CFD Markets News and Forecasts — 03-11-2011

The euro rose versus the dollar and yen after Greek Prime Minister George Papandreou signaled he won’t call for a referendum on a bailout package, easing concern voters would reject it and send the nation into default. Papandreou reached out to his political opposition about setting up a transitional government, indicating an accord would secure aid and remove the need for a referendum on euro membership.

The 17-nation currency earlier approached a three-week low versus the greenback after the European Central Bank cut its key interest rate to 1.25 percent and said Europe is heading toward a “mild recession.”

The dollar dropped as stocks and commodities rallied, damping demand for haven assets.

The euro gained 0.8 percent to $1.3850 at 1:50 p.m. in New York, after falling as much as 0.7 percent. It dropped to $1.3609 on Nov. 1, the weakest since Oct. 12. The shared currency strengthened 0.6 percent to 107.97 yen. It slid earlier as much as 0.7 percent after the ECB announcement. The Japanese currency rose 0.1 percent to 77.97 per dollar.

European stocks advanced after the euro-area central bank unexpectedly cut the benchmark interest rate and Greek Prime Minister George Papandreou signaled he won’t call a referendum on the latest bailout package.

The ECB unexpectedly cut interest rates as Italian and Spanish borrowing costs soared after euro-area leaders raised the prospect of Greece leaving the monetary union. ECB officials, meeting under the presidency of Mario Draghi for the first time, cut the benchmark interest rate by 25 basis points to 1.25 percent.

Papandreou signaled he won’t call a referendum calling into question Greece’s membership of the euro, saying he will reach out to the opposition about forming a transitional government.

The Greek prime minister said the country belongs in the currency bloc and welcomed support shown by the main opposition New Democracy party for last week’s rescue agreement agreed with EU leaders in Brussels.

National benchmark indexes gained in 17 of the 18 western European markets. France’s CAC 40 rallied 2.7 percent and Germany’s DAX climbed 2.8 percent. The U.K.’s FTSE 100 added 1.1 percent.

National Bank of Greece SA led the country’s lenders higher, it rose 11 percent to 1.80 euros. Alpha Bank SA climbed 15 percent to 1.07 euros. Piraeus Bank SA rallied 10 percent to 23.6 euro cents. Banks rose throughout Europe, with BNP Paribas SA, France’s biggest bank, advancing 7.5 percent to 31.92 euros. Commerzbank AG, Germany’s second-largest lender, added 5.5 percent to 1.75 euros.

Swiss Re Ltd. and Man Group Plc gained more than 2 percent after reporting better-than-expected earnings.

Swiss Re rose 6.1 percent to 49 Swiss francs. The world’s second-biggest reinsurer said third-quarter profit more than doubled to $1.35 billion. That beat the $539 million average estimate of nine analysts surveyed by Bloomberg.

Man Group gained 2.4 percent to 144.7 pence. The biggest publicly traded hedge-fund manager reported a smaller-than- forecast decline in pretax profit in the fiscal first half. Pretax profit dropped to $195 million in the six months through September from $227 million in the year-earlier period, the London-based company said. Man forecast pretax profit of $185 million.

Cable & Wireless Communications jumped 7.8 percent to 39.33 pence. The company said first-half net income before exceptional items rose 9 percent to $163 million. The company also said restructuring is ahead of schedule.

Aker Solutions ASA surged 10 percent to 67.15 kroner. Norway’s biggest oil platform maker said third-quarter net income more than tripled to 1.12 billion kroner ($200 million) as it booked a gain after separating out Kvaerner ASA.

ING Groep NV rallied 9.4 percent to 6.18 euros. The biggest financial-services company in the Netherlands said it plans to cut 11 percent of the jobs at its Dutch bank and posted third- quarter earnings that surpassed analysts’ estimates.

Tenaris SA soared 15 percent to 12.85 euros. The world’s largest maker of seamless pipes said third-quarter profit rose 7 percent on higher demand in the U.S. and Europe and increased prices.

