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Hitt og þetta 26. september 2006

DJ EUROPEAN MORNING BRIEFING: US Econ Hopes Lift Stocks


US SUMMARY: Stocks Rally On Fed Official's Comments

DJIA 11575.81 gain 67.71 up 0.6%
NASDAQ 2249.07 gain 30.14 up 1.4%
S&P 500 1326.37 gain 11.59 up 0.9%
Dow Future 11636.00 loss 12.00 dn 0.1%
NASDAQ Future 1664.00 loss 1.25 dn 0.1%
S&P Future 1335.00 loss 0.75 dn 0.1%
Euro-USD 1.2748 loss 0.0003 dn 0.02%
10-Yr US Treasury: 4.55% down 0.05

(Futures values, Treasury, EUR/USD Data as of 0450 GMT)
Stocks rose Monday after Dallas Federal Reserve President Richard Fisher suggested inflation would be dampened by a slowing economy. He said that while the housing and car sectors are economic weak points, the rest of the U.S. economy is doing "extremely well." The dollar was mixed, with Treasurys rallying and oil rising.

STOCKS: Fisher's remarks pushed stocks higher in what had been a session of seesaw trading, with investors first bidding stocks higher on lower oil prices, then sending them lower on falling housing prices. Investors, alert to any sign of a sharp economic slowdown, have been especially skittish in recent sessions as data has shown a slowing housing market while bond yields and oil prices have fallen hard.

"The pace of growth could slow down, but that doesn't mean the market is going to get killed," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher. "I think it's early to talk about a recession."

Another market expert had doubts. "I don't think there's any question we're heading into a recessionary environment," said John O'Donoghue, co-head of equities at Cowen & Co. "The question is how severe it's going to be."

FOREX: The dollar, which is opening little changed, gained slightly on the euro but held against the yen Monday in New York.

"The ranges are remarkably tight, and there is a tremendous lack of follow-through," said John McCarthy, director of foreign exchange at ING Capital Markets in New York.

The Fed's Fisher warned that if current inflation rates were to be sustained, "it would seriously debauch the dollar."

"I don't know a soul on the (Federal Open Market Committee) who would accept that kind of erosion in the purchasing power of our currency," he added.

BONDS: Treasury prices surged higher Monday, with the 10-year yield at a fresh 7-month low, as a combination of weak housing data and mortgage-bond related buying boosted the market.

"We have seen a remarkable rally," said David Ader, head of government bond strategy at RBS Greenwich Capital. But, he added that his firm will avoid adding long positions until the 10-year yield breaks below 4.50%.

Jason Evans, head of government trading at Deutsche Bank in New York, said he expects upcoming supply to weigh on the market and push yields higher over the next few days. The Treasury Department will sell $20 billion of two-year notes Wednesday and $14 billion of five-year notes Thursday.

Raymond Remy, head of fixed income at Daiwa Securities America in New York, also expects a "bit of a retracement over the next few days."

The market was pricing in a 33% chance of a Fed rate cut in December, while investors had been pricing in only 13% chance of a cut Friday.

OIL: Prices closed at $61.45, up 90 cents, on the New York Mercantile Exchange, on concern OPEC could cut output. But BP said it had permission to restart the eastern half of Alaska's Prudhoe Bay oil field, which should expand oil inventories. The price of natural gas sagged, falling to a three-year low.

ASIAN SUMMARY: Stocks Lower As Oil Rebounds

USD-Yen 116.48 loss 0.06 dn 0.05%
AUD-USD 0.7549 gain 0.0014 up 0.2%
Nikkei 225 15529.30 loss 104.50 dn 0.7%
Hang Seng 17519.21 loss 26.83 dn 0.2%
S&P/ASX 200 4949.50 loss 3.40 dn 0.1%
Taiwan Index 6902.75 loss 8.46 dn 0.1%
S.Korea Kospi 1339.82 loss 15.39 dn 1.1%
JGB Yield 1.6300% up 0.0050
(All values as of 0450 GMT)
STOCKS: Share markets across the region turned lower, with investors skeptical over the underlying strength of Wall Street's overnight rally.

Japan's Prime Minister Junichiro Koizumi said goodbye to his followers Tuesday and prepared to turn over power to his protege, Shinzo Abe. Investors are cautious ahead of Abe's appointments to his cabinet.

FOREX: The dollar has good support at Y116.20, backed up by purchase orders placed by import companies, traders said. However, hedge funds still want to test the dollar's downside.

