Thursday, July 15, 2010

Update Daily Investment News

Asian Stocks Decline as Fed Cuts Forecast, Retail Sales Fall
(Bloomberg) -- Asian stocks fell as concern increased that an economic recovery may stall after reports showed U.S. retail sales declined and the Federal Reserve cut its growth forecast.

Fed Officials Saw No Need for More Stimulus in June (Update5)
(Bloomberg) -- Federal Reserve officials saw no need to boost stimulus to the economy while trimming their forecasts for growth and noting that risks to the recovery had increased, minutes of their June meeting showed.

[Dow Jones] ASIA OUTLOOK: Asian stock markets likely to trade in relatively tight ranges with DJIA ending barely higher; some could succumb to profit-taking after recent gains; techs could lead gainers, tracking Nasdaq's 0.4% rise. China, Hong Kong investors will be closely watching Agricultural Bank of China's debut on Shanghai stock market. FX markets likely in tight ranges, look to stocks for cues; Fed minutes overnight reinforce view U.S. recovery slowing, could hurt riskier currencies. EUR/USD at 1.2740 vs 1.2735 in late NY trade, EUR/JPY at 112.48 vs 112.29, USD/JPY at 88.27 vs 88.19. On data slate: Australia consumer inflationary expectations survey at 0100 GMT, China GDP, PPI, CPI, retail sales, fixed asset investment, industrial output, all at 0200 GMT; also Singapore retail sales at 0500 GMT, Bank of Japan policy meeting, press conference at 0630 GMT, Philippine central bank policy decision at 0800 GMT, China FDI also due, Germany's Merkel in China, Philippine overseas workers' remittances also due. Later there's ECB bulletin, BOE MPC member Miles speaks, U.S. initial jobless claims, PPI, Empire State manufacturing survey, industrial production, foreign U.S. debt holdings, Fed governor Duke speaks, deputy Treasury Secretary Wolin speaks, Richmond Fed president Lacker speaks, Senate Banking Committee considers nominee for Fed Vice Chair.

(Dow Jones)--Agricultural Bank of China Ltd. (1288.HK) said Thursday the retail portion of its Hong Kong initial public offering was 4.87 times oversubscribed, but the lender hasn't exercised the overallotment option yet. 

[Dow Jones] Nikkei may open tad lower on profit-taking following Wednesday's 2.7% gain (index's sharpest point gain since June 3) before stabilizing; moderately weaker USD/JPY (now 88.30), EUR/JPY (now 112.46), following U.S. Fed's grim economic forecast, expected to weigh on auto and other exporter shares. "It's going to be a difficult day to move in either direction on a mix of both caution and expectation," says Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets. Nikkei range for today: 9650-9850 vs 9795.24 Wednesday close. Downside risk seen on chip-linked shares such as Tokyo Electron (8035.TO), which surged on Intel (INTC)'s bullish 3Q outlook yesterday, likely tempered by strong orders. Eyes also on slew of key economic data from China and listing debut of Agricultural Bank of China in Shanghai. Nikkei 225 September futures ended Chicago trading at 9780 vs Osaka close at 9790.

[Dow Jones] Mixed session on Wall Street may prompt investors to take some money off Singapore shares in early trade after yesterday's run-up fuelled by city-state's strong 2Q10 GDP data. Debut of Agricultural Bank of China in Shanghai, slew of China economic data such as 2Q10 GDP, June CPI, will be closely watched as session progresses. Support for STI, +0.8% at almost 3-month high of 2952.81 yesterday, tipped at this week's low of 2914, with resistance at 2984 (April 30 high).

[Dow Jones] S&P/ASX 200 offshore leads flat, though overnight SPI 200 futures down 16 points, or 0.4%, at 4429.0 on renewed concern about U.S. economy. DJIA up 3.7 points at 10366.72 (7th straight gain), S&P 500 down 0.2 points, Nasdaq up 0.4%. Fed lowered its 2010 GDP growth forecast to 3.0%-3.5% from 3.2%-3.7%, FOMC minutes raised possibility the economy may need further monetary stimulus if it shows more serious signs of slowing, and U.S. June retail sales fell more than expected. But Wall Street was supported by strong results from Intel, which rose 1.7%, helping Microsoft up 1.3%, Hewlett-Packard up 1.2% and Cisco up 2.8%. S&P 500 Financials down 0.9%, with KBW Bank index down 1.6%.

2158 GMT [Dow Jones] AUD/USD likely to trade heavy going into wave of Chinese data expected later today, says Richard Franulovich, senior currency strategist with Westpac. "There is a preference to sell the Aussie ahead of this news under the broader idea that Chinese growth is slowing," says strategist. "Though,the rumors on these numbers have been pretty weak, so if it isn't that weak, you could see the Aussie bounce." AUD/USD recently at 0.8837, up from around 0.8800 late yesterday. Post China data, Franulovich says series of economic reports, earnings from J.P. Morgan, Google and Citi to drive cross; tips resistance around 0.8900.

