathaway, chief economist at New York-based Nasdaq.

The SEC could consider alternatives, including a proposal developed by the stock exchanges in October that would ban short selling for a few days if a stock loses 20 percent. The SEC could also revisit a previously proposed variant of the uptick rule that required short sales to get executed at least 1 cent above the best bid at the time of the trade.

That might prove detrimental by inhibiting firms that buy and short stocks to exploit fleeting, tiny price swings, said William Sterling, Zurich-based UBS’s global head of institutional electronic trading.

“Those short-term traders can be providing important liquidity to the market in many cases,” said Sterling. “Inhibiting them seems like it could increase volatility.”

To contact the reporters on this story: Edgar Ortega in New York at ebarrales@bloomberg.net; Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.

Read more...

FedEx, Ford, Texas Instruments, US Airways: U.S. Equity Preview

By Eric Martin

Dec. 9 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 8 a.m. in New York, unless otherwise specified.

Standard & Poor’s 500 Index futures expiring in December added 0.1 percent to 905.4. Dow Jones Industrial Average futures lost 5 points, or 0.1 percent, to 8,870. Nasdaq-100 Index futures increased 1.5, or 0.1 percent, to 1,213.5.

Con-way Inc. (CNW US) fell 6.8 percent to $24.02. The second-largest U.S. trucking company slashed its 2008 earnings forecast to as much as 20 percent less than the average estimate from analysts and cut 1,450 jobs as freight volumes fell.

Danaher Corp. (DHR US) lost 78 cents to $51.18. The maker of Craftsman tools said fourth-quarter profit will be lower than previously forecast and the company will cut 1,700 jobs.

FedEx Corp. (FDX US) sank 9.4 percent to $67.40. The second- biggest U.S. package-shipping company lowered its fiscal 2009 earnings forecast to no more than $4.75 a share from as much as $5.25, blaming the “significantly weaker” economy.

United Parcel Service Inc. (UPS US) fell 5.8 percent to $55.24 in trading after the close of U.S. exchanges yesterday.

General Motors Corp. (GM US) dropped 2.2 percent to $4.82. Congressional Democrats sent President George W. Bush a draft proposal for a $15 billion, short-term rescue of U.S. automakers and said it will likely be voted on this week. Final details are yet to be worked out and White House officials said they don’t agree with all parts of the legislation.

Ford Motor Co. (F US), the second-biggest U.S.-based automaker, declined 7.4 percent to $3.13. The second-biggest U.S. automaker said it won’t seek a short-term bridge loan from the government because it doesn’t face a “near-term liquidity issue.”

National Semiconductor Corp. (NSM US) decreased 1.2 percent to $10.17. The maker of chips for the five largest mobile-phone makers forecast third-quarter sales that trailed analysts’ estimates as the U.S. recession damped demand for handsets.

Texas Instruments Inc. (TXN US) lost 3.5 percent to $14.30. The second-largest U.S. chipmaker predicted sales and profit that missed analysts’ estimates as the economic slump cut into demand for electronics.

US Airways Group Inc. (LCC US) gained 3.3 percent to $8.15. Airline industry losses in 2009 may shrink to half this year’s level as a decline in fuel costs more than makes up for a reduction in the number of people flying. Carriers may lose a total of $2.5 billion next year, compared with $5 billion in the current 12 months, the International Air Transport Association said.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

Read more...

U.S. Stock-Index Futures Drop; FedEx, Texas Instruments Retreat

By Daniela Silberstein and Whitney Kisling

Dec. 9 (Bloomberg) -- U.S. stock futures fell, indicating the market may halt a two-day advance, after companies from FedEx Corp. to Texas Instruments Inc. forecast earnings that disappointed investors as the recession crimps sales.

FedEx, the second-biggest U.S. package-shipping company, lost 10 percent after projecting profit below analysts’ estimates amid a “significantly weaker” economy. Texas Instruments, the second-largest U.S. chipmaker, and National Semiconductor Corp. slid on waning demand for mobile phones and electronics.

“You’re going to have to get used to this for the next three months, you’re going to see lowering of guidance,” said Robert Lutts, president and chief investment officer at Cabot Money Management, which oversees $400 million in Boston. “This is the real economy.”

Futures on the S&P 500 expiring in December lost 0.7 percent to 898.2 at 9:12 a.m. in New York. Dow Jones Industrial Average futures declined 64 points, or 0.7 percent, to 8,811 and Nasdaq- 100 Index futures slipped 0.8 percent to 1,202.5.

The S&P 500 yesterday extended its gain from an 11-year low last month to 21 percent, marking a technical end to the 13-month bear market, as President-elect Barack Obama pledged the biggest public-works spending package since the 1950s. The benchmark for U.S. equities is still down 38 percent in 2008 after the collapse of subprime mortgages curbed earnings.

European shares rose for a second day and Asian stocks climbed for a third, led by commodity producers and shipping lines, on expectations stimulus plans from the U.S. to India will buoy the global economy.

$1 Trillion

More than $31 trillion has been erased from the value of global equities this year, while debt losses and writedowns at the world’s largest lenders and insurers approach $1 trillion.

