Morning Forex Fundamental
EUR
'Positive economic data from the U.S. and rumors of further stimulus from Chinese authorities is enough to lift the markets' - Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers
European stocks rose on Wednesday
Impact high
European stocks closed in green on Wednesday after a report showed U.S. durable goods orders rose by more than expected in May and on speculation that China will introduce additional economic stimulus.
The Stoxx Europe 600 Index gained 1.35 per cent to 245.87. Germany's DAX Index added 1.50 per cent and France's CAC 40 Index rose 1.67 per cent. The U.K.'s FTSE 100 Index increased 1.41 per cent to 5,523.92.
'Today's move all boils down to the news related to the world's two largest economies' said Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers in London.
'Positive economic data from the U.S. and rumors of further stimulus from Chinese authorities is enough to lift the markets out of the doldrums that we have seen in recent days.'
USD
'The economy is growing, but it's still muddling through' - Joseph LaVorgna, chief U.S. economist at Deutsche Bank
U.S. durable goods orders rise
Impact High
U.S. durable goods orders rose in May for the first time in three months, easing concern the economy is deteriorating. Bookings for goods meant to last at least three years increased 1.1 per cent, said the Commerce Department on Wednesday.
'The economy is growing, but it's still muddling through,' said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York.
'Concerns about the collapse of manufacturing are grossly overblown.'
'The stagnation in durable goods orders in recent months is a clear sign that, in response to the easing in global demand, America's industrial recovery is running out of steam,' said Paul Dales, senior US economist at Capital Economics.
GBP
'Weak consumer confidence and uncertainty over the economic outlook are still putting a break on consumer spending across the whole retail sector' - Judith McKenna, chair of the CBI Distributive Trades Panel and Asda's chief operating officer
CBI: U.K. retail sales rise
Impact High
Retail sales in the U.K. rose in June boosted by the Diamond Jubilee celebrations, said the Confederation of British Industry on Wednesday. The index measuring sales rose to 42 from 21 in May. Above 0 indicates higher sales volume, below indicates lower.
'The Jubilee provided a much-needed boost to our High Streets with many families and communities making the most of the Bank Holiday and coming together to celebrate,' said Judith McKenna, chair of the CBI Distributive Trades Panel and Asda's chief operating officer.
'However, it is notable that sales were still considered below par for the time of year. Weak consumer confidence and uncertainty over the economic outlook are still putting a break on consumer spending across the whole retail sector,' she said.
CHF
'… better-than-expected U.S. durable- goods and housing data have helped to push European markets higher today' - George Satlas, head of investments at TT ELTA Mutual Funds Management SA
Swiss stocks rose on Wednesday
Impact: Medium
Swiss stocks extended gains on Wednesday after a report showed durable goods orders in the world's largest economy rose more than economists forecast.
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, rose 0.65%, or 38.81 points, to 5,996.53. The broader Swiss Performance Index gained 0.66%, or 36.65 points, to 5,564.79.
'As it is quite difficult to get any positive signs from the European Union nowadays, better-than-expected U.S. durable- goods and housing data have helped to push European markets higher today,' said George Satlas, head of investments at TT ELTA Mutual Funds Management SA in Athens
JPY
'… the [sales] tax increase isn't good for the economy in the long run' - Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co
Japanese stocks gained on Wednesday
Impact: Medium
Japanese stocks rose for the first time in four days on Wednesday.
The Nikkei 225 Stock Average gained 0.77 per cent, or 66.50 points, to 8,730.49. The broader Topix Index advanced 0.89 per cent, or 6.59, to 745.48.
'There's a last-minute jump in demand for houses ahead of the consumption tax increase, so property and construction shares may benefit,' said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd.
'Still, the tax increase isn't good for the economy in the long run.'
Press Review
Europe
Pro-bailout parties secured ruling majority in Greek parliamentary elections, easing the immediate risk of the euro area's breakup.
Spanish 10-year bond yields rose above 7 per cent on June 18 for the first time since the creation of the monetary union.
Barclays settles allegations that it manipulated key lending rates
http://finance.fortune.cnn.com/2012/06/27/barclays-libor/?hpt=ibu_c1
Fortune - U.K. bank Barclays agreed to pay $453 million to settle claims brought by U.S. and U.K. bank regulators and law enforcement officials that the bank participated in a scheme to fix two key lending rates, including the closely watched LIBOR, which affects as much as $350 trillion in loans and derivatives.
Merkel heads to Brussels for crucial euro summit
http://www.bbc.co.uk/news/world-europe-18620965
European Union leaders are preparing to meet for a closely-watched Brussels summit on the fate of the euro.
USA
After the release of the latest US unemployment figures, some members of the Federal Open Market Committee stated that the Fed might weigh QE3. The Fed decided to extend the Operation Twist by acquiring 267B USD of long-term debt till the end of 2012.
The Fed has cut its forecast of the US economic growth to 2.4% from 2.9% in 2012.
Dollar Weakens Against Majors Before EU Summit; Aussie Advances
http://www.bloomberg.com/news/2012-06-28/dollar-weakens-against-peers-before-eu-summit-aussie-advances.html
The dollar weakened against most of its major counterparts as Asian stocks rallied for a second day and European leaders gather for a summit in Brussels to stem the region's debt crisis.
Felda Soars Over 20% in World's 2nd Largest IPO
http://www.cnbc.com/id/47987575
Shares in Malaysian palm oil firm Felda Global surged 20 percent in their trading debut on Thursday, as investors cheered on the world's second largest IPO after Facebook's rocky initial public offering.
Asia & Pacific
China is suffering a major economic slowdown, as growth flags in the country's real estate, construction, steel, and other sectors. As a part of fiscal opening policy, China will allow direct Yen-Yuan trades.
Japan's trade deficit widened for a third consecutive month to 907.26 billion Yen in May.
Japan gains in quiet Asia ahead of EU summit
http://www.marketwatch.com/story/asia-stocks-gain-ahead-of-eu-meeting-2012-06-27
Asian stocks traded mostly flat to modestly higher Thursday, with a Japanese stock rally the exception, ahead of a crucial European Union summit due to start later in the global trading day.
China's Stock Index Drops for Seventh Day on Earnings Concerns
http://www.bloomberg.com/news/2012-06-28/china-s-stock-futures-rise-on-policy-outlook-u-s-economic-data.html
China's benchmark stock index slid for a seventh day, the longest stretch of losses in 13 months, as concern the nation's economic slowdown is curbing earnings growth overshadowed an improving outlook for exports to the U.S |
