CFD Markets News and Forecasts — 11-10-2012

The dollar fell against most major currencies, as speculation arose that Spain could ask for help, and the increased demand for Italian bonds, influenced increasing appetite for riskier assets.

The dollar continued to trade down, even after the published data showed that the number of initial claims for unemployment benefits fell to the lowest level in four years. The number of initial claims for unemployment benefits during the week (September 30 - October 6) decreased by 30,000 to 339,000 level. However, this decline is largely due to the fact that one state has not published data.

Earlier, the euro has significantly decreased since the rating agency S & P downgraded Spain's credit rating by two notches, but because it has increased the likelihood that Spain, for financial support, the euro has soared.

The dollar index (DXY), which is used to track the value of the dollar against the currencies of the U.S. partner, fell 0.2% to 79.779.

The Australian dollar strengthened after the published data, according to which it was reported that the number of employed increased by 14,500 people in September, which was almost three times more than the average estimate of economists. At the same time, the unemployment rate rose to 5.4%, reaching its highest level since April 2010.

The euro broke a three-day decline against the yen on speculation regarding the financing of Spain. Note also that the profitability of Spanish 10-year bonds fell to 5.76% today.

During the U.S. session, the dollar fell sharply against the yen, after a significant increase in the early afternoon. However, the combination of weak economic performance in Japan, increased pressure on the Bank of Japan in order to soften its monetary policy, as well as the probability of the intervention to the depreciation of the yen is likely to retard the growth of the Japanese currency in the near future. 

• Inflation is likely to "slow down" in the medium term

• Recovery in the labor market will be gradual

• Fed faces a long-term inflationary risk in the new policy

• U.S. GDP will grow by 2% this year, 3% in 2013 and 2014

• Inflation is expected in the medium term will remain near the target level

• New incentives from the Federal Reserve could weaken the credibility of the central bank

• Will have to raise rates before mid-2015 in order to avoid inflation

• Uncertainty remains a major constraint to economic growth

• I opposed the stimulus at the September meeting of the Operations Committee on the Federal Open Market

• New measures by the Fed is neither practical nor efficient for the economy

European stocks advanced for the first time in four days as U.S. jobless claims fell to a four- year low and Burberry Group Plc (BRBY) led luxury-goods makers higher.

Burberry jumped the most in more than 10 years as it reported second-quarter same-store sales that topped analyst estimates. Carrefour SA (CA) climbed 3.7 percent after the world’s second-largest retailer posted third-quarter sales that beat estimates. Banco Popular Espanol SA (POP) led Spanish banks lower after Standard & Poor’s downgraded the country’s debt to one level above junk.

The Stoxx Europe 600 Index (SXXP) climbed 0.8 percent to 270.84 at the close of trading.

The U.S. trade deficit widened in August to $44.2 billion from a revised $42.5 billion in July, a Commerce Department report showed. Economists had projected an increase to $44 billion.

S&P lowered Spain’s debt rating to one level above junk, citing increasing economic and political risks. The country’s worsening recession is “limiting the Spanish government’s policy options

Separately, German Finance Minister Wolfgang Schaeuble said today euro-area governments agree that any decision on Greece will be taken after the IMF, the European Commission and the ECB publish their review.

National benchmark indexes climbed in 16 of the 18 western European markets.

FTSE 100 5,832.96 +56.25 +0.97% CAC 40 3,417.28 +51.41 +1.53% DAX 7,279.42 +74.19 +1.03%  

Burberry surged 13 percent to 1,136 pence, the biggest gain since at least July 2002, after the U.K.’s largest luxury-goods maker said sales at stores open at least a year rose 1 percent in the second-quarter, beating the average analyst estimate calling for a 1 percent drop.

LVMH Moet Hennessy Louis Vuitton SA (MC) climbed 3.8 percent to 122.95 euros, Cie. Financiere Richemont SA added 4.5 percent to 59.90 Swiss francs and Christian Dior SA (CDI) advanced 3.6 percent to 108.30 euros.

Carrefour advanced 3.7 percent to 16.58 euros after the French retailer said third-quarter revenue rose 2.1 percent to 22.6 billion euros, topping the average analyst estimate of 22.4 billion euros.

BAE Systems Plc (BA/) rose 2.4 percent to 328.5 pence after Chief Executive Officer Ian King said the company is “strong and financially robust.” Adjusted earnings per share will show “modest growth” this year if price negotiations with Saudi Arabia over a fighter-jet order are concluded on time, the London-based company said today.

