International Trading
Market Commentary
- Key Notes: S&P500 ended flat yesterday as encouraging jobs data clashed with the poorer manufacturing data. When key economic data show mixed signals and the markets have rallied for so many days, it is not surprising that markets shows a lack of momentum due to the clash of bulls and bears. For the day ahead, we will be taking cue from the outcome for UOM sentiment index. We might see the index resuming its upwards trends should the data print out positive, though any gains will likely be capped. The established resistance is at 1,030.
On currencies, the Yen closed marginally weaker against the Dollar after there are speculations that Japan’s government will take more decisive steps to weaken the Yen further. For the day ahead, we will be focusing more on EURUSD currency pair. The Euro rallied for a couple of days against the Dollar after increasing confidence help to buoy the demand for risk currencies. Last night, the EURUSD tried to breach 1.3100 levels but were unable to sustain above it for long. It could be indicative that 1.31 forms a strong level of resistance and profit-taking. We would not be surprised if Euro weakens against the Dollar today as the 16-nation currency seems to be increasingly susceptible to profit-taking after many days of advances. The established support for EURUSD is at 1.300.
Market Summary
US: Most US stocks fell after a lower profit forecast from FedEx overshadowed gains in technology shares before Apple’s release of the iPad tablet computer in China. FedEx lost 3.8%. Apple gained 2.4% to an all-time high of $276.57 and technology stocks advanced the most among 10 industries in the Standard & Poor’s 500 Index. Ford Motor climbed 4.8% after Barclays upgraded the stocks. On the economic front, the US Labor Department showed that jobless claims dropped by 3,000 to 450,000 in the week ended Sept. 11. This was better than the median forecast of 459,000. The Fed Philadelphia’s general economic index reported -0.7 this month. This was worse than median estimates of +2.0.
Europe: European stocks dropped as UK retail sales unexpectedly fell and US Fed Philadelphia Index contracted. BT Group tumbled 3.1% after Morgan Stanley downgraded the stock. Ericsson retreated 2.1% while Siemens led a rally in industrial stocks. On the economic front, UK retail sales dropped 0.5%. This was worse than the median estimates of +0.3%.
Asia: Asian stocks fell as declines among banks and mining companies overshadowed speculations that Japan will take more steps to weaken the Yen. China Construction Bank slid 2% on concerns that Chinese lenders have to boost their capital adequacy ratios. BHP Billiton lost 1.8% after commodity prices declined. Toyota Motor advanced 1.7% as Prime Minister Naoto Kan pledged “decisive measures” on the Yen following intervention yesterday in the currency market. In Shanghai, banking shares slumped after news says Chinese banking regulators may require the nation’s biggest lenders to boost their capital adequacy ratios to as high as 15% by the end of 2012.
Singapore: The STI lost 0.13% to close lower at 3,067.11. Volume was 1.93 billion shares worth $1.69 billion. Losers led gainers 270 to 212.
Currencies: The Yen traded near a five-week low against the Euro as US consumer confidence improved, sapping demand for safer assets. Japan’s currency headed for a weekly loss against all of its 16 major counterparts on speculations that the nation will weaken the Yen to keep it from undermining an export-led recovery. Switzerland’s Franc was set to end a five-week gain versus the Euro after the Swiss National Bank cut its inflation forecast.
Key Events/Data To Look Out For:
