Day ahead

08:45: Italy - PMI Services

-08:50: France - PMI Services

-08:55: Germany - PMI Services

-09:00: Eurozone - PMI Services, PMI Composite

-09:30: UK - PMI Services, M4 Money Supply Mortgage Approvals

-10:00: Eurozone - CPI Estimate

-10:00: Italy - CPI

-13:30: US - NFP, Unemployment Rate

-15:00: US - Factory Orders, ISM Non-Manf Composite

 

U.S News

U.S. stocks fell, following the biggest rally in a year for the Standard & Poor’s 500 Index, as Federal Reserve policy makers said they will probably end their $85 billion monthly bond-purchase program sometime in 2013.

The Standard & Poor’s 500 Index fell 0.2 percent to 1,459.37 in New York. The benchmark index yesterday reached its highest level since September after lawmakers passed a budget bill, avoiding the so-called fiscal cliff. The Dow Jones Industrial Average lost 21.19 points, or 0.2 percent, to 13,391.36 today. About 6.7 billion shares traded hands on U.S. exchanges today, or 10 percent above the three-month average.

Policy makers are expanding their third round of so-called quantitative easing to boost economic growth and cut the jobless rate, now at 7.7 percent.

About 6.7 billion shares traded hands on U.S. exchanges today, or 10 per cent above the three-month average

 

Asian News

Asian stocks outside Japan fell, paring the biggest weekly advance in more than a month, after Federal Reserve policy makers said they will probably end their $85 billion monthly bond-purchase program sometime this year.

Japanese equities jumped as markets reopened from holidays. Rio Tinto Group dropped 1 percent in Sydney as metals prices fell. Toyota Motor Corp. surged 6.4 percent as the yen weakened to the lowest level against the dollar since July 2010, boosting the earnings outlook for exporters.

Raw-material shares posted the largest declines among 10 industry groups on the Asia excluding Japan equities gauge. BHP Billiton Ltd, fell 0.6 percent to A$37.91 in Sydney. Zijin Mining Group Co., China’s biggest gold miner by market value, fell 2.5 percent to HK$3.08 in Hong Kong.

 

European News

European stock futures fell as minutes from the Federal Reserve’s Dec. 11-12 meeting showed some policy makers said it may be appropriate to end the $85 billion monthly bond-purchase program in 2013.

European (SXXP) equity markets are set to open lower tracking overnight declines in the U.S. and Asia,” “Also keeping markets subdued today will be the U.S. jobs and unemployment data out this afternoon. Caution always surrounds the figures but uncertainty is likely to be heightened following the hawkish FOMC minutes.”

Fresnillo, the world’s biggest primary silver producer, may move after UBS downgraded the shares to neutral from buy, citing recent gains in the stock.

Corio may be active after the shares were raised to buy from sell at Berenberg, which cited the largest Dutch property developer’s sale of retail and office properties in the fourth quarter of 2012 for 118 million euros ($153 million).

 

Currencies

The yen extended its longest weekly losing streak since 1989 against the dollar before U.S. data forecast to show hiring increased the most in four months.

The U.S. currency maintained a two-day gain versus the euro after minutes of the Federal Reserve’s last meeting showed policy makers may end their $85 billion monthly bond purchases this year. The yen fell against major peers amid bets that the Bank of Japan (8301) will boost money supply to end deflation.

The yen touched 87.83 per dollar, the weakest since July 28, 2010, before trading at 87.74 as of 7 a.m. in London, down 0.6 percent from the close yesterday. It declined 0.5 percent to 114.40 per euro. The dollar gained 0.1 percent to $1.3040 per euro.

 

Bonds

Treasuries dropped for a fourth day, making them the world’s worst performing bonds as economists said a report will show the U.S. unemployment rate held at the lowest level since 2008.

Government securities maturing in 10 years and longer have handed investors a 4.72 percent loss in the past month, the biggest decline of 144 debt indexes tracked by Bloomberg and the European Federation of Financial Analysts Societies.

Equities are trouncing bonds. The MSCI All-Country World Index (MXWD) of stocks advanced 4.5 percent including reinvested dividends, according to data compiled by Bloomberg.

 

Commodities

Oil trimmed its fourth weekly gain after U.S. Federal Reserve policy makers signaled they may end a stimulus program. Prices dropped as much as 0.8 percent, trimming crude’s weekly increase to 1.5 percent. Brent crude for February settlement slid 62 cents, or 0.6 percent, to $111.52 a barrel on the London-based ICE Futures Europe exchange yesterday.

Gold traders expect prices to rebound from the longest weekly losing streak in eight years as mounting concern that U.S. lawmakers are doing too little to control the budget deficit spurs demand for a protection of wealth. The metal fell 1 percent to $1,647.35 an ounce today after U.S. Federal Reserve policy makers said they’ll probably end asset purchases this year. Gold will reach $2,000 this year, according to a Bloomberg survey of 49 traders and analysts last month, as investors hedge against inflation and weaker currencies.

 

 

Sayyed Hussain