CFD Markets News and Forecasts — 12-11-2012

The euro traded close to a two-month low against the dollar as a draft policy makers’ report said Greece may require an extra $15 billion during the next two years and there are “very large risks.”

Europe’s shared currency traded at almost a one-month low against the yen after the report about the so-called troika as European leaders prepare to meet to seek a plan to maintain Greece’s solvency. Giving Greece a two-year extension to meet budget targets would ease the impact of austerity measures, the troika said.

The Australian dollar rallied after a bigger- than-estimated trade surplus in China improved prospects for commodity exports. China’s exports exceeded imports by $32 billion in October, the customs administration said Nov. 10, compared with a $27.3 billion trade surplus estimated by economists. China is Australia’s biggest trading partner.

The pound fell amid speculation the Bank of England’s latest growth and inflation projections may lead to more asset purchases. The Bank of England’s quarterly report is due in two days and may provide room for further asset purchases to boost growth. The central bank refrained from adding more stimulus at its most recent policy meeting, minutes from which are due next week.

European stocks fell to a two-week low as euro-area finance ministers met to discuss Greek aid and concern grew that impending U.S. tax increases and spending cuts will harm the world’s biggest economy.

National benchmark indexes fell in 12 of the 18 western- European markets today. France’s CAC 40 dropped 0.4 percent, while Germany’s DAX and the U.K.’s FTSE 100 were little changed.

Greece’s ASE sank 3.6 percent as Alpha Bank tumbled 14 percent to 1.56 euros. National Bank of Greece SA, the nation’s largest lender, lost 14 percent to 1.51 euros.

Plans to give Greece extra time to meet deficit-cutting targets would open up a financing gap of about 15 billion euros through 2014 and 17.6 billion euros in the two following years, the country’s creditors said. The so-called troika of the European Commission, ECB and International Monetary Fund supplied the estimates for tonight’s meeting of euro-area finance ministers in Brussels, according to a document obtained by Bloomberg News.

Telecom Italia climbed 4.2 percent to 72 euro cents. Italy’s former phone monopoly received interest from Sawiris, founder of Orascom Telecom Holding SAE, about an investment “through underwriting of new stock,” the Milan-based company said today. The offer is valued at more than 2 billion euros, said a person familiar with the matter, asking not to be identified because the discussions are confidential.

Banco Popular Espanol SA surged 4.6 percent to 1.17 euros as the Spanish bank said it plans to sell as much as 2.5 billion euros of discounted shares to close a capital shortfall.

Oil fluctuated in New York as rising Chinese crude imports countered concern that an economic contraction in Japan will reduce fuel consumption.

Futures traded in a $1.05-a-barrel range after China’s net crude purchases rose to the highest level in five months in October. Price retreated after Japan said its economy shrank last quarter as overseas sales and consumer spending slumped.

China’s net crude imports rose to 5.52 million barrels a day in October, also the highest level since May, the General Administration of Customs said Nov. 10 in Beijing. Industrial production was up 9.6 percent in October from a year earlier, the National Bureau of Statistics said Nov. 9.

Japan’s gross domestic product fell an annualized 3.5 percent in the three months through September, after a revised 0.3 percent gain the previous quarter, the Cabinet Office said in Tokyo. A drop of 3.4 percent was the median estimate of economists.

The U.S., China and Japan are the world’s biggest oil- consuming countries, accounting for a combined 37 percent of world demand, according to BP’s Statistical Review of World Energy. The 27 members of the EU were responsible for 16 percent of global oil use in 2011, BP said.

Crude oil for December delivery traded in a range of $85,42 –  $86,54 a barrel on the New York Mercantile Exchange. Prices are down 13 percent this year.

Brent oil for December settlement climbed 48 cents, or 0.4 percent, to $109.88 a barrel on the London-based ICE Futures Europe exchange.

Gold continues to go after the most successful week in late August because of concerns that the U.S. recession may begin, if Congress does not agree on reducing the budget deficit.

