CFD Markets News and Forecasts — 12-08-2011

"All eyes will be on upcoming data - next week's manufacturing, housing and inflation data may clarify the outlook. July IP may rise but more timely regional manufacturing data could slip; they are especially watching jobless claims. DB expects "CPI to move back into positive territory (+0.2% vs. -0.2% previously) as oil prices held steady last month. However, this may not be the case in August given benchmark crude has declined -8.6%"

US dollar declines amid dropping Reuters/Michigan consumer sentiment index. The August index is at 54.9 versus estimated 63.2 and previous figure of 63.7.
Euro gains versus the dollar despite today’s report, which showed EU industrial production unexpectedly fell in June. Earlier the 17-nation currency fell also as traders bet the European Central Bank may cut its key interest rate as austerity measures crimp growth. Also today Egan-Jones ratings agency downgraded France's AAA rating and projected a further downgrade to A+. This agency was the first to downgrade U.S AAA rating on July 18. However, market participants didn’t attach importance to the lowering.
British pound also rises against the dollar
Japan’s yen resumes shedding.
The Swiss franc is still depreciated after data showed France’s economy stalled in the second quarter. The currency also falls as yesterday Swiss National Bank Deputy President Thomas Jordan said that a temporary tie between the franc and the euro to curb the Swiss currency’s gains would be legal under the central bank’s mandate.
The Canada’s dollar sheds on concern about faltering economy of U.S., Canada’s biggest trade partner.

The Appeals Court for 11th Circuit, based in Atlanta, rules the President's healthcare law unconstitutional for requiring individuals to purchase insurance or be penalized. The rest of the law, however, may remain in effect. Next stop: Supreme Court.

Investors are still in a good mood.

"The report said that all of the weakness occurred before Standard & Poor's announced its downgrade of the US sovereign credit rating, suggesting that the contentious debt limit debate could have been a significant factor behind the drop."

The stock markets continue soaring amid decline June business inventories data and beating July data on retail sales. Earlier the markets appeared under pressure by dropping Reuters/Michigan consumer sentiment index. The August index is at 54.9 versus estimated 63.2 and previous figure of 63.7.
A bulk of strong corporate reports also encouraged investors.

• Dudley in Q&A says do not expect a double-dip recession, but the risk is higher.
• Dudley still expects faster growth in H2.

Notes fin'l mkt conditions "remain unsettled and the equity market in particular remains very volatile" but that lower rates in react to FOMC statement will help the economy. FOMC discussed a range of  

EUR/USD $1.4225
USD/JPY Y75.75, Y76.00, Y76.25, Y76.75, Y77.55, Y77.75
EUR/JPY Y114.90
GBP/USD $1.6355, $1.6400
AUD/USD $1.0100, $1.0300, $1.0325

U.S. stock futures gained, signaling benchmark indexes may trim a third straight weekly decline, as the biggest increase in retail sales in four months tempered concern the economy is slowing. 

EUR/USD Offers $1.4400/05, $1.4370, $1.4350/55, $1.4310, $1.4295/300
Offers $1.4200/190, $1.4175/70, $1.4150/40, $1.4105/00, $1.4075/70, $1.4155/50

Reported resistance/offers in the area between $1.4250/60 so far able to counter the upside pressure, though pullbacks so far remain fairly shallow. Stops are noted above $1.4270, a break to open a move toward $1.4300, with earlier reports noting decent sell interest sitting above this level.

The French 10-year spread is trading 8bps tighter vs Bunds at +64bps -- tightest level since Aug 1.

04:30     Japan     Industrial output final     June     +3.9%     +3.9%     +3.8%

The euro fell against the dollar, headed for a second consecutive weekly decline, before reports that may show industrial production in the region stalled in June and Greece’s economy shrank.
The 17-nation currency was poised for its biggest weekly drop in three months against the yen as traders bet the European Central Bank may cut its key interest rate as austerity measures crimp growth. The Swiss franc pared gains against the euro even after data showed France’s economy stalled in the second quarter. The Australian and New Zealand currencies weakened before data that may show confidence among U.S. consumers dropped to the lowest level in more than two years.