[Dow Jones] EUR/USD holding strong after US stocks recovered from minor slip, last 1.2744 vs 1.2735 late in New York, but all eyes on China data, says Bank of NZ. "Chinese GDP, industrial production and retail sales data due today will be influential in whether this potential break higher in EUR/USD has legs - with some talk of a move to 1.30-1.31." Says rising channel resistance off June 6 low at 1.2782 on day.

[Dow Jones] NZD/USD performing well, recent break through topside resistance opens up 0.7330 although may not get there today, says HSBC NZ Chief Manager Daniel Brdanovic. Pair last 0.7238. Says if EUR/USD breaks through 1.2780, last 1.2742, then NZD/USD could head to 0.7280 with support at 0.7200; "The Kiwi is well supported, the US dollar remains weak, euro is still rallying, albeit quite slowly." Says all eyes will be on China data today, risk is that data disappoints.  

[Dow Jones] USD/JPY may trade with slight negative bias in 88.00-89.00 range vs last 88.33, as FOMC minutes from last month's policy meeting released overnight show board members cut their growth forecast; that may prompt players in Asia to remain bearish on pair on strengthened expectations U.S. rates to remain ultra-low for time being, says Hideaki Inoue, senior FX dealer at Mitsubishi UFJ Trust and Banking. But says no sharp breaks lower expected; "while negative for dollar-yen, the FOMC minutes weren't outside the range of expectations." Says players focused on U.S. corporate earnings, share market moves for rest of week. Tips EUR/USD in 1.2700-1.2800 range vs 1.2738; says EUR/JPY may trade in 112.00-113.50 band vs 112.50.

Dow Jones] Nymex crude likely to consolidate for now after retreating more than $1.50 from 2-week high $78.15/bbl yesterday, Dow Jones technical analysis shows. Daily continuation chart mixed as MACD & stochastics in bullish mode, but bearish shooting-star candlestick pattern completed yesterday. Support at $76.38 (yesterday's low); breach would expose downside to $74.25 (Tuesday's low), then $73.86 (previous cap set July 6), $71.44 (July 7 low) and $71.09 (July 6 reaction low). But rise above $78.15 resistance would reinstate near-term positive outlook, targeting $78.32 (June 29 high), then $78.54 (100-day moving average), $79.38 (June 28 reaction high), psychological $80 and $80.53 (previous base set April 19). August crude last down 42 cents at $76.62/bbl on Globex.

[Dow Jones] Spot gold bid $1,209.10 early in Sydney, up 80 cents from late NY, down about $3 from a day ago. Gold futures fell a little overnight in NY and with equities and currency markets stable, there was little demand for gold as a rainy-day asset. Technically, Barclays Capital sees gold chopping higher, with daily momentum pointed up and market pulling away above trendline support at $1,182, maintains its near-term focus higher towards $1,225/$1,227. "Retracement resistance beyond $1,227 is at $1,235, and it would take a recovery above this latter level to suggest that gold is primed to post new 2010 highs," it says.

[Dow Jones] U.S. Treasury yields should continue falling as overnight 30-year bond auction showed demand for sovereign bonds remain strong, also dovish FOMC minutes supportive for prices, says Jun Kato, senior manager of investment at Shinkin Asset Management. Adds weak retail sales data also weigh on yields as suggests U.S. economic recovery may be losing its momentum. Tips 10-year yield to trade in 3.035%-3.060% vs 3.050% last.

[Dow Jones] Base metal markets will be watching out for large batch of Chinese economic data due for release at 0200 GMT today, including GDP and industrial production, says Commonwealth Bank of Australia. LME 3-month copper rose $40 vs Tuesday's PM kerb to $6,725/metric ton, aluminum gained $14 to $2,009, lead edged $3 higher to $1,828, while tin rose $25 to $17,950 but zinc fell $15 to $1,850 and nickel lost $150 to $19,400.

[Dow Jones] PREVIEW: China 2Q GDP growth likely slowed to 10.5% on-year from 11.9% in 1Q, according to median forecast of 14 economists polled by Dow Jones. Economists say long-anticipated slowdown is not itself cause for concern, but are eyeing risk factors in 2H, including eruo-zone impact on exports, degree of slowdown in private property investment. Economists say one of most important swing factors for growth in 2H will be to what extent private investment in property construction slows in response to government restrictions on home buying. CPI likely +3.3% in June vs +3.1% in May, according to poll, but economists expect inflation to decline in 2H on base effects, falling food prices. Producer price index likely +6.8% in June, down from May's 7.1% rise because of lower global commodity prices. China's National Bureau of Statistics due to report GDP, other economic data at 0200 GMT.

Dow Jones] PREVIEW: BOJ likely to upgrade real economic growth projection for fiscal year started April to 2.4%-2.6% vs 1.8% forecast in April, say people familiar with matter; this due to expectations that strong exports will continue to benefit overall economy. Upgrade also suggests BOJ's policy board almost certain to keep monetary policy unchanged at end of 2-day meeting Thursday, especially as signs emerging that domestic demand may pick up on back of improvement in corporate earnings.

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