Bumi Plc (BUMI) soared 39 percent to 259 pence, the most since its London listing in July 2010, after PT Bakrie & Brothers Tbk proposed an asset swap. The Bakrie Group offered to exchange a 23.8 percent stake in Bumi for 10.3 percent of PT Bumi Resources, Bumi said in a statement.

Banco Popular slid 4.9 percent to 1.30 euros. Bankia SA (BKIA) dropped 0.3 percent to 1.02 euros, paring earlier losses of as much as 3.8 percent.

Siemens AG (SIE) retreated 1.3 percent to 77.05 euros after Deutsche Bank AG cut its recommendation on the shares to hold from buy.

Crude oil futures maintain growth even after a U.S. government report showed that inventory levels neiti rose, while stocks of distillates and gasoline fell.

The Department of Energy said that inventories increased by 1.67 million barrels to a level of 366.4 million barrels last week. It is projected that growth would be around 1.5 million barrels.

Note that these data have been published tons a day later than usual this week in observance of Columbus Day on October 8.

It is learned that distillate stocks, which include heating oil and diesel, fell 3.18 million barrels to 120.9 million level. Many analysts had expected the fall to 1 million barrels.

At the same time, gasoline inventories fell by 534,000 barrels to 195.4 million mark last week, while still achieving the lowest level in nearly four years. Inventories forecast had increased by 250,000 barrels.

Futures also rose after data showed that the number of applications for unemployment benefits in the U.S. fell to a four-year low.

Also, the rise in prices continue to impact the tensions between Syria and Turkey, which could disrupt oil supplies from the Middle East.

November futures price of U.S. light crude oil WTI (Light Sweet Crude Oil) is 92.52 per barrel on the New York Mercantile Exchange.

November futures price of North Sea Brent crude oil mixture is 115.32 dollars a barrel on the London Stock Exchange ICE Futures Europe.

Gold prices rose today, interrupted in this series of four fall after ratings agency S & P downgraded Spain's credit rating by two notches to the level of "BBB-", while increasing the likelihood that the country's financial assistance. In this regard, the euro has grown rapidly, pulling the top in gold prices.

Note that during the previous four days, the price of gold fell by more than 2%, registering with the longest decline since June.

Also note that the price of gold rose 13% in 2012 so far, which makes it one of the most efficient products this year.

After an attempt to break the gold level of $ 1,800 per ounce has failed, the market began a slight downward correction.

Short-term traders may expect a decrease in net long speculative positions from current high levels, before they will resume major purchases of gold.

Gold prices also rose even despite the fact that the number of initial claims for unemployment benefits fell to the lowest level since 2008, pointing out that the effort to raise start working. The Ministry of Labour said that figure fell by 30,000 to 339,000 level last week.

Recall that the U.S. Federal Reserve pledged to stimulate spending as long as the employment situation is not significantly improved.

Also note that the gold-mining owned by Gold Fields, AngloGold Ashanti and Harmony Gold in South Africa hit by strikes and AngloGold now hinting that, in connection with these events, they can shut down some of their deposits.

October futures price of gold on the COMEX fell 7.3$ today and now is 1770.50 an ounce.

EUR/USD $1.2850, $1.2875, $1.2900, $1.2930, $1.2950, $1.2975, $1.3000

USD/JPY Y77.75, Y78.30, Y78.50, Y78.60, Y78.65

EUR/JPY Y100.00, Y100.50

GBP/USD $1.5945-50, $1.6080, $1.6110, $1.6115

USD/CHF Chf0.9375, Chf0.9450

AUD/USD $1.0175, $1.0300

NZD/USD $0.8175

Caterpillar CAT downgraded to Sector Perform from Outperform at RBC Capital
Exxon Mobil XOM Dahlman Rose Initiated Buy, target $100
Chevron CVX Dahlman Rose Initiated Hold

The UK's Debt Management Office announced Thursday that it sold Stg1.5 billion of the new 0.125% Mar 2024 index-linked Gilt, with a cover of 2.56 times and a real yield -0.441%.

Data:
06:00 Germany CPI, m/m (finally) September 0.0% 0.0% 0.0%
06:00 Germany CPI, y/y (finally) September +2.0% +2.0% +2.0%
06:45 France CPI, m/m September +0.7% +0.1% -0.3%
06:45 France CPI, y/y September +2.1% +2.3% +2.2%
07:30 U.S. FOMC Member Yellen Speaks -
08:00 Eurozone ECB Monthly Report October
 

The euro rose against the dollar and the yen, having played incurred at the beginning of the European session losses after lowering the credit rating of Spain. Yesterday, the rating agency Standard & Poor's downgraded Spain's credit rating two notches to BBB-from BBB +, which is close to "junk" status. Growth in the euro may be due to expectations of players that fall Spanish rating can push the country to the formal request for financial assistance, which potentially opens the door to activate the program OMT. In addition, the support of the measure, today reminded the players and the October newsletter ECB.

