CFD Markets News and Forecasts — 07-11-2012

The dollar index rose to two-month high, as investors flocked to safer assets on concern that U.S. President Barack Obama will struggle to persuade Congress to avoid the so-called "financial cliff" after his historic re-election.

The euro fell to its weakest level in the last two months against the dollar after European Central Bank President Mario Draghi said that the crisis in the region affects Germany.

The U.S. currency weakened against the yen since Obama defeated Republican rival Mitt Romney, who is opposed to the current policy of the Federal Reserve System, which is based on stimulating the economy.

The euro fell against most major currencies, except the Norwegian krone against the fact that Greek lawmakers were ready to vote on the austerity measures required to receive international aid.

Also today, the European Commission said that the euro zone economy is likely to grow by only 0.1% in 2013, compared to the vulnerable forecast at 1% increase. The committee lowered its forecast for growth in Germany to 0.8% from 1.7%.

Switzerland franc rose against the euro and fell against the dollar after the central bank said the country's foreign exchange reserves declined last month, which was the first time since February. Also published data showed that consumer price index rose in October, much less than expected.

European stocks fell the most in two weeks as the European Commission cut its growth forecast for the region and concern over an impending fiscal crisis in the U.S. increased after the re-election of President Barack Obama.

Randgold Resources Ltd. (RRS) slumped the most in six months after predicting that its annual output will be at the bottom of its target. Holcim Ltd. (HOLN), the world’s largest cement maker, slid 2.4 percent as earnings missed analysts’ estimates. BNP Paribas SA jumped 1.1 percent after third-quarter net income more than doubled. Hochtief AG (HOT) advanced 3.1 percent after reiterating full-year profit targets.

The Stoxx Europe 600 Index (SXXP) declined 1.4 percent to 271.04 at the close of trading, erasing an earlier gain of as much as 0.7 percent.

Brussels-based European Commission today projected the 17- nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent. It cut the estimate for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent.

National benchmark indexes declined in all of the 18 western European markets today except Denmark.

FTSE 100 5,791.63 -93.27 -1.58% CAC 40 3,409.59 -69.07 -1.99% DAX 7,232.83 -144.93 -1.96%  

In the euro area, September retail sales decreased more than economists estimated, a report showed today. Sales fell 0.2 percent from August, when they rose 0.2 percent, the European Union’s statistics office in Luxembourg said. Economists had forecast a decline of 0.1 percent.

Rhoen-Klinikum AG (RHK) fell 5 percent to 14.53 euros after the hospital operator said profit this year will be hurt by lower revenue at two hospitals and costs from Fresenius SE’s failed takeover bid. The company already cut its earnings forecast in July.

William Demant Holding A/S (WDH) declined 5.1 percent to 468.80 kroner, the lowest price in nine months. The Nordic region’s largest maker of hearings aids cut its 2012 profit forecast. The company now sees earnings before interest and taxes “on par with or just short of” the 2011 level, compared with its earlier guidance for an increase.

Hochtief added 3.1 percent to 39.77 euros, its biggest gain in three weeks. Germany’s largest builder reiterated its full- year profit targets and reported a third-quarter pretax profit of 354.7 million euros, compared with a loss of 101.6 million euros a year earlier.

Alstom SA (ALO) advanced 1.4 percent to 27.98 euros. The French maker of power equipment and high-speed trains reported first- half earnings that beat analysts’ estimates on higher sales and orders for trains. Income from operations in the six months ended Sept. 30 rose 12 percent to 703 million euros, the company said. That exceeded the 689 million-euro average of analyst. Net income rose 11 percent to 403 million euros, also beating forecasts.

Oil prices continued their decline after a U.S. government report showed an increase in reserves for the fourth time in five weeks.

Oil reserves increased by 1.77 million barrels to 374.8 million barrels level last week. Stocks are forecast to fall by were 2 million barrels.

Gasoline stocks rose 2.9 million barrels, or 1.4% - to 202.4 million barrels, but were still up 0.9% compared to last year. Analysts had expected gasoline inventories fell by 1 million barrels.

Demand for gasoline in the four weeks ended November 2, increased by 0.2% on an annualized basis, and the average was at 8.6 million barrels a day.

Note that U.S. refineries operated at 85.4% of the total capacity, which is 2.3% lower compared to the previous week. Analysts expected capacity to fall to 86.2 percent.

Distillate stocks, which include diesel and heating oil, rose by 100,000 barrels to 118.1 million barrels levels, but analysts had expected distillate stocks fell by 2 million barrels.

Industry-funded American Petroleum Institute said yesterday that inventories fell 27,000 barrels last week to the level of 371.7 million barrels.

