CFD Markets News and Forecasts — 30-03-2011

Despite the strong tone currently displayed in the broad market, Family Dollar (FDO 52.21, -0.19) is under pressure. The stock's slip comes in the face of an upside earnings surprise and a strong forecast. In contrast, fellow discount retailer Dollar General (DG 31.52, +1.00) is up more than 3%.

AUD/JPY holds at Y85.55, on the high side of the day's range of Y84.59 to Y85.80. At the earlier peak, the pair was up 14.4% from the Y75.02ish lows seen March 17. Westpac strategists say "the pair's rebound will only encourage markets to buy dips." They maintain that Y88 "looks achievable, with a break of Y88 opening Y90."

The S&P 500 recently attempted a push up to the 1332, but it has since eased back from that mark. The stock market's hesitation near the one-month high comes after a near 6% climb in only two weeks.

CS also adjusted down ests. "We now expect 2.5% real GDP growth in Q1 (from our previous forecast of 3.5%). Our Q2 forecast moves to 3.3% (from 3.7%). Our 2011 second half forecasts are unaltered (3.8% and 4.0% for Q3 and Q4, respectively)."

Another round of broad-based buying has the stock market back near its one-month high and on pace for a quarterly gain of about 5%.
Telecom stocks have been the best performers over the past few sessions. Blue chips Verizon (VZ 38.84, +0.55) and AT&T (T 30.87, +0.82) have been leaders in the space. Their strength has also helped take the Dow to within close reach of the 33-month high that was set in February.

   

EUR/USD printed high was $1.4148 and retreated to $1.4135 as flows remain choppy. Offers remain $1.4150/60 although there are a few tight stops mixed in above $1.4150 for good measure.

The yen fell to almost a three-week low versus the dollar amid demand for higher-yielding assets.
The Japanese currency weakened for a fifth straight day against the dollar as a private report showed U.S. companies added 201,000 jobs in March, fueling speculation the Federal Reserve may curtail its debt buying.
The private report precedes the Labor Department’s nonfarm payroll numbers to be released April 1. U.S. payrolls added 190,000 in March, according to the median estimate of economists.

Japan’s currency has weakened 2.3% against the dollar in the first quarter and 7% against the euro. Those declines accelerated in March with the yen losing 2.6% against the dollar and 1.6% to the euro in the past nine days.
“Interest-rate differentials weigh against the yen,” said Jon Wetreich, currency strategist at Brown Brothers Harriman & Co.. “The European Central Bank couldn’t be any more clear that rates are going up. The Bank of England has been reasonably hawkish, and now we’re getting comments from certain Fed members indicating, not that rates are going up anytime soon, but everyone is getting the news that quantitative easing is over.”
Europe’s common currency has strengthened 5.2% versus the dollar this year as euro-region policy makers stiffened their anti-inflation views. The ECB will increase its main refinancing rate by a quarter-percentage point to 1.25% at its April 7 meeting, according to the median forecast of economists.

GBP/USD probes resistance ahead of $1.6050 ($1.6047 50% $1.6083/10) with a break above opens a move toward $1.6066 (76.4%). Support remains in place back at $1.6010/05, stops below $1.6000.

EUR/USD eases lower $1.4080 - at $1.4064 with a break under overnight low at $1.4058 will make a break of 2-days triangle pattern. The demand interest said layered into $1.4050. Topside now suggested around $1.4100 with base at $1.4060 area roughly.

EUR/USD
Offers: $1.4115/20, $1.4150/60, $1.4175/80, $1.4200
Bids: $1.4050/40, $1.4020/00, $1.3980, $1.3955/50

U.S. stocks were set to open higher Wednesday, as investors considered two job reports: one that showed fewer planned job cuts and one that showed an increase in private sector employment.

