LONDON (Thomson Financial) - US SUMMARY: Stocks up, dollar weak after European interest rate hike Index Change Pct change *DJIA 12552.96 +68.34 +0.55 *Nasdaq 2480.32 +21.01 +0.85 *S&P 500 1447.80 +8.93 +0.62 Dow Future 12604.00 +50.00 +0.40 (2015 GMT) Nasdaq Future 1826.00 -1.75 -0.10 (0340 GMT) S&P Future 1455.00 -0.50 -0.03 (0340 GMT) eur-usd 1.3480 +0.053 Brent crude Nymex 63.85 usd +1.84 usd 10 yr US treasury 4.74 pct 2/32 * yesterday's close
STOCKS: Stocks resumed their advance Thursday following a one-day hiatus as investors looked past a somewhat cloudy picture for retail sales and higher oil prices.
Retailers' reports on sales at stores open at least a year, an important measure known as same-stores sales, initially concerned some investors Thursday because of scattered warnings that sales would be light during April. Investors seemed to shake off those concerns as well as unease about inflation and oil as they awaited a deluge of earnings reports set to begin in earnest next week.
Wal-Mart Stores Inc said same-store sales for the March period rose 4 pct -- well above the 1.6 pct Wall Street expected -- but the company warned April will prove a difficult month. Customers of the world's largest retailer can be more sensitive than more affluent shoppers to gas prices, which have been increasing in recent months. Wal-Mart fell 1 cent to 47.26 usd.
Meanwhile, quarterly earnings reports, which began trickling in this week, haven't offered a strong catalyst to push stocks higher.
FOREX: The US dollar fell against the euro and other major currencies Thursday after the European Central Bank held its interest rate steady -- and suggested a hike in June -- and US jobless claims hit a two-month high. Higher interest rates, used to combat inflation, can bolster a currency by making certain types of investments more attractive.
The dollar bought 1.3480 euro in late New York trading, up from 1.3427 eur late Wednesday, while the pound rose to 1.9783 usd from 1.9753 usd.
The Japanese yen fell to 119.06 from 119.30.
The US Federal Reserve has left rates unchanged over recent months even as the ECB steadily increased the cost of borrowing.
Meanwhile, the US Labor Department reported Thursday that applications for jobless benefits totaled 342,000 last week, up 19,000 from the previous week.
In other trading, the dollar bought 1.2167 sfr, down from 1.2201 late Wednesday, and 1.1348 cad, down from 1.1420.
BONDS: Treasurys closed nearly unchanged Thursday after the government held an auction of inflation indexed notes that wasn't particularly well received.
In a sale that some had speculated would go well, the Treasury sold 6 bln usd in a reopened 10-year inflation indexed note at a yield of 2.284 pct, with the bid-to-cover index -- a gauge of investor interest -- coming in at 1.88. The auction had been expected to do well given the security's level relative to other Treasury, coupled with seasonal factors, its small size and ongoing worries about inflation. In the wake of the auction, the bond market gave up what had been meagre gains.
At 5 pm EDT (9 pm GMT), the 10-year Treasury note was down 63 cents per 1,000 usd in face value, or 2/32 point, from same time Wednesday. Its yield, which moves in the opposite direction, was unchanged at 4.73 pct.
OIL: Oil and gasoline prices rose Thursday after the US government reported dwindling domestic gasoline stockpiles in the face of unflagging demand.
Total US gasoline stockpiles sank by 5.5 mln barrels last week to 199.7 mln barrels, the US Energy Information Administration reported Wednesday. Word of refinery malfunctions in Texas and Louisiana further boosted prices in the afternoon, said Citigroup Global Markets energy analyst Tim Evans.
Gasoline futures rose 3.31 cents to settle at 2.1918 usd per gallon on the New York Mercantile Exchange. Meanwhile, alternative fuel ethanol hit a 7-month high, corresponding to an overall rise in gas prices since last August.
Light, sweet crude for May delivery rose 1.84 usd to close at 63.85 usd a barrel on the New York Mercantile Exchange.
