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Overnight Briefing

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U.S. stocks gained

Thu, Dec 11 2008, 05:26 GMT
by Jyske Bank Team

Jyske Bank

• Oil higher

• House passes auto bailout, Senate prospects uncertain

• China CPI up 2.4 %, below forecast

Today’s main events:

• SEK: Unemployment

• USD: Trade Balance

• USD: Initial Claims

American Time Zone:

U.S. stock gained

U.S. stocks gained, recovering half of yesterday’s slide, as higher energy and metal prices triggered a rally in commodity producers that overshadowed concern Congress won’t rescue the nation’s auto industry. Chesapeake Energy Corp. jumped 23 % and Peabody Energy Corp. rallied 19 % as crude and coal increased. Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, climbed 16 %. General Motors Corp. reversed a gain of more than 6 % and Ford Motors Co. pared most of its advance as Republican senators vowed to stall the rescue bill.

USD fell to two-week low

The dollar fell to a two-week low versus the euro and the yen declined as stock gains and government efforts to cushion against the global economic slump reduced the haven appeal of the currencies.

Oil higher

Crude oil climbed on speculation that the economy and energy demand will recover as U.S. lawmakers hammer out a USD 15 billion bailout of automakers.

Far East Time Zone:

House passes auto bailout, Senate prospects uncertain

The House of Representatives approved bailout legislation on Wednesday that would force U.S. automakers to restructure or fail, sending the measure to the Senate where prospects for passage are uncertain.
Democrats sought to reclaim momentum in the USD 14 billion bailout effort, with the bill they negotiated with the Bush administration clearing the chamber by 237-170.
Democrats advocated passage based on the belief that government inaction could lead to an industry collapse that would cost taxpayers far more than the loans intended to see them through March and help them restructure.
While the House stuck to its plan for quick action, uncertainty gripped the Senate where a razor-thin Democratic majority cannot ensure passage. Sixty votes are needed to clear procedural hurdles.
A vote could come as early as Thursday, but some Republicans have vowed to slow or even block the legislation.

China Nov CPI up 2.4 %, below forecasts

China's annual consumer price inflation fell to a 22-month low of 2.4 % in November from 4.0 % in October as the pace of food and non-food price increases both continued to decline.

The seventh consecutive monthly drop in CPI inflation, now well below February's peak of 8.7 %, shows price pressures are ebbing fast as the economy slows, giving the central bank room to cut interest rates still further after a slew of cuts since September.

Asian shares fell

Asian shares fell on Thursday as concerns over the global economy once again took centre stage, while renewed uncertainty about the U.S. auto bailout plan sparked a subtle shift towards assets seen safer such as the yen.
The MSCI index for Asia-Pacific stocks outside Japan was down 0.2 % at 0240 GMT, paring gains of 4.5 % a day earlier when investors had been encouraged by talks a U.S. bailout plan for auto makers had been reached.
Japan's Nikkei average fell 0.8 %. Major indexes in Australia and Singapore lost more than 1 % each, while Shanghai and Hong Kong posted more modest falls.

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Published on  Thu, Dec 11 2008, 05:38 GMT