Ramsey
21-08-2002, Wed 10:09 AM
عن دواوجونز نيوزواير
EUROPEAN OUTLOOK: Another Uneven Start For Markets
Euro-USD 0.9832 gain 0.0040 up 0.4%
Stlg-USD 1.5327 gain 0.0069 up 0.2%
USD-Franc 1.4934 loss 0.0062 dn 0.4%
ZURICH (Dow Jones)--European shares are likely to open little changed, amid pockets of weakness such as telecoms, while government bonds open slightly higher. The euro opens in a tight range against the dollar.
STOCKS: European shares will open little changed, although KPN and Deutsche Telecom, which reports earnings this session, illustrate the perils of debt piles. Defensive stocks could hold sway this session. But Nestle's earnings report for the first half will have to provide enough inspiration for dispirited investors who sold the stock off on a Merrill Lynch downgrade Tuesday.
David Page, strategist at Investec Securities, said the markets are currently entering a phase of consolidation. "We have seen fairly steady progress since the first week of August and there is some confidence seeping back into equities," he said. However, he added that it remains unclear whether U.S. economic data will show renewed weakness going forward.
"This week represents a virtual trading drought in terms of economic data," said Anais Faraj at Nomura Securities, adding that the markets are still in the grip of a bear market rally.
"There is a feeling that the market has discounted a double-dip recession and this has underscored a certain level of confidence in most European markets," he said, adding that most market observers don't expect a U.S. economic recovery in the third quarter. However, he said it is still far from clear whether the recession will extend into the fourth quarter, where the spotlight now rests.
BONDS: Euro-zone government bonds are expected to extend gains after Treasurys rallied in the U.S. and on the consolidation in stocks.
The euro-zone yield curve steepened again Tuesday on the outperformance of the front end and profit-taking following recent flattening as the market shrugged off reports of a 13% increase in German supply next year.
"There is some profit-taking on the market, although people bear in mind that floods across central Europe and especially in Germany could trigger a new German bond issue," said a dealer.
Several Federal Reserve officials are scheduled to deliver comments later in the session.
FOREX: The euro gets a leg up at the start after the dollar slipped because of falling stocks.
Various outside influences injected some nervousness to U.S. trading. "There were a lot of rumors and in this volatile, thin market, it's easy to push currencies around," said Thomas Molloy, a trader at Bank Leumi in New York.
The euro managed to edge higher despite concerns that heavy floods in Germany and parts of central Europe could prevent the single currency from climbing back up to parity anytime soon. "The euro could be capped right now," said Stephen Jen, chief currency economist at Morgan Stanley. "That could be one result of the floods."
EUROPEAN OUTLOOK: Another Uneven Start For Markets
Euro-USD 0.9832 gain 0.0040 up 0.4%
Stlg-USD 1.5327 gain 0.0069 up 0.2%
USD-Franc 1.4934 loss 0.0062 dn 0.4%
ZURICH (Dow Jones)--European shares are likely to open little changed, amid pockets of weakness such as telecoms, while government bonds open slightly higher. The euro opens in a tight range against the dollar.
STOCKS: European shares will open little changed, although KPN and Deutsche Telecom, which reports earnings this session, illustrate the perils of debt piles. Defensive stocks could hold sway this session. But Nestle's earnings report for the first half will have to provide enough inspiration for dispirited investors who sold the stock off on a Merrill Lynch downgrade Tuesday.
David Page, strategist at Investec Securities, said the markets are currently entering a phase of consolidation. "We have seen fairly steady progress since the first week of August and there is some confidence seeping back into equities," he said. However, he added that it remains unclear whether U.S. economic data will show renewed weakness going forward.
"This week represents a virtual trading drought in terms of economic data," said Anais Faraj at Nomura Securities, adding that the markets are still in the grip of a bear market rally.
"There is a feeling that the market has discounted a double-dip recession and this has underscored a certain level of confidence in most European markets," he said, adding that most market observers don't expect a U.S. economic recovery in the third quarter. However, he said it is still far from clear whether the recession will extend into the fourth quarter, where the spotlight now rests.
BONDS: Euro-zone government bonds are expected to extend gains after Treasurys rallied in the U.S. and on the consolidation in stocks.
The euro-zone yield curve steepened again Tuesday on the outperformance of the front end and profit-taking following recent flattening as the market shrugged off reports of a 13% increase in German supply next year.
"There is some profit-taking on the market, although people bear in mind that floods across central Europe and especially in Germany could trigger a new German bond issue," said a dealer.
Several Federal Reserve officials are scheduled to deliver comments later in the session.
FOREX: The euro gets a leg up at the start after the dollar slipped because of falling stocks.
Various outside influences injected some nervousness to U.S. trading. "There were a lot of rumors and in this volatile, thin market, it's easy to push currencies around," said Thomas Molloy, a trader at Bank Leumi in New York.
The euro managed to edge higher despite concerns that heavy floods in Germany and parts of central Europe could prevent the single currency from climbing back up to parity anytime soon. "The euro could be capped right now," said Stephen Jen, chief currency economist at Morgan Stanley. "That could be one result of the floods."