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US stock market opening report (March 17, 2010, Wednesday)

Contributed by Paddy Power Trader

By Paddy Power Trader

European bourses opened higher and have continued their strength moving into the North American open, with industrials and basic materials being the best performing sectors. The weakness in the USD index provided strength to commodities that in turn has helped basic materials.

Bund futures opened lower on the back of strength in equities and supply coming from Germany, however after good demand bund futures retraced losses and moving into the North American open they are trading unchanged.

Forex

GBP gained strength across the board following much better than expected UK Jobless Claims Change figure. The GBP/USD rose to highs of 1.5382, whereas EUR/GBP slumped to 0.8956.

In other news, Australian interest rates are likely to rise further, a top central banker said, backing market expectations that the cash rate will be moved up towards normal levels in coming months as growth speeds up. Elsewhere, China said on Wednesday it “could not be any clearer” in its repeated commitment to a stable exchange rate after the US Congress threatened to levy duties on some Chinese exports if it fails to revalue its currency. (RTRS)

Also in news, Harvard University Professor Feldstein, who warned almost two decades ago that the EUR would prove an “economic liability”, said Greece’s austerity plan will fail and the country may quit the single currency to fix its fiscal crisis. (BBG)

Commodities

At its latest meeting, OPEC agreed to retain the oil production target, however some officials said that demand is increasing which helped push WTI crude futures higher. Also supporting prices was a weaker USD.

In OPEC news:

- OPEC, content with oil prices exceeding USD 80 a barrel and agreed for the fifth time since 2008 to keep its production limits unchanged. Even as some members voiced concern that supply may be too high.

- OPEC has a “50-50 chance” of raising its production quota at the September meeting as prices approach USD 85 a barrel, Algerian minister Khelil said.

In geopolitical news:

- Iran is ready to deliver 1,200kg of low-enriched uranium in one go in return for fuel for a Tehran reactor, but the exchange must be inside the country.