BONDS: Prices of Japanese government bonds are meandering and remain trapped in narrow trading ranges pending new developments, dealers said.

OIL: Prices have risen 14 cents to $61.59 Tuesday, extending overnight gains, on worry that OPEC could cut production if prices remain under $60.

METALS: Spot gold has recovered toward $593 an ounce, as traders cover short some positions on technical grounds. Longer-term, however, the outlook remains bearish. Copper futures have followed oil higher, but demand for the base metal is waning, particularly from China, dealers said.

EUROPEAN OUTLOOK: Shares Buoyed By US Soft Landing Hopes

Euro-USD 1.2748 loss 0.0003 dn 0.02%
Stlg-USD 1.9006 gain 0.0008 up 0.04%
USD-Franc 1.2380 loss 0.0005 dn 0.04%
(All values as of 0450 GMT)
European shares and government debt are set for a positive start, with the euro little changed.

STOCKS: European markets are likely to gain at the open, after Wall Street's rally, with M&A prospects adding support.

U.K. spreadbettor Cantor Index is calling the FTSE up 22 points at 5820, the DAX up 40 at 5941 and the CAC up 20 to 5166.

Bert Jansen, a European equity strategist at Exane BNP Paribas in Paris, noted that with credit cheap, deals will be plentiful throughout Europe and not just in the pharmaceuticals sector.

"It really is a theme across sectors," he said. "Just look at the performance of Spanish utilities, these stocks have gone through the roof."

In corporate news, a battle by E.On to acquire Endesa, Spain's largest producer of electricity, took a new turn as Spanish infrastructure and energy company Acciona said it had bought a 10 percent stake in Endesa.

Renault Executive Vice President Patrick Pelata, a key player in discussions with General Motors about a potential three-way alliance among GM, Renault and Nissan Motor, said GM hasn't seemed to display the same urgency as its potential partners regarding the need to confront Toyota Motor's global expansion drive.

Leading European stock market indexes ended mixed Monday, as companies reacted differently to a softening in commodity prices, though a continuation of healthcare sector consolidation provided support.

FOREX: The euro is seen little changed to start and talk is surfacing that the European Central Bank and the Fed will have to cut rates next year to forestall too much slowdown.

Investors will now turn their attention to data in the euro zone with the release of Germany's IFO business climate survey Tuesday at 0800 GMT. The report follows a series of sharp falls in the Center for European Economic Research, or German ZEW index over recent months, the latest of which came just last week when the business index dropped to its lowest level since 1999.

BONDS: The outlook for European government debt remains bullish, although lofty gains may inspire some profit-taking. For now, tame inflation data lends support, ahead of the IFO numbers.

Late Monday, German consumer inflation fell more than market expectations in September, chiefly on the back of lower energy and transport fuel prices, as well as seasonal and base effects the federal statistics office Destatis said Monday

Prices fell 0.4% on the month in September after falling 0.1% in August and were 1% higher on the year, down from 1.7% the previous month, the office said.

The data are somewhat lower than anticipated by a Dow Jones Newswires poll of 17 economists, which had forecast consumer prices to fall 0.3% on the month and rise 1.1% on the year.

"The market is firm and the Bund future is holding up close to contracts highs on tame inflation figures from Germany," said Christoph Rieger, fixed-income strategist at Dresdner Kleinwort. Although the numbers are unlikely to prevent markets from betting on two more 25-basis-points interest rate hikes by the European Central Bank this year, Rieger said, they have led to a re-pricing of rate expectations for 2007.

The announcement by the German debt agency of a cut to fourth-quarter capital market issuance of EUR5 billion to EUR29 billion, due to strong tax revenue and lower labor market spending, also underpins the market. "Altogether this is good news...and it may support the recent outperformance (of German bunds) against other core euro zone government debt," said BNP Paribas in a research note.

Prices of European government bonds gained as technical factors provided support.



(MORE TO FOLLOW) Dow Jones Newswires

September 26, 2006 01:45 ET (05:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.


