AMERICAN MARKETS OUTLOOK: Stocks are likely to open higher
Monday, in line with U.S. futures, boosted by a strong start to the
holiday shopping season, hopes for progress by European leaders in
addressing the euro-zone debt crisis and some bargain-hunting.
David Morrison at GFT called the Dow Jones Industrial Average up
210 at 11,442, and Standard & Poor's 500 up 26 at 1185. "There
is evidence of fresh buying with many traders convinced that global
stock indexes are oversold - if only in the short term," said
Morrison. "Now the question is how much more upside there is to be
had. Italian bonds are firmer today, but are off their highs,
unlike stock indexes, and EUR/USD still looks extremely vulnerable
from a technical perspective," he added. Dow front-month futures
contract traded 2.2% higher at 11,430, S&P 500 futures contract
was up 2.7% at 1184.60.
EUROPEAN MARKETS: Euro Stoxx 50 edged higher in morning trading
and was up 3.6% at 2188.04 after last week's negative price action
across most risky assets provided value-hunters with an excuse to
buy. Banks racked up hefty gains, with the Stoxx Europe 600 index
for the sector 4.5% higher after sentiment. Despite the strong push
higher, Dolmen Securities was increasingly cautious on the outlook
for global equities as the political impasse in Europe continued to
undermine both corporate and consumer confidence. It said the
chance of relief in the form of European Central Bank action looked
remote with no new powers expected to be given to it. "This leaves
very little prospect of a meaningful rally for markets heading into
year end," said Dolmen.
London's FTSE 100 was up 2.1% at 5274.34 despite data showing
sales volumes at UK retailers in November fell to their lowest
level since March 2009. Banks continued to provide most of the
upside, with Royal Bank of Scotland up 5.8% and Lloyds 4.3% higher.
Heavily-weighted mining stocks also rallied, with Vedanta Resources
up 4.8% and Kazakhmys 4.1% higher. However, David Jones, chief
market strategist at IG Index, also noted caution on the rally. "It
will take a few more days of positive moves to convince traders
that this rally actually has some solid foundations and is not just
a dead cat bounce built on rumor and hope," said Jones.
At 1110 GMT, December bunds were down 0.39 at 133.76, and
December gilts were 0.37 lower at 129.34.
At 1110 GMT, the dollar was down at Y77.67, the euro was up at
$1.3380, and the pound was also up at $1.5588.
===========================
TOP STORIES:
OECD URGES BOLD ECB ACTION TO STEM DEEPENING CRISIS: The global
economic outlook has deteriorated significantly, Organization for
Economic Cooperation and Development said, as it urged the European
Central Bank to act more decisively to prevent the euro-zone
sovereign debt crisis from deepening further.
GERMANY DENIES TRIPLE-A BOND REPORT: Germany's finance ministry
denied a report that Germany and other triple-A-rated euro-zone
countries are considering issuing common bonds to stabilize their
credit rating and create a firewall to protect the euro zone.
CHINA BACKS MORE IMF FUNDS BUT NOT JUST FOR EUROPE: China
continued to back additional funding for the International Monetary
Fund, but it doesn't want that money earmarked for Europe, a source
told The Wall Street Journal.
ICAP TESTING TRADES IN GREEK DRACHMA: ICAP, which operates the
biggest system for enabling currency trades between banks, said it
is prepping electronic-trading systems for a possible exit by
Greece from the euro zone and a return of the drachma.
IMF DENIES ITALY BAILOUT TALKS: The IMF denied that it is in
talks with Italy to prepare a major bailout for the G7 nation, with
a spokesman saying that "there are no discussions with the Italian
authorities on a program for IMF financing."
============================
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
ANALYSIS: David Cottle argued that the final toll exacted on the
world's economy by the financial crisis remains incalculable, the
only certainty being that it will be severe.
FOCUS: The U.K. government on Tuesday will set out a range of
schemes designed to revive growth in an already weak economy that
now faces a number of headwinds from the euro zone.