Stocks will climb in 2009 in the face of falling earnings and a slowdown in economic growth because of cheap valuations, according to strategists at Credit Suisse Group AG, Deutsche Bank AG and Merrill Lynch & Co. The S&P 500 may rise to 1,050 by the end of 2009 from yesterday’s close price of 909.7, a team of Credit Suisse strategists wrote in a note today. Goldman Sachs Group Inc. chief investment strategist David Kostin projected a 21 percent gain by the end of next year as the economy stabilizes.

Laszlo Birinyi, the investor who accurately predicted this year’s rout in financial shares, said the S&P 500 reached a bear market bottom two weeks ago and recommended buying the largest U.S. stocks.

‘I’d Be Hesitant’

“A bull market is forming, it’s just not going to be any outsized gains over the next three to six months,” he told Bloomberg Television yesterday. “The market is going to do better, but it won’t be up, up and away. With all the concerns and issues around the world, I’d be hesitant about being very, very aggressive.”

FedEx Corp. fell 10 percent to $66.75 after saying annual profit may be as much as one-third lower than analysts expected because of a “significantly weaker” economy.

Texas Instruments slid 2.2 percent to $14.49. Fourth-quarter profit will fall to as little as 10 cents a share, compared with a previous estimate of at least 30 cents, the company said. Sales will be $2.3 billion to $2.5 billion, down from a previous estimate of as much as $3.07 billion.

National Semiconductor, the producer of chips for the five largest mobile-phone makers, lost 1.2 percent to $10.17. Revenue this period will drop about 30 percent from the second quarter ended Nov. 23 as the recession reduced demand for handsets.

Con-Way, Danaher

Con-way Inc., the second-biggest U.S. trucker, reduced its full-year 2008 earnings forecast to as much as 20 percent less than analysts’ average estimate as freight demand fell to 2003 levels. The company also cut 1,450 jobs. The shares slid 6.8 percent to $24.02.

Danaher Corp. fell 1.6 percent to $51.15. The maker of Craftsman tools said fourth-quarter profit will be lower than previously forecast and the company will cut 1,700 jobs.

Fewer Americans probably signed contracts to buy previously owned homes in October as credit markets seized up, signaling the housing slump will extend into a fourth year, economists said before a report today.

The National Association of Realtors’ index of signed purchase agreements for homes dropped 3 percent in October, according to the median estimate of economists surveyed by Bloomberg News. The data is expected at 10 a.m. in Washington.

GM, Ford

General Motors Corp., the largest U.S. automaker whose shares surged 21 percent yesterday, dropped 1.8 percent to $4.84. Congressional Democrats sent President George W. Bush a draft proposal for a $15 billion, short-term aid for U.S. automakers. Some Senate Republicans yesterday expressed doubt about the plan, which is to be voted on in a special session this week.

Ford Motor Co., the second-biggest U.S.-based automaker, declined 3.8 percent to $3.25.

The U.S. government may end up holding stakes in GM, Ford and Chrysler LLC if Congress and the White House reach agreement.

Under the proposed rescue, details of which are still being discussed, the Treasury would get warrants for stock equivalent to 20 percent of any government loans. With GM seeking as much as $10 billion and valued at $3 billion, the government may become the biggest shareholder. The legislation isn’t clear on what kind of holding the government would take, leaving it the option of preferred, common, voting or non-voting shares.

To contact the reporters on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net.

Read more...

