AMERICAN MARKETS OUTLOOK:
U.S. stocks are expected to open lower Tuesday, tracking
European markets as investors struggle to deal with the fallout of
an inconclusive Greek general election, said GFT. "The chances of
forming a Greek government look remote, and this could mean that
another election needs to be held," said Fawad Razaqzada,
strategist at GFT Markets. "In the meantime, with no government,
the ECB/IMF/EU may be forced to withhold the country's next bailout
tranche, adding further uncertainty," he added.
By 1037 GMT, futures on the Dow Jones Industrial Average were
0.2% lower at 13,008.5, S&P 500 Index futures were down 0.5% at
1,358.5, and Nasdaq 100 futures were down 0.6% at 2,619.5.
EUROPEAN MARKETS:
At 1036 GMT, the Euro Stoxx 50 was down 1.3% at 2253.25,
slipping a little further into the red. Almost all of the Stoxx
600's sectors were in negative territory. But the
telecommunications sub-index was up 1.2%, after American Movil
stated its intention to up its stake in Royal KPN, which showed a
19% gain. Investors continued to keep an eye on Greece. There was
little reaction immediately after the Dutch 10-year bond auction,
which Newedge said went "smoothly."
Meanwhile, the FTSE 100 was down 0.3% at 5637.79, remaining
mildly in the red but off earlier lows and faring much better than
its European counterparts, as investors continued to digest the
weekend's election results in France and Greece. "With little
economic data of importance out today, all eyes remain on Europe,"
IG Index said. "A lack of direction from the various sides could
mean that markets will continue to slip lower, especially given
Friday's weaker jobs number in the U.S. that removed the 'improving
U.S. economy' element of the bullish case," it added. Mining stocks
were the biggest drag, with Vedanta Resources down 5.4% and
Randgold Resources off 3%.
At 1036 GMT, June bunds were down 0.42 at 142.24, and June gilts
were down 0.69 at 117.59.
FOREX:
Better-than-expected German industrial production helped the
euro off of its $1.3001 day floor, though sentiment still looked to
be on the turn as major currencies fell to fresh marginal lows.
Peripheral bond yields were pretty much flat-lining and equities
were still deep in the red, with the CAC underperforming after the
weekend change of government.
At 1036 GMT, the euro was down at $1.3027, the dollar was down
at Y79.79 and the pound was also down at $1.6144.
===========================
TOP STORIES:
HSBC Boosted By Investment Bank, Emerging Markets
HSBC said that its investment banking division and
emerging-market operations helped boost underlying first-quarter
profit, as the London-based lender looks to retrench its global
operations to a few key markets.
Euro-Zone Bonds Under Pressure On Greece Woes
Lower-rated euro-zone government bonds slipped with a political
stalemate following Greek elections keeping investors cautious and
fueling demand for safe-haven German bunds.
German Industrial Output Rises Strongly On Building Boom
German industrial output rebounded strongly in March following
February's weather-related weakness, driven by a boom in
construction, data from the economy ministry showed Tuesday.
Statoil Profit Falls; Sees $17B Capex In 2012
Norwegian oil giant Statoil said it expects capital expenditures
of around $17 billion in 2012, as it posts lower first-quarter
earnings on the year.
===========================
INSIGHT & ANALYSIS:
EUROPEAN INSURERS LOOK EAST: European insurance companies may
step up activity in the primary bond market over the next few
months as a backlog of deals shelved during the sovereign debt
crisis last year are revived, market participants said.
FOREX FOCUS: Growth Debate Could Yet Help The Euro
The political debate over fiscal discipline may be getting all
the headlines, but it's the debate between investors on the issue
that will matter for the euro, wrote Nicholas Hastings.
MONEY TALKS: The End Of Austerity?
So, what was the good news in the weekend's European elections?
The French abandon austerity by choosing Socialist Francois
Hollande over the conservative incumbent Nicolas Sarkozy.
===========================
STILL TO COME
GMT COUNTRY/PERIOD
1130 US Apr NFIB Small Business Optimism Index
1145 US May 5 ICSC-Goldman Sachs Chain Store
Sales Index
1215 CAN Apr Housing Starts
1230 EU ECB President Mario Draghi speech
1255 US May 5 Johnson Redbook Retail Sales Index
1345 US Richmond Fed Pres Lacker holds
roundtable discussion
1400 US ISM Semiannual Report On Business/
Economic Forecast
1400 US May IBD/TIPP Economic Optimism Index
1400 US Mar Job Openings/Labor Turnover Survey
1645 US Dallas Fed Pres Fisher speech
2030 US May 4 API Weekly Statistical Bulletin
2301 UK Apr BRC-KPMG Retail Sales Monitor
2301 UK Apr REC & KPMG Report on Jobs
2350 JPN Apr International Reserves/
Foreign Currency
N/A US Americas Society/Council of
Americas Annual Conference
===========================
OTHER NEWS:
Fresh Greece Elections Loom, No Coalition Forged
Greece's first efforts to negotiate a cross-party coalition
government following inconclusive weekend elections stumbled,
raising the specter of new elections.
Aviva CEO Quits Amid Pay Rebellion
British insurance group Aviva said CEO Andrew Moss will stand
down with immediate effect, the latest U.K. CEO to leave amid
investor anger over pay.
Berlin Still Backs Austerity
German Economics Minister Philipp Roesler stresses Berlin won't
back down with its call for austerity in Europe, and that it will
support growth packages to supplement consolidation efforts only if
they aren't funded with higher debt.
EU Could Give Spain More Time On Deficit Target
The European Commission looks to give Spain one more year to
reach its 3% deficit target, extending the deadline to 2014 from
2013, El Pais reports.
Munich Re Swings To Profit
Germany's Munich Re, the world's largest reinsurer by premium
revenue, said it swung to a net profit in the first quarter, helped
by low costs for large disasters and a decent contribution from
investments, helped by less-volatile capital markets.
LME Says Received Binding Offers
Binding offers to buy the London Metal Exchange have been
received and are being evaluated by the exchange's board, the LME
said.
Spain's Bankia, BFA May Merge
Spanish lender Bankia and its parent Banco Financiero de Ahorros
may end up merging to carry out a more global clean-up of the bank,
according to media reports.
Russian Police, Anti-Putin Protesters Clash For Third Day
Anti-government protesters and riot police skirmish in Moscow
for a third day, as the Russian parliament convenes following
President Vladimir Putin's inauguration for a vote on his choice of
a prime minister.
Barclays Seeks Securities Partner In China
Barclays is seeking a mainland partner to set up an investment
banking venture that will take advantage of the fast growth of
China's capital market, South China Morning Post reports.
CLP To Keep Majority In TRUenergy After IPO
Power generator CLP intends to maintain a majority stake in its
TRUenergy unit if it proceeds with a possible initial public
offering of the Australian company.
JPMorgan, RBS To Advise On London Yuan Center
JPMorgan and Royal Bank of Scotland are joining hands with five
other banks to advise on the development of an offshore yuan center
in London, people familiar with the situation said.
-By Jaya Matta, Dow Jones Newswires; 4420-7842-9476;
jaya.matta@dowjones.com