Futures also fell, as victory in the U.S. presidential election won. At the same time, Greece today voted in favor of the austerity measures. Note also that the U.S. president will hold talks with the Congress to avoid a financial break in the country.

December futures price of U.S. light crude oil WTI (Light Sweet Crude Oil) fell to 85.15 dollars a barrel on the New York Mercantile Exchange.

December futures price for North Sea petroleum mix of mark Brent fell $ 3.20 to 107.80 dollars a barrel on the London Stock Exchange ICE Futures Europe.

Today, the price of gold reached a two-week high against the fact that the U.S. election Barack won, but later the situation has changed, and the price of gold began to decline sharply as investors' attention shifted to the U.S. financial woes. We also note that, despite this uncertainty, the dollar has appreciated significantly against the euro due to the fact that the currency is seen as a safe-haven.

Gold prices topped $ 1,731 an ounce, which is the strongest level since Oct. 23, but later the price fell sharply, down with less than $ 1.7100.

Many analysts and investors are shifting their attention to the financial challenges facing Obama in his next line, and try to assess this impact on the value of gold.

Also, economists note that gold could rise to $ 1,800 per ounce by the end of 2012 and about $ 1900 to the end of the first half of 2013, which is supported by the continuing weakness of the monetary policy of the USA and the possibility of further quantitative easing.

Also today, the importers of gold in India, the world's largest purchaser of yellow metal, reduced the amount of their purchases during the peak festival season, as prices stabilized near its highest level in more than two weeks.

December futures price of gold on COMEX today fell to 1709.40 dollars per ounce.

Canadian dollar handed position, won after the election, and decreased at the beginning of the U.S. session, as attention shifted from relief in respect of soft policy of the Federal Reserve to concerns about "financial cliff" and the debt ceiling.

On the one hand, an Obama victory means continuing to stimulate the economy and the dollar's decline. On the other hand, the balance of power in the Senate and House of Representatives, which is dominated by representatives of different parties, indicates that the market expects the uncertainty before the talks about "fiscal cliff" and the debt ceiling.

Later on Wednesday, the Greek Parliament will vote on a package of austerity measures and structural reforms, without which Greece is experiencing financial difficulties, it may be unable to access aid funds. Uncertainty about this vote on Wednesday is likely to increase the overall uncertainty in the market.

At the moment the pair USD / CAD rose to the level of 0.9950

Pair is testing the key level of Y80.00 for the second time in a day. Later today, Japan will release the set of indicators, including orders for machinery, foreign investment and trade balance.

Currently, USD / JPY traded at around Y79.92. The nearest support level - Y79.77 (Nov 1 low).

U.S. stock futures fell as President Barack Obama was re-elected.
Investors also watched the latest developments in Europe’s attempt to tame its debt crisis. Greek lawmakers vote today on an austerity bill that contains austerity measures demanded by the so-called troika that oversees euro-area bailouts insists.

Global Stocks:

Nikkei  8,972.89 -2.26 -0.03%
Hang Seng 22,099.85 +155.42 +0.71%
Shanghai Composite 2,105.73 -0.27 -0.01%
FTSE  5,860.94 -23.96 -0.41%
CAC  3,450.02 -28.64 -0.82%
DAX 7,307.13 -70.63 -0.96%
Crude oil $87.51 -1,35%
Gold $1727.70 +0.74%

- See growth downturn lasting until year end

- Europe exports to benefit from stronger global growth

- Underlying domestic price pressures subdued

- Greece recovery seen in 2014

- See Portugal recession ending mid-2013

- Fiscal consolidation, reforms essential

- Need to boost public, private investment

- Lower pace of consolidation in Italy a 'concern'

- We focus on structural deficits not headline numbers

EUR/USD $1.2700, $1.2800, $1.2850, $1.2875

USD/JPY Y79.75, Y79.95, Y80.00, Y80.50

EUR/JPY Y104.00

GBP/USD  $1.5915, $1.6025

EUR/GBP stg0.8035

AUD/USD $1.0370, $1.0375, $1.0400, $1.0425, $1.0450

 08:00 Switzerland Foreign Currency Reserves October 429.3 432.0 424.4

08:15 Switzerland Consumer Price Index (MoM) October +0.3% +0.3% +0.1%
08:15 Switzerland Consumer Price Index (YoY) October -0.4% -0.2% -0.2%
10:00 Eurozone Retail Sales (MoM) September +0.2% 0.0% -0.2%
10:00 Eurozone Retail Sales (YoY) September -0.9% -0.8% -0.8%
11:00 Germany Industrial Production s.a. (MoM) September -0.5% -0.4% -1.8%
11:00 Germany Industrial Production (YoY) September -1.4% +0.2% -1.2%
12:10 Eurozone ECB President Mario Draghi Speaks -
 

The dollar fell against the yen on speculation Barack Obama’s re-election as president will boost chances the U.S. will maintain monetary stimulus policies that tend to weaken the greenback.