EUR/GBP Losing Upside Momentum, BoC in Focus Next

Market Overview | Written by ActionForex.com | Dec 09 08 11:24 GMT |

Sterling is mildly softer against Euro after worse than expected industrial production and manufacturing data released from UK. However, upside momentum is seen diminishing with bearish divergence condition in 4 hours MACD and RSI. Recent rally could be limited by 61.8% projection of 0.7808 to 0.8660 from 0.8234 at 0.8761 and bring correction. Break of 0.8578 will be the first indication that rise from 0.7693 has completed it's five wave sequent. In other words, a short term top is at least formed and deeper correction should then be seen to retest 0.8234 support. UK's manufacturing production dropped -1.4% mom, almost 3 times as much as economists expected and the worst contraction since 1980, with over 70% of the manufacturing categories plummeted. Year-over-year rate deteriorated to -4.9% versus expectation of -3.2%. Also taking account into utilities, mining and oil extraction, industrial production also fell more-than-expected by -1.7% and -5.2% on monthly and annual basis, respectively. Other data from US saw trade deficit of -7.75B pound, wider than consensus. DCLG house prices plunged 7.4% YoY(consensus: -6.5%, Sep: -5.1%) in October, indicating a sharper deterioration in the nation's house price than economists forecast. Released overnight, November BRC retail sales dropped 2.6%, consistent with market expectation. RICS house prices balance fell 76%, better than consensus of -83% and the revised 81%, in November. Though the pace of the decline has been slowed down, sales plunged to a record low as financial crisis and recession have depressed demand for property. From Eurozone, ZEW economic confidence posted improvement in Germany as well as the 15-nation Eurozone in December. In Germany, the index rose to -45.2 from a reading of -53.5 in November, better than consensus expectations of -55.0. In Eurozone, the gauge rose to -46.1 in December from -54 last month. The figure is also above consensus of -59. Germany, trade surplus surprisingly widened to 16.4B euro (consensus: 14B euro) in October from 13.7B euro in September. On monthly basis, decline in imports (-3.5%) was higher than that in exports (-0.5%). Current account surplus for the month rose to 15B euro, better than market expectation buy worse than revised 15.4B euro in September. Released earlier, Swiss unemployment rate rose from 2.6% to 2.7% in Nov as expected. Japan's finalized 3Q GDP came in at an annualized -1.8% (preliminary: -0.4%; 2Q: -0.5%), showing the nation is deeper in recession. On quarterly basis, 3Q GDP declined 0.5%, still more severe than initial figure of -0.2% and 2Q's -0.1%. Contraction in exports and capital spending is going to affect economic growth in the 4th quarter and early 2009. Leading indicators dropped to 85 as expected in Oct. Machine tools orders dropped by -62.6% in Nov. Australia November NAB business confidence dropped to -30 (October: -29), the lowest point since the gauge began in 1989. Moreover, the business conditions index fell 6 months to -17, a level back not seen since 1992. In US session, Bank of Canada is expected to reduce interest rate by 50 bp to 1.75%. On the central bank's statement on Oct 21, it's already stated further easing will be required to attain a 2% inflation target in medium term. Later in mid-November, the BoC Governor said that there's downside risk of the Monetary Policy Report released in the previous month. In November, over 70K jobs were lost and PMI fell to 40.2, the lowest level since the gauge began. Building permits sank 15.75% in October. Tight credit market, sliding house prices and surging unemployment rate made bigger rate cuts possible. Also to be released, US pending home sales in October should fall 3% after dropping 4.6% a month ago. Economic Indicators Update GMT Ccy Events Actual Consensus Previous Revised 23:50 JPY Japan GDP annualised Q3 F -1.80% -0.90% -0.40% 23:50 JPY Japan GDP Q/Q Q3 F -0.50% -0.20% -0.10% 23:50 JPY Japan GDP deflator Y/Y Q3 F -1.60% -1.60% -1.60% 0:01 GBP U.K. BRC retail sales Dec -2.60% -2.20% 0:01 GBP U.K. RICS house prices balance Dec -76.00% -83.00% -81.80% -81.00% 0:30 AUD Australia NAB business confidence Nov -30 N/A -29 5:00 JPY Japan Leading indicators Oct 85 85 89.4 89.2 6:00 JPY Japan Machine tools orders Y/Y Nov -62.20% N/A -40.00% 6:45 CHF Swiss Unemployment rate Nov 2.70% 2.70% 2.60% 7:00 EUR Germany Trade balance (euro) Oct 16.4B 14.0B 13.7B 7:00 EUR Germany Export M/M Oct -0.50% -0.90% 0.70% 7:00 EUR Germany Import M/M Oct -3.50% -2.70% 0.90% 7:00 EUR Germany Current account Oct 15.0B 14.0B 15.0B 15.4B 9:30 GBP U.K. Trade balance (gbp) Oct -7.75B -7.5B -7.48B -7.36B 9:30 GBP U.K. DCLG house prices Y/Y Oct -7.40% -6.50% -5.10% 9:30 GBP U.K. Industrial prod'n M/M Oct -1.70% -0.50% -0.20% -0.30% 9:30 GBP U.K. Industrial prod'n Y/Y Oct -5.20% -3.20% -2.20% -2.90% 9:30 GBP U.K. Manufacturing prod'n M/M Oct -1.40% -0.60% -0.80% -0.90% 9:30 GBP U.K. Manufacturing prod'n Y/Y Oct -4.90% -3.20% -2.30% -3.10% 10:00 EUR Eurozone ZEW Economic Sentiment Dec -46.1 -59 -54 10:00 EUR Germany ZEW Economic Sentiment Dec -45.2 -55 -53.5 14:00 CAD BOC rate decision Dec 1.75% 2.25% 15:00 USD U.S. Pending home sales Oct N/A 89.2M 15:00 USD U.S. Pending home sales M/M Oct -3.00% -4.60%

Read more...

Sterling Remains in Trouble

Daily Forex Fundamentals | Written by Investica | Dec 09 08 12:09 GMT |

The weak data will reinforce fears over the UK economy which is likely to prevent more than a limited corrective recovery for Sterling. Sterling strengthened to a high above 1.50 in early Europe on Monday while the UK currency also regained the 0.86 level against the Euro, but it was unable to sustain the advance as confidence remained extremely weak. Underlying confidence in the currency still remains extremely fragile on fears over underlying capital flows out of the UK. In this environment, Sterling weakened back to record lows beyond 0.87 against the Euro and also retreated to 1.48 against the dollar before rallying again as Wall Street rallied in choppy trading. The latest BRC retail sales data recorded a 2.6% like-for-like sales decline in the year to November, maintaining the weak trend, although this figure was marginally firmer than expected. Markets will be more concerned over evidence on December sales trends, especially following the tax reductions. Sterling was below 1.48 again on Tuesday as the economic data remained weak. Industrial production fell by a further 1.7% in October to give a 5.2% year-on-year decline. Investica http://www.investica.co.uk Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.

Read more...