The euro falls against the dollar amid resumed concern that Europe will fail to contain its sovereign-debt crisis.Earlier the euro soared in the wake of news that Italy and France will announce a naked short-selling ban after the close Thursday.
The Swiss franc continue falling after Swiss National Bank Deputy President Thomas Jordan was reported today to have said in an interview with Tages-Anzeiger that a temporary tie between the franc and the euro to curb the Swiss currency’s gains would be legal under the central bank’s mandate.
The pound strengthened against the dollar after U.K. Chancellor of the Exchequer George Osborne rebuffed opposition demands to review spending cuts as the euro- region’s debt woes roil stock markets around the world.
The yen sheds as higher Treasury yields make the dollar more attractive to Japanese investors.
The Australian dollar bounces back versus the dollar amid weakness of the latter. Earlier the Australian currency fell versus its New Zealand counterpart after a report showed the jobless rate unexpectedly rose.
European data for Friday starts at 0530GMT with France HICP data for July, which is expected to show a decline of -0.3% m/m, +2.3% y/y as well as the flash release of Q2 GDP data, which is seen rising 0.3% q/q, 2.0% y/y. France data continues at 0630GMT with the bank of France retail survey and at 0645GMT with Q2 payrolls data. European data then rounds off with EMU industrial output for June, which is likely to be unchanged m/m.
US data starts at 1230GMT with retail sales, which are expected to rise 0.6% in July, as vehicle sales accelerated, but gasoline prices fell for the second straight month. Nonauto retail sales are forecast to rise 0.3%. At 1355GMT, the Michigan Sentiment Index is expected to rise to a reading of 63.5 in early-August from 63.7 in July. At 1400GMT, business inventories are expected to rise 0.5% in June. Factory inventories were already reported up 0.2% in the month.

Nikkei  -56.80  (-0.63%)  8,981.94
Topix    -5.85  (-0.75%)  770.88
Hang Seng  -188.53  (-0.95%)  19,595.10
FTSE-100   +155.67  (+3.11%)  5,162.83
DAX    +184.24  (+3.28%)  5,797.66
CAC    +86.67  (+2.89%)  3,089.66
Dow      +423.37  (+3.95%)  11,143.30
Nasdaq   +111.63  (+4.69%)  2,492.68
S&P500  +51.88  (+4.63%)  1,172.64
10-Years    2.34%  +0.23
Oil       -0.22  (-0.26%)   85.50
Gold  +10.30  (+0.59%)  85.50

Asian markets ended Thursday mostly lower.
Mainland Chinese and South Korean shares advanced Thursday, while most other equity markets came off earlier lows as bargain buyers circled back into equities on attractive valuations.
The markets fell after sell-off of financial stocks in U.S markets, as investors worried that problems in the European banking sector could spillover into the U.S. banks. European stock markets declined amid speculation that France, Europe's second largest economy after Germany, may be first to face a rating cut.
Thursday marked the second day of gains in Seoul after the government there banned short-selling for three months, in the wake of extreme losses.
Some reports also cited speculation about state-owned funds as a reason for the support to the Chinese market. Dow Jones Newswires cited a Chinese media account as saying that the National Council for Social Security Fund had bought at least 10 billion yuan ($1.6 billion) worth of stocks since Tuesday.
Gains in Shanghai were led by airline stocks on hopes that steep recent fall in crude-oil prices and a rising yuan would cut their fuel costs, with bargain buyers also snapping up some banks and property developers.  
Shares of Air China Ltd. jumped 4.9%, and China Eastern Airlines Corp. soared 10.1%; in Hong Kong, they gained 2.9% and 6.5%, respectively. In Tokyo, Shinsei Bank Ltd. fell 2.2%, and Mitsubishi UFJ Financial Group Inc. dropped 1.9%
Attractive valuations also pushed several financials higher in the region, with China Construction Bank Corp. rising 1.7% in Hong Kong and Australia & New Zealand Banking Group Ltd. climbing 1.5% in Sydney.
Japanese exporters declined as the dollar dropped below the 77-yen mark. Panasonic Corp. JP:6752 -1.72%  fell 1.7%, and Sony Corp. JP:6758 -2.18%   SNE -0.21%  surrendered 2.2%.
Supporting the Australian stock market, shares of Telstra Corp. rose 5.7% after the telecommunications major’s profits beat analyst forecasts.

European markets rebounded into green zone.
Despite ongoing worries about the solvency of French bank Societe Generale, France's second-largest bank and concern that France, the second largest economy in Europe after Germany, may face a rating cut even though the major rating agencies have reiterated France's AAA rating, the markets buoyed by data showing an unexpected drop in weekly jobless claims in U.S.
Another support was news that Italy and France will announce a naked short-selling ban after the close Thursday.
As a result, banking shares recouped some of the previous session’s heavy losses.
In Paris, BNP Paribas ended up 0.3% and Societe Generale rose 3.7%. SocGen shares fell 15% Wednesday amid rumors of a French downgrade and problems for the bank itself.
Italy’s UniCredit SpA added 3.4% after high volatility resulted in trading on several Italian banks being temporarily suspended.
The strong franc has been a big drag on earnings for Swiss companies and the currency’s fall buoyed shares of UBS AG, which rallied 10.1%.
The U.K. FTSE 100 index gained 3.1%, as shares of banking giant Barclays PLC rallied 8.6%, recouping losses from the previous session.