THE WALL STREET JOURNAL: Investors are on a global quest for
investments where the value isn't beholden to the broader market
swings fueled by debt woes in Europe and political battles in the
U.S., Matt Wirz wrote.
THE WALL STREET JOURNAL: Russian Prime Minister Vladimir Putin
accused foreign powers of trying to influence Russia's elections
and promised to press ahead with plans to boost defense spending to
safeguard the country's dignity.
===========================
STILL TO COME
ET/GMT COUNTRY/PERIOD
0700 1200 GER Dec GfK consumer climate survey
0800 1300 GER Nov Provisional CPI
0830 1330 US Oct Chicago Fed Midwest Manufacturing Index
1000 1500 US Oct New Residential Sales
1000 1500 UK Bank of England Gov King gives evidence to MPs on Inflation Report
1030 1530 US Nov Texas Manufacturing Outlook Survey
1200 1700 FRA Oct Claimant count and job advertisements
1830 2330 JPN Oct Household Spending
1830 2330 JPN Oct Labor Force Survey
1850 2350 JPN Oct Preliminary Retail Sales
1850 2350 JPN Nov Provisional Trade Statistics for 1st 10 days of Month
1930 0030 JPN Oct Detailed Import & Export Statistics
N/A N/A UK Bank of England Gov King's Annual Report
===========================
OTHER NEWS:
EUROPEAN LEADERS NEGOTIATE NEW FISCAL TIES: The euro zone's
leaders are negotiating a ground-breaking fiscal pact aimed at
preventing the currency bloc from fracturing by tethering its
members even closer together.
MOODY'S RAISES PROSPECT OF MULTIPLE EURO-ZONE DEFAULTS: The
probability of a series of defaults by euro-zone countries is no
longer negligible, Moody's warned, noting that the longer the
liquidity crisis continued, the more rapidly the risk of default
would rise.
SPAIN GOVT MAJORITY IS POSITIVE SAYS MOODY'S: The Spanish
government's absolute majority in the general election provides the
new administration with a strong mandate to implement reforms that
could support the country's creditworthiness, Moody's said.
SHIRAKAWA SAYS JAPAN FACING SEVERE CONDITIONS: Bank of Japan
Gov. Masaaki Shirakawa said Japan will continue to face severe
conditions as the European debt crisis, the yen's continued
strength and flooding in Thailand take a toll on exports.
INTERNATIONAL ENERGY AGENCY: EU OIL IMPORT COSTS PASS $400B IN
2011: The EU's oil import costs have soared to over $400 billion
this year and is an additional factor curtailing the region's
recovery, the Financial Times reported.
IRAQ SIGNS FINAL $17.2B SHELL GAS DEAL: Iraq signed the final
$17.2 billion deal with Shell and Mitsubishi to capture and process
flared gas from southern Iraqi oil fields.
RIO TINTO RAMPS UP IRON ORE OUTPUT: Rio Tinto warned customer
sentiment has become more negative in the face of global
uncertainty as the U.S. and European economies waver.
UK TO GUARANTEE LENDING TO SMALL, MIDSIZE FIRMS: The U.K.
Treasury will guarantee bank lending to small and medium-sized
companies to reduce costs of such debt and stimulate lending, a
person familiar with the matter told The Wall Street Journal.
EGYPT MILITARY DIGS IN FOR ELECTIONS MONDAY: As thousands of
protesters descended on Cairo's Tahrir Square to reaffirm their
call for a transfer of power to a civilian authority, Egypt's
military rulers appeared to dig in, insisting they'll usher the
nation through elections.
LLOYDS GAINS FORMER UBS FX HEAD: Lloyds Banking hired Darren
Coote as global head of spot currency trading, despite letting go
of a number of staff across its fixed income, foreign-exchange and
treasury markets in recent weeks.
TAVAN TOLGOI IPO VALUATION COULD BE £10B: Mongolian coal miner
Tavan Tolgoi is preparing its London, Hong Kong and Ulan Bator
listing, which could value the firm at as much as £10 billion, the
Sunday Times reported.
-By James Leigh, Dow Jones Newswires; 4420-7842-9482;
james.leigh@dowjones.com