The U.S. currency was mixed versus its major peers as Obama defeated Republican challenger Mitt Romney, who disagreed with current Federal Reserve policy. Obama now faces the so-called fiscal cliff, $600 billion in tax increases and spending cuts set to be implemented in 2013.

The euro erased gains as European Central Bank President Mario Draghi said the Europe’s crisis is affecting Germany.

Gains in the euro were tempered as Greek lawmakers prepared to vote on austerity measures needed to keep its international bailout on track.

The 238 pages of additional austerity plans, ranging from raising the retirement age to eliminating holiday payments for pensioners, will be debated by the Greek parliament today with a roll-call vote expected. Approval is the first of the parliamentary votes required by Nov. 12 to unlock a 31 billion- euro portion of international aid.

EUR/USD

Offers    $1.2880 

Bids  $1.2805/00, $1.2760/50, $1.2710/00

- Econ,fin situation in the EMU remains challenging

- EMU growth expected to remain weak in near term

- EMU unemployment is deplorably high

- Fiscal consolidation progressing well in most countries

- ECB OMT clear signal to mkt: EMU break-up fear baseless

- Unlimited omt does not mean uncontrolled

- OMT conditionality is important

- Fin union dsn't have to mean pooling deposit guarantees

European stocks advanced to an almost three-week high as American President Barack Obama defeated Republican Mitt Romney to win a second term.

Obama defeated Republican Mitt Romney, winning at least 303 electoral votes in yesterday’s election with 270 needed for the victory. With one state -- Florida -- yet to be decided, Romney had 206 electoral votes.

The president faces a partisan divide in Congress, with Republicans retaining their House majority, while Democrats kept control of the Senate. A looming “fiscal cliff” of tax increases and spending cuts will start in January if Congress and the White House don’t act before then.

In China, Vice President Xi Jinping was appointed the secretary general of the 18th Chinese Communist Party Congress, a procedural move that signals he’ll replace President Hu Jintao as head of the party and government in the world’s second- largest economy. The congress will be held Nov. 8-14.

In the euro area, September retail sales decreased more than economists estimated, a report showed today. Sales fell 0.2 percent from August, when they rose 0.2 percent, the European Union’s statistics office in Luxembourg said. Economists had forecast a decline of 0.1 percent.

In indebted Greece, Prime Minister Antonis Samaras faces a test of his fragile coalition government today as he seeks parliamentary approval for austerity measures.

The 238 pages of austerity measures, ranging from raising the retirement age two years to 67 to eliminating Christmas and holiday payments for pensioners, will be debated in the 300-seat Parliament from 10 a.m. with a vote expected after 8 p.m. Athens time. Approval of the legislation is the first of the parliamentary votes required by Nov. 12 to obtain a 31 billion- euro ($40 billion) portion of international aid.

BNP Paribas rose 5.1 percent to 41.10 euros, contributing the most to the Stoxx 600’s gain. France’s biggest lender said third-quarter profit more than doubled after its investment- banking unit posted higher revenue. Net income climbed to 1.32 billion euros from 541 million euros a year earlier. That exceeded the 1.06 billion-euro average estimate of analysts.

Hochtief surged 6.3 percent to 41.02 euros, its biggest gain since Sept. 14. Germany’s largest builder reiterated its full-year profit targets and reported a third-quarter pretax profit of 354.7 million euros, compared with a loss of 101.6 million euros a year earlier.

Randgold Resources Ltd. slumped 5.5 percent to 7,020 pence, the sharpest decrease since June 7. The producer of gold in West Africa said full-year output will be at the bottom of its target range of 825,000 ounces to 865,000 ounces. The company also said its costs will increase after power disruptions at the Tongon mine in Ivory Coast.

FTSE 100 5,912.29 +27.39 +0.47%

CAC 40 3,501.79 +23.13 +0.66%

DAX 7,408.54 +30.78 +0.42%

Germany allotted E3.29bln of its 5-year benchmark 0.50% Oct 2017 Bobl issue Wednesday at an average yield 0.42% (0.53%) and bid-to-cover ratio of 1.5 times (2.2).

Asian stocks advanced for a second day, with News Corp. and Nissan Motor Co. lifting the regional benchmark index on earnings that cheered investors, as U.S. President Barack Obama defeated Republican Mitt Romney to win a second term.

Nikkei 225 8,972.89 -2.26 -0.03%

Hang Seng 22,087.07 +142.64 +0.65%

S&P/ASX 200 4,516.46 +31.66 +0.71%

Shanghai Composite 2,105.73 -0.27 -0.01%

News Corp., the media company run by billionaire Rupert Murdoch, gained 3.2 percent in Sydney after reporting profit that topped estimates.