Precious metal rising in price while the dollar is under pressure from fears about threatening the U.S. financial crisis. If the White House and Congress agree, at the beginning of next year, will come into force automatically spending cuts and tax increases, estimated at $ 600 billion, which could push the U.S. economy into recession.

Euro holds above a two-month low against the dollar as Greece's ruling coalition won enough votes in parliament to approve the budget for 2013.

Today, the euro zone finance ministers meet in Brussels to discuss Greece's selection of a new portion of loans. According to German Finance Minister Wolfgang Schaeuble, the "troika" of international creditors are unlikely to present a full report on Monday on Greece.

On the physical market, jewelers reduced purchases, speculators and investors are waiting for the new price increase. Importers in India also stopped buying, because due to the weakening rupee, local prices increased to a maximum of seven weeks. The festive season, with rising demand for gold will culminate this week during festivals Dhanteras and Diwali, but the wedding season will last until December.

December futures price of gold on COMEX today rose to 1738.30 dollars per ounce.

- France attitude on Greece positive,constructive

- Must take decisive steps on Greece today

- Should see growth if we resolve Greek problem

- France making big efforts to reduce deficits

U.S. stock futures advanced amid a surge in takeover activity.

Global Stocks:

Nikkei  8,676.44 -81.16 -0.93%
Hang Seng 21,430.3 +45.92 +0.21%
Shanghai Composite 2,079.27 +10.21 +0.49%
FTSE  5,790.28 +20.60 +0.36%
CAC  3,418.28 -5.29 -0.15%
DAX 7,187.22 +23.72 +0.33%
Crude oil $85.81 -0.30%
Gold $1734.80 +0.23%

Walt Disney (DIS) was upgraded to Buy at Citigroup

McDonald's (MCD) was initiated with Buy at Davenport

Johnson & Johnson (JNJ) was downgraded to Hold at Jefferies

Caterpillar (CAT) was downgraded to a Neutral at JPMorgan.

EUR/USD $1.2700, $1.2750, $1.2800, $1.2850, $1.2870

USD/JPY Y79.00, Y79.70, Y80.00

GBP/USD $1.5900, $1.6000, $1.6100

Data

00:30 Australia Home Loans September +1.8% +1.1% +0.9%

00:30 Australia National Australia Bank's Business Confidence October 0

02:30 Japan BOJ Governor Shirakawa Speaks -

06:00 Japan Prelim Machine Tool Orders, y/y October -2.8% -6.7%

11:00 Eurozone Eurogroup Meetings

EUR/USD

Offers $1.2820, $1.2800/10, $1.2760, $1.2730

Bids $1.2690, $1.2665-50, $1.2630/20

Trading in Europe in different directions, and a slight change in the indices. The focus of the market is Greece, but which last week approved the budget for 2013 with a small surplus (1.1%), excluding debt service. If the country does not receive the next tranche of aid, it is threatened with default this week.

German Chancellor Angela Merkel and the chairman of the Foreign Affairs Committee Bundestag Ruprecht Polenz supported the creation of a free trade area between the EU and the U.S.. The German government intends to ensure that the authorities in Washington as soon as possible to discuss this issue.

FTSE 100 5,781.64 +11.96 +0.21%

CAC 40 3,418.57 -5.00 -0.15%

DAX 7,179.81 +16.31 +0.23%

Telecom Italia Shares rose 3%. According to press reports, Orascom Telecom Holding SAE is planning to acquire a minority stake in the Italian telephone operator.

The capitalization of the Swiss phone company Swisscom AG rose by 1%. After JPMorgan Chase & Co. increased Swisscom recommendation on the shares to "overweight" from "neutral."