Tensions over Iran's defiance of a UN Security Council demand that it cease uranium enrichment also supported prices, along with a warning from the International Energy Agency that OPEC production was at its lowest point in more than two years. Oil prices have been volatile the last couple of weeks, gaining nearly 5 usd a barrel after Iran detained 15 British sailors and marines, dropping on their release last Thursday, and then sliding almost 3 usd Monday on expectations of oversupply at a key North American delivery point before slowly recovering somewhat.
In Paris, the International Energy Agency warned that output by the Organization of Petroleum Exporting countries had slid to its lowest level in more than two years on production outages and self-imposed cuts.
Still, a Platts survey of OPEC production last month said the average 26.54 mln barrels pumped a day by OPEC members under quotes still represented overproduction of 740,000 barrels a day above the group's production target.
METALS: Gold prices fell -- after rising for 5 consecutive weeks -- on speculation that the rally was overdone.
Gold futures for June delivery fell 2 usd to 679.70 usd an ounce on the Comex division of the New York Mercantile Exchange. This triggered further selling, pushing the price of the precious metal down to 675.50 usd at one point.
EVENTS:
General Electric Co Q1 results. EPS forecast 0.44 usd vs 0.39 (before market opens)
Feb trade balance (1230 GMT) - The US international trade deficit is seen widening to 60 bln usd in February as the cost of petroleum imports more than offsets growth in merchandise and services exports, said Jeoff Hall of Thomson IFR Markets. The ex-petroleum deficit however, should be less than 39 bln usd as petroleum's share of the total deficit climbs to its highest in a decade, he added. 'After more than doubling between January 2002 and January 2006, the trade balance has undergone significant repair in the last 14 months.'
March producer prices (1230 GMT) - Wholesale inflation is seen rising 0.8 pct, as measured by the Labor Department's Producer Price Index. Excluding volatile food and energy prices, 'core wholesale inflation' is seen rising 0.2 pct in March. The overall rise is led by higher fuel prices. 'Transportation equipment prices should continue to be soft and help keep the core PPI rate from rising more than our 0.2 pct expectation. Still, year-ago changes in headline and core PPI are moving in the wrong direction for the Fed to have any confidence in lower the funds rate,' Hall said.
University of Michigan April consumer sentiment - Consumer Sentiment, as measured by the University of Michigan, is seen remaining basically steady at 88.5 in early April after reaching 88.4 in late March. The index fell in the second half of last month on higher gasoline prices and the dampening growth in the housing and manufacturing sectors, Hall said. ASIA SUMMARY: Stocks higher, oil up Index Change Pct change Nikkei 225 17565.17 +24.75 +0.14 (0230 GMT) S&P/ASX 200 6145.60 -12.40 -0.20 (0337 GMT) Straits Times 3377.81 +5.12 +0.15 (0332 GMT) Hang Seng 20414.20 +33.99 +0.17 (0232 GMT) BSE Sensex 13125.05 +11.24 +0.09 (0330 GMT) usd-yen 118.85 -0.16 -0.13 (Intra-day trade) usd-sgd 1.5167 -0.0015 -0.10 (Intra-day trade) usd-inr 42.8175 -0.0075 -0.02 (Intra-day trade)
10-year JGBs 1.665 pct -- -- (Intra
day trade)Brent North Sea 68.91 usd +0.19 +0.28 (Intra-day trade) crude for May
STOCKS: Asian shares were mostly higher in early trade. Tokyo shares ended the morning session mixed as cautious investors tempered their buying activity before the earnings season gets into full swing in Japan and the US, and ahead of the weekend meeting of G7 finance ministers and central bankers. There is speculation that the G7 ministers and bankers may discuss the recent weakness of the yen. Hong Kong share prices were firmer following a positive lead from Wall Street overnight, with China financials leading the early gains ahead of China Construction Bank's 2006 results announcement. Jakarta shares opened higher, taking cues from Wall Street, with focus on select blue chips. Manila, Taipei, Singapore, Kuala Lumpur and Sydney opened higher. Bombay shares opened higher and continued to climb, minutes after bellwether Infosys Technologies reported a 56 pct rise in full-year net profit before exceptionals.
