London Session Update Pre New York Open

Sep 13 • Mind The Gap • 2429 Views • Comments Off on London Session Update Pre New York Open

Greece’s issues are back in focus

Greece’s crisis is expected to be back on the agenda again today with many analysts and commentators predicting that Greece will need another bailout, perhaps two. The meeting of eurozone finance ministers gets under way in Vilnius, Lithuania this morning as international lenders predict Greece will need another ‘micro’ bailout of circa €10-11bn in the second half of 2014. Other EU finance ministers, not just the 17 nations that have adopted the euro, will be present with the topic of financial stability high up on the agenda for discussion. The agenda is already partly set by the introduction from the Lithuanian government who are hosting and therefore chairing the meeting;

“Government deficits and current account deficits are decreasing, economic confidence is stabilizing, while international competitiveness indicators show strong positive signs. However, many challenging factors remain: in a number of member states the general government debt level increased over the last year, unemployment persists at an unacceptably high level and youth unemployment, in particular, remains a challenge for most.”

Japan revised July industrial output up 3.4 pct m/m

Japanese industrial output rose 3.4 percent in July, revised data showed on Friday, suggesting that the recovery in factory activity remains intact. The figure compares with an initial reading of a 3.2 percent increase and follows a 3.1 percent decline in June. The capacity utilisation index rose 3.7 percent in July from a month earlier to 99.3.

Market snapshot at 9:30 am UK time

The Nikkei closed up by 0.12%, the strong industrial production figures produced in the overnight session helping the Nikkei appreciate with yen falling. The Hang Seng closed down 0.22% with the CSI closing down 0.74%. The ASX 200 closed down 0.44%.

European markets have experienced mixed fortunes in the first part of the morning session. The STOXX is down 0.21%, the UK FTSE is down 0.18%, DAX down 0.15%, the Athens exchange is down 0.22% and the Istanbul exchange is down 0.36%.

ICE WTI oil is down 0.50% per barrel at $108.06 per barrel. NYMEX natural is down 0.30% at $3.63 per therm. COMEX gold is down 1.16% at $1315.20, COMEX silver is down 1.64% at $21.76 per ounce.

The DJIA equity index future is currently down 0.02%, the SPX future down 0.08% and the NASDAQ equity index future is up 0.09%.

Forex focus

The dollar rose by 0.2 percent to 99.71 yen early in the London session, after strengthening 0.6 percent this week. The U.S. currency rose 0.1 percent to $1.3284 per euro after gaining 0.1 percent yesterday. The yen fell 0.1 percent to 132.47 per euro. The dollar headed for a second weekly advance versus yen before a report that economists said will show U.S. retail sales accelerated, boosting bets that the Federal Reserve will taper its bond-purchase programme next week.

Sterling was little changed at $1.5789 early in the London session after rising to $1.5840 yesterday, the highest level seen since Feb 8th. It has gained 1 percent this week. Sterling traded at 84.06 pence per euro after appreciating to 83.83 pence on Sept 11th, the strongest level seen since Jan 23rd. The pound is set for a second weekly advance versus the dollar, before the construction output data for the UK is published which analysts are predicting will add to signs that the U.K. economy is gaining momentum.

Sterling has risen 7.1 percent in the past six months, the best performance amongst the 10 developed-nation currencies tracked by Bloomberg’s Correlation-Weighted Indexes. The dollar has gained 0.6 percent and the euro has advanced 3.3 percent.

The Aussie was little changed at NZ$1.1390 early in Sydney from yesterday, when it touched NZ$1.1338, the lowest level seen since Aug 20th. It’s set for a 0.8 percent drop this week. Australia’s currency slid 0.1 percent to 92.59 U.S. cents from yesterday, when it reached 93.54 cents, the strongest level seen since June 19th. It bought 92.28 yen from 92.29 yesterday, and is now set for a 1.4 percent weekly gain. New Zealand’s dollar traded at 81.31 cents from 81.38 yesterday, when it reached 81.58, the highest since Aug 19th. The kiwi has gained 1.6 percent against the greenback this week and jumped 2.2 percent versus its Japanese peer to 81.03 yen.