AMERICAN MARKETS OUTLOOK: U.S. stocks are expected to open lower Tuesday, tracking European markets as investors struggle to deal with the fallout of an inconclusive Greek general election, said GFT. "The chances of forming a Greek government look remote, and this could mean that another election needs to be held," said Fawad Razaqzada, strategist at GFT Markets. "In the meantime, with no government, the ECB/IMF/EU may be forced to withhold the country's next bailout tranche, adding further uncertainty," he added. By 1037 GMT, futures on the Dow Jones Industrial Average were 0.2% lower at 13,008.5, S&P 500 Index futures were down 0.5% at 1,358.5, and Nasdaq 100 futures were down 0.6% at 2,619.5. EUROPEAN MARKETS: At 1036 GMT, the Euro Stoxx 50 was down 1.3% at 2253.25, slipping a little further into the red. Almost all of the Stoxx 600's sectors were in negative territory. But the telecommunications sub-index was up 1.2%, after American Movil stated its intention to up its stake in Royal KPN, which showed a 19% gain. Investors continued to keep an eye on Greece. There was little reaction immediately after the Dutch 10-year bond auction, which Newedge said went "smoothly." Meanwhile, the FTSE 100 was down 0.3% at 5637.79, remaining mildly in the red but off earlier lows and faring much better than its European counterparts, as investors continued to digest the weekend's election results in France and Greece. "With little economic data of importance out today, all eyes remain on Europe," IG Index said. "A lack of direction from the various sides could mean that markets will continue to slip lower, especially given Friday's weaker jobs number in the U.S. that removed the 'improving U.S. economy' element of the bullish case," it added. Mining stocks were the biggest drag, with Vedanta Resources down 5.4% and Randgold Resources off 3%. At 1036 GMT, June bunds were down 0.42 at 142.24, and June gilts were down 0.69 at 117.59. FOREX: Better-than-expected German industrial production helped the euro off of its $1.3001 day floor, though sentiment still looked to be on the turn as major currencies fell to fresh marginal lows. Peripheral bond yields were pretty much flat-lining and equities were still deep in the red, with the CAC underperforming after the weekend change of government. At 1036 GMT, the euro was down at $1.3027, the dollar was down at Y79.79 and the pound was also down at $1.6144. =========================== TOP STORIES: HSBC Boosted By Investment Bank, Emerging Markets HSBC said that its investment banking division and emerging-market operations helped boost underlying first-quarter profit, as the London-based lender looks to retrench its global operations to a few key markets. Euro-Zone Bonds Under Pressure On Greece Woes Lower-rated euro-zone government bonds slipped with a political stalemate following Greek elections keeping investors cautious and fueling demand for safe-haven German bunds. German Industrial Output Rises Strongly On Building Boom German industrial output rebounded strongly in March following February's weather-related weakness, driven by a boom in construction, data from the economy ministry showed Tuesday. Statoil Profit Falls; Sees $17B Capex In 2012 Norwegian oil giant Statoil said it expects capital expenditures of around $17 billion in 2012, as it posts lower first-quarter earnings on the year. =========================== INSIGHT & ANALYSIS: EUROPEAN INSURERS LOOK EAST: European insurance companies may step up activity in the primary bond market over the next few months as a backlog of deals shelved during the sovereign debt crisis last year are revived, market participants said. FOREX FOCUS: Growth Debate Could Yet Help The Euro The political debate over fiscal discipline may be getting all the headlines, but it's the debate between investors on the issue that will matter for the euro, wrote Nicholas Hastings. MONEY TALKS: The End Of Austerity? So, what was the good news in the weekend's European elections? The French abandon austerity by choosing Socialist Francois Hollande over the conservative incumbent Nicolas Sarkozy. =========================== STILL TO COME GMT COUNTRY/PERIOD 1130 US Apr NFIB Small Business Optimism Index 1145 US May 5 ICSC-Goldman Sachs Chain Store Sales Index 1215 CAN Apr Housing Starts 1230 EU ECB President Mario Draghi speech 1255 US May 5 Johnson Redbook Retail Sales Index 1345 US Richmond Fed Pres Lacker holds roundtable discussion 1400 US ISM Semiannual Report On Business/ Economic Forecast 1400 US May IBD/TIPP Economic Optimism Index 1400 US Mar Job Openings/Labor Turnover Survey 1645 US Dallas Fed Pres Fisher speech 2030 US May 4 API Weekly Statistical Bulletin 2301 UK Apr BRC-KPMG Retail Sales Monitor 2301 UK Apr REC & KPMG Report on Jobs 2350 JPN Apr International Reserves/ Foreign Currency N/A US Americas Society/Council of Americas Annual Conference =========================== OTHER NEWS: Fresh Greece Elections Loom, No Coalition Forged Greece's first efforts to negotiate a cross-party coalition government following inconclusive weekend elections stumbled, raising the specter of new elections. Aviva CEO Quits Amid Pay Rebellion British insurance group Aviva said CEO Andrew Moss will stand down with immediate effect, the latest U.K. CEO to leave amid investor anger over pay. Berlin Still Backs Austerity German Economics Minister Philipp Roesler stresses Berlin won't back down with its call for austerity in Europe, and that it will support growth packages to supplement consolidation efforts only if they aren't funded with higher debt. EU Could Give Spain More Time On Deficit Target The European Commission looks to give Spain one more year to reach its 3% deficit target, extending the deadline to 2014 from 2013, El Pais reports. Munich Re Swings To Profit Germany's Munich Re, the world's largest reinsurer by premium revenue, said it swung to a net profit in the first quarter, helped by low costs for large disasters and a decent contribution from investments, helped by less-volatile capital markets. LME Says Received Binding Offers Binding offers to buy the London Metal Exchange have been received and are being evaluated by the exchange's board, the LME said. Spain's Bankia, BFA May Merge Spanish lender Bankia and its parent Banco Financiero de Ahorros may end up merging to carry out a more global clean-up of the bank, according to media reports. Russian Police, Anti-Putin Protesters Clash For Third Day Anti-government protesters and riot police skirmish in Moscow for a third day, as the Russian parliament convenes following President Vladimir Putin's inauguration for a vote on his choice of a prime minister. Barclays Seeks Securities Partner In China Barclays is seeking a mainland partner to set up an investment banking venture that will take advantage of the fast growth of China's capital market, South China Morning Post reports. CLP To Keep Majority In TRUenergy After IPO Power generator CLP intends to maintain a majority stake in its TRUenergy unit if it proceeds with a possible initial public offering of the Australian company. JPMorgan, RBS To Advise On London Yuan Center JPMorgan and Royal Bank of Scotland are joining hands with five other banks to advise on the development of an offshore yuan center in London, people familiar with the situation said. -By Jaya Matta, Dow Jones Newswires; 4420-7842-9476; jaya.matta@dowjones.com
