1. Morning News Call - EMEA, Oct 12


    MARKET VIEWEuropean shares are set to fall on Wednesday after Slovak lawmakers rejected a plan to expand the euro zone rescue fund and after Alcoa kick-started the earnings season with weaker-than-expected results.Spreadbetters see Britain’s FTSE 100 opening 0.7 percent lower, Germany’s DAX 0.6 percent down and France’s CAC-40 0.5 percent lower.Slovakia is the only euro zone country that has yet to approve a plan to boost the funds available to the bailout vehicle, and a re-vote was expected later this week. While the main opposition party was set to support the measure now the government has resigned, the twist has added to market nervousness just as European authorities were striving to come up with concrete steps to avoid a wider contagion.A rebound in Hong Kong and Shanghai shares helped lift most Asian stocks into positive territory on Wednesday after losses earlier, but concerns that Europe’s debt crisis has hurt confidence in the global economy and is weighing on corporate earnings limited gains. Concerns that the Slovak parliament’s rejection of the euro zone plan could slow efforts to prevent the region’s debt woes from morphing into a banking crisis led to a widening in Asian credit spreads.MSCI’s broadest index of Asia Pacific shares outside Japan rose 0.2 percent, but the materials sector bucked the trend and fell 1 percent. Meanwhile, S&P 500 futures eased after Alcoa’s below-forecast results, which could sour the mood on Wall Street later as attention turns to the U.S. earnings season.The euro fell broadly, reversing its recent corrective rally made on hopes for a solution to the debt crisis, with fragile risk sentiment soured after the Slovak parliament rejected the euro zone plan. The euro last changed hands 0.3 percent lower at $1.3593. Stop losses were cited around $1.3710, while a pivotal technical support area at the 50 percent retracement of the $1.3346-1.3698 rally loomed around $1.3520-25. The dollar index gained to 77.822 on the day, after having skidded from an 8-1/2 month peak of 79.838 set on Oct. 4. Versus the Japanese currency, the dollar was at 76.71, trading in an ever-tightening range.Brent crude fell, snapping five days of gains, after OPEC cut its global oil demand forecast and plans for greater powers for a euro zone bailout fund hit a snag, rattling investor confidence. Brent crude for November lost 16 cents to $110.57 a barrel by 0408 GMT, after gaining for a fifth day on Tuesday, rising nearly 11 percent, its biggest rise since August 2009. U.S. crude was down 48 cents to $85.33, after slipping as low as $84.52.Spot gold traded flat, as investors waited for cues from further developments in the euro zone’s debt crisis, and robust physical demand in Asia underpinned sentiment. Spot gold was flat at $1,665.49 an ounce by 0358 GMT, after losing 0.8 percent in the previous session.U.S. Treasuries prices retreated on Tuesday, pushing benchmark yields to their highest in more than a month. Benchmark 10-year notes traded 25/32 lower to yield 2.16 percent, up from 2.07 percent late on Friday. The 10-year yield rose as high as 2.18 percent, its highest since September 1. It was about 50 basis points higher from a 60-year trough hit more than two weeks ago.MARKET SNAPSHOT AT 0515 GMTS&P 500 INDEX FUTURES 1,186.30 down 0.28% down 3.30DJIA FUTURES 11,306.00 down 0.19% down 21.00NIKKEI 8,756.13 down 0.20% down 17.55MSCI ASIA, EX-JP 458.91 up 0.50% up 2.30EURO/USD 1.3621 up 0.21% up 0.0028USD/JPY 76.71 down 0.05% down 0.04SPOT GOLD $1,666.19 up 0.05% up $0.76US CRUDE $85.45 down 0.42% down $0.3610-YR US TSY YLD 2.1390% down 0.018010-YR BUND YLD 2.0835% up 0.0010GLOBAL TOP STORIESThe parliament of tiny Slovakia stalled the expansion of a bailout fund to rescue the euro zone from its debt crisis on Tuesday, but international lenders said they were likely to grant a loan to Greece next month, buying time for a broader response.Alcoa, the largest U.S. aluminum producer, said an economic slowdown hurt demand and knocked prices for the metal lower, denting its third-quarter profit and sending its shares down in after-hours trading.The U.S. Senate approved a controversial bill aimed at forcing China to raise the value of the yuan in an effort to save American jobs, sending it to the House of Representatives where its fate is uncertain.U.S. private equity firm Bain Capital plans to finalise a deal to buy Japanese restaurant chain Skylark from a unit of Nomura Holdings for about $3.4 billion, a source with knowledge of the matter said.Millions of BlackBerry customers across four continents are without email, messaging and browsing service on their smartphones after a series of failures in Research In Motion’s private network.EUROPEAN COMPANY NEWSEurope’s banks will have to achieve a significantly stronger capital position under a quick-fire regulatory health check and may need to raise some 100 billion euros, banking and regulatory sources said on Tuesday.Merger partners Deutsche Boerse and NYSE Euronext have until Nov. 8 to formally address the European Commission’s specific concerns over their $9 billion deal, according to a source familiar with the time table.Shares of Europe-focus fashion retailer Esprit Holdings fell more than 13 percent on Wednesday after a media report that the company had exaggerated the number of its retail outlets in China.Sberbank, Russia’s No.1 lender, is looking at Denizbank, Dexia’s Turkish arm, as a potential acquisition target but has yet to begin talks.The euro zone sovereign debt crisis has become systemic and risks to the economy are increasing rapidly with Europe’s banks in the danger zone, European Systemic Risk Board (ESRB) Chairman Jean-Claude Trichet said on Tuesday.TODAY’S COMPANY ANNOUNCEMENTSAustria Austrian Airlines TrafficDenmark Bang & Olufsen Q1France Casino Guichard Perrachon Q3 SalesFrance Fonciere Sepric PreliminaryFinland Citycon Q3Germany Ahlers Q3Germany Baader Bank PreliminaryGermany Lufthansa TrafficNetherlands ASML Holding Q3Switzerland Flughafen Zurich TrafficUnited Kingdom Burberry TradingUnited Kingdom Ceres Power PreliminaryUnited Kingdom Travis Perkins TradingTODAY’S TOP ECONOMIC EVENTS (all times GMT)0530 - France final consumer price index (CPI) for Sept mm. Forecast at 0.3 pct vs. 0.6 pct. Forecast yy at 2.6 pct vs. 2.4 pct.0600 - Germany wholesale price index for Sept mm. Seen at minus 0.1 pct vs. 0.1 pct. Forecast yy at 5.4 pct vs. 6.5 pct.0700 - ECB Governing Council member Jozef Makuch attends seminar on financial sector supervision in the euro zone in Bystrica, Slovakia.0730 - EU Commissioner for Monetary and Economic Affairs Olli Rehn gives speech at Irish Banking Federation annual conference in Dublin, Ireland.0830 - United Kingdom claimant count for Sept. Forecast for 25.0 k vs. 20.3 k.0830 - United Kingdom ILO unemployment rate for Aug. Forecast at 8.0 pct vs. 7.9 pct.0830 - United Kingdom weekly average earnings for Aug (including bonus). Seen up 2.9 pct vs. 2.8 pct. Weekly average earnings (excluding bonus) seen up 2.0 pct vs. 2.1 pct.0900 - Euro zone industrial production for Aug mm. Forecast for minus 0.7 pct vs. 1.00 pct. Forecast yy of 2.2 pct vs. 4.2 pct.1600 - German Finance Minister Wolfgang Schaeuble gives speech at CDU conference in Berlin, Germany.1700 - United States House Financial Services Committee oversight and investigations

     
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