Futures edge higher on Cyprus deal
Markets are set for a slightly positive open after the small island country reached a bank deal with Greece.
U.S. equity futures erased earlier losses and edged up in premarket trade after
Cyprus agreed with Greece to spin off Greek units of debt-ridden Cypriot banks, which removed uncertainty over the fate of those operations.
Still, the country has until Monday to raise billions of dollars to secure the bailout before the European Central Bank pulls its emergency funding on Monday. This could mean Cyprus becomes the first eurozone member state to exit the currency bloc.
In other news, the German IFO business climate index, a broad measure of economic confidence in Germany, fell to 106.7 from 107.4 in February, missing expectations of a reading of 107.6. It is important to note that both the current conditions and the expectations indexes were weak, and that 85% of respondents had already done so before Cyprus's problems flared up.
The OECD said it now expects China to grow 8.5% in 2013 and 8.9% in 2014.
Italy's Democratic Party leader Pier Luigi Bersani is attempting to form a grand coalition in Parliament to pass election reform and hopefully win in a second round of elections. The coalition would be with former Italian Prime Minister Silvio Berlusconi and his allies and would block out the radicals MS5 party led by Beppe Grillo.
S&P 500 futures rose 0.4 points to 1,539.30.
The EUR/USD was slightly higher at 1.2938 in volatile trading.
Spanish 10-year government bond yields fell to 4.86% from 4.88%.
Italian 10-year government bond yields fell to 4.57% from 4.58%.
Gold declined 0.15% to $1,611.30 per ounce.
Asian shares were mixed overnight with Japanese markets down strongly on comments from Finance Minister Aso that easing benefits would take time to filter through the economy. The Japanese Nikkei Index fell 2.35% and the Shanghai Composite Index rose 0.17% while the Hang Seng Index declined 0.5%. Also, the Korean Kospi fell 0.11% and Australian shares rose 0.16%.
European shares were mostly lower on Cyprus fears but also on the weak German IFO survey. The Spanish Ibex Index declined 0.61% and the Italian FTSE MIB Index gained 0.21%. Meanwhile, the German DAX fell 0.22% and the French CAC declined 0.46% while U.K. shares rose 0.02%.
Commodities were mixed overnight as gold slipped and copper continued to rebound from its lows. WTI crude futures rose 0.19% to $92.63 per barrel and Brent crude futures declined 0.12% to $107.34 per barrel. Copper futures rose 0.35% to $344.70 per pound on hopes of a Chinese rebound. Gold was lower and silver futures declined 0.57% to $29.05 per ounce.
Currency markets were in flux overnight as the euro popped and the yen strengthened also. The EUR/USD was higher at 1.2938 and the dollar fell against the yen to 94.38. Overall, the Dollar Index fell 0.09% on weakness against the euro, the yen, the pound, and the Swiss franc. Notably, the pound failed to break and hold above 1.52 against the dollar after declining below 1.49 in its skid.
Stocks moving in the premarket included:
Nike (NKE) shares rose 8.47% premarket after the company reported better than expected earnings.
Micron Technology (MU) rose 3.42% after reporting better than expected earnings.
Salesforce.com (CRM) shares rose 0.85% premarket after the company announced a 4-for-1 stock split.
Citigroup (C) shares fell 1.08% premarket on Cyprus fears.
Notable companies expected to report earnings Friday include:
Darden Restaurants (DRI) is expected to report third quarter earnings per share of $1.01 vs. $1.25 a year ago.
Tiffany (TIF) is expected to report fourth quarter earnings per share of $1.36 vs. $1.39 a year ago.
On the economics calendar Friday, the ECRI weekly index is due out and the Federal Reserve's Sarah Bloom Raskin is set to speak on the labor market in Washington.
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The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
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