Before the opening bell, one report showed that employers announced fewer planned job cuts in March, even as government sector layoffs mounted.
A second report showed private sector employment rose by 201,000 in March, according to payroll processor ADP. The figure came in slightly below forecasts but remained above 200,000. Investors look to the ADP report as a guide for what's coming in Friday's government report.
U.S. stocks finished near session highs Tuesday, thanks to solid gains in telecommunication and retail stocks including AT&T (T) and Verizon (VZ).
Companies: Shares of Family Dollar (FDO) rose nearly 3% after the discount retailer reported slightly better-than-expected sales and earnings, and said it's on track to continue growing, albeit at a measured pace.
Shares of Cephalon (CEPH) surged 31% in premarket trading after specialty pharmaceutical firm Valeant (VRX) launched a hostile bid for the U.S. drugmaker.
Private equity firm Apollo Global (APO) will likely get an early boost. The firm priced its initial public offering at $19 a share -- the top end of its expected range. The offering drew strong demand.
BlackRock's (BLK) stock rose more than 5%. The investment firm is replacing Genzyme (GENZ) on the S&P 500.
World markets:

Oil for May delivery slid 44 cents to $104.35 a barrel.
Gold futures for April delivery rose/fell $2.10 to $1,418.30 an ounce.
The price on the benchmark 10-year U.S. Treasury was steady, with the yield unchanged from Tuesday at 3.49%.

• Recovery,consolidation needed for periphery confidence;
  
• ESM terms raises short-term risk of sovereign default.

The dollar advanced to a two-week high against the yen on speculation the Federal Reserve may consider ending its $600 billion program of government debt purchases earlier than planned.
“The rally in dollar-yen has to do with the market starting to take the hint that policy in the U.S. might be tightened earlier than we thought,” said Adam Cole, global head of foreign-exchange strategy at Royal Bank of Canada in London. “Risky assets generally are performing, and safe-haven assets are underperforming.”
The euro slipped against the dollar as the European Central Bank Executive Board member Lorenzo Bini Smaghi said the risk of the region’s sovereign-debt crisis spreading to other European Union or euro-area nations is “not insignificant.”
Speculation that Portugal may follow Greece and Ireland in accepting financial aid intensified yesterday after S&P cut Portugal’s credit rating to BBB-, saying the nation’s “considerable external financing needs” mean a financial rescue is likely.
The Swiss franc dropped against most of its major counterparts as evidence the global economic recovery is strengthening sapped demand for a refuge. Australia’s currency rose to a record versus the greenback on bets demand for the nation’s commodities will rise. The dollar gained after St. Louis Fed President James Bullard said yesterday the central bank may “reverse” current policy.

Employers have announced 130,749 job cuts through Q1, -28% YOY and the lowest Q1 total since 1995.

European shares hit a three-week high on Wednesday, with investors positioned for positive U.S. ADP National Employment data, while miners gained on hopes the global economy is recovering.

The mining sector featured among the best performers, with the STOXX Europe 600 Basic Resources .SXPP gaining 1.8 percent. Vedanta (VED.L) rose 3.8 percent as traders cited a bullish Morgan Stanley note.

Eased back to early European lows of $1.4060, having tested resistance at $1.4115/20. Break under $1.4060 to open a move toward $1.4045, ahead of $1.4020.

Cable gets kicked back higher as market reacts to stronger than forecast CBI data, the rate moving up to retest earlier highs/offers at $1.6080. Rate currently trades back around $1.6075. Next offers seen in place at $1.6090/00, ahead of $1.6115 (38.2% $1.6400/1.5935).

Shanghai Composite -0.08% 2,955.77
Nikkei +2.46% 9708.79
Hang Seng +1.70% 23,451

The yen fell to the lowest level in 10 months against the euro on speculation central banks in Europe and the U.S. are closer to removing stimulus as the global economy recovers.
Japan’s currency weakened against all of its major counterparts as the European Central Bank member Jozef Makuch said it is “highly probable” that the bank will raise interest rates next week. St. Louis Federal Reserve President James Bullard said signs of an improving economy may lead the central bank to curtail debt buying.
The euro pared losses against the dollar after U.S. consumer confidence dropped to a three-month low of 63.4, according to the Conference Board’s confidence index.
The shared currency’s strength was unfazed against the yen as Standard & Poor’s Ratings services lowered Portugal’s sovereign credit ratings to BBB-/A-3. BBB- is the lowest investment grade. Greece was also cut by S&P to BB- from BB+ and its outlook remains negative. 
The ECB will lift its main refinancing rate by 25 basis points to 1.25 percent at its April 7 meeting, according to the median forecast of economists. 
Europe’s rate will reach 1.75 percent by the end of this year, up from the current record low 1 percent, while the Fed will lift rates in the first quarter of next year and the Bank of Japan will leave its key interest rate unchanged.