Rheinmetall AG tumbled 7.6 percent to 35.12 euros. The maker of KS Kolbenschmidt engine pistons and a partner in Germany’s Puma battle tank said it won’t stage an initial public offering of its automotive unit, citing stock-market declines. Rheinmetall’s third-quarter earnings before interest and taxes rose to 76 million euros, missing analyst estimates.

• Tensions in financial markets is primarily due to sovereign risk in Europe

• Volatility in exchange rates creates a risk to economic growth and financial stability

• In the emerging markets show signs of vulnerability

• Employment must be in the forefront of the implementation of actions to restore economicrostv

• Rising commodity prices hurt economic growth

• We intend to improve the stability of banks to the financial and economic shocks

Offers at $1.3850, the value of the 55d ma.

According to the International Labour Organization (ILO) unemployment rate in Germany, seasonally adjusted, in September fell to 5.8% from 5.9% in August, the number of unemployed at the same time in September fell by 30 thousand to 2.44 million.

U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second day, as the European Central Bank unexpectedly cut rates and the region’s leaders increased pressure on Greece to accept a bailout.

The ECB unexpectedly cut interest rates at President Mario Draghi’s first meeting in charge after euro-area leaders raised the prospect of Greece exiting the monetary union, sending bond yields soaring in Italy and Spain. Stocks extended gains after the Associated Press reported that Greece’s plan to hold a referendum on its bailout has been scrapped.

European leaders for the first time raised the prospect of the euro area splintering, forcing debt-stricken Greece to decide whether it’s in or out when it holds a referendum on a bailout package next month. German and French leaders holding emergency talks on the eve of a Group of 20 summit today in Cannes, France, withheld 8 billion euros ($11 billion) of assistance.

Earlier today, stocks rose after BBC reported that Papandreou would step down and propose a coalition government headed by former European Central Bank vice-president Lucas Papademos, without saying how it got the information. Later, two officials with the ruling Pasok party said Papandreou won’t resign his post and plans to speak in Parliament in Athens today as scheduled.

Dow 11,951.23 +115.19 +0.97%, Nasdaq 2,667.70 +27.72 +1.05%, S&P 500 1,249.32 +11.42 +0.92%

Qualcomm jumped 6.6 percent to $55.65. The company, which gets most of its profit from licenses on technology used in so- called 3G phones, is benefiting as more consumers switch to the technology -- especially in developing countries. Widening use of smartphones fuels growth in royalty revenue and sales of cellular radio chips and processors.

Kraft Foods Inc. (KFT), the food company planning to split in two next year, added 3.7 percent after raising its earnings forecast. Chief Executive Officer Irene Rosenfeld plans to spin off the North American grocery business by the end of next year to focus on selling snack foods in emerging markets. Food companies such as Kraft, Sara Lee Corp. and General Mills Inc. have raised prices on many products this year to make up for higher costs for ingredients such as corn, coffee and sugar.

Estee Lauder Cos. jumped 14 percent to $114.71. The maker of Clinique and Bobbi Brown makeup lines announced plans for a 2-for-1 split. The New York-based company also said it will increase its annual dividend by 40 percent to $1.05 a share.

Jefferies Group Inc.pared its loss to 9.1 percent as it said it has no “meaningful net exposure” to European sovereign debt after its shares plunged as much as 20 percent earlier today, triggering stock-market circuit breakers. Egan-Jones Ratings Co. downgraded the firm’s creditworthiness to BBB- from BBB, citing “a changed environment” after the collapse of MF Global Holdings Ltd. and saying it was concerned about the size of Jefferies’ $2.7 billion in “sovereign obligations” relative to the investment bank’s equity.

Dollar prices to Buy Gold rose sharply to a six-week high of $1757 per ounce late on Thursday morning - though only 0.7% above last week's close - following reports that Greek prime minister George Papandreou was on the verge of offering his resignation.

