October132011

Morning News Call - EMEA, Oct 13


MARKET VIEWEuropean shares are set to open lower on Thursday after sharp gains in the previous session as global growth worries resurface following weaker than expected Chinese trade data.Spreadbetters see Britain’s FTSE 100 opening 0.6 percent down, while Germany’s DAX and France’s CAC-40 are seen 0.4 percent lower.China’s trade surplus narrowed in September for a second month in a row as growth of exports and imports both fell below forecasts, reflecting global economic weakness. Exports rose 17.1 percent last month from a year ago, slowing from a 24.5 percent gain in August, and imports increased 20.9 percent, compared with August’s 30.2 percent rise.Asian shares rose on growing hopes that Europe is taking concrete steps to contain the region’s debt woes and head off a systemic banking crisis. Strengthening investor confidence in the euro zone underpinned the euro, while receding concerns about the banks’ problems threatening the wider financial system sharply tightened Asian credit markets.Lawmakers in Slovakia struck a deal on Wednesday to ratify a plan to bolster the euro zone’s rescue fund by Friday. Slovakia is the only country in the 17-nation bloc left to approve the revamp of the fund. Adding to the sense of urgency, the President of the European Commission, Jose Manuel Barroso, said Europe needed to take decisive action on Greece and outlined a broad plan to contain the debt crisis.MSCI’s broadest index of Asia Pacific shares outside Japan rose 1.1 percent, following a 1.4 percent gain in the MSCI world equity index, which posted an increase for the sixth session in a row on Wednesday. The Nikkei average rose 1.15 percent to a four-week high, with shares of major exporters such as Sony rising as players bought their shares back on tentative signs of progress in the European debt crisis.The euro dipped, taking a breather after rallying to a one-month high the previous day, with market players saying it may eke out more gains ahead of a European Union summit next week. The euro dipped 0.1 percent to $1.3783. It had touched a one-month high of $1.3834 on Wednesday on trading platform EBS, its rise having gained steam after breaching an option barrier at $1.3700 and triggering stop-loss bids.Brent crude fell to near $111 a barrel, snapping six days of gains, after the trade data from China. Brent crude for November fell 19 cents to $111.17 by 0345 GMT, after a gain of 11.6 percent over the previous six sessions. U.S. November crude slipped 72 cents to $84.85, after tumbling to an intraday low of $84.64.Gold prices held steady, as optimism for a solution to the euro zone crisis underpinned sentiment, while tight physical supply in Asia continued to lend support. Spot gold edged up 0.1 percent to $1,678.49 an ounce by 0257 GMT, off a 2-1/2-week high of $1,691.6 hit in the previous session. U.S. gold inched down 0.1 percent to $1,681.U.S. Treasury debt prices fell on Wednesday, lifting benchmark yields to their highest in six weeks, as stocks rallied on optimism about Europe’s debt crisis and global economic prospects. The improvement in risk sentiment diminished the appeal of benchmark 10-year Treasury notes at Wednesday’s $21 billion auction, attracting weak demand with the yield above pre-auction rates. The bid-to-cover ratio, a gauge of demand which compares total bids with the amount offered, was 2.86, the weakest since November 2010. In late afternoon trading, 10-year yields were up 6 basis points at 2.22 percent. Ten-year notes were last down 17/32 in price.MARKET SNAPSHOT AT 0515 GMTS&P 500 INDEX FUTURES 1,198.10 up 0.05% up 0.60DJIA FUTURES 11,422.00 up 0.11% up 13.00NIKKEI 8,826.70 up 1.00% up 87.80MSCI ASIA, EX-JP 470.36 up 1.57% up 7.28EURO/USD 1.3802 down 0.13% down 0.0018USD/JPY 77.10 up 0.19% up 0.15SPOT GOLD $1,675.99 down 0.04% down $0.71US CRUDE $84.76 down 0.96% down $0.8210-YR US TSY YLD 2.2030% down 0.007010-YR BUND YLD 2.2035% up 0.0150GLOBAL TOP STORIESChina’s trade surplus narrowed in September for a second straight month as growth of exports and imports both pulled back, reflecting global economic weakness and domestic cooling, and giving Beijing ammunition to resist U.S. pressure to allow the yuan to rise more quickly.Euro zone countries will ask banks to accept losses of up to 50 percent on their holdings of Greek debt, officials said on Wednesday, as part of a grand plan to avert a disorderly default and stem a crisis that threatens the world economy.An Australian court slapped a temporary ban on the sale of Samsung Electronics’ latest computer tablet in Australia on Thursday, handing rival Apple another legal victory in the two firms’ global patent war.Global miner Rio Tinto on Thursday reported a 5 percent rise in third-quarter iron ore production from a year ago and said its Australian coal operations had recovered from flooding earlier in the year.The company that makes the BlackBerry smartphone is working frantically to end a three-day global service disruption that has frustrated millions of its customers and pumped up pressure on its management to make sweeping changes.EUROPEAN COMPANY NEWSCarrefour, Europe’s largest retailer, is expected to post a modest rise in third-quarter sales on Thursday as robust demand in Latin America will barely cushion sluggish markets in France and austerity-hit Southern Europe.Glencore, the world’s biggest commodities trader, is expected to sign a deal within days to give an $800-$900 million loan to Indonesia’s Bakrie Group to help it refinance its debt, sources with knowledge of the deal said on Thursday.Pratt & Whitney said on Wednesday that it will spend $1.5 billion to buy Rolls-Royce Holding’s share of the International Aero Engines consortium that produces the engine that powers the Airbus A320 plane family.Crisis-hit car maker Saab has received about 100 million crowns ($15 million), part of a bridge loan secured by China’s Zhejiang Youngman Lotus Automobile that is key to the Swedish firm’s short-term survival, daily Dagens Industri reported on Wednesday.The U.S. offshore drilling regulator on Wednesday formally issued sanctions against BP and the major contractors involved in the 2010 explosion on the Deepwater Horizon rig that killed 11 workers and spewed more than 4 million barrels of oil into the Gulf of Mexico.TODAY’S COMPANY ANNOUNCEMENTSBelgium Omega Pharma Q3 TradeFrance Carrefour Q3 SalesFrance Vergnet Q2France Cegid Q3 SalesFrance Lacie Q4Germany Suedzucker Q2Germany Fraport TrafficGermany Wilex Q3Switzerland Roche Q3 SalesSweden Avanza Bank Q3United Kingdom Air Partner PreliminaryUnited Kingdom Ashmore Group Q1 TradeUnited Kingdom Booker Group InterimUnited Kingdom E2V Technologies TradingUnited Kingdom Grainger TradingUnited Kingdom Hamworthy TradingUnited Kingdom Ladbrokes TradingUnited Kingdom Rio Tinto Q3 OutputUnited Kingdom Renishaw TradingUnited Kingdom WH Smith PreliminaryTODAY’S TOP ECONOMIC EVENTS (all times GMT)0600 - Germany final consumer price index (CPI) for Sept mm, seen up 0.1 pct, unchanged. CPI yy seen up 2.6 pct, unchanged.0615 - European Central Bank Governing Council member Erkki Liikanen to give speech at Affecto Forum in Helsinki, Finland.0700 - ECB Governing Council member Jozef Makuch to address a conference on Slovak economy outlook in Bratislava, Slovakia.0715 - Switzerland producer/import prices for

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