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17-09-2002, Tue 10:54 AM
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EUROPEAN OUTLOOK: Shares To Open Higher, Bonds Lower On Iraq
Euro-USD 0.9657 loss 0.0036 dn 0.4%
Stlg-USD 1.5368 loss 0.0047 dn 0.3%
USD-Franc 1.5241 gain 0.0088 up 0.6%
ZURICH (Dow Jones)--European shares should open with gains on the Iraq inspection offer, while government bonds and the euro open under pressure.
STOCKS: European shares will open higher in an initially positive reaction to the Iraqi offer. But investors may temper their buying later should the view that Iraq's bid is a mere ploy gain credence.
European stocks were mixed to lower Monday despite strong gains in the heavily-weighted oil sector as growing concern over the health of the global economy and the threat of war tempered optimism. Stocks related to oil and gold likely will lose out to profit-taking, while chemical stocks should gain.
Shares in mobile operator MobilCom moved significantly higher Monday as the German government moved to bail out the floundering telecom.
BONDS: Euro-zone government bonds should open lower on the Iraq news and on prospects that the key German ZEW index will show additional weakness.
Euro-zone government bonds rallied Monday on weak European stock markets.
Prices of U.S. Treasurys lost ground overnight Tuesday after the Iraq news. Any surprise strength in U.S. industrial production figures later could add to that pressure.
FOREX: The euro starts the session under pressure from the Iraqi arms inspection offer and from prospects that Wall Street shares will rally later.
Uncertainty ahead of Germany's upcoming election also took some shine off the euro.
Pausing for breath, currency traders awaited more information about a possible policy shift in Japan, following market-moving remarks by a top Japanese official at the end of last week. On Friday, Japan's Vice Finance Minister for International Affairs Haruhiko Kuroda raised the option of the Japanese government making massive sales of yen in order to reflate the economy.
The market is awaiting the outcome of the Bank of Japan's two-day policy meeting for a response.
Among other currencies, the Swiss franc may stand to lose some ground if the Iraq offer prompts save-haven seekers to take profit.
Elsewhere, Treasury Secretary Paul O'Neill said the U.S. can afford to take action against Iraq, and predicted the economy will be growing at a rate of 3% to 3.5% by year's end
EUROPEAN OUTLOOK: Shares To Open Higher, Bonds Lower On Iraq
Euro-USD 0.9657 loss 0.0036 dn 0.4%
Stlg-USD 1.5368 loss 0.0047 dn 0.3%
USD-Franc 1.5241 gain 0.0088 up 0.6%
ZURICH (Dow Jones)--European shares should open with gains on the Iraq inspection offer, while government bonds and the euro open under pressure.
STOCKS: European shares will open higher in an initially positive reaction to the Iraqi offer. But investors may temper their buying later should the view that Iraq's bid is a mere ploy gain credence.
European stocks were mixed to lower Monday despite strong gains in the heavily-weighted oil sector as growing concern over the health of the global economy and the threat of war tempered optimism. Stocks related to oil and gold likely will lose out to profit-taking, while chemical stocks should gain.
Shares in mobile operator MobilCom moved significantly higher Monday as the German government moved to bail out the floundering telecom.
BONDS: Euro-zone government bonds should open lower on the Iraq news and on prospects that the key German ZEW index will show additional weakness.
Euro-zone government bonds rallied Monday on weak European stock markets.
Prices of U.S. Treasurys lost ground overnight Tuesday after the Iraq news. Any surprise strength in U.S. industrial production figures later could add to that pressure.
FOREX: The euro starts the session under pressure from the Iraqi arms inspection offer and from prospects that Wall Street shares will rally later.
Uncertainty ahead of Germany's upcoming election also took some shine off the euro.
Pausing for breath, currency traders awaited more information about a possible policy shift in Japan, following market-moving remarks by a top Japanese official at the end of last week. On Friday, Japan's Vice Finance Minister for International Affairs Haruhiko Kuroda raised the option of the Japanese government making massive sales of yen in order to reflate the economy.
The market is awaiting the outcome of the Bank of Japan's two-day policy meeting for a response.
Among other currencies, the Swiss franc may stand to lose some ground if the Iraq offer prompts save-haven seekers to take profit.
Elsewhere, Treasury Secretary Paul O'Neill said the U.S. can afford to take action against Iraq, and predicted the economy will be growing at a rate of 3% to 3.5% by year's end