CFD Markets News and Forecasts — 07-06-2011

The euro appreciated against the majority of its peers as the European Central Bank signaled its approval of Greek bond rollovers and equities advanced for the first time in a week. The Standard & Poor’s 500 Index rose 0.5%, snapping four consecutive days of losses. The MSCI World (MXWO) Index gained 0.4%.
ECB President Jean-Claude Trichet yesterday gave his first signal that he endorses encouraging investors to buy new Greek bonds to replace maturing securities, potentially making the debt situation more sustainable.
A debt rollover is being considered as an alternative means of easing Greece’s funding squeeze, two officials familiar with the matter said last week on condition of anonymity. Investors may be given preferred status, higher coupon payments or collateral as incentives to roll over the holdings when they mature, two separate officials, who declined to be identified because the talks are in progress, said last week.
“The market is taking it pretty much for granted that Greece will get sufficient funds to tide it through the next couple of years,” said Alan Ruskin, global head of Group-of-10 foreign-exchange strategy at Deutsche Bank AG in New York.
The Swiss franc weakened against all major counterparts as data showed consumer prices were steady last month, damping speculation that the nation’s central bank will raise borrowing costs.
The franc weakened for the first time in three days versus the euro. Consumer-price inflation in May was unchanged from a month earlier, the Federal Statistics Office in Neuchatel said today. Prices rose 0.4 percent from a year earlier. Economists’ median estimate was for a monthly decline of 0.1 percent. The franc reached a record against the dollar before declining.
“The CPI data won’t spook the Swiss National Bank, which remains relatively dovish,” said Chris Walker, a foreign- exchange strategist at UBS AG in London. “The SNB doesn’t want to give any more incentive to buy the franc. They’re still worried about the level of the franc, which is mainly driven by external factors, such as risk appetite.”
The Swiss currency has strengthened amid concern that the European sovereign-debt crisis will deteriorate, spurring investor demand for a haven.

• следует внимательно наблюдать за процессом, поскольку неожиданный рост кредитной активности может спровоцировать инфляцию.

The major market averages have eased off their best levels of the day, but still hold solid gains. The S&P and Dow lead the advance with gains of 0.4% while the Nasdaq trails with a 0.3% gain.
The S&P 500 Technology Index has slipped into negative territory, seeing fractional losses for the session. Despite a plethora of positive comments regarding yesterday's announcement of the iCloud, shares of Apple (AAPL 334.29, -3.75) are among the worst performers in the technology space as they trade down close to 1.1%. The stock has been stuck in a range between $330 and $360 throughout most of 2011 and today's weakness brings the price within a couple dollars of the year's lower bound.

Nomura says weekly retail data show "Sales in June, which is considered to be the peak of seasonal business activity before July clearance sales, started off strong." They say warm weather may have helped sales.

Crude continues to show notable volatility this morning ahead of OPEC's meeting tomorrow. After falling over 1% after pit trading began to new session lows of $97.81, crude has recovered most of its losses in recent trade and is now down 0.3% at $98.70/barrel
Natural gas trended higher shortly after pit trading opened and pushed into positive territroy. But after hitting current session highs of $4.85/MMBtu at the top of the hour, it dropped 1.2% over the next seven minutes to $4.79. After trading in a tight range over the last 25 minutes, the energy component is down 0.7 at $4.79/MMBtu
In the precious metals space, gold is showing little action, while siler is back near the $37 level. Gold futures have been chopping around the unchanged line this morning and is currently down 0.03% at $1546.80/oz. Silver has been in positive territory all session. It hit session highs of $37.52/oz. in early morning trade and has shown a general downtrend since. In current activity, it's up 0.7% at $37.04/oz.

