Stocks have surrendered a chunk of their gains in recent trade. There is no clear catalyst to account for the slip, but it coincides with a move by Treasuries to their session high.
December consumer credit, the only item on the economic calendar, was just released. It showed an increase of $6.09 billion, which is far more than the $2.50 billion increase that had been expected, on average, among polled economists. Consumer credit for November was revised upward to $2.02 billion from $1.34 billion.
The stock market has spent the past couple of hours trading in a narrow range, which has allowed this session's gains to consolidate. Though the broader market has become range bound, financials have made a modest move to fresh session highs. The sector is now up 1.6%, which is double what the broader market has achieved.
GBP/USD has held close to $1.6100 for much of the US session, essentially locked inside $1.6090/1.6130 as sterling-yen holds above Y132.50 (above the 200d ma). Cable focus for the week still the MPC meeting Thursday. Offers still atop the overnight high at $1.6185 and said to extend to $1.6200.
The euro slid for a fourth day versus the dollar as data showed German factory orders fell more than analysts forecast in December, while U.S. reports this week are forecast to indicate the nation’s recovery is gaining strength.
The 17-nation shared currency erased earlier gains versus the yen after the Economy Ministry in Berlin reported factory orders dropped 3.4% from November.
Economists had forecast a 1.5% decline in German factory orders.
The greenback gained versus nine of its 16 most-traded counterparts as the Standard & Poor’s 500 Index climbed 0.8%.
The dollar gained versus the euro and yen on Feb. 4 as a report showed the U.S. unemployment rate unexpectedly dropped in January to 9%, the lowest since April 2009.
The pound rose against most of its major counterparts on speculation the Bank of England will be forced to raise interest rates to contain inflation.
“Sterling regained some ground at the start of the week, and we would expect further recovery as we move closer to the February MPC meeting on Thursday and especially the quarterly inflation report next week,” Valentin Marinov, a senior currency strategist at Citigroup Inc., wrote.
A report this week is forecast to show U.K. manufacturing expanded for an eighth month in December. Output rose 0.4% after a 0.6% gain in November, the Office for National Statistics will say on Feb. 10.
On the same day, the Bank of England is forecast to keep its bond-purchase plan at 200 billion pounds ($323 billion) and leave benchmark rates at a record low 0.5%, according to all economists in a survey.
The Australian dollar advanced as job advertisements in the nation rose for a ninth month. Jobs advertised in newspapers and on the Internet climbed 2.4% in January from December, when they increased a revised 1.2%, Australia & New Zealand Banking Group Ltd. said in a report.
Technical analysts at Barclays Capital say trendline support in dollar-yen around Y81.25 "has remained intact". They look for pullbacks "within the range" and eventually see scope for a rally towards Y83.25 (Y83.20ish highs seen Jan 27). However, a break above Y83.25 "at least" will be needed to target Y85.20/Y85.90.
USD/JPY recovers to Asian high on Y82.46 when supply ahead of Y82.50 capped. That supply remains intact. Above Y82.50, the usual cluster of tight stops, better stops atop Y82.60/70/80.
EUR/USD squeeze extends to $1.3570 area now with light supply expected around $1.3570/75 area to slow any gains. Euro respecting the cluster of support noted earlier below $1.3500. Offers still in place around $1.3625.
Following a brief pause, stocks have extended today's advance to a fresh session high. Financials are still out in front; they now sport a 1.4% gain.
Financials have benefited from a rather broad bid that has sent more than 90% of the sector's members to a gain. Multi-line insurers are in the best shape -- they've collectively gained 3.1%, so far, today.
The S&P 500 Financial Sector is up little more than 5% this year.
EUR/USD squeezing higher ahead of the London fixing event with trade to $1.3550 area. Tech support in the $1.3480/00 zone. Area of $1.3570/80 now suggested as nearby resistance with a few offers in place there ahead of supply at the $1.3626 overnight high area.
USD/JPY holds Y82.32 area with the dollar leaking back from a recent peek above Y82.40 (overnight high at Y82.46). Offers around Y82.50. Stops a risk above Y82.50 area.
USD/CAD holds C$0.9877, in the upper reaches of the day's C$0.9851/95 range. Area of C$0.9920 expected to provide resistance/supply, while the area below C$0.9840 underpins.
