CFD Markets News and Forecasts — 15-02-2011

Stocks have spent the entire session chopping along with modest losses in a relatively narrow range. The drift comes after stocks advanced to within about a point of the S&P 500's 100% gain level from its 2009 low, which was registered just beneath the 667 line. The hesitation on the part of buyers to extend the stock market's recent run into today's trade comes amid a mixed batch of data and an underwhelming dose of corporate news.

The euro advanced versus most major counterparts as data showed German investor confidence increased this month and U.S. retail sales rose in January less than economists forecast.
Commerce Department data showed U.S. retail purchases rose 0.3 percent last month, the smallest gain since a drop in June. Economists in a Bloomberg News survey predicted a gain of 0.5 percent.
“The euro’s price action is encouraging and somewhat corrective to some of the weakness we’ve seen in recent days,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “It’s responding mostly to those retail sales figures, with the disappointing data leading to a slightly stronger euro.”
Global demand for U.S. stocks, bonds and other financial assets fell in December from a month earlier, the Treasury Department reported. Net buying of long-term equities, notes and bonds totaled $65.9 billion during the month compared with net buying of $85.1 billion in November, according to data released today in Washington.
The pound rose against all 16 major currencies as U.K. inflation increased. Europe’s common currency lost 0.9 percent versus the greenback over the past week.

Failure to extend an early rebound encouraged sellers to redouble their efforts, but support continues to limit broad market losses. The action has left the stock market only modestly lower for the session.
Energy stocks have been hit with some stiff selling, however. The sector surged more than 2% in the prior session, but participants appear to be taking profits as they send the sector to a 1.2% loss in the face of higher oil prices, which were last quoted with a 0.6% gain at $85.35 per barrel.
Materials stocks were also strong yesterday, when they advanced to a 1.0% gain. They are down 0.7% today.

HSBC says an 8mo high in Feb Empire mfg index at 15.43 shows "recovery in manufacturing activity is continuing and becoming more widespread as the New York region catches up with increasing measures of activity in other parts of the country."

Stocks are slowly working their way back from an opening slip. Financials are still out in front, although the sector trades with a gain of only 0.2%.
The dollar is down for the first time in several days. Its greatest loss has come against the British pound, which is up 0.7% to $1.615 following news that the CPI for the United Kingdom increased by 4.0% in January.
Business inventory data for December was just released. Inventories reportedly increased by 0.8% after a 0.4% increase in the prior month. The data has done little to move the broader market.

EUR/JPY printed session high on Y113.40 and still holding higher despite current retreat. Break above Friday's high of Y113.44 likely to open higher towards Y114.01 the Jan 27 high. Cross trades Y113.23.

U.S. stocks were headed for a flat opening Tuesday.
Stocks ended Monday's session mixed, as investors digested President Obama's 2012 budget proposal in a quiet trading session.
The market has been moving gradually higher this year amid expectations of an improving economy. The S&P 500 is up nearly 6% so far in 2011.

Economy: The Commerce Department said total retail sales rose 0.3% last month. Economists on average had forecast an increase of 0.5% for January, compared to a 0.6% gain in sales the prior month.
Sales excluding autos and auto parts also rose a weaker-than-expected 0.3%, compared to a 0.5% increase in ex-auto sales in December.
Other economic reports on tap before the market opens include data on business inventories.
Companies: Sirius XM Radio (SIRI) reported a loss of 2% per share in the fourth quarter and issued a 2011 sales outlook that was slightly below analysts' expectations. Shares were down 3% in premarket trading.
Shares of Netflix (NFLX) fell 1.5% in premarket trading, a day after the stock rose to an all-time high.
After the closing bell, Dell (DELL, Fortune 500) will report its quarterly results. Analysts expect the company to report earnings per share of 37 cents, on $15.71 billion in revenue.
World markets: European stocks were mixed in morning trading. Britain's FTSE 100 ticked fell 0.1%, the DAX in Germany gained 0.1% and France's CAC 40 added 0.4%.
China's consumer price index rose 4.9% in January, up slightly from 4.6% growth in December.
Asian markets ended the session mixed. The Shanghai Composite was flat and the Hang Seng in Hong Kong slid nearly 1%, while Japan's Nikkei added 0.2%.

Mixed bag of US data will see focus on slightly softer than expected retail sales data. Currently EUR/USD at $1.3510, GBP/USD - on $1.6137 and USD/JPY - at Y83.68.

Data released
07:00     Germany     GDP (Q4) flash    0.4%    0.5%    0.7%
07:00     Germany     GDP (Q4) flash Y/Y    4.0%    4.1%    3.9%
09:00     Italy     GDP (Q4) preliminary    0.1%    0.2%    0.3%
09:00     Italy     GDP (Q4) preliminary Y/Y    1.3%    1.4%    1.1%
09:30     UK     HICP (January)    0.1%    0.3%    1.0%
09:30     UK     HICP (January) Y/Y    4.0%    4.2%    3.7%
09:30     UK     HICP ex EFAT (January) Y/Y    3.0%    3.3%    2.9%
09:30     UK     Retail prices (January)    0.3%    0.2%    0.7%
09:30     UK     Retail prices (January) Y/Y    5.1%    5.1%    4.8%
09:30     UK     RPI-X (January) Y/Y         5.1%    4.7%
10:00     Germany     ZEW economic expectations index (February)    15.7    20.0    15.4
10:00     EU(16)     GDP (Q4) flash    0.3%    0.4%    0.3%
10:00     EU(16)     GDP (Q4) flash Y/Y    2.0%    2.1%    1.9%
10:00     EU(16)     Trade balance (December) adjusted, bln     -2.3    -    -3.2 (-1.9)

