AMERICAN MARKETS OUTLOOK: U.S. stock markets are set to open higher Monday as investors are torn between a healthy-looking economy and weaker-then-expected corporate results so far, market-watchers said.
Finspreads in London is calling the Dow Jones Industrial Average to open up 0.2% at 10,818 and the S&P 500 up 0.2% to 1266. Two issues of interest Monday will be the speech of the new Federal Reserve Chairman Ben Bernanke and concerns that developments in Iran might push oil back up toward $70 a barrel.
EUROPEAN MARKETS: European stock markets are higher midday despite losses in Asia as takeovers and takeover speculation boost the markets. BNP confirmed it would buy 48% of Banca Nazionale del Lavoro; Goldmans Sachs Capital Partners said it was in early-stage discussions to acquire Germany's ProSiebenSat.1 Media; while two U.S. private-equity firms said they plan to buy Experian, the business and information services unit of the U.K.'s GUS. The FTSE 100 index is up 0.4% at 5782.9, the DAX is trading 0.6% higher at 5692.8, while the CAC is 0.3% firmer at 4950.7.
Bunds and gilts are a touch higher and are now marking time ahead of the speech by European Central Bank President Jean-Claude Trichet at 1415 GMT. The March bund future is up 0.11 at 120.38, while March gilts are up 0.19 at 113.96.
The dollar is higher against most major currencies but it is down against the yen after failing to make a sustained break over Y119.00 Friday. The positive sentiment driving the U.S. currency comes from increased expectations of another hike in U.S. interest rates after Friday's strong U.S. employment report. The euro is down to $1.1992, the pound has fallen to $1.7557, while the dollar has slipped to Y118.69.
BNP BUYS ITALY'S BANCA NAZIONALE DEL LAVORO: BNP Paribas SA (13110.FR) veered from its recent acquisition strategy to forge the opportunistic deal announced late Friday and acquire Italy's Banca Nazionale del Lavoro SpA (BNL.MI). (News Snap by Digby Larner)
LAFARGE PLANS BUY-OUT OF NORTH AMERICAN SUBSIDIARY: Lafarge SA (12053.FR) shares rose nearly 4% early Monday after the world's leading cement maker unveiled plans for a debt-financed buyout of minority shareholders in its North American subsidiary for $3 billion in cash. (News Snap by Greg Keller)
LLOYDS UP ON TAKEOVER TALK: Lloyds TSB Group PLC (LYG) opened for trade in London up 1.7% on continued takeover speculation. Last week the shares were buoyed by speculation - not confirmed - that the company may be bought by a U.S. bank.
OIL PRICES HIGHER ON AS IRAN VOWS TO PUSH AHEAD WITH NUCLEAR PROGRAM: Crude oil futures in London rose Monday as Iran said it was pushing ahead with its nuclear program despite being reported to the U.N. Security Council. (By Tim Falconer)
RUSSIA SAYS IRAN URANIUM JOINT VENTURE STILL POSSIBLE: A top Russian diplomat said Monday that it will be possible to create a joint venture to enrich uranium for Iran in Russia only if Tehran resumes its moratorium on enrichment activities, the Interfax news agency reported. (AP)
INSIGHT & ANALYSIS FROM DOW JONES NEWSWIRES:
=FOREX FOCUS: Yield differentials are very much back in the driving seat, putting the yen even more at risk than it was before. At the start of the year, market talk was that yields were no longer important, and that a combination of rising risk aversion and increased U.S. structural concerns would finally give low yielders room to bounce. (By Nicholas Hastings)
=CHARTING EUROPE: This column achieved a 64% correct forecast rate in 2005, with the help of December's 66.67%. Charting Europe's correct forecast rate has been consistent over the past five years and comes in at an average of 67.35%, with 72.9% of technical predictions coming right in 2004, 64.51% in 2003, 67.47% in 2002 and 67.86% in 2001. (By Axel Rudolph)
STILL TO COME
0815/1415 UK Annual State of the Economy conference
on the world economy. Speakers incl ECB
President Jean-Claude Trichet, Federal
Reserve Bank of Dallas President Richard
1000/1500 US Pres Bush sends federal budget to Congress
1000/1500 US Federal Reserve Chairman Bernanke sworn in
1130/1630 US Asst Tsy Secy Fratto leads briefing on
FY07 Budget Blue Book in Washington
1500/2000 US Jan Tsy STRIPS
1830/2350 JPN Jan Foreign Reserves
German manufacturing orders dried up in December, bringing a disappointing end to what had looked a promising fourth quarter. German manufacturers saw a 1.6% drop in new orders in the final month of the year, cutting the full-year increase to 3.9%, the German Economics Ministry reported. (Data Snap by Emily Barrett)
Spanish-Argentine oil and energy company Repsol YPF SA (REP) announced the purchase of 10% of Sweden's Western Siberian Resources Ltd. (WSIB-SDB.SK), a move marking a strategic advance by Repsol into the oil-rich former Soviet Union. (News Snap by Greg Walters)
Swiss pharmaceutical company Serono SA (SRA) unveiled a 72% rise in fourth-quarter net profit, helped by a decline in expenses, and said it was still exploring strategic options for the company. (News Snap by Stefanie Weitz)
Irish budget airline Ryanair Holdings PLC (RYAAY) Monday reported a 21% drop in fiscal third-quarter net profit amid rising fuel costs and stuck to its guidance for full-year profitability. (News Snap by Rod Stone)
German automaker group VDA said new car registrations in Germany were up 11% in January on the year at 223,000. The rise was primarily due to one more working day in January compared with the corresponding month last year, the industry group said. (Data Snap by Jan Hromadko)
U.K. biotechnology company Cambridge Antibody Technology Group PLC (CATG) said first-quarter revenues soared thanks to the resolution of its legal row with U.S. partner Abbott Laboratories (ABT) over best-selling arthritis drug Humira. (News Snap by Elena Berton)
Switzerland-based staffing company Adecco SA (ADO) launched its voluntary public tender offer for German competitor Deutscher Industrie Service AG (DDE.XE), saying it won't change its takeover terms despite resistance from several DIS shareholders.