EUR/USD $1.2700, $1.2725, $1.2775, $1.2800, $1.2850, $1.2900

USD/JPY  Y79.00, Y79.30, Y79.40, Y80.00, Y80.50

EUR/JPY Y103.25

GBP/USD  $1.6000, $1.6030, $1.6050, $1.6100, $1.5910

EUR/GBP  stg0.8000

GBP/CHF Chf1.5230

USD/CHF Chf0.9425

AUD/USD $1.0400, $1.0425, $1.0430, $1.0445

Asian stocks fell, with the regional benchmark index headed for its lowest close in a month, after Japan’s economy shrank at the fastest pace since last year’s earthquake, overshadowing an acceleration in China’s exports.

Nikkei 225 8,676.44 -81.16 -0.93%

S&P/ASX 200 4,448.03 -13.99 -0.31%

Shanghai Composite 2,079.27 +10.21 +0.49%

Yokohama Rubber Co. sank 6.3 percent after posting quarterly earnings that missed analysts’ estimates and as the price of rubber fell to a two-month low following the Japanese data.

QBE Insurance Group Ltd. sank 8.3 percent, the most in 11 months, after Australia’s No. 1 insurer by market value said it will issue debt due to losses from U.S. super storm Sandy.

Li & Fung Ltd., a supplier of clothes and toys to Wal-Mart Stores Inc., climbed 1.3 percent as China’s exports grew at the fastest rate since May.

The euro fell to a two-month low against the dollar and to the weakest level in nearly a month against the yen since the fall of French industrial production adds speculation that Europe's economic prospects are deteriorating. The data showed that the amount of French industrial production fell by 2.7%, compared to the previous month, while the average forecast was at 1%. We also learned that business confidence in the second-largest economy of the euro area reached a three-year low last month.

The single currency was headed for a weekly decline against the yen and the dollar, as Greek lawmakers prepared to vote on November 11 for the next year's budget. The euro recovered some losses, even in spite of the fact that the index of U.S. consumer confidence rose to a five-year maximum.

The yen reached 79.08 per dollar, which is the strongest level since Oct. 18, but also showed an increase against most other major currencies. Note that the currency is generally stronger in times of political, financial and economic turmoil, and the latest data on the trade surplus means that the country has to rely on foreign creditors. But, despite this growth rate still declined, approaching with up to the opening level of the day.

The dollar index (DXY) rose 0.3% to 81.035, after an early increase to the level of 81.087, which is a two-month high.

Canadian dollar recovered today suffered losses early in the day, after a report on the level of consumer confidence in the United States. Note that the currency is trading above parity with U.S. counterpart for a second day.

Asian stocks fell, with the regional benchmark index headed for the biggest two-day loss in two months, as companies cut forecasts and Australia’s central bank trimmed its national growth outlook. Shares pared losses after data added to signs China’s economy is bottoming.

Nikkei 225 8,757.6 -79.55 -0.90%

Hang Seng 21,353.1 -213.81 -0.99%

S&P/ASX 200 4,462.02 -21.80 -0.49%

Shanghai Composite 2,069.07 -2.44 -0.12%

Nexon Co., a developer of online games, slumped 16 percent in Tokyo after cutting its net-income forecast.

Emeco Holdings Ltd., a mining-equipment maker, plunged 17 percent in Sydney after reducing its profit target.

National Australia Bank Ltd., the nation’s fourth-biggest lender by market value, dropped 0.7 percent in Sydney.

Chinese developer Guangzhou R&F Properties Company Ltd. rose 1.6 percent in Hong Kong.

00:30 Australia Home Loans September +1.8% +1.1% +0.9%

00:30 Australia National Australia Bank's Business Confidence October 0

02:30 Japan BOJ Governor Shirakawa Speaks

00:30 Australia Home Loans September +1.8% +1.1% +0.9%

00:30 Australia National Australia Bank's Business Confidence October 0

02:30 Japan BOJ Governor Shirakawa Speaks -

06:00 Japan Prelim Machine Tool Orders, y/y October -2.8%

11:00 Eurozone Eurogroup Meetings -

21:45 New Zealand Food Prices Index, m/m October -0.9%