BONDS: Japanese government bond prices ended the morning session mostly flat, mirroring the directionless trading in US Treasury bonds overnight, with the stock market here also failing to give any new leads. Akihiko Inoue, a strategist at Mizuho Investor Securities, said: 'Market players lacked trading incentives against the background of the lackluster performance by the US Treasury market overnight and the stock market here this morning.'
FOREX: The US dollar was lower against the yen and euro in Sydney trade following the European Central Bank meeting, in which the central bank kept interest rates on hold at 3.75 pct and shifted expectations that an interest rate hike will occur in June rather than in May. Despite the postponement of a potential ECB rate hike by a month, the euro rose to a two-year high above 1.3500 usd in overnight trading. With US-China trade tensions escalating of late, tonight's US trade report for February will be in the spotlight for the US dollar. Also due in the US tonight is March producer inflation data and the latest University of Michigan consumer sentiment survey for April.
OIL: Crude prices edged higher in Asian trade on concerns over tightening US gasoline supplies and after an international oil policy watchdog urged OPEC to increase production. At 0310 GMT New York's main oil futures contract, light sweet crude for delivery in May, was up 19 cents at 64.04 usd per barrel after surging 1.84 usd to 63.85 usd in US trading overnight. 'People are looking at the strong demand for gasoline in the US. Another reason is that last night, the IEA reported that world crude oil stocks have been down by a huge amount. These are push factors,' said Mitsui Bussan Futures chief commodities strategist Tetsu Emori in Tokyo.
METALS: Gold inched higher yesterday as the dollar continued to languish near two-year lows against the euro, with inflation concerns in the US and ongoing strength in the oil price also helping underpin prices. The yellow metal was also buoyed by inflation concerns flagged up in the Federal Reserve minutes. Copper hit a fresh seven-month high yesterday, for the third time this week on falling inventories and supply fears from Chile. Stocks stored in LME-certified warehouses fell for the third consecutive day, lifting prices. In a daily report, the LME said inventories across the globe fell 950 tonnes to 174,550 tonnes. Nickel was down on profit taking, but had reached an intra day high of 48,200 usd yesterday.
EVENTS
Samsung Electronics Q1 results
Hong Kong-listed China Construction Bank FY results
Hong Kong-listed Dalian Port FY results
Rio Tinto PLC AGM, London
Euro zone Feb industrial output (1000 GMT)
G7 finance ministers and central bankers meeting, Washington
EVENTS FOR SATURDAY
Taiwan market open EUROPE SUMMARY: London shares close higher, tracks Wall St, SABMiller up on strong volume Index Change Pct change *FTSE 6416.40 +3.10 +0.05 *DAX 7142.95 -9.88 -0.14 *CAC 5748.94 -2.98 -0.05 UK10-year Bond 92.20 -0.23 UK 30-year Bond 95.60 -0.5 stg-usd 1.9784 +0.0004 eur-usd 1.3491 +0.0055 sfr-usd 1.2151 -0.0038 Brent crude ICE 68.72/bbl +0.88 * yesterday's close
STOCKS: UK blue-chips closed higher on Thursday after reversing earlier falls with SABMiller up on strong volume growth. The index tracked Wall Street's swings which saw opening falls on economic concerns give way to belief that first-quarter results will prove resilient. Meanwhile, the markets will be eyeing J Sainsbury that has a 'put up' or 'shut up' deadline from the takeover panel today. Euro zone Feb industrial output is seen rising by 0.4 pct from the previous month for an annual increase of 4.1 pct. French March CPI is seen picking up, with a 0.5 pct monthly rise for a 1.2 pct annual gain.