EUR/USD extends losses to $1.3510. Bids remain ahead of $1.3500. Some light stops sub $1.3510 were triggered. Support below $1.3500 ($1.3498 21-dma) and $1.3482 fibo.
Stocks are up nicely in the first few minutes of trade. The opening advance has taken all three major equity averages to new two-year highs. Strength is broad based, but defensive-oriented issues like health care (-0.1%) and telecom (-0.3%) are lagging. Energy (+0.8%), industrials (+0.8%), and Financials (+0.7%) are in the best shape.
U.S. stocks were set to open higher Monday, as investors welcomed a spate of corporate mergers ahead of President Obama's speech at the Chamber of Commerce.
Stocks closed a choppy session on Friday higher -- ending the week with gains of more than 2% -- as investors looked past a muddy report on the U.S. job market.
For the week, the Dow gained nearly 2.3%; while the S&P 500 was up 2.7%. The Nasdaq added more than 3% over the last five trading days.
Later Monday, a government report is expected to show that consumer credit rose a seasonally adjusted $2.5 billion in December, after increasing by $1.3 billion the previous month.
Companies: AOL (AOL) agreed to purchase news blog service The Huffington Post for $315 million, the two entities announced early Monday.
Ensco (ESV) announced plans to buy rival offshore drilling company Pride International (PDE) in a cash-and-stock deal valued at $41.60 per share, which represents a 21% permium to Pride's closing price on Friday, the companies said.
Shares of Houston-based Pride (PDE) surged 13% before the opening bell.
Medical device maker Danaher Corp. (DHR) will buy Beckman Coulter (BEC) for $6.8 billion, or $83.50 per share. Beckman shares jumped 10% in pre-market trading.
U.S.-listed shares of Nokia (NOK) were up over 2% in pre-market trading following reports that a management shake-up is brewing at the Finnish cellphone company.
World markets:
Oil for March delivery gained 5 cents to $89.06 a barrel.
Gold futures for April delivery rose $1.90 to $1,350.70 an ounce.
Three-month copper futures hit $10,160 per ton on the London Metal Exchange, a new record high.
The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.65% from 3.58% late Friday
Says "risks are for 4.5%" because manufacturing is ramping up but there is "breadth across sectors and countries." EM Asia is getting a near-term lift "but usual outperformance will be trimmed some in 2011."
Sales continue to weigh on the pair as dollar-yen also begins to lose ground towards earlier Asian lows. A break in the cross through Y111.45 points to further fall back towards Friday's low of Y110.75, with a move back through the 100 dma currently around Y111.82 needed to rechallenge Y112.20/30 earlier resistance.
"A slew of incoming data suggests the recovery has broadened. We expect the saving rate to stay near current levels in 2011 as consumption grows in line with personal income; households should continue to drive the recovery." They see higher oil prices as a risk for a slowing.
The Nikkei 225 ended up 48.52 points, or 0.46%, to stand at 10,592.04.
Preliminary volume in the Nikkei constituents totalled 1.415bn shares, with 135 issues trading higher and 71 lower. A total of 19 were unchanged.
The broader-based TOPIX was 5.03 points higher at 940.39.
Comments: the pair got support around Chf0.9525 and tries to extend gains. The nearest resistance Chf0.9590, ahead of Chf0.9620.
Comments: the pair keeps positive mood. The nearest resistance - $1.6070. Above growth is possible to $1/6275/00. The nearest support - $1.6080, ahead of $1.6030/00.
Comments: the pair gained from Friday's low. The nearest support - $1.3540, ahead of $1.3480. The nearest resistance - $1.3625. Above growth is possible to $1.3680.
05:00 Japan Leading indicators composite index (December) preliminary 101.4 100.6
05:00 Japan Coincident indicators composite index (December) preliminary - 102.4
11:00 Germany Manufacturing orders (December) seasonally adjusted -1.9% 5.2%
11:00 Germany Manufacturing orders (December) not seasonally adjusted, workday adjusted Y/Y 22.2% 20.6%
20:00 USA Consumer credit (December), bln 2.0 1.3
23:50 Japan Current account (December) unadjusted, trln 1.070 0.926
23:50 Japan Trade balance (December) unadjusted, trln - 0.260
23:50 Japan (M2+CDs) money supply (January) Y/Y 2.3% 2.3%
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