Reports » US

US stock market opening report (March 16, 2010, Tuesday)

Contributed by Paddy Power Trader

By Paddy Power Trader

European bourses opened in positive territory and have maintained the strength moving into the North American open, with financials and basic materials as the best performing sectors. Increasing signs of a possible financial aid package for Greece from the Eurozone countries have provided strength to financials, whereas the weakness in the USD index has boosted commodities, which in turn has lifted basic materials.

German government 10-year bund futures traded lower this morning due to supply coming from Ireland, light trading volumes, and strength in equities. Spreads on the 10yr Greek/Bund bond yields also continued to tighten another 6-7bps today below 300 post the Euro Group meeting.

The markets look ahead to the FOMC rate decision due to come later in the US session at 1815 GMT, where the Federal Reserve is expected to weigh how and when to signal higher rates, although a rate hike is not imminent according to analysts.

Forex

The USD index traded in negative territory ahead of the FOMC rate decision due later in the US session. In other news, EUR/GBP gained strength on the back of market talk of European corporate demand as well as an early Europe GBP selling from a UK clearer and a German bank according to analyst at IFR Markets.

In other news, Australia’s central bank expects to raise interest rates further to keep pace with a buoyant economy and rising home prices, and played down the risk that the shoddy finances of some European countries could scupper global growth, according to RBA’s March meeting minutes. (RTRS)

Elsewhere, Japanese finance minister Kan said that currencies need to be stable and the government would need to act if they make abnormal moves. But Kan said in parliament that currency rates should basically be determined by markets. Also, China again turned a deaf ear to US demands for a stronger CNY, saying the currency is not the cause of its trade surplus and pledging to keep the exchange rate stable to help its exporters. (RTRS)

Commodities

Heading into the North American open, weakness in the USD index has led WTI crude futures higher.

None of OPEC’s 12 members have called for changes in the group’s overall production quota, set at the end of 2008. Saudi Arabia’s oil minister yesterday said that prices are in the right range and there is no need to change production policy. He added that he does not think there will be a need for any additional Opec meetings this year.