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14-08-2002, Wed 9:21 AM
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EUROPEAN OUTLOOK: Fed's Inaction To Aid Govt Bonds
Euro-USD 0.9885 gain 0.0050 up 0.5%
Stlg-USD 1.5412 gain 0.0042 up 0.3%
USD-Franc 1.4798 loss 0.0068 dn 0.4%
ZURICH (Dow Jones)--European shares are expected to open lower, with government bonds higher and the euro again aiming for parity.
STOCKS: European shares are pegged to open lower after Wall Street's gains and ahead of a key day for European corporate earnings.
European stocks registered modest gains Tuesday, but most investors erred on the side of caution and kept their powder dry ahead of the U.S. Federal Reserve's decision on interest rates.
At a sector level, media stocks were among the big losers again Tuesday as investors stayed jittery about the prospect of huge write-downs at France's Vivendi Universal. soured sector sentiment, traders said.
Banking stocks pointed north Tuesday, cheered in part by Switzerland's largest bank, UBS, posting better-than-expected second-quarter results. But Credit Suisse Group's earnings report Wednesday could set a bearish tone in the sector this session.
Allianz, Wella, Roche Holding and E.on also report Wednesday.
BONDS: Euro-zone government bonds are expected to open higher after the U.S. Treasurys' powerful advance, which continued into Asian trading.
Euro-zone government bonds rose, having opened higher in line with initially weaker stock markets and then been boosted by poor economic data.
FOREX: The euro is aiming toward parity again after cruising to $0.9880 overnight in getting a boost from the Fed's inaction and a boost from poor German economic data.
"The risks are weighted mainly toward conditions that may generate economic weakness," for the foreseeable future, the Federal Open Market Committee stated. The language implied the Fed is once again prepared to cut interest rates, possibly as early as Sept. 24.
After taking an initial hit, the euro shrugged off a markedly weak sentiment report in Europe's biggest economy Tuesday. Germany's Zentrum fuer Europaeische Wirtschaftsforschung's economic expectations index posted its largest fall in two years with a sharply lower-than-expected reading of 43.4 for August, much worse than expectations.
Ripple effects from the ZEW index were initially dollar-supportive, driving more flows out of European assets and into the U.S. Treasury bond market.
EUROPEAN OUTLOOK: Fed's Inaction To Aid Govt Bonds
Euro-USD 0.9885 gain 0.0050 up 0.5%
Stlg-USD 1.5412 gain 0.0042 up 0.3%
USD-Franc 1.4798 loss 0.0068 dn 0.4%
ZURICH (Dow Jones)--European shares are expected to open lower, with government bonds higher and the euro again aiming for parity.
STOCKS: European shares are pegged to open lower after Wall Street's gains and ahead of a key day for European corporate earnings.
European stocks registered modest gains Tuesday, but most investors erred on the side of caution and kept their powder dry ahead of the U.S. Federal Reserve's decision on interest rates.
At a sector level, media stocks were among the big losers again Tuesday as investors stayed jittery about the prospect of huge write-downs at France's Vivendi Universal. soured sector sentiment, traders said.
Banking stocks pointed north Tuesday, cheered in part by Switzerland's largest bank, UBS, posting better-than-expected second-quarter results. But Credit Suisse Group's earnings report Wednesday could set a bearish tone in the sector this session.
Allianz, Wella, Roche Holding and E.on also report Wednesday.
BONDS: Euro-zone government bonds are expected to open higher after the U.S. Treasurys' powerful advance, which continued into Asian trading.
Euro-zone government bonds rose, having opened higher in line with initially weaker stock markets and then been boosted by poor economic data.
FOREX: The euro is aiming toward parity again after cruising to $0.9880 overnight in getting a boost from the Fed's inaction and a boost from poor German economic data.
"The risks are weighted mainly toward conditions that may generate economic weakness," for the foreseeable future, the Federal Open Market Committee stated. The language implied the Fed is once again prepared to cut interest rates, possibly as early as Sept. 24.
After taking an initial hit, the euro shrugged off a markedly weak sentiment report in Europe's biggest economy Tuesday. Germany's Zentrum fuer Europaeische Wirtschaftsforschung's economic expectations index posted its largest fall in two years with a sharply lower-than-expected reading of 43.4 for August, much worse than expectations.
Ripple effects from the ZEW index were initially dollar-supportive, driving more flows out of European assets and into the U.S. Treasury bond market.