Eurozone leaders were openly discussing a Greek exit from the Euro last night, while the Greek government was reportedly close to collapse, after another member of prime minister Papandreou's party indicated they will not support the government in a confidence vote scheduled for tomorrow - taking Papandreou's majority down to one.

Stocks and commodities gained, while the Euro dropped sharply following the European Central Bank's decision to cut interest rates. The ECB meantime cut its key interest rate Thursday by a quarter-point to 1.25%, following its first monetary policy meeting since Mario Draghi took over as president.

Gold futures for December delivery raised to $ 1.768,30 per troy ounce in New York

Oil rose for a second day in New York, reversing earlier losses as European leaders pressured Greece into proceeding with a rescue package that may stem the region’s debt crisis.

West Texas Intermediate futures rebounded from a 1.8 percent decline before a Group of 20 summit set to begin today in Cannes, France. Led by Germany and France, Europe’s economic and political anchors, the euro’s guardians yesterday cut off financial aid for Greece until an early December vote determines whether it deserves a fresh batch of loans.

European leaders raised the prospect of the euro area splintering, forcing Greece to decide whether it’s in or out when it holds a referendum on a bailout package next month.

On Thursday, the focus of market participants were meeting the European Central Bank, which was the first for the new ECB president Mario Draghi, who succeeded on 1 November, this post by Jean-Claude Trichet. At the end of this session the European Central Bank unexpectedly lowered the discount rate by 25 basis points to 1.25% level, which put pressure on the euro.

The main attention is focused on investors awaiting the outcome of negotiations, the G20 leaders in Cannes. Summit of the "Big Twenty" opens today at the French Cannes. The leaders of the "twenty" is expected to discuss the global economy, reforming the global financial system and regulation of financial markets, as well as the problems of volatility in commodity prices. The focus of the G20 will also be providing employment, enhancing social protection and anti-corruption, energy issues and climate change.

Crude for December delivery rose to $94.23 a barrel on the New York Mercantile Exchange. It earlier fell as low as $90.87 a barrel.

Brent for December settlement traded 34 cents higher at $109.68 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to New York crude was $16.61 a barrel, compared with settlements of $16.83 yesterday and a record-high $27.88 on Oct. 14.

• tensions in mkts to dampen growth in EMU 2H, beyond
• downward revision of fcasts very likely
• inflation risks still broadly balanced
• eurozone growth iin 2H to be 'very moderate'
• HICP above 2% for some months, but below 2% '12

• tensions in mkts to dampen growth in EMU 2H, beyond
• downward revision of fcasts very likely
• inflation risks still broadly balanced
• eurozone growth iin 2H to be 'very moderate'
• HICP above 2% for some months, but below 2% '12

EUR/USD

Offers $1.3900/10, $1.3850

Bids $1.3800, $1.3780, $1.3765/60, $1.3725/20, $1.3700, $1.3660/55, $1.3640/35

Currently FTSE  5,507 +22.82 +0.42%, CAC  3,169 +58.82 +1.89%, DAX 6,076 +110.39 +1.85%.European stocks advanced, Europen stocks erasing earlier losses after Greek Prime Minister George Papandreou’s ruling party split over his call for a referendum on the latest bailout package, sparking speculation the vote may not happen.

Resistance 3: Y79.50 (Oct 31 high)

Resistance 2: Y79.00 (Nov 1 high)

Resistance 1: Y78.40 (Nov 2 high)

Current price: Y78.01

Support 1:Y77.90 (Nov 2 low)

Support 2:Y77.55 (50.0 % FIBO Y75.55-Y79.55)

Support 3:Y77.10 (61.8 % FIBO Y75.55-Y79.55)

The euro continues declined, trading 0.8 percent from a three-week low against the dollar, as European leaders said Greece will vote next month to determine whether it will stay in the 17-nation currency.