US stock exchanges soared on labor market data.
The markets were supported continue rising amid strong corporate earnings of such large companies as Cisco Systems (CSCO) and encouraging data on US labor market.
Despite ongoing concern about the solvency of French bank Societe Generale, US stocks advanced as investors speculated that recent losses have overestimated the slowdown in the pace of economic growth.
Economy: The Labor Department's report showed a decline in jobless claims by 7K to 395K in the week ended on Aug 6. Analysts forecast a figure’s rise to 412K.
The U.S. Commerce Department reported lower-than-expected June statistics on international trade (-$53.1B versus est. -$47.5B and prev. -$50.8B) and trade balance (-$1.56B versus est. -$0.90B and prev. -$1.04B).
Corporate news: Dow component Cisco Systems Inc (CSCO) jumped 16% as last night the company reported better-than-expected fiscal Q4 results on profit and sales and forecast the current quarter higher than expected as well.
Shares of News Corp. (NWSA) soared 18% after the company beat earnings and sales expectations despite recent phone-hacking allegations.
The relief over Europe's banking sector helped U.S. bank shares recover from the previous session's slide. Shares of Bank of America (BAC) gained more than 6%, while JPMorgan Chase (JPM) rose 7% and Morgan Stanley (MS) shares increased by 11%.
Cisco Systems Inc. (CSCO) $15.73 +14.57% (The company last night reported better-than-expected fiscal Q4 results on profit and sales and forecast the current quarter higher than expected as well. The company was upgraded by Wunderlich and Morgan Stanley today)
AOL Inc.’ (AOL) shares gained 12% as the internet company authorized a $250 million stock buyback.

Comments: the pair remains under pressure. The immediate support - Y76.50, further - on Y76.30. The immediate resistance is located on - Y77.20. Above growth is possible  to Y77.80/90.

EUR/USD $1.4225
USD/JPY Y75.75, Y76.00, Y76.25, Y76.75, Y77.55, Y77.75
EUR/JPY Y114.90
GBP/USD $1.6355, $1.6400
AUD/USD $1.0100, $1.0300, $1.0325

Comments: the pair remains under the pressure. Immediate support $1.6180. The next support - $1.6110. The immediate resistance - $1.6250. Above growth is possible to $1.6330.

Comments:The immediate resistance is - $1.4300. Above growth is possible to $1.4400. The immediate support - $1.4120. Below losses are possible to $1.4050.

Following US gains and despite a mixed Asian session the FTSE 100 is seen higher by 23 points with the Dax up 26 and Cac up 7.

Nikkei  -56.80  (-0.63%)  8,981.94

Topix    -5.85  (-0.75%)  770.88
Hang Seng  -188.53  (-0.95%)  19,595.10
FTSE-100   +155.67  (+3.11%)  5,162.83
DAX    +184.24  (+3.28%)  5,797.66
CAC    +86.67  (+2.89%)  3,089.66
Dow      +423.37  (+3.95%)  11,143.30
Nasdaq   +111.63  (+4.69%)  2,492.68
S&P500  +51.88  (+4.63%)  1,172.64
10-Years    2.34%  +0.23
Oil       -0.22  (-0.26%)   85.50
Gold  +10.30  (+0.59%)  85.50

05:30     France     GDP (Q2) preliminary         0.3%    0.9%
05:30     France     GDP (Q2) preliminary Y/Y         2.0%    2.2%
05:30     France     CPI (July) unadjusted         -0.2%    0.1%
05:30     France     CPI (July) unadjusted Y/Y         2.2%    2.1%
05:30     France     HICP (July) Y/Y         2.4%    2.3%
09:00     EU(17)     Industrial production (June)         0.1%    0.1%
09:00     EU(17)     Industrial production (June) Y/Y          4.5%    4.0%
12:30     USA     Retail sales (July)         0.4%    0.1%
12:30     USA     Retail sales excluding auto (July)         0.2%    0.0%
13:55     USA     Michigan sentiment index (August) preliminary         63.2    63.7
14:00     USA     Business inventories (June)         0.6%    1.0%