EUR/USD: the pair bargained within the limits of $1,4050-$ 1,4150.

GBP/USD: the pair bargained within the limits of $1,5940-$ 1,6040.

USD/JPY: the pair become stronger in around Y82,40.

The main EMU release comes at 0900GMT, when the EMU Economic Sentiment data for March is expected to remain steady around 107.3 with industrial confidence at 6.0 and consumer confidence confirmed at -10.6.

US data starts at 1100GMT with the weekly MBA Mortgage Application Index, which is followed at 1130GMT by Challenger Layoffs for March and at 1215GMT by the March ADP National Employment Report. Along with the

1400GMT release of the Help-wanted Online data for March, this will help shape some thinking ahead of Friday's key US labour data, with forecasts currently expected no change in the unemployment rate and a 195k change

in the NFP number. 

Japanese stocks pared declines on optimism progress was being made to contain a crisis at a crippled nuclear-power station where potentially lethal levels of radiation were detected yesterday.

Tokyo Electric Power Co., the plant operator, tumbled 19 percent. Kandenko Co., the engineering company affiliated with the utility, dropped 4.8 percent. Dai-ichi Life Insurance Co., Tokyo Electric’s No. 2 shareholder, sank 4 percent. Shares also retreated after Goldman Sachs Group Inc. cut its forecast for Japan’s economic growth almost in half.

The Nikkei 225 Stock Average lost 0.2 percent to 9,459.08 as of the close of trading in Tokyo, recovering from a 1.7 percent slump after Tokyo Electric said radioactive water at the stricken Fukushima Dai-Ichi plant hasn’t leaked into the sea and that the utility will begin using fresh water to cool the spent- fuel pool of the No. 2 reactor today.

The Nikkei’s 7 percent drop since the quake made it the worst performer among indexes for the world’s largest markets, after the temblor and tsunami killed more than 10,000 people, razed homes and factories and crippled the Fukushima Dai-Ichi plant northeast of Tokyo.

European stocks rose for a fifth day, erasing losses for the Stoxx Europe 600 Index in the final hour of trade, as a rally in mining shares offset concern that banks will need to sell more shares to increase their capital.

BHP Billiton Ltd. and Vedanta Resources Plc climbed more than 2 percent as metal prices advanced in London. Unione di Banche Italiane ScpA (UBI) tumbled by a record 12 percent after Italy’s fourth-biggest bank said it plans to offer new shares. Banco Popolare Scrl sank 6.3 percent as Goldman Sachs Group Inc. slashed its share price estimate 5.2 percent.

Stocks in Europe limited gains today after Standard & Poor’s downgraded Portugal and Greece’s debt ratings. The ratings firm said that the European Union’s new bailout rules may mean both nations will eventually renege on their debt obligations.

S&P cut Portugal for the second time in a week to the lowest investment-grade rating of BBB-, while Greece’s rating fell two grades to BB-, three levels below investment grade. 

U.S. stocks advanced, erasing yesterday’s loss, as Home Depot Inc. (HD) drove consumer companies higher and the Standard & Poor’s 500 Index rebounded off a level watched by investors who use charts to make forecasts.

Home Depot rose 2.2 percent as the largest U.S. home- improvement retailer sold $2 billion in bonds to help finance buybacks. Amazon.com Inc. (AMZN) climbed 2.6 percent after introducing a music-streaming service before Apple Inc. (AAPL) and Google Inc. (GOOG) AK Steel Holding Corp. (AKS) gained 5.3 percent as SAC Capital Advisors LP reported a stake. Apollo Group Inc. (APOL), the biggest U.S. for- profit college, fell 7.2 percent following lower enrollment.