Dollar and Yen Stronger

Daily Forex Fundamentals | Written by CurrencyThoughts | Dec 09 08 12:20 GMT |

Dollar/yen is unchanged. Both rose 2.0% against the Australian dollar, 1.4% against the kiwi, 1.0% against the Swissy and sterling, and 0.9% versus the euro. Among commodity currencies, the Canadian dollar (-0.2%) has been resilient ahead of the Bank of Canada rate announcement due at 14:00 GMT. The Nikkei firmed 0.8%, but stocks fell 0.8% in Australia, 1.9% in Hong Kong, and 2.6% in China. Other Asian equities rose: Singapore +5.8%, Indonesia +5.3%, and the Philippines +1.4%. In Europe, the Paris Cac, British Ftse, and German Dax are trading 2.3%, 1.6%, and 1.3% higher. Japan's auction of 5-year JGB's went as expected, and the 10-year yield is flat at 1.385%. Gilt yields are lower. Oil is steady at $43.64/barrel after a sharp rise on Monday. Gold firmed 0.3% to $771.60 per ounce. Japanese third-quarter GDP growth was revised sharply lower to -1.8% saar from -0.4% reported initially. GDP was 0.5% below the 3Q07 level. Nominal GDP fell 2.7% saar and by 2.1% from a year earlier. Investment slumped 7.8% saar. Net exports exerted a drag. Australian business conditions slid 6 points to -17, while business confidence dropped 10 points to -30. Both readings were the worst since the early 1990's. British industrial production slumped 1.7% m/m in October, three times greater than expected and by 5.2% from October 2007, the biggest on-year drop since April 1991. Factory output fell 1.4% from September. Mining production declined 7.3%. The British Retail Consortium reported a 2.6% on-year decline in same-store sales last month. The DCLG gauge of British housing prices fell 2.5% in October and by 7.4% in the year to October, down from a 5.1% on-year drop in September. U.K. mortgage approvals swooned 52% from a year ago. The RICs house price balance ticked up to -76.5 from -81.0 in October, but sales were at a record low. The French trade deficit of EUR 7.06 billion in October constituted a record gap despite a better energy balance and was 18.4% wider than in September. The deficit had been forecast to shrink mildly. The German current account surplus in October amounted to EUR 15.0 bn, similar to EUR 15.4 bn in September and EUR 15.2 bn in October 2007. The seasonally adjusted merchandise trade surplus rebounded 20.6% to EUR 15.8 bn, as exports slid 0.5% but imports fell much more (-3.5%). Real manufacturing turnover in Germany fell 3.3% in the year to October, depressed by a 4.5% drop in the foreign component. The British goods trade gap in October of Gbp 7.75 billion was wider than forecast and 5.3% greater than in September. The German ZEW expectations index of investor sentiment improved surprisingly to -45.1 in December from -53.5 in November, but don't count on a similar rise in the IFO index because the current conditions ZEW index worsened to -64.5 from -50.4. The ZEW indices for Euroland mirrored the German figures, with expectations improving to -46.1 from -54.0 and conditions weakening to -71.5 from -58.9. Swedish consumer prices fell 0.8% in November and rose by 2.5% on-year, down from 2.7% in the year to October. The Swiss jobless rate held steady in November at 2.7%. A Japanese paper reported that the government is considering another fiscal stimulus of as much as Y 20 trillion (over 3% of GDP). Japan's index of leading economic indicators fell 4.2 points in October. The coincident index dropped 2.5 points. Expressed as diffusion indices, they both had a score of zero. Real GDE in South Africa rose 1.0% saar last quarter. The current account deficit amounted to 7.9% of GDE. Bank of Korea minutes from an emergency meeting on October 27th revealed a 6-0 unanimous vote in favor of the 75-bp rate cut decided then. Another cut of 25 bps to 4.0% followed on November 7th, and the central bank is expected to ease yet again on December 11th. Concern about China is rising. An advisor to the central bank said exports in November may be lower than a year earlier, and that industrial output may have risen just 5% versus 8.2% y/y in October. The Governor of the Reserve Bank of Australia singled out China's slowdown, saying growth could be worse than 8%. U.S. lawmakers are still working on the details of a bailout of the automakers to avert bankruptcies at yearend. Larry Greenberg CurrencyThoughts

Read more...

FX Thoughts for the Day

Daily Forex Technicals | Written by Kshitij Consultancy Services | Dec 09 08 12:07 GMT |

