AMERICAN MARKETS OUTLOOK: U.S. stock markets are set to open higher Wednesday, following the positive market response to Tuesday's dovish Federal Reserve March rate-setting meeting minutes.
"Regardless of the euphoria over yesterday's FOMC minutes, investors will keep a close eye on the consumer price index data due to be released today," says Angus Campbell at FinSpreads. "The focus will be on the core data, which is expected to come in at 0.2% and a lower figure to complement yesterday's producer price index could lead to another rally today."
Companies continue to report first-quarter earnings with Coca-Cola, JP Morgan and United Technologies reporting before the open and Apple, Intel and Citrix reporting later in the day.
FinSpreads is calling the Dow Jones Industrial Average to open 18 points higher at 11,286, the S&P 500 up 2.4 points at 1310 and the Nasdaq 100 up 7 points at 1733.
EUROPEAN MARKETS: European markets gained ground Wednesday, following strong gains on Wall Street as hopes were raised that the U.S. interest rate-tightening cycle is nearly complete.
In London, the FTSE 100 is up 0.5% at 6076.40, after hitting a morning high of 6100 for the first time in more than five years. The rise was spurred by continued resource sector gains and hopes that U.S. interest rate hikes are nearing an end. The release of minutes of the last Bank of England Monetary Policy Committee meeting "proved relatively uncontentious," says economist Gavin Redknapp at Standard Chartered.
In Frankfurt, the DAX 30 is up 1.3% at 5979.82, with the Federal Reserve's comments helping to boost finance stocks in particular. Volumes are still relatively thin as investors are slowly building new positions after the holiday weekend, says one trader. In Paris, the CAC 40 is up 1.0% at 5147.87.
Bunds and gilts are higher, tracking gains by Treasurys, which were aided by the dovish minutes from the Federal Reserve March rate-setting meeting. The focus is on U.S. March inflation data at 1230 GMT. "I think the message from today's (Wednesday) inflation data is that the core consumer price index will be benign, so that should be bond market friendly and should allow this bounce we're seeing to continue near-term," says RIA strategist Nick Stamenkovic. The June bund future is up 0.55 at 116.13 and the June gilt future is up 0.38 at 110.99.
In the currency market, sentiment toward the dollar continued to deteriorate on news that the Fed may stop raising rates sooner than the market had anticipated. The market is looking to Wednesday's U.S. CPI data to support the dovish sentiments expressed in the Federal Reserve minutes. The euro pushed up to $1.2354, with the pound up at $1.7846 following the release of the Bank of England minutes. The dollar eased back against the yen to Y116.98.
ASML 1Q NET PROFIT DOWN 20%, STARTS SHARE BUYBACK: Dutch semiconductor equipment maker ASML Holding NV (ASML) posted 1Q net profit of EUR80 million, from EUR100 million a year earlier and below analysts' expectations, due to falling machine sales. But the company says its order intake improved, indicating a positive outlook for 2006. (News Snap by Stefan Simons)
APACHE TO BUY BP'S FIELDS IN GULF OF MEXICO FOR $1.3B: Apache Corp. (APA) says it will buy all of BP PLC's (BP) remaining oil and natural-gas fields on the Gulf of Mexico's continental shelf for $1.3 billion, investing in offshore production at a time when recent hurricanes have scared away investors and other oil companies. (WSJ)
REGULATORS TO DECIDE ON ARCELOR, MITTAL IN TWO WEEKS: Chief Executive of Mittal Steel Lakshmi Mittal says that regulators will decide in two weeks time whether to allow his company's takeover of European steel giant Arcelor. Earlier, Mittal met with Belgium's prime minister about the deal.
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
=FOREX FOCUS: As crude oil prices establish themselves at new record highs over $70 a barrel, the dollar's downside potential is growing. (By Nicholas Hastings)
=CHARTING EUROPE: June COMEX gold futures reached a new 25-year high at $628.1 in the morning's electronic Access session and are fast approaching the next upside target between $638.5 and $641.0. (By Axel Rudolph)
=THE SKEPTIC: BAE Systems' decision to sell its 20% stake in Airbus poses a serious threat to Airbus jobs in the U.K. (By Howard Wheeldon)
=THE SKEPTIC: It's too bad Peugeot's decision to close the Ryton-on-Dunsmore plant and turn its back on U.K. manufacturing wasn't accompanied by a big closure program at the carmaker's poor-performing French plants, or at the very least an announcement of extensive French job cuts. (By Howard Wheeldon)
STILL TO COME
ET/GMT COUNTRY PERIOD
0830/1230 US March CPI
0830/1230 US March CPI, ex-food and energy
1030/1430 US Apr 14 US Energy Dept Gasoline Stocks (in
1030/1430 US Apr 14 US Energy Dept Crude Oil Stocks (in
US Apr 14 US Energy Dept Distillate Stocks
1240/1640 US Pres Bush speaks on US
competitiveness in Tuskegee, Ala.
1430/1830 US Tsy
Secy Snow addresses World
Health Care Congress in Washington
1950/2350 JPN Mar Trade Balance
1950/2350 JPN Mar MOF Oil Imports
1950/2350 JPN Weekly Portfolio Flows
The Bank of England's Monetary Policy Committee voted 7-1 to keep rates on hold at 4.5% in April's meeting, show the minutes of the gathering. Stephen Nickell voted apart from the rest of the committee, as he has done for the previous four meetings. (By Corey Boles and Andrew Peaple)
Associated British Foods PLC (ABF.LN) posted a 5% rise in underlying first-half profit - as strong growth at its low-cost clothing chain Primark offset a weak performance at British Sugar - but warned that earnings in the second half would be lower than last year. (News Snap by Michael Carolan)
Swiss pharmaceutical company Roche Holding AG (RHHBY) said the so-called Rapid Response Stockpile of its influenza drug Tamiflu is now assembled and available to the World Health Organization upon request.
German drug maker Schering AG (SHR) reported a 20.8% rise in first-quarter net profit due to good sales of its key products, particularly its multiple sclerosis drugs and oral contraceptives. (News Snap by Gangolf Schrimpf)
German producer prices rose strongly in March, propelled by energy prices, data released by the Federal Statistics Office showed. (News Snap by Sarah Sloat)
France's current account deficit widened almost tenfold on the year in February due to a sharp rise in imports, the Finance Ministry said. (News Snap by David Gauthier-Villars)
U.K. pharmaceutical company Skyepharma PLC (SKP.LN) ended a tumultuous year - in which shareholders rebelled and caused its founder Ian Gowrie-Smith to step down as chairman - by reporting a wider-than-expected net loss. (News Snap by Martina Cruz)