US stock market opening report (February 05, 2010, Friday)

Date: 5 February 2010
Contributed by Paddy Power Trader

By Paddy Power Trader

The Federal Reserve would consider reopening its program to support the mortgage market if interest rates spiked or the economy showed new weakness, Federal Reserve Bank of New York President William C. Dudley said in two new interviews. The Fed is buying USD 1.25 trillion in mortgage-backed securities in its effort to prop up the economy but has said it will end those purchases March 31. (Washington Post)

Indices And Company News

European bourses opened lower following continuing debt concerns regarding European countries including Greece, Portugal and Spain. The debt concerns promoted risk-averse trade and also led 5-year CDS for the affected countries to widen, and these financial concerns adversely affected the financial sector. Investors went for the safe-haven route resulting in strength in the USD index, which in turn weighed on commodities. Moving into the North American open, equities are trading into the negative territory, though sideways, ahead of economic figures from the US later in the session.

Forex

EUR remained under pressure across the board for most of the session due to ongoing uncertainty regarding the economic situation in the Eurozone countries such as Greece, Portugal and Spain. The worse than expected German Industrial Production data exerted further pressure on the EUR. Amid risk-averse trade, the USD index traded in the positive territory for the entire session so far. In other news, EUR/CHF registered strength following news of apparent intervention by the SNB selling CHF for EUR.

ECB’s Nowotny said that EUR/USD exchange rate is not worrying and the current EUR/USD rate is within normal range. (BBG) In other news, the Swiss National Bank was seen selling CHF for EUR in Asian trading time, three people who saw the action said. EUR/CHF was trading at 1.4727 (+0.83) at 0608 GMT. (RTRS) However, SNB spokesman Haymoz declined to comment on currency moves. (BBG)

Elsewhere, the CAD received a short term boost after much better than anticipated jobs data with the Canadian Net Change in Employment (Jan) coming in M/M at 43.0K vs. Exp. 15.0K (Prev. -2.6K), with the unemployment (Jan) rate M/M at 8.3% vs. Exp. 8.5% (Prev. 8.5%) (BBG)

Commodities

Heading into the North American open, despite volatile price action during opening hours, WTI crude futures are trading little changed as market participants await the release of the monthly jobs data out of the US.

Other oil related news:

- Bad weather cuts oil exports from Iraq’s Basra to 840,000 bpd on Friday, down from 1.57mln bpd. North Sea Brent crude oil loading set at 140,000 bpd in March.

- Norway central bank deputy governor says bank will cut forecasts for oil investments in monetary policy report.

In gas related news:

- BG Group says expects weak demand for gas in 2010 across the globe.

In geopolitical news:

- Russian foreign minister calls for Iran to engage “constructively” on nuclear program.

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