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Overnight Briefing

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USD rose for third day

Thu, Oct 2 2008, 06:05 GMT
by Jyske Bank Team

Jyske Bank

• Oil declined after inventory data

• Bush urges House to pass bailout bill like Senate

• Nikkei down

Today’s main events:

• EUR: Producer prices

• Rate decision from ECB

• USD: Jobless claims

American Time Zone:

U.S. stocks fell

U.S. stocks fell as a report showed manufacturing contracted more than forecast and analysts cut earnings estimates on industrial companies, overshadowing Warren Buffett's USD 3 billion investment in General Electric Co. Ingersoll-Rand Co. and Parker Hannifin Corp. slid more than 3.6 % on Citigroup Inc. analysts' prediction that credit losses will delay spending on equipment. GE dropped as much as 9.8 % as Deutsche Bank AG said profit will be hurt by “deterioration” at its financial unit, then trimmed losses on plans to raise USD 15 billion from Buffett and others.
Benchmark indexes pared their declines as Bank of America Corp. and Citigroup climbed more than 8 percent on speculation Congress will approve the USD 700 billion financial-rescue plan.

USD rose for a third day

The dollar advanced against the euro for a third consecutive day as demand for funding in the U.S. currency increased, reflecting banks' reluctance to lend to each other amid a global credit crunch.

Oil declined after inventory data

Crude oil fell after a U.S. government report showed a bigger-than-forecast increase in supplies as fuel consumption dropped to the lowest since 2001.

Far East Time Zone:

Bush urges House to pass bailout bill like Senate

President George W. Bush on Wednesday praised Senate passage of a USD 700 billion package aimed at rescuing the U.S. financial system and urged the U.S. House of Representatives to quickly do the same. "With the improvements the Senate has made, I believe members of both parties in the House can support this legislation," Bush said in a written statement. "The American people expect, and our economy demands, that the House pass this good bill this week and send it to my desk."
“The bill the Senate passed is essential to the financial security of every American," he said.

Nikkei down

Japan's Nikkei stock average slipped 1.1 % on Thursday despite passage of the financial bailout bill by the U.S. Senate, with worries about its fate in the U.S. House and concern about the global economy overpowering relief.

The Senate voted 74-25 for the historic USD 700 billion bailout of the U.S. financial industry, with the results coming out late in morning trade.

But the market reaction was negative. "Basically, there's still a lot of distrust of this bill in the House, so it's hard to know what will happen there," said Katsuhiko Kodama, senior strategist at Toyo Securities. "Even more, if you look at recent indicators for the U.S. and Japan the economy is clearly bad, and investor attention is shifting to the economy. You can't expect a rebound just on the bill passing the Senate."

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Published on  Thu, Oct 2 2008, 06:09 GMT