The major European index futures are pointing towards a lower opening for the markets on Monday. Global cues are also weak, with the U.S. stocks plunging on Friday and the major markets across the Asia-Pacific region showing substantial weakness on Monday. However, crude prices have eased from all-time highs hit on Thursday. The major economic data slated for release in Europe are the projections for Euro-Zone budget deficit to GDP and government debt to GDP ratios as of December 31. The markets may also look up to ECB's Trichet's speech in New York. There are no major releases scheduled for the day in the U.S., but traders may look up to Fed's Kroszner's speech to bankers in Washington. The European markets fell on Friday, as banking stocks declined after disappointing earnings from another U.S. bank, Wachovia Corp., raised concerns that the worst of the credit market turmoil is not yet over. The markets were also impacted by a weakening U.S. dollar. The FTSEurofirst 300 index of pan-European blue chips closed 0.6% lower at 1,563.83, while the narrower DJ Stoxx 50 index fell 0.7% to 3,819.90. Around Europe, the U.K.'s FTSE 100 index dropped 1.23% to 6,527.90, while France's CAC 40 index slipped 0.46% to 5,740.48 and Germany's DAX index gave away 0.47% to 7,884.12. The U.S. dollar slid to a record low against the euro Friday on speculation that the U.S. housing slump will lead the economy into recession, forcing the U.S. Federal Reserve to cut interest rates again. The pound also rose after a stronger than anticipated U.K. GDP data lowered the possibility of a interest cut by the Bank of England. At 1:45 am ET, the euro and the pound were quoted at US$1.4326 and US$2.0509, respectively. In London, December Brent crude fell 81 cents to settle at US$83.79 a barrel on the ICE Futures exchange. At around 1:07 a.m. ET Monday, Brent crude futures were trading at US$83.14, down 65 cents. Among metals, copper and zinc were steady, while lead, aluminium, tin and nickel surged higher on Friday. Among individual stocks, AstraZeneca may react to reports that it has outsourced production of ingredients for some of its medicines to low-cost manufacturers in Asia, while BAE Systems may move after reports indicated that the company may hire GKN Chief Executive Officer Kevin Smith to succeed Mike Turner. HSBC Holdings is likely to react to reports that chairman, Stephen Green, will meet shareholder Knight Vinke Asset Management LLC for talks after it criticized the bank's strategy and Northern Rock may move after it replaced Matt Ridley. Resolution may see some action after reports showed that Standard Life and Swiss Reinsurance will make a GBP 5 billion offer for Resolution this week. Axa may see action after it completed a partnership with Monte dei Paschi di Siena by buying half of the Italian bank's insurance unit and Total may fall after it said on Friday that its petrochemical refinery in Port Arthur, Texas, may be shut down after a product transfer pipeline was damaged during an explosion. Bayerische Motoren Werke and Daimler may move following reports that both the companies may cooperate in the construction of parts to reduce costs. Daimler may also hand out record discounts to help promote its vehicles in the fourth quarter, reported indicated. Commerzbank may react sharply to indications that the bank is more affected by the credit market crisis than previously expected. Deutsche Telekom may rise following reports that the company may seek to buy some of Hutchison Whampoa Ltd.'s '3' wireless units in western Europe.
October 22, 2007 2:27 AM