BONDS: European government bonds were lower on Thursday after the European Central Bank president Jean-Claude Trichet signalled that euro zone interest rates will rise again soon, most likely in June. The ECB left euro zone interest rates unchanged at 3.75 pct yesterday, as expected. Trichet subsequently said the ECB will continue to monitor euro zone inflation risks 'very closely' and reiterated that monetary policy is 'on the accommodative side'. Bonds initially edged up after the news due to the fact that the market had been speculating in the run-up to the meeting that the ECB may opt for an early hike. Any gains were short-lived, however, and with interest rates set to rise again, bonds soon renewed their downward trend. In the UK, gilts were also lower, tracking their European counterparts, with worse-than-expected UK trade data and a weak survey on UK manufacturing and services sector activity from the BCC yesterday having little impact. Earlier, the UK's Debt Management Office announced its auction of 1.1 bln stg in index-linked gilts maturing in 2017 received reasonable demand, with the bid-to-cover ratio at 2.07.
FOREX: The euro stayed strong in the wake of comments by ECB president Jean-Claude Trichet yesterday signalling that the next interest rate rise will come in June, virtually ruling out the possibility of an early hike next month. The euro remained just off its all-time highs against the yen and the Swiss franc, and two-year highs against the dollar, following Trichet's comments. Elsewhere, the pound was higher against the dollar on the US currency's broad weakness, but fell towards day lows against the euro in the face of strong gains in the single currency, in the absence of any market-moving news out of the UK. Thursday's weaker-than-expected trade data and British Chambers of Commerce survey of manufacturing and services sector activity did little to alter expectations of a May interest rate hike by the Bank of England.
METALS: Copper hit a fresh seven-month high yesterday for the third time this week on falling inventories and supply fears from Chile. In a daily report, the LME said inventories across the globe fell 950 tonnes to 174,550 tonnes. At 12.16 pm, copper for three-month delivery stood at 7,855 usd, against 7,850 usd at Wednesday's close. Nickel was down on profit taking at 46,937 from 47,100 usd yesterday, but had reached an intra day high of 48,200 usd earlier. Elsewhere, zinc was up at 3,564 usd against 3,540, lead was down at 1,980 usd against 1,995, while tin was up slightly at 14,125 usd against 14,100. Aluminium was flat at 2,870 usd. Gold inched higher as the dollar continued to languish near two-year lows against the euro, with inflation concerns in the US and ongoing strength in the oil price also helping underpin prices.
Brent crude for May rose 88 cents to 68.72 usd a barrel on the ICE Futures exchange in London.
EVENTS:
UNITED KINGDOM
AGMs
Rio Tinto
OTHER
J Sainsbury takeover panel 'put up, or shut up' deadline
BENELUX
Dutch February foreign trade (0730 GMT)
Kinepolis Q1 visitor figures
CMB annual report published
Ifri Energy Breakfast roundtable with Suez CEO (0800-1030 GMT)
FRANCE
March CPI (0645 GMT)- March HICP gauge is predicted to pick up to 0.6 pct and 1.3 pct from 0.2 pct and 1.2 pct respectively in January.
ITALY
Final March CPI (0800 GMT) - March CPI is expected to be left unrevised from previous estimates of a 0.2 pct month-on-month gain and a 1.7 pct year-on-year increase.
Telecom Italia Media AGM (1st and 2nd call)
SCANDINAVIA
Finnish March CPI (0600 GMT)
Finnish Feb balance of payments
GERMANY
VW presents new models at Lepizig Auto Mobile show (0845 GMT)
Porsche presents new models at Lepizig Auto Mobile show (1015 GMT)
German Economy Minister Michael Glos visits Russia to attend German-Russian summit on energy issues, RWE CEO Harry Roels is part of delegation (day 2 of 2)
SPAIN
March CPI, final HICP - March CPI is predicted to show a pick up, with a month-on-month rise of 0.6 pct and a year-on-year increase of 2.4 pct. The HICP measure is seen easing a touch to 2.4 pct year-on-year from 2.5 pct the previous month.
EUROPEAN UNION/EURO AREA
Euro zone February industrial output (1000 GMT) - Euro zone February industrial output is seen rising by 0.4 pct from the previous month for an annual increase of 4.1 pct - an improvement on the 0.2 pct monthly fall and 3.7 pct annual gain in January.
EU rules on inquiry into proposed acquisition of APN by INM, Providence and Carlyle Asia
Proposed acquisition by Accor SA of 52 Dorint AG hotels
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