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US stock market opening report (March 10, 2010, Wednesday)

Contributed by Paddy Power Trader

By Paddy Power Trader

European bourses opened unchanged and moving into the North American open are trading in minor positive territory. Basic materials has been the best performing sector due to strength in metals, especially Gold, followed by oil and gas sector as OPEC raising its 2010 world oil demand growth forecast provided strength to WTI crude futures.

Fed’s extended period rate pledge has been criticised by some on the FOMC. Kansas City Fed President Thomas Hoenig voted against repeating the statement on January 27 because he wanted to keep “the broadest options possible”. Since then, Dallas Fed President Richard Fisher, James Bullard of St. Louis and the Philadelphia Fed’s Charles Plosser have also expressed reservations. (BBG)

US economists raised their forecast for economic growth in 2010 in March, the third straight monthly rise, while trimming their growth forecast for 2011, according to a survey in the Blue Chip Economic Indicators newsletter. Economy is expected to grow by 3.0% in 2011, which is 0.1% lower than estimates made a month ago, according to the survey. But economists raised their 2010 growth forecast for the third consecutive month to 3.1%, up 0.1% from February. (RTRS)

Two US Senate Democrats, Jeff Merkley and Carl Levin, said they will propose on Wednesday placing new limits on proprietary trading by banks and nonbank financial firms, widening the Volcker Rule backed by the White House. (RTRS)

Forex

GBP came under further pressure following worse than expected UK Industrial and Manufacturing Production figures. In other news, commodities linked currencies performed well: AUD gained strength across the board due to strength in Gold, whereas NZD gained strength ahead of New Zealand’s central bank rate announcement later in the session amid market talk that the central bank may raise rates. Elsewhere, moving into the North American open, the USD index pared earlier gains as OPEC raising its 2010 world oil demand growth forecast provided strength to the WTI crude futures that in turn weighed on the USD index.

Commodities

Heading into the North American open, WTI crude reversed earlier losses to trade higher as the USD index moved to unchanged on the session and data from China boosted evidence of global demand recovery.

In oil and OPEC news:

- OPEC raised 2010 world oil demand growth forecast to 880,000bpd, up from prev. forecast of 810,000bpd. OPEC met 53% of pledged supply curbs in Feb from 56% in Jan. OPEC said its production likely to exceed market need, but gives cushion for expected H2 demand rise.

- Kuwait SPC (Supreme Petroleum Council) says OPEC won’t change quotas in meeting next week and will call for compliance.

- China turned a net importer of fuel in Feb. after exporting more oil products than it bought for two months as demand from factories rose and exports of goods surged.

- Norway’s preliminary Feb. oil production 2.01mln bdp and preliminary Feb. gas production 9.7bln cubic metres.