USD-CHF @ 1.2142/46...Range of 1.1980-1.2325 R: 1.2233 / 1.2286 S: 1.2091-77 / 1.2049-28 / 1.1953-38 Swiss hasn't changed much since the morning report was written. It has traded in a thin range of 1.2088-1.2147 continuing to honour the Support at 21-day MA. However, in the last hour, it shot up to 1.2178 as we profited out at 1.2170 On the daily candles, the pair could possibly be ranged between 1.1980-1.2325. It has slipped into the narrower channel which it was trading in prior to the outbreak on 19th Nov. If it breaks this channel once again, the next band could be 1.1750-1.2550. To see the chart of Swiss, click on: http://www.kshitij.com/graphgallery/chfcandle.shtml#candle GBP-USD @ 1.4753/57...Trades lower R: 1.4808 / 1.4860-77 / 1.4992-99 S: 1.4757-52 / 1.4435 / 1.4351 Cable has been trading lower taking pressure from the 21-day MA. Having fallen from 1.5050 over the last few hours, it could possibly take a breather and rise up towards 1.4850. However, if it continues to dip, and fails to honour any Supports in between, we could see a fall towards 1.45 over the US session. In the broader picture, the range of 1.4487-1.5544 looks likely to be held going forward as it seems to be consolidating within this band over the past few weeks. AUD-USD @ 0.6542/47...Support in the region 0.6477-0.6501 R: 0.6562 / 0.6611 / 0.6855 S: 0.6513-492 / 0.6475-65 / 0.6291 Aussie is trading bound by the 13-SMA and 21-SMA on the 4-hourly chart and also taking Support from the braids of 8-, 13- and 21-day MA. Till it manages to stay above this Support range of 0.6477-501, the continuation of uptrend on the nearer term charts cannot be ruled out where it could possibly move up towards 0.67. However, if it does trade below this Support range, we could potentially see some bearish attitude being built up going forward. Kshitij Consultancy Service http://www.fxthoughts.com Legal disclaimer and risk disclosure These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

Read more...

Daily FX Report

Daily Forex Technicals | Written by Varengold Bank | Dec 09 08 10:37 GMT |

Good morning from wonderful Hamburg. We started the new Week with a huge rally on the stock markets around the World. In Germany the most important DAX Index rose 7.63 % and let us hopes that the worst time could be behind us. Now we have to find out how the FX markets responds. However, we wish you a prosperous trading. Markets review On Monday the USD fell against a basket of major currencies due to reaction of the largest U.S. public spending plan since 1951 which president-elect Barack Obama fancy. GBP rose against the USD to 1.4948 and the EUR/USD to 1.2955 in late New York trading. Overnight the EUR/USD fell on its low to 1.2857 on speculation the German economic sentiment data report could be dropped near a record low. For this reason as well the EUR/JPY fell on its low to 119.11 from 120.26 yesterday. The economic difficulties in Japan increase more and more. The final revision of Japan's thirdquarter Gross Domestic Product showed the annualized growth rate fell 1.8 % in the three months through September. That is twice worst than originally estimated by the government. The AUD/USD opened 2.14 % higher at 0.6673. During the day the currency pair dispenses its gains and trades currently at 0.6555 while Australia's second largest lender, Westpac Banking Corp, announced an A$2.5 bln share sale. New Zealand will cut the income tax to stimulate its domestic economy. Today the NDZ/USD trades in a range between 0.5465 and 0.5395. Technical analysis EUR/CHF Since October 27th the EUR/CHF traded upward and breaks yesterday the resistance at 1.5559. But the Momentum Indicator shows that the upward trend slow down and maybe the EUR/CHF could dispense gains. If the currency pair claims over its new support line at 1.5559 it could boost the bullish trend GBP/JPY The GBP/JPY has been trading in a bearish trend since September and breaks its support at 137.21 on December 5th. Yesterday we saw a small recovery during higher volume and the market closed above the support line. If the GBP/JPY can extend the gains, it could break the bearish trend. Pivot Points - Daily FX Support and Resistance Levels Daily Calendar & Key FX Events Varengold Bank IMPORTANT NOTIFICATION TO BE READ IN CONJUNCTION WITH THE CONTENTS OF THIS DOCUMENT This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational urposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.

Read more...

HK shares drop 1.9 pct after rally; shippers gain

* Blue chips retract after Monday's 8.7 pct rally

* Commodity counters notch up gains on higher oil

* China Cosco surges on global freight index rebound (Updates to close)

By Parvathy Ullatil

HONG KONG, Dec 9 (Reuters) - Hong Kong shares dropped 1.9 percent on Tuesday, with gains in oil and metal stocks offset by a pullback in other blue chips following the previous session's steep rally.

Worries about poor November economic data from the United States and China in the coming days accelerated the market's descent in the afternoon session.

Dodging the downdraft, China's largest shipping conglomerate China Cosco (1919.HK: Quote, Profile, Research, Stock Buzz) surged 11.8 percent on Tuesday after the Baltic Dry Index .BADI, which gauges changes in the prices of shipping commodities, broke its three-week losing streak to gain more than 1 percent overnight.

China Shipping Development (1138.HK: Quote, Profile, Research, Stock Buzz) followed suit with a 6.2 percent rally while port operator China Merchants Holdings (0144.HK: Quote, Profile, Research, Stock Buzz) jumped 5.1 percent.

The benchmark Hang Seng Index .HSI finished 291.65 points lower at 14,753.22 led by a 4.2 percent fall in heavyweight China Mobile (0941.HK: Quote, Profile, Research, Stock Buzz).

Earlier Tuesday the index rose more than 1 percent on expectations of bigger and bolder steps from governments to revive the global economy after U.S. President-elect Barrack Obama proposed a massive public works investment and U.S. automakers inched closer to securing a government handout.

"The outlook is pretty mixed at this point. While the sentiment has improved a bit, the market had gained too much too fast and we are bound to give up another 300-500 points in the near term," said Alex Wong, director with Ample Finance.

