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Forex Blog - US Market Update
US Market Update
DJIA +15 Nasdaq +13 S&P +3
- Optimism has been fairly robust this morning despite mixed economic data, helping to keep the major US indices in positive territory. The November Pending Home Sales data came in significantly worse than expected, hitting its lowest level since the series began eight years ago. The November Factory Orders reading showed US manufacturing activity contracting at the fastest pace since 1980. Meanwhile, front-month crude tested above $50/bbl as the natural gas row between Russia and Ukraine began affecting the rest of Europe and the Mideast crisis continued its spiral. Integrated oil and oil services firms are benefiting from strength in crude, with both the USO and OIH extending a week of gains before weekly data figures.
- Potash name Mosaic fell as much as 6% after the open this morning following its pessimistic view of 2009 offered along with its Q2 earnings report yesterday after the close. Other fertilizer names such as POT and AGU fell in sympathy despite MOS disclosure of efforts to sustain pricing; shares of all three firms regained some of this ground by mid morning. LDK Solar is down nearly 10% after the firm slashed its outlook for Q4 yesterday evening; selected solar names are trading off as well, with benchmark solar ETF TAN-3%. Endo Pharma offered to acquire Indevus Pharma for $4.50/shr in cash, pushing IDEV up 70% this morning. ENDP is off around 10%. A broad selection of corporations continue to cut guidance, lay off employees and reduce production. Dollar Thrifty said its Q4 loss would be "significantly in excessâ€ť of the last year's, Micrel reduced its earnings and revenue outlook and cut jobs, and Laboratory Corporation of America cut its view for 2009.
- In currencies, the greenback retraced its gains made in the European session against various European pairs and retained a firm tone against the JPY. The EUR/USD pair, which tested 1.3315, moved back towards 1.3440 area aided by chatter that the Bank of International Settlements (BIS) was purchasing euros around the 1.3350 area. The USD's momentum due in part to the larger-than-expected drop in November pending home sales data. Dealers noted that the 1.3440 area marked a 38% retracement of the intra-day move in the session. EUR/GBP once again found itself in the volatility hot seat, rebounding from session lows of 0.9100 after dealers noted that merger-related flows from the â‚¬12B EDF-British Energy merger had been completed. The cross ended the US morning around the 0.9180 area. CAD firmed up during the New York morning with the higher energy prices. After testing the 1.200 level in Europe, the USD/CAD move below the 1.1770 level as OPEC compliance and Russian-Ukraine dispute pushed up crude.
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