ECB noted the importance and effectiveness of the program OMT and signaled that he is ready to activate the program as needed. The Bank expects that in 2012 the rate of inflation will not exceed 2%, and then falls below this mark. Despite running the ECB measures, it is expected that the economy "will continue to remain under pressure in the inevitable process of balance sheet adjustment in the financial non-financial sector, as well as high unemployment and uneven recovery processes occurring in the world economy", - stated in the bulletin.

In addition to the German inflation figures for September, which coincided with forecasts (0.0% m / m, +2.0% y / y vs. prev. +2.1%), Today also published a report on the French CPI (+2.2% y / y with the expected increase +2.4% to +2.5% in September, -0.3% m / m vs. 0.0%).

Investors' attention focused on the meeting of finance ministers and central bankers the Group of Seven in Tokyo, which will be held later on Thursday.

The Japanese yen fell against the dollar after Japan's Economy Minister Maehara said that Japan may conduct an intervention on their own, without the approval of the United States, as the interests of Japan and the U.S. conflict in terms of exchange rates. The minister added that the purchase of foreign bonds by the Bank of Japan - one of the ways to increase the monetary base and the Bank of Japan will decide how to buy foreign bonds.

The Australian dollar rose against the U.S. dollar after today's publication of positive statistics on the labor market. As reported by the Australian Bureau of Statistics, in September, the number of employed people in the country grew by 14,500, showing the largest increase in new jobs since May 2012. It should be noted that the figure for the third consecutive month goes better than analysts' expectations.

EUR/USD

European stocks advanced for the first time in four days as Burberry Group Plc led luxury-goods makers higher, offsetting a rating cut on Spanish debt by Standard & Poor’s.

S&P lowered Spain’s debt rating to one level above junk, citing increasing economic and political risks. The country’s worsening recession is “limiting the Spanish government’s policy options,” S&P said in a statement late yesterday, lowering its rating by two levels to BBB- from BBB+. S&P assigned a negative outlook to Spain’s long-term rating and cut the short-term sovereign level to A-3 from A-2.

FTSE 100 5,799.32 +22.61 +0.39%

CAC 40 3,379.63 +13.76 +0.41%

DAX 7,252.7 +47.47 +0.66%

EUR/USD $1.2850, $1.2875, $1.2900, $1.2930, $1.2950, $1.2975, $1.3000

USD/JPY Y77.75, Y78.30, Y78.50, Y78.60, Y78.65

EUR/JPY Y100.00, Y100.50

GBP/USD $1.5945-50, $1.6080, $1.6110, $1.6115

USD/CHF Chf0.9375, Chf0.9450

AUD/USD $1.0175, $1.0300

NZD/USD $0.8175

Asian stocks swung between gains and losses after Standard & Poor’s downgraded Spain’s credit rating and as Japanese machinery makers declined after a report showed orders fell. Utility companies advanced. Companies that do business in Europe dropped after S&P downgraded Spain’s debt rating to one level above junk, citing mounting economic and political risks as the government considers a second bailout.

Nikkei 225 8,546.78 -49.45 -0.58%

S&P/ASX 200 4,483.5 -7.24 -0.16%

Shanghai Composite 2,107.63 -12.31 -0.58%

Esprit Holdings Ltd., a Hong Kong-based clothier that counts Europe as its biggest market, dropped 1.2 percent in Hong Kong.

Fanuc Corp., the world’s largest maker of controls that run machine tools, slipped 2.4 percent in Tokyo.

Lynas Corp. slumped 15 percent in Sydney after a court ruling further delayed the development of its rare-earth refinery in Malaysia.

Yesterday the euro rose to one-week low against the U.S. dollar after failing to fall below a key technical level.

The single currency fell to near its 200-day moving average before cutting losses. Earlier, the euro was down, as European finance ministers this week failed to reassure investors as to the eurozone sovereign debt crisis is close to resolution.

As European finance ministers meeting in Luxembourg this week welcomed the determination of Greece to trim its deficit to your budget.

The Canadian dollar fell against most of its most traded currencies against the fact that the concerns about slowing growth in China will have a negative impact on demand for commodities such as oil and gold.