26 Sep 2006 05:45 GMT =DJ EUROPEAN MORNING BRIEFING: US Econ Hopes Lift Stocks -2-

CALENDAR: Tuesday, Sep 26: German Ifo; Fed's Bies

GMT Expected Previous
0600 GER Import Prices +0.1%MM +1.2%MM
+5.5%YY +6.3%YY
0800 GER Sep Ifo Business Climate 104.4 105.0
0800 GER Sep Ifo Business Expectations 100.5 101.5
0800 GER Sep Ifo Current Assessment 108.3 108.6
0800 GER Fin Min Steinbrueck speaks at BDI indus
federation conference in Berlin
0830 UK 2Q Business Invest +1.7%QQ
+4.6%YY
0915 GER ECB allocates main refi ops bids
1145 US Sep 23 ICSC-UBS Store Sales Index -1.1%
1255 US Sep 23 Redbook Retail Sales Index Unch
1300 GER ECB Gold, Forex Reserves
1330 GER ECB calls for long-term refi ops bids
1400 US Fed Gov Bies speaks on Basel II Capital
Accord in Washington
1400 US Sept Richmond Fed Mfg Index 3
1400 US Sep Conference Board Consumer Confidence 104.0 99.6
Index
2100 US Sep 24 ABC/Washington Post Consumer Confidence -15
Index
N/A GER Bundesbank calls for bids for 5-yr Bobl
notes auction

-By Dennis Baker; Dow Jones Newswires; dennis.baker@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

September 26, 2006 01:45 ET (05:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.


26 Sep 2006 05:45 GMT =DJ EUROPEAN MORNING BRIEFING: Corporate Events

SCHEDULED EVENTS:

A.G. Barr (BAG.LN): 1H Earnings

Anglesey Mining (AYM.LN): AGM

Ashtead Group (AHT.LN): AGM

Astaldi (AST.MI): 1H Earnings

Atlantic Global (ATL.LN): 1H Earnings

Aubay (6373.FR): 1H Earnings

Audika (6375.FR): 1H Earnings

Avocet Mining (AVM.LN): AGM

Beneteau (3516.AE): FY Sales

Business & Decision (7895.FR): 1H Earnings

CNP Assurances (12022.FR): 1H Earnings

Coheris (403176.FR): 1H Earnings

Corin Group (CRG.LN): 1H Earnings

Cremonini (CRM.MI): 1H Earnings

CW Residential (CWE.LN): 1H Earnings

Dairy Crest Group (DCG.LN): Trading Update

Dexia (DEXB.BT): Investors Day

Enterprise Inns (ETI.LN): Trading Update

Entertainment Rights (ERT.LN): 1H Earnings

Exendis (44085.AE): 1H Earnings

Fiera Milano (FM.MI): FY Earnings

Game Group (GMG.LN): 1H Earnings

Gascogne (12441.FR): 1H Earnings

Havelock Europa (HVE.LN): 1H Earnings

IAWS Group (IAW.DB): FY Earnings

ICM Computer (ICM.LN): FY Earnings

Informa (INF.LN): 1H Earnings

JKX Oil & Gas (JKX.LN): 1H Earnings

Land of Leather Holdings (LAN.LN): FY Earnings/AGM

Mitchells & Butlers (MAB.LN): Trading Update

Murgitroyd Group (MUR.LN): AGM

NWF Group (NWF.LN): AGM

Orpea (18479.FR): 1H Earnings

Oxford Instruments (OXIG.LN): AGM

Parity Group (PTY.LN): 1H Earnings

Porsche (POR3.XE): FY Press Conference

Prosodie (415203.FR): 1H Analyst Meeting

Regent Inns (REG.LN): FY Earnings

RHM (RHM.LN): AGM

Robotic Technology Systems (RTS.LN): 1H Earnings

SAES Getters (SG.MI): 1H Earnings

ServicePower Technologies (SVR.LN): 1H Earnings

Severfield-Rowan (SFR.LN): 1H Earnings

William Sinclair Holdings (SNCL.LN): FY Earnings

Spaencom (SPNC-B.KO): FY Earnings

TK Development (TKDV.KO): 1H Earnings

Touch Group (TOU.LN): 1H Earnings

Trigano (6270.FR): FY Sales

Vanco (VAN.LN): 1H Earnings

White Young Green (WHY.LN): FY Earnings


(MORE TO FOLLOW) Dow Jones Newswires

September 26, 2006 01:45 ET (05:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.


26 Sep 2006 05:45 GMT =DJ EUROPEAN MORNING BRIEFING: Div Payments & Ex Div Dates

Allied Irish Banks (AIB): 1H Dividend Payment Date

Kaufman & Broad (12105.FR): 1H Dividend Payment Date


(END) Dow Jones Newswires

September 26, 2006 01:45 ET (05:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.

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