The euro dropped for a third day versus the yen after French President Nicolas Sarkozy said Greece won’t receive a “single cent” in aid without holding to the terms of its bailout agreement. The dollar and yen gained against most of their 16 major counterparts as Asian stocks declined, boosting investor appetite for safer assets.

New Zealand’s currency weakened after a statistics bureau report showed the unemployment rate unexpectedly rose to 6.6 percent in the third quarter from 6.5 percent in the previous period.

EUR/USD: on Asian session the pair the pair continues yesterday's falling.

GBP/USD: on Asian session the pair decreased.

USD/JPY: on Asian session the pair holds in range Y78.00-Y78.15..

The U.S. dollar offset the losses against the euro after the Federal Reserve raised its assessment of the economy. The Central Bank said here that "significant risks" remain, but, still, refrained from taking additional measures to ease monetary policy. The published statistics on the market yesterday, employment has also supported the dollar. As reported today, an independent U.S. recruiting and analytical agency ADP (Automatic Data Processing) in the private sector appeared 110 000 new jobs during the month of October. Data for September were revised up to 25 thousand items in a big way in the final count recorded 116 000 new employees of private firms and companies, not 91 thousand, as previously thought. In October, the vast majority of new positions, namely 114 000 was created in the service sector, while industrial workers, by contrast, have reduced staff by 4000 workers.

GBP/USD: the pair gain in first half of yesterday but lost later.

USD/JPY: yesterday the pair decreased to Y78.00.

Asian stocks fell for a third day as Greece’s plan for a referendum on Europe’s bailout stoked concern the sovereign-debt crisis won’t be contained. Hong Kong stocks rallied on speculation that China may act to stimulate its economy. This week’s slide in Asian stocks has almost erased gains that came last week as Europe appeared to have struck a deal to contain the debt crisis. Papandreou, whose hold on power is weakening, will fly to Cannes, France, today on the eve of a Group of 20 summit that starts tomorrow.

European stocks rose, snapping the biggest three-day drop in almost two months, as U.S. companies hired more workers than forecast and Federal Reserve policy makers raised their assessment of the economy in a statement at the close of trading. Euro-area leaders, racing to prevent their week-old debt crisis strategy from unraveling, are holding emergency talks today to tell Greece there is no alternative to the budget cuts imposed in the bailout plan.

National benchmark indexes climbed in 11 of the 18 western European markets today. The U.K.’s FTSE 100 rose 1.2 percent and France’s CAC 40 advanced 1.4 percent. Germany’s DAX Index gained 2.3 percent.

Randgold climbed 7.4 percent to 7,235 pence, the highest price since it first started trading in 1997. The miner said it expects its gold production to increase as much as 22 percent next year as output in Mali and Ivory Coast rises. Output may jump to 850,000 ounces to 900,000 ounces in 2012 from a target of 740,000 ounces to 760,000 ounces this year, Chief Executive Officer Mark Bristow said today in an interview in London.

Rio Tinto, the world’s second-biggest mining company, advanced 3.8 percent to 3,375 pence as copper rose more than 1.5 percent on the London Metal Exchange. Antofagasta Plc advanced 5.4 percent to 1,174 pence as the copper producer controlled by Chile’s Luksic family reported a 17 percent increase in quarterly output.

Next Plc, the U.K.’s second-largest clothing retailer, advanced 6.5 percent to 2,723 pence after reporting growth in third-quarter brand sales that exceeded analyst estimates.

Lundin Petroleum AB, the oil explorer with a stake in the giant Avaldsnes-Aldous Major North Sea find, rose 6.5 percent to 163 kronor after forecasting higher production in 2012. The company reported third-quarter earnings before interest, taxes, depreciation and amortization of $262 million, beating the average analyst estimate of $223 million.

Volkswagen AG led a gauge of automakers to the biggest gain of all industry groups in the Stoxx 600, rallying 6 percent to 127.20 euros. China’s passenger-car market may grow 8 percent to 10 percent a year over the coming five years, Karl-Thomas Neumann, head of VW’s Chinese operations said today at a conference in Berlin.