The major market averages have eased off their opening levels, but still trade higher for the session. The Dow and S&P lead the way with 0.3% gains while the Nasdaq lags with a 0.1% advance.
Shares of International Paper (IP 30.00, +0.35) and Temple-Inland (TIN 29.63, +8.62) are in focus today after International Paper made a $30.60 per share bid for Temple-Inland. The unsolicited bid was quickly rejected with Temple-Inland saying it “grossly undervalues” the company despite being a 46% premium to Monday’s closing price. Other packaging/paper stocks such as Boise (BZ 7.99, +0.52) and Packaging Corp. of America (PKG 28.50, +1.67) are seeing a positive response to the news.  

EUR/USD recovers again after earlier dip to $1.4650. Resistance remain at $1.4680 with offers mentioned there. Bids eyed at $1.4650, now under assault. Stops known below $1.4640 and $1.4630.

EUR/USD  $1.4485, $1.4400
USD/JPY Y80.50, Y80.85
EUR/JPY Y118.00, Y115.00
GBP/USD $1.6400, $1.6410, $1.6450
AUD/USD $1.0715, $1.0640, $1.0540, $1.0530
AUD/JPY Y85.25

U.S. stocks were poised to claw higher early Tuesday, as investors await comments from Federal Reserve Chairman Ben Bernanke about the state of the economy.
A variety of reports, namely Friday's disappointing jobs data, have signaled a slowdown in the recovery and that's making investors nervous.
"There are worries that the U.S. economy is sputtering and global economic growth is slowing," said David Jones, chief market strategist at IG Markets.
In addition, the Federal Reserve's $600 billion stimulus will run out later this month.
Bernanke is scheduled to speak Tuesday before the International Monetary Conference.

Economy: The Federal Reserve will release its consumer credit report later today.
Companies: Ford (F, Fortune 500) plans to boost worldwide production 50% by mid-decade, to 8 million vehicles a year, CNN confirmed. Shares of the auto giant rose more than 1% in premarket trading.
Shares of International Paper Co. (IP, Fortune 500) jumped more than 4% in premarket trading, after the company offered to buy Temple-Inland (TIN) for $3.38 billion in cash late Monday. Temple-Inland's board rejected the offer. The company's stock soared 44% premarket.
After the bell, home builder Hovnanian Enterprises (HOV) is slated to report its second-quarter results. The company is expected to post a loss of 51 cents on revenue of $263 million.

EUR/USD gains ground, holding around session highs on $1.4672 following the remarks from France finmin Lagarde that Greek rescue deal to include additional package from eurozone/IMF. Nothing new, but it helps the rate to hold higher.

GBP/USD recovers from lows and currently holds around $1.6444, challenging resistance at $1.6435/40. Above here the rate can test $1.6460 ahead of earlier high at $1.6474. Offers seen from this latter level, extending toward $1.6480 with stops above.

Data released:
07:00     UK     Halifax house price index (May)    0.1%    0.3%    -1.4%
07:00     UK     Halifax house price index (May) 3m Y/Y    -4.2%    -4.0%    -3.7%
09:00     EU(17)     Retail sales (April) adjusted    0.9%    0.3%    -1.0%
09:00     EU(17)     Retail sales (April) adjusted Y/Y     1.1%    0.0%    -1.7%
10:00     Germany     Manufacturing orders (April) seasonally adjusted    2.8%    2.1%    -2.7 (-4.0)%
10:00     Germany     Manufacturing orders (April) not seasonally adjusted, workday adjusted Y/Y    10.5%    9.2%    10.1 (9.7)%

The euro appreciated as the European Central Bank signalled its approval of Greek bond rollovers and German Chancellor Angela Merkel told U.S. President Barack Obama the region will overcome its debt crisis.
The single currency reached a one-month high versus the dollar and approached its strongest level in a week versus the yen.
ECB President Jean-Claude Trichet yesterday gave his first signal that he endorses encouraging investors to buy new Greek bonds to replace maturing securities, potentially making the debt situation more sustainable.
The Dollar Index slid to the lowest in more than a month as a Chinese official said there are risks from holding too many dollar assets.
The central bank left its benchmark interest rate unchanged for a sixth meeting as signs of slower growth from the U.S. to China dimmed prospects for an acceleration in hiring at home.
Australia’s dollar fell from near a four-week high against its U.S. counterpart as policymakers said monetary policy remains appropriate.
The Canadian dollar rose against its U.S. counterpart and the yen as Finance Minister Jim Flaherty said he will seek to bring federal finances back into surplus by 2014. Flaherty’s Conservative Party won a majority in last month’s election.