"China has yet to announce the big stimulus plan it is rumoured to be working on and investors are getting a bit impatient now, also there are worries about more industries lining up for bailouts if the U.S. carmakers are rescued."

Turnover dropped, with shares worth HK$56.9 billion changing hands compared with HK$63.9 billion on Monday.

The China Enterprises Index of top locally listed mainland Chinese firms .HSCE dropped 1.7 percent to 8,001.74.

COMMODITIES CUSHION FALL

Commodity-linked stocks led gainers on the main index as oil prices held steady on Tuesday after surging 7 percent overnight on an equity market rebound and signs of deepening cuts from top supplier Saudi Arabia.

Shares in offshore oil specialist CNOOC (0883.HK: Quote, Profile, Research, Stock Buzz) jumped 4.4 percent.

China Shenhua (1088.HK: Quote, Profile, Research, Stock Buzz), the world's most valuable coal miner, gained 4.1 percent while smaller rival China Coal Energy (1898.HK: Quote, Profile, Research, Stock Buzz) soared 8.9 percent.

Metal stocks also rose on resurgent commodity prices as stimulus measures from governments across the world are seen steadying plunging demand for raw materials.

"The global economic outlook is looking a little less dire with stock markets staging a slight rebound and all the support coming in from the big rescue measures planned by various governments," said Andrew To, sales director with Tai Fook Securities.

Gold miner Zijin Mining (2899.HK: Quote, Profile, Research, Stock Buzz) added 3 percent.

Jiangxi Copper (0358.HK: Quote, Profile, Research, Stock Buzz) climbed 4.4 percent while Angang Steel (0347.HK: Quote, Profile, Research, Stock Buzz) put on 5.9 percent.

(Reporting by Parvathy Ullatil; Editing by Ken Wills)

Read more...

FTSE retreats as oils fall, data weighs

* FTSE 100 falls 1.1 percent

* Investors profit take after sharp gains on Monday

* Miners, oils down on soft commodity prices

By Simon Falush

LONDON, Dec 9 (Reuters) - Britain's leading share index fell 1.1 percent early on Tuesday erasing some of the previous session's gains, as retail sales and housing data put a spotlight on problems dogging the UK economy.

By 0844 GMT, the FTSE 100 .FTSE was down 48.86 points at 4,253.20 after gaining 6.2 percent on Monday.

"We've had some profit taking, the volumes yesterday were pretty thin, so I'm not sure there was that much conviction in the rally," said Rob Griffiths, strategist at Cazenove.

British house sales fell to a record low and prices fell sharply, though at a slightly lower pace, the Royal Institution of Chartered Surveyors said. [ID:nLAG003139]

Banks, many of which are heavily exposed to the UK property market, retreated from sharp gains the previous session.

HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered fell between 1.4 and 4 percent, but Lloyds (LLOY.L: Quote, Profile, Research, Stock Buzz) gained 0.3 percent.

Meanwhile, the climate for Britain's embattled retailers continues to worsen.

Retail sales were falling at their sharpest pace in more than three years in November, the British Retail Consortium said [ID:nLAG003138], while profits are set to plunge at high street stores by 3.6 billion pounds ($5.3 billion) according to researchers Verdict. [ID:nL8299595]

However, analysts said that given the grim economic backdrop, investors are not too alarmed by this type of data.

"There's a lot of bad news priced in, and the market is taking theses numbers in its stride, it will take a substantial disappointment to dent stocks," Griffiths said.

Marks & Spencer (MKS.L: Quote, Profile, Research, Stock Buzz) fell 1.2 percent, Kingfisher (KGF.L: Quote, Profile, Research, Stock Buzz) slid 2.2 percent and Next (NXT.L: Quote, Profile, Research, Stock Buzz) lost 0.2 percent.

Miners retreated from sharp gains the previous session as metal prices fell, with copper falling 3.5 percent .

Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz) slid 2.6 percent while Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) eased 4.1 percent and Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz) lost 2 percent.

Energy companies also fell with the price of crude mired near $44 per barrel, more than $100 off its high set in July CLc1.

BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) and BG Group (BG.L: Quote, Profile, Research, Stock Buzz) fell between 0.6 and 2.7 percent.

Heavyweight mobile telephone operator Vodafone (VOD.L: Quote, Profile, Research, Stock Buzz) fell 2.2 percent. It said it would make a public offer for navigational and locating services firm Wayfinder Systems, valuing the Swedish company at $30 million.

Investors will look to UK manufacturing and trade data for October released at 0930 GMT for further guidance on the state of the UK economy and how sharp and deep the recession is likely to be. (Editing by Hans Peters)

Read more...

Nikkei rises 0.8 pct, econ hopes vie with strong yen

* Nikkei gains 0.8 pct, highest close in more than a week

* Machinery shares up on hopes of business from U.S. stimulus

* Yen's rise against dollar caps gains, profit-taking emerges

* Eyes on fate of Big Three, but slightly more hopeful (Adds stocks, details)

By Elaine Lies

TOKYO, Dec 9 (Reuters) - Japan's Nikkei average rose 0.8 percent on Tuesday, with the yen's advance digging away at gains made by machinery firms such as Komatsu (6301.T: Quote, Profile, Research, Stock Buzz) on hopes U.S. stimulus plans will prevent a recession there from deepening. Some exporters such as Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) managed to cling to gains despite the dollar's falling to the lower 92 yen level, but others edged down, mainly electronics firms like Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz).

