News and Views: 19 June, 2008

Asian markets rose as banking sector losses were outweighed by gains in property stocks

Indices:

European markets:

European shares dropped sharply on Wednesday as banks and oil makers continued to decline. Slide in US markets after earnings from FedEx and Morgan Stanley was disappointing for investors which further deteriorated European markets. (source: sharecast.com).

The German Dax was 67 points lower at 6,728 the French CAC also dropped 67 points to 4,618. (source: sharecast.com).

US markets: 

US markets like their European counterparts fell after a disappointing quarterly results from FedEx and Morgan Stanley lower. (source: sharecast.com).

Dow Jones closed down 131 points to 12,029 with Nasdaq sliding 28 points to 2,429. The S&P 500 finished 13 points lower at 1,337. (source: sharecast.com).

Asian markets:

Asian markets rose as banking sector losses were outweighed by gains in property stocks. Despite lower US markets, did not deter Japanese shares from rising, which were however low initially. (source: sharecast.com).

The benchmark Nikkei 225 index rose 104 points to end at 14,452. Hong Kong's Hang Seng index settled 267 points higher at 23,325. (source: sharecast.com).

Currencies:

Dollar fell again against major currencies, when traders were under pressure and speculated if the Federal Reserve may increase interest rates to control inflation. Poor quarterly results from Morgan Stanley and FedEx also hit dollar sentiment and concern over the health of US economy. Whereas, euro rose after ECB (European Central Bank) member and Luxembourg Central Bank President said: "Interest rates will remain at historically high levels, probably until the end of this year. ECB remained on state of elevated alert over inflation pressures.". Sterling was under pressure after BoE (Bank of England) governor Mervyn King commented that the central bank may not raise interest rates. (source: sharecast.com). 

Commodities:

Oil:

Oil saw another volatile day after government said oil supplies decreased slightly less than expected last week. Later oil declined further after an AP press news from Nigeria came in that Nigerian oil workers were going on strike against a unit of Chevron. (source: sharecast.com).

Crude closing price settled $2.67 higher at $136.68 per barrel. (source: sharecast.com).

Gold: 

Bonds:   

Yields move inversely to bond prices. 

US Treasuries:

US treasuries were in demand as investors took full advantage with volatile indicies on the other end. Traders also saw treasuries lucrative with Fed's possible lift in interest rates next week. (source: sharecast.com).

Yields on 10-year notes slipped 3 basis points to 4.17%. (source: sharecast.com).

European Bonds:

European bonds were not so much in demand with ECB's policy maker Juergen Stark said: "the ECB would do everything necessary to contain inflation". (source: sharecast.com).

The yield on the benchmark 10-year bund rose 1 basis point to 4.62%. (source: sharecast.com).

Economic Calendar - 19 June 2008:

14:00pm Leading Indicators (MoM) (May) – US:  The Leading Indicators released by the Conference Board measures future trends of the overall economic activity including employment, average manufacturing workweek, initial claims, permits for new housing construction, stock prices and yield curve. It is considered as a measure for economic stability in United States. This event generates some volatility for the USD. A high reading is seen as positive (or bullish). Previous rate was 0.1%. (Medium volatility expected). 

14:00pm Philadelphia Fed Manufacturing Survey (Jun) - US: The Philadelphia Fed Survey is a spread index of manufacturing conditions (movements of manufacturing) within the Federal Reserve Bank of Philadelphia. This survey, served as an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing Index (Institute for Supply Management) and the index of industrial production. It is also used as a forecast of The ISM Index. An above-the-expectaitons reading is seen as positive.. Previous rate was -15.6. (Medium volatility expected).