Nissan surged 4.1 percent after analysts said its earnings forecast was conservative and Chinese customers are returning to the carmaker’s dealerships.

Zijin Mining Group Co. climbed 3.6 percent in Hong Kong, pacing gains among gold producers as the precious metal rose on speculation the U.S. will continue monetary easing after Obama’s victory.

The dollar fell against most of the 16 most traded currencies against the fact that voters in the United States must now decide who will lead the world's largest economy within the next four years.

Asian stocks rose amid low trading volume, with gains in Japanese utilities helping reverse yesterday’s losses on the regional benchmark index, as investors awaited the results of the U.S. presidential election and a once-in-a-decade leadership change in China.

Nikkei 225 8,975.15 -32.29 -0.36%

Hang Seng 21,944.43 -61.97 -0.28%

S&P/ASX 200 4,484.8 +10.68 +0.24%

Shanghai Composite 2,106 -8.03 -0.38%

Kansai Electric Power Co. led a rebound in utilities after sliding yesterday as advisers to the regulator disagreed on the earthquake risk to the nation’s only operating nuclear plant.

HSBC Holdings Plc dropped 1.2 percent in Hong Kong after saying it may face charges tied to money-laundering.

Alumina Ltd. lost 7.9 percent after an Indonesian court stopped an ore export ban that bolstered demand for the Australian miner’s product.

The dollar weakened on speculation President Barack Obama’s re-election victory will boost chances the U.S. will continue monetary stimulus policies that tend to weaken the currency. The dollar reversed earlier gains versus the euro after Obama defeated Republican challenger Mitt Romney, according to television network projections that show the president winning the electoral votes needed for re-election. Romney had said he disagrees with the Federal Reserve measures to stimulate the economy and would replace Chairman Ben S. Bernanke at the end of his term in January 2014.

Demand for the euro was limited as Greece headed for a vote on austerity measures needed to keep its bailout on track. In Greece, the 238 pages of austerity measures, ranging from raising the retirement age two years to 67 to eliminating Christmas and holiday payments for pensioners, will be debated in the 300-seat Parliament from 10 a.m. Athens time with a roll- call vote expected after 8 p.m. today. Approval of the legislation is the first of the parliamentary votes required by Nov. 12 to unlock a 31 billion-euro ($40 billion) portion of international aid.

German industrial production probably fell for a second month in September, decreasing 0.7 percent from the prior month, according to the median estimate of economists in a Bloomberg News survey. A separate report may show euro-area retail sales slid 0.1 percent in September, according to another poll.

Change % Change Last

Oil $88.39 -0.32 -0.36%

Gold $1,715.50 +0.50 +0.03%

Change % Change Last

Nikkei 225 8,975.15 -32.29 -0.36%

Hang Seng 21,944.43 -61.97 -0.28%

S&P/ASX 200 4,484.8 +10.68 +0.24%

Shanghai Composite 2,106 -8.03 -0.38%

FTSE 100 5,884.9 +45.84 +0.79%

CAC 40 3,478.66 +30.16 +0.87%

DAX 7,377.76 +51.29 +0.70%    

Dow 13,245.68 +133.24 +1.02%

Nasdaq 3,011.93 +12.27 +0.41%

(pare/closed(00:00 GMT +02:00)/change, %)

EUR/USD $1,2813 +0,13%

GBP/USD $1,5995 +0,11%

USD/CHF Chf0,9427 -0,07%

USD/JPY Y80,35 +0,09%

EUR/JPY Y102,95 +0,22%

GBP/JPY Y128,51 +0,19%

AUD/USD $1,0434 +0,67%

NZD/USD $0,8269 +0,23%

USD/CAD C$0,9919 -0,43%

08:00 Switzerland Foreign Currency Reserves October 429.3 432.0

08:15 Switzerland Consumer Price Index (MoM) October +0.3% +0.3%

08:15 Switzerland Consumer Price Index (YoY) October -0.4% -0.2%

10:00 Eurozone Retail Sales (MoM) September +0.1% 0.0%

10:00 Eurozone Retail Sales (YoY) September -1.3% -0.8%

11:00 Germany Industrial Production s.a. (MoM) September -0.5% -0.4%

11:00 Germany Industrial Production (YoY) September -1.4% +0.2%

12:10 Eurozone ECB President Mario Draghi Speaks -

15:30 U.S. Crude Oil Inventories - -2.0

20:00 U.S. Consumer Credit September 18.1 10.1

21:45 New Zealand Employment Change, q/q Quarter III -0.1% +0.3%

21:45 New Zealand Unemployment Rate Quarter III 6.8% 6.7%

23:50 Japan Core Machinery Orders September -3.3% -1.9%