Lloyds, Britain’s biggest mortgage, dropped 4.4 percent to 29.21 pence. Horta-Osorio is taking leave of absence from his duties as CEO following medical advice and will be replaced in the interim by Finance Director Tim Tookey.

Logica Plc sank 7.3 percent to 83 pence as the Anglo-Dutch computer services provider posted third-quarter sales that trailed analyst estimates and cut its annual earnings forecast.

Meda AB, Sweden’s largest publicly traded drugmaker, fell 7.6 percent to 59.30 kronor after saying its profit margin in northern Europe dropped in the third quarter.

Resistance 3: Y80.20 (Aug 4 high)

Resistance 2: Y79.50 (Oct 31 high)

Resistance 1: Y78.45 (session high)

The current price: Y78.03

Support 1:Y77.95 (Nov 2 low)

Support 2: Y77.55 (50.0% FIBO Y75.55-Y79.55)

Support 3: Y77.20 (MA(233) H1)

Comments: the pair holds in range.

Resistance 3: Chf0.9005 (high of the American session on Oct 20)

Resistance 2: Chf0.8960 (Nov 1 high)

Resistance 1: Chf0.8880 (session high)

The current price: Chf0.8878

Support 1: Chf0.8830 (session low)

Support 2: Chf0.8765 (50.0% FIBO Chf0.8960-Chf0.8565)

Support 3: Chf0.8715 (61.8% FIBO Chf0.8960-Chf0.8565)

Comments: the pair is on uptrend. In focus resistance Chf0.8905.

Resistance 3: $ 1.6150/65 (area of Oct 28-31 high)

Resistance 2: $ 1.6045 (Nov 2 high)

Resistance 1: $ 1.5970 (resistance line from Oct 31)

The current price: $1.5902

Support 1 : $1.5875 (session low)

Support 2 : $1.5770 (support line from Oct 31)

Support 3 : $1.5680 (Oct 20 low)

Comments: the pair is on downtrend. In focus resistance $1.5875.

Resistance 3 : $1.3925 (50.0% FIBO $1.3605-$ 1.4245)

Resistance 2 : $1.3830 (Nov 2 high)

Resistance 1 : $1.3755 (session high)

The current price: $1.3703

Support 1 : $1.3660 (session low)

Support 2 : $1.3565 (Oct 11 low)

Support 3 : $1.3500 (psychological mark)

Comments: the pair is on downtrend. In focus support $1.3660.

Change % Change Last

Nikkei 225 8,640 -195.10 -2.21%

Hang Seng 19,734 +363.75 +1.88%

S&P/ASX 200 4,185 -48.26 -1.14%

Shanghai Composite 2,504 +34.09 +1.38%

FTSE 100 5,484 +62.53 +1.15%

CAC 40 3,111 +42.26 +1.38%

DAX 5,966 +131.12 +2.25%

Dow 11,836.04 +178.08 +1.53%

Nasdaq 2,639.98 +33.02 +1.27%

S&P 500 1,237.90 +19.62 +1.61%

10 Year Yield 2.01% +0.00 --

Oil $92.89 +0.38 +0.41%

Gold $1,738.70 +9.10 +0.53%

00:30 Australia Retail sales (MoM) September +0.6% +0.5%

00:30 Australia Retail Sales Y/Y September 1.8%

01:00 China Non-Manufacturing PMI October 59.3 57.7

06:00 G20 G20 Meetings

09:30 United Kingdom Purchasing Manager Index Services October 52.9 51.9

12:30 U.S. Initial Jobless Claims 402 402

12:45 Eurozone ECB Interest Rate Decision 1.50% 1.50%

13:30 Eurozone ECB Press Conference

14:00 U.S. ISM Non-Manufacturing October 53.0 53.9

14:00 U.S. Factory Orders September -0.2% 0.0%