Futures Rise as Leaders Pledge to Resume Budget
U.S. equity futures rose slightly in thin overnight trade as
President Obama pledged to resume talks over avoiding the Fiscal
Cliff as soon as leaders returned to session after the Christmas
break. Earlier this week, it seemed unlikely that any deal would
be reached as the sides were vastly different in their approaches
to fiscal reform and were not communicating well following the
failed Plan B in the House.
In other news around the markets:
- Volkswagen AG (
) and General Motors (NYSE:
) are set to see market share gains in the domestic Chinese
market in 2013 as territorial disputes weaken the market power
of Japanese makers such as Honda Motor Corp (NYSE:
) and Toyota Motors (NYSE:
- Despite most markets being closed on Christmas day, the
interbank forex markets were open and the GBP/USD cross flash
crashed yesterday, dropping from 1.6140 to 1.5899 before
retracing the entire move downwards.
- S&P 500 futures rose 2 points to 1,421.75.
- The EUR/USD was higher at 1.3212.
- Spanish 10-year government bond yields were unchanged at
- Italian 10-year government bond yields were unchanged at
- Gold fell 0.2 percent to $1,656.10 per ounce.
Asian shares rose in thin overnight trade on renewed hopes
that some sort of deal can be reached in Washington to avoid the
Fiscal Cliff and on the dovish Bank of Japan minutes released
overnight. The Japanese Nikkei Index rose 1.49 percent on new
hopes of easing while the Shanghai Composite Index rose 0.25
percent and the Hang Seng Index gained 0.16 percent. In addition,
the Korean Kospi Index rose 0.02 percent and Australian shares
gained 0.25 percent.
European markets were closed on Wednesday in observance of
Commodities were were mixed overnight with energy futures
rising and precious metals lagging. WTI Crude futures gained 0.59
percent to $89.13 per barrel and Brent Crude futures gained 0.75
percent to $109.62 per barrel. Copper futures gained 0.61
percent, rising to $356.75, on hopes that renewed stimulus in
Japan will boost growth and copper demand. Gold was lower and
silver futures were flat at $29.90 per ounce.
Currency markets had a slight risk-on tone overnight in very
thin trade as the large European market remained closed. The
EUR/USD was higher at 1.3212 and the dollar gained demonstrably
against the yen, rising 0.76 percent to 85.41. Overall, the
Dollar Index fell 0.08 percent on weakness against the euro, the
Swiss franc, and the Swedish krone, and strength against the yen
off-setting this weakness. In addition, the Australian dollar
rose against the greenback with copper prices and was even
stronger against the yen.
No notable companies are expected to report earnings
On the economics calendar Wednesday, Same Store Sales and the
Redbook are due out and will shed light on retail sales over the
holiday week. Later, the Case-Shiller Home Price Index is due out
and the Richmond Fed Manufacturing Index and Investor Sentiment
are also expected. In addition, the Treasury is set to auction
4-week, 3-month, and 6-month bills.
Good luck and good trading.
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