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Overnight Briefing

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U.S. equities rose

Tue, Sep 9 2008, 05:32 GMT
by Jyske Bank Team

Jyske Bank

• The dollar sharply higher

• Nikkei fell 1.4 % in morning trade

• Australia retail sales rebound in August

Today’s main events:

• DEM Trade Balance & Current Account

• SEK Consumer Price Index

• USD Pending Home Sales

• ABC Consumer Confidence

American Time Zone:

U.S. equities rose

U.S. stocks climbed, adding to a rally across Europe and Asia, on speculation the government takeover of Fannie Mae and Freddie Mac will stabilize the global financial system battered by USD 507 billion in credit losses. Citigroup Inc., Wachovia Corp. and Bank of America Corp. added more than 4 % after Treasury Secretary Henry Paulson said the government will provide short-term funding to mortgage lenders Fannie and Freddie. KB Home and D.R. Horton Inc. jumped more than 11 %, sending a gauge of homebuilders to a four-month high. SanDisk Corp. slumped 8 %, leading technology shares lower, after UBS AG cut earnings estimates for the largest maker of memory cards used in digital cameras.

USD sharply higher

The dollar rose to the highest since October of 1.4055 against the euro as the U.S. government's takeover of Fannie Mae and Freddie Mac boosted confidence in financial markets in the world's largest economy.
The yen fell against the high yielders on speculation the bailout will encourage traders to buy higher-yielding assets funded by loans made in Japan.

Oil lower

Crude oil fell below USD 105 a barrel in New York for the first time since April as the dollar rose against the euro for an eighth day, curbing the appeal of commodities as an inflation hedge.

Far East Time Zone:

Nikkei down 1.4 % in morning trade

The Nikkei average fell 1.4 % on Tuesday, as investors locked in profits after a rally the previous day, amid continued uncertainty over the global economic outlook.

Japan's top banks fell back from double-digit percentage gains seen on Monday following the U.S. government's seizure of troubled mortgage finance companies Fannie and Freddie.

Shippers such as Mitsui OSK Lines Ltd declined sharply after the key freight index fell to its lowest in more than one year, indicating a slowdown in the global economy.

The benchmark Nikkei fell 172.10 points to 12,452.36.
The index had jumped 3.4 % on Monday The broader Topix lost 1.3 % to 1,200.94.

Australia retail sales rebound in August

Australian retail sales rose by almost triple what was expected in July, suggesting some resilience among hard-pressed consumers, though analysts stressed the data should be treated with caution.

The Australian Bureau of Statistics also warned the series would be more volatile going forward and should be treated with caution. A full survey of sales will now only be released every quarter.

Other data on Tuesday showed the number of home loans taken out in July dipped slightly.
Business conditions and confidence edged up from seven-year lows in August, but only thanks to strength in mining as activity elsewhere was subdued.

AUD/USD traded between 0.8020 and 0.8172

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Published on  Tue, Sep 9 2008, 05:40 GMT