CFD Markets News and Forecasts — 13-10-2011

• FOMC has overestimated strength of economic recovery
• as economy recovers, FOMC should reduce monetary accommodation

• should have Troika's Greece report mid-next week

European stocks fell from a two- month high as Chinese exports slowed and the European Central Bank warned imposing further losses on holders of Greek debt posed a risk to the euro area’s financial stability. European banks extended losses as the European Central Bank said financial institutions’ involvement in euro-area bailouts through enforced investor losses posed a risk to financial stability and would have “direct negative effects” on lenders. China’s export growth slowed to its weakest pace in seven months. Officials said that trade faces “severe challenges” as the yuan strengthens and confidence slides in developed nations. Exports climbed a less-than-forecast 17.1 percent in September from a year earlier, customs bureau data showed in Beijing today. The trade surplus of the world’s second-largest economy fell to $14.51 billion last month from $17.76 billion in August. Imports rose 20.9 percent, also less than forecast.

FTSE 100 5,403 -38.42 -0.71%, CAC 40  3,187 -42.82 -1.33%, DAX 5,915 -79.63 -1.33%

National benchmark indexes fell in 16 of the 18 western- European markets. The U.K.’s FTSE 100 Index slid 0.7 percent. France’s CAC 40 Index and Germany’s DAX Index both slipped 1.3 percent.

Austria’s Raiffeisen Bank International AG dropped 3.2 percent to 22.50 euros and Commerzbank AG, Germany’s second- biggest lender, slipped 4.8 percent to 1.76 euros. UniCredit SpA plunged 12 percent to 92.7 euro cents, its largest slide since March 2009.

Carrefour SA retreated 5.9 percent after saying its profit may drop as much as 20 percent this year. Roche Holding AG slid 4.5 percent after posting third-quarter revenue that missed analysts’ estimates. Alcatel-Lucent surged 5.3 percent on a report France’s biggest telecommunications equipment maker will sell its corporate call-center business.

Rolls-Royce Group Plc jumped 9.9 percent to 688 pence after the jet-engine maker agreed to sell its share in a venture making engines for the Airbus A320 aircraft. Rolls-Royce sold its 32.5 percent stake in International Aero Engines to Pratt & Whitney for $1.5 billion and payments for 15 years.

The dollar and yen advanced versus most of their major counterparts after JPMorgan Chase & Co. reported a decline in profit and China’s export growth slowed, weakening stocks and spurring demand for a refuge.

The euro slid from the highest level in almost five weeks against the yen after the European Central Bank said the involvement of private-sector banks in bailouts would risk financial stability. The euro pared its drop versus the dollar after Slovakia approved Europe’s enhanced bailout fund, completing ratification across the currency region.

The yen rallied after yesterday’s 0.8 percent slide against the dollar as investors pared bets the Bank of Japan will introduce additional measures to weaken the currency.Japan’s currency tends to appreciate during economic and financial turmoil because the nation’s current-account surplus makes the nation less reliant on foreign capital.

The dollar benefits as the world’s main reserve currency. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback versus the currencies of six major trading partners, rose 0.4 percent to 77.316.

U.S. stocks fell, following the biggest Standard & Poor’s 500 Index gain over seven days since 2009, amid a drop in JPMorgan Chase & Co.’s earnings and concern equities rallied too much on optimism about Europe’s crisis.

Dow 11,416.38 -102.47 -0.89%, Nasdaq 2,601.01 -3.72 -0.14%, S&P 500 1,194.97 -12.28 -1.02%

Financial shares had the biggest decline in the S&P 500 among 10 industries, falling 2.4 percent.

JPMorgan tumbled 4.9 percent after reporting a profit slump of about 33 percent, excluding a $1.9 billion accounting benefit, as earnings from investment banking and trading decreased. Bank of America Corp. and Citigroup Inc. fell at least 4.8 percent. General Electric Co. and Alcoa Inc. dropped more than 1.4 percent, pacing losses among companies most-dependent on economic growth.

Bids $1.5670/60, $1.5640/35, $1.5620/10, $1.5605/00

Currently FTSE  5,392 -49.33 -0.91%, CAC  3,192 -37.94 -1.17%, DAX 5,935 -59.38 -0.99%.

European stocks fell as China’s export growth slowed.