Also, the Canadian dollar fell after it was reported that car sales in China unexpectedly fell, it was the first time in eight months. Also, the company Alcoa Inc (AA) said that the slowdown in growth in the country will lead to a global reduction in demand for aluminum. Note that raw materials account for about half of Canada's export revenue, and China, which is the world's largest consumer of metals and energy.

Pound broke his three-day losing streak against the dollar, up from its lowest level in four weeks after the National Institute of Economic and Social Research said the UK economy expanded in the third quarter by 0.8%, registering with the highest rates growth over the past five years. Bond yields fell after the governor of the Bank of England Governor Mervyn King said that inflation targeting should remain the focus of monetary policy.

The Australian dollar rose on the third day after the country sold its most long-term debt over the past thirty years, while increasing demand for assets of the country.

Also, the currency rose against the fact that the price of iron ore, which is the largest export product in Australia, rose to two-month high. Demand for currency was reduced in anticipation of tomorrow's report on the unemployment rate, which is expected to have grown to a three-month high.

Asian stocks fell, with the regional benchmark index heading for a one-month low, on concern China’s economic slowdown and its territorial dispute with Japan are weighing on corporate earnings.

Nikkei 225 8,596.23 -173.36 -1.98%

S&P/ASX 200 4,490.7 -14.65 -0.33%

Shanghai Composite 2,117.46 +2.23 +0.11%

Toyota Motor Corp. slipped 2.3 percent, pacing declines among Japanese carmakers that reported a slump in China sales.

Steel & Tube Holdings Ltd. tumbled 8.3 percent in Wellington after iron-ore producer Arrium Ltd. sold its entire 50.3 percent stake in its New Zealand unit at a discount.

Korea Electric Power Corp. sank 3.3 percent after Yonhap News agency said the utility’s chief executive officer forecast a loss.

00:00 Australia Consumer Inflation Expectation October +2.4% +2.6%

00:30 Australia Unemployment rate September 5.1% 5.3% 5.4%

00:30 Australia Changing the number of employed September -8.8 4.4 14.5

01:00 G20 G20 Meetings -

05:00 Japan Consumer Confidence September 40.5 41.2 40.1

Change % Change Last

Oil 91.38 +0.13 +0.14%

Gold 1,764.80 -0.30 -0.02%

Change % Change Last

Nikkei 225 8,596.23 -173.36 -1.98%

S&P/ASX 200 4,490.7 -14.65 -0.33%

Shanghai Composite 2,117.46 +2.23 +0.11%

FTSE 100 5,787.21 -23.04 -0.40%

CAC 40 3,369.79 -12.99 -0.38%

DAX 7,212.46 -22.07 -0.31%

Dow 13,345.05 -128.48 -0.95%

Nasdaq 3,051.78 -13.24 -0.43%

S&P 500 1,432.59 -8.89 -0.62% 

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

EUR/USD $1,2851 -0,25%

GBP/USD $1,6001 -0,01%

USD/CHF Chf0,9391 -0,13%

USD/JPY Y78,15 -0,13%

EUR/JPY Y100,43 -0,38%

GBP/JPY Y125,04 -0,14%

AUD/USD $1,0219 +0,12%

NZD/USD $0,8164 -0,11%

00:00 Australia Consumer Inflation Expectation October +2.4% +2.6%

00:30 Australia Unemployment rate September 5.1% 5.3% 5.4%

00:30 Australia Changing the number of employed September -8.8 4.4

01:00 G20 G20 Meetings -

05:00 Japan Consumer Confidence September 40.5 41.2

06:00 Germany CPI, m/m (finally) September 0.0% 0.0%

06:00 Germany CPI, m/m (finally) September +2.0% +2.0%

06:45 France CPI, m/m September +0.7% +0.1%

06:45 France CPI, m/m September +2.1% +2.3%

07:30 U.S. FOMC Member Yellen Speaks -

08:00 Eurozone ECB Monthly Report October

12:30 Canada Trade balance, billions August -2.3 -1.7

12:30 Canada New Housing Price Index August +0.1% +0.2%

12:30 U.S. International trade, bln August -42.0 -43.9

12:30 U.S. Initial Jobless Claims - 367 370

12:30 U.S. Import Price Index September +0.7% +0.7%

14:00 U.S. FOMC Member Jeremy Stein Speaks -

15:00 U.S. Crude Oil Inventories - -0.5

18:00 U.S. Federal budget September -190.5 -4.0