The euro gained versus most of its major counterparts as data showed German investor confidence rose for a fourth month in February.
The ZEW Center for European Economic Research said its index of investor and analyst expectations, which aims to predict developments six months in advance, increased to 15.7 from 15.4 in January. Economists forecast a gain to 20, according to the median of estimates.
“Although the German ZEW number was perhaps not as strong as the market was expecting, overall the numbers weren’t actually that poor, so couple that with some buying interest in terms of flow in the market and you have seen euro-dollar actually perform relatively well,” said Lauren Rosborough, a senior strategist.
The finance ministers agreed that a permanent rescue mechanism to be set up from 2013 would total 500 billion euros, but there was no agreement over how to beef up its existing rescue fund.
The yen weakened before reports that are forecast to show a strengthening U.S. economy, increasing the appeal of higher-yielding assets.
The Bank of Japan kept rates on hold at the end of its two-day policy meeting as widely expected.

EUR/USD initially declined to $1.3460 before recovered to $1.3552. Rate holds higher, but off session highs.

GBP/USD broke above strong resistance at $1.6100 and printed session high on $1.6144. Offers at $1.6140/60.

USD/JPY rose from Y83.40 to Y83.80. Offers mentioned ahead of Y84.00 with stops above.

The main US releases are due to come at 1330GMT, when the Jan retail sales data, Jan export/import data and Feb NY Fed Empire State Survey come.
Retail sales are expected to rise 0.5% in January. Sales excluding motor vehicles are also expected to post a 0.5% increase on the higher gasoline prices.
The Empire State Index is expected to rise to a reading of 15.0 in February, indicating further expansion.
At 1400GMT the release of the December TICS data is scheduled.

Prices move higher on the day now through the 100 day MA around $1365 and tripped some stops through $1369/70. Gold printed high at $1373.75 before easing back to $1372.75. Next target $1379.40 and $1393.25 (Jan 13 high) ahead of $1400.

EUR/GBP breaks down through stg0.8400 to lows around stg0.8383. Cross also breaks under support at stg0.8390. Cross currently trades near stg0.8385.

EUR/GBP collapses again from early highs of stg0.8447 as cable makes a second attack on the $1.6100 resistance level. Cross now probing critical support at stg0.8400/8398 and stg0.8390. Large bids luck beneath at stg0.8350. Cross currently resting around stg0.8397.

The euro edged higher on Tuesday but faced headwinds in moving further away from a three-week low hit a day earlier when reports about ailing lender WestLB triggered another outbreak of worries on euro zone debt and banking problems.
Market players said the euro could slip back if upcoming U.S. data, including retail sales figures later in the day, paints an improving picture of the economy, which could push up U.S. interest rates further.
"The dollar is likely to be bought back more. Investors have come to think that the Fed will not extend its quantitative easing beyond June, and markets will try to bet on an eventual rate hike by the Fed for now," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp.

The finance ministers agreed that a permanent rescue mechanism to be set up from 2013 would total 500 billion euros, but there was no agreement over how to beef up its existing rescue fund.
While policymakers have said they will hammer out a deal by March, analysts noted that there are some political events that could shake investor confidence on the euro in coming days.
They said a German local election on Feb. 20 could make Berlin reluctant to dish out aid to indebted countries.
"The greenback may regain its footing over the next 24 hours of trading as the economic docket is expected to reinforce an improved outlook for future growth," said David Song, currency analyst at DailyFX. "As market participants expect retail sales to increase for the seventh consecutive month in January, the expansion in private sector activity is likely to reinforce an enhanced outlook for the world's largest economy as household spending remains one of the leading drivers of growth."
Against the yen, the dollar gained, edging close to a three-week high of Y83.68 set on Friday.
The Bank of Japan kept rates on hold at the end of its two-day policy meeting as widely expected.
The Australian dollar rose. It was helped by China's consumer price index that came in at 4.9%, below market expectations of 5.3%, though it was exactly the same as a whispered number that swirled through markets yesterday.

• but stability is not so much a question of personalities than of convictions;

• Weber was a strong defender of the stability policy inside the euro area and I don't know the deeper reasons why he made the decision he has made.

• Real Differences of View Among MPC On CPI Outlook          

• Inflation to Rise to 4-5% in Next Few Months                             

• High Inflation due VAT, Sterling fall, Commodity Prices       

• Lot of Uncertainty Over Medium Term CPI Outlook               

• MPC Sees CPI As Likely Above/Below Target In 2-3 Years  

• Real Differences of View Among MPC On CPI Outlook          

• Inflation to Rise to 4-5% in Next Few Months                             

• High Inflation due VAT, Sterling fall, Commodity Prices       

• Lot of Uncertainty Over Medium Term CPI Outlook               

• MPC Sees CPI As Likely Above/Below Target In 2-3 Years