Nintendo Co Ltd (7974.OS: Quote, Profile, Research, Stock Buzz) climbed 4.2 percent to 33,700 yen after it said sales of its Wii game console more than doubled during the week of the Thanksgiving holiday in the United States, apparently defying the retail gloom of the global economic crisis. [ID:nT338918]

But market players said wariness remained about how long shares could rise given overall economic conditions.

"Wall Street shares rose on expectations, but things haven't gotten any better. In fact, the indicators are so bad they could hardly be worse," said Yutaka Miura, a senior technical analyst at Shinko Securities.

"Certainly we do have economic policies, but we still don't know exactly what this will result in, and the situation of the U.S. carmakers has yet to be resolved. This uncertainty is hitting the dollar and then stocks." The benchmark Nikkei .N225 gained 66.82 points to 8,395.87 after earlier rising to 8,499.60, its highest level in more than a week. The broader Topix .TOPX rose 0.7 percent to 817.94

"There's reassurance to an extent because of stimulus plans from various nations, including the United States and China, and because it looks as though the Big Three may be safe for now," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"But we need something new to see more gains, something concrete."

U.S. stocks rallied to their highest level in a month on Monday on optimism that President-elect Barack Obama's proposed infrastructure spending could limit the depth of the recession and on hopes for the bailout of automakers GM (GM.N: Quote, Profile, Research, Stock Buzz), Ford (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler CBS.UL. [ID:nN05458678]

Obama has started by asking his economic team to come up with a plan to create at least 2.5 million new jobs by 2011. Congress is also expected to pass a hefty new economic stimulus bill in January that could be ready for Obama's signature immediately after he is sworn in.

Meanwhile, the White House reviewed a Democratic plan on Monday to bail out stricken automakers with up to $15 billion in loans, a move that would also clear the way for longer-term help if industry meets certain conditions. [ID:nN07466561]

MACHINERY MOVES But in one indication of how tough the situation still remains, Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) announced after the close a swathe of restructuring steps including cutting production facilities by about 10 percent from the current 57 sites and eliminating some 8,000 workers in its electronics division.

The U.S. rally was powered by construction machinery companies, with Caterpillar (CAT.N: Quote, Profile, Research, Stock Buzz) surging almost 11 percent on expectations of the infrastructure spending.

Japanese machinery shares, strong on Monday, extended their rise for the same reason, although most had pared gains by the close.

Komatsu climbed 2.9 percent to 1,036 yen and Kubota (6326.T: Quote, Profile, Research, Stock Buzz) rose 6.5 percent to 555 yen. Hitachi Construction (6305.T: Quote, Profile, Research, Stock Buzz) climbed 3.3 percent to 995 yen.

Shipping firms also climbed on the same expectations, with the sea transport sub-index gaining 5.7 percent to become the third-strongest of the subindices.

Mitsui O.S.K. Lines (9104.T: Quote, Profile, Research, Stock Buzz) gained 6.2 percent to 498 yen, while Nippon Yusen (9101.T: Quote, Profile, Research, Stock Buzz), Japan's largest shipping firm, rose 6 percent. Kawasaki Kisen (9107.T: Quote, Profile, Research, Stock Buzz) rose 4 percent to 367 yen.

Honda climbed 6.3 percent to 1,845 yen, partly on relief about U.S. automakers. But Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) edged up just 0.7 percent to 2,750 yen.

Canon shed 0.4 percent and Hitachi Ltd (6501.T: Quote, Profile, Research, Stock Buzz) lost 1.2 percent to 424 yen, while Panasonic Corp (6752.T: Quote, Profile, Research, Stock Buzz) lost 1.2 percent to 1,070 yen.

Sony, though, rose 3.9 percent to 1,896 yen.

Trade was active on the Tokyo exchange's first section, with some 2 billion shares changing hands, compared with last week's daily average of 1.8 billion.

Advancing stocks outnumbered declining ones 823 to 763. (Reporting by Elaine Lies; Editing by Michael Watson)

Read more...

Europe stocks tick up briefly but UK output weighs

LONDON, Dec 9 (Reuters) - European shares gave up losses to briefly turn positive early on Tuesday, with the automobile sector the biggest gainer, but quickly returned to the red after weak British industrial output figures.

By 0926 GMT, the FTSEurofirst 300 .FTEU3 index was down 0.1 percent at 847.57 points.

BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz), Daimler (DAIGn.DE: Quote, Profile, Research, Stock Buzz), Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz) and Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) were up 1.4 to 2.6 percent.

Congressional Democrats and the White House have been in talks for several days to finalize an emergency loan package estimated to be worth up to $15 billion to prevent the collapse of General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC.

Bank stocks took most points off the index, with Santander (SAN.MC: Quote, Profile, Research, Stock Buzz) the heaviest weighted loser, down 2.4 percent.

Data on Tuesday showed that British industrial output fell at its sharpest pace in nearly six years in October, and revisions to the previous months' data could mean the economy shrank even faster in the third quarter than initially thought. (Reporting by Joanne Frearson) (joanne.frearson@reuters.com; +44 207 542 2773, Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net)

Read more...

Japan's GDP Falls

Daily Forex Fundamentals | Written by AC-Markets | Dec 09 08 09:08 GMT |

Market Brief The Usd was slightly weaker in the Asian session, as impending hopes of a new fiscal package aimed at aiding US automakers and stimulates the US economy. There is speculation that President-elect Obama's stimulus package could possibly top $1trn. At this point it's too early to tell if we are witnessing a Christmas bounce or just short covering. The EurUsd traded to a high of 1.2967 before retracing to 1.2843, while UsdJpy continued to trend lower down to 92.39 from 93.07. Yesterday Wall Street closed higher, as sentiment shifter to optimistic. Asian regional indexes have failed to hold gains and are now trading lower. Commodities are still firm, with both crude and gold seeing slight gains. In Japan, the Q3's GDP fell to -1.8& vs. -0.9% exp. The primary culprit was inventories and public sector demand. Industrial production for October showed that inventories are at the highest level since 2001, so we would expect that inventories would weigh on futures releases of GDP. Domestic demand printed at -1.0%, while external demand (both import and exports) was soft. Japan has been in a recession since November 2007 and with labor market and consumer sentiment under pressure, consumption looks to stay depressed. Any hopes of a near term recovery are low. However, the Jpy is not currently trading on domestic economic conditions and continues to gain support from larger macro factors at work. In Australia, NAB Survey business conditions in November tumbled again to -17 index points (business confidence fell to -30). For the first time, the index is lower than in the 2000 domestic slowdown. It would be hard to argue that Australia is not in a recession given these indicators and we expect further economic deterioration in the near term. In European session We expect German ZEW investor sentiment to fall a bit further in December, from what was already a troublingly low level. The Bank of Canada's rate decision is announced today and we are expecting at 75bp cut. MMs have priced in roughtly 66bp worth of easing and consensus is for a 50bp cut. However, a weak domestic housing and other economic indicators showing steep deterioration warrant aggressive easing. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Read more...

Currency Technical Report

Daily Forex Technicals | Written by FX Greece | Dec 09 08 09:26 GMT |

EUR/USD Resistance: 1,2870/ 1,2930/ 1,2970/ 1,3010/ 1,3050/ 1,3080/ 1,3130/ Support: 1,2840-50/ 1,2810/ 1,2780/ 1,2740-50/ 1,2700/ 1,2660/ 1,2620/ 1,2580 Comment: The upward break of 1,2830-50 resistance led to the targets we had set in our previous analysis at 1,2950-70 area. As we can see in the daily chart, euro met the trend line that links the previous tops at 1,2950-70 area, and it could be the upper part of a triangle formation. But even if we see a move above yesterday's tops, we should wait for the break of 1,3080-3120, in order to confirm that the breakout is near.. As a result, we remain cautious after the reach of yesterday's targets and resistance levels at 1,2950-70 and wait for support at 1,2840-50 and 1,2780-00 to be confirmed. Below the second area, the immediate resumption scenario would be less possible, while below 1,2740, it will be canceled. The formation of a reversal candle in the daily chart above important resistance would indicate that the consolidation is likely to be turned into a triangle formation , and a retracement to 1,2550-00, would be possible once again. According to our upward scenario, bulls should gain momentum at 1,2780-00 and form a consolidation between 1,2800 and 1,2950. The upward break of 1,2970 could lead to a wider move towards 1,3100 area. A possible move above 1,3130 could lead to a sharp move in the end of the year, with targets set at 1,3850-00 area. For the time being, the price remains within the known ranges… STRATEGY: Buy : Buy orders could be tried at 1,2780-00 area, adding more at 1,2750, with stops below 1,2700. If the second area is not reached, targets could be set at 1,2900-30. Otherwise, targets will be set at 1,2850 area… Sell: Sell opportunities emerge at 1,2920-30 area with stops above 1,2985, according to the short term consolidation scenario…. FX Greece DISCLAIMER The details and information included in the above analysis, are part of research based exclusively on currency charts and are of purely instructional and educational nature. None of the information featuring in the analysis can be considered as an invitation for opening positions in FOREX market or in the market of forward contracts or any securities listed on an organized or unorganized market. We assume no responsibility for any kind of losses ,profits or property loss resulting, in whole or in part, from acts that are based either directly or indirectly on the processing or the use of information, details and strategies, the reader may find in the analysis. The readers hold full responsibility for the use and the results of their actions. The recipients of the analysis must acknowledge and accept that investment choices of any kind, especially concerning the FOREX market, contain risks (high, low and occasionally zero) of reduction or even loss of their investment. Therefore, they should always be cautious prior to any kind of action. We reserve the right to change the terms and the characteristics of the analysis. The contents of the analysis are solely intended for personal use. They may not be retransmitted, reproduced, distributed, published, adapted, modified or assigned to third parties in any way whatsoever. Anyone having access to them is required to comply with the law provisions on the protection of third party intellectual property rights.

Read more...