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Overnight Briefing

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U.S. stocks rose

Mon, Aug 18 2008, 05:58 GMT
by Jyske Bank Team

Jyske Bank

• Weak oil and commodity prices help support dollar

• EUR/USD hits 6 months low

Today’s main events:

• US NAHB housing market

• CH Retail sales

• BOJ rate announcement

American Time Zone:

U.S. stocks rose

U.S. stocks rose, sending the Standard & Poor's 500 Index to a third weekly gain, as lower commodity prices boosted the outlook for consumer companies and the two largest bond insurers had their credit ratings affirmed.
Wal-Mart Stores Inc., the world's largest retailer, climbed the most in a week as crude slid for a second day. Ambac Financial Corp. rallied 30 percent and MBIA Inc. advanced 9 percent after S&P concluded a credit review without lowering the companies' ratings.
General Electric Co. gained 1 percent on a Federal Reserve report showing manufacturing in New York unexpectedly grew in August as materials prices retreated.
``It's a big positive for all the companies we invest in that use oil,'' Charles Bobrinskoy, who helps manage about $13 billion as vice chairman of Ariel Investments in Chicago, told Bloomberg Television. ``Commodities got way too high and consumer stocks in particular got too low.''

EUR/USD at 6 months low

The dollar headed for a fifth weekly gain against the euro, its longest winning streak in more than two years, as the European and Japanese economies contracted.
The U.S. currency rose to the strongest level in almost six months against the euro of 1.4664 and a seven-month high versus the yen of 110.67.
The pound dropped for an 11th day against the dollar, the longest run of declines in at least 37 years, on speculation a recession will force the Bank of England to cut interest rates.

Oil declined but recovered

Oil fell more than USD3 to 111.75 a barrel in New York to a three-month low as the stronger dollar curbed the appeal of commodities as an inflation hedge. But towards the end of the session oil recovered and closed the week at USD 113,50.

Far East Time Zone:

EUR/USD hits a new low

The dollar rose against the euro on Monday and hit a low of 146,45, extending its gains from last week. The dollar was also near a seven-month high against a basket of six major currencies before recovering to 147,60.But the dollar has still gained about 6 percent against euro this month.

Nikkei and EURJPY rose

Nikkei rose for the first time in five days as a rally led by industrial and materials companies. Nikkei rose 1,77% to 13250.
EUR/JPY rose with Nikkei after it hit a low of 161,85 in early trade. The EUR/JPY was up 0,3% at 162,40.

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Published on  Mon, Aug 18 2008, 06:05 GMT