EUR/USD rose to session high on $1.4680 before retreated to $1.4650.

GBP/USD tested highs on $1.6470, but failed to break above abd retreated to $1.6416.

USD/JPY slowly recovers fron Asian lows on Y79.96. Rate recovered to Y80.24.

There is a lack of early data from core-Europe on Tuesday, with data not getting going until the 0900GMT release of EMU retail trade data for April. Germany then releases total manufacturing orders at 1000GMT.
At 1945GMT Fed Chairman Ben Bernanke is due to deliver a speech to the International Monetary Conference in Atlanta.

GBP/USD continues to dragg down, Earlier rate triggered offers between $1.6400/20 to print session highs on $1.6474. Rate currently holds around $1.6412. Small bids ahead of $1.6400 with stops below. Break under widens losses to $1.6345/55.

Banks were welcomed on European equity markets on Tuesday, helping most of the region’s indices.
French banks were among the best financial sectors performers. Crédit Agricole has lost more than 15% in the past 10 weeks and was up 1.7% on Tuesday after being upgraded to “buy” from “neutral” by Nomura.
Deutsche Bank gained 1.3%, while Société Générale gained 1.2%. Dutch financial services group ING climbed 2.3%.
Overall, the FTSE Eurofirst 300 index was up 0.4% to 1,109.29.

The US dollar held a mixed bias Tuesday, as the euro continued to recover off overnight lows, while a less-hawkish-than-expected statement from the Reserve Bank of Australia boosted the U.S. dollar against other major currencies.
The euro weakened last night after Eurogroup President Jean-Claude Juncker reportedly said that the euro was overvalued against some of its major counterparts.
"While ECB rate hike expectations (which may heighten this week after the 9 June ECB policy decision) and potentially softer commodity price may provide support for the euro, the sovereign debt worries within the Eurozone periphery economies are unlikely to go away soon and will continue to weigh down on the euro," said analysts at United Overseas Bank.
Traders said speculation of a further interest rate hike in China also keeping the U.S. dollar in favor.
The official Economic Information Daily reported Tuesday that the People's Bank of China is likely to raise benchmark interest rates by 25 basis points at the end of this week, citing unidentified Chinese analysts. The PBOC may also raise the required reserve ratio by 50 basis points after the release of May economic data due to come out on June 14.              
The RBA today announced it was keeping its official cash rate on hold at 4.75%, in line with expectations, but issued a statement which was interpreted to be less-hawkish than what many economists had expected.
In the conclusion of today's statement, RBA Governor Glenn Stevens said: "At today's meeting, the Board judged that the current monetary policy remained appropriate."
There is no major data today.

he yen rose against the dollar and the euro as signs the economic recovery is slowing boosted demand for the currency as a refuge.
The Dollar Index rose for the first time in three days after earlier touching the lowest level in a month on speculation the Federal Reserve may keep trying to support economic growth. Global stocks declined.
The MSCI World Index of stocks fell 0.4 percent, and the Standard & Poor’s 500 Index declined 0.5 percent. 
With the European Central Bank forecast to raise interest rates further, the shared currency also may have more room to gain, according to CIBC’s Stretch.
Producer prices in the euro region rose 6.7 percent in April from a year earlier, after a revised 6.8 percent increase in March, the European Union’s statistics office in Luxembourg said today. The March producer-price inflation rate was the highest since September 2008, the month Lehman Brothers Holdings Inc. filed for bankruptcy. 

At 1945GMT Fed Chairman Ben Bernanke is due to deliver a speech to the International Monetary Conference in Atlanta.