Futures higher on strong Chinese data
ECB and BOE rate decision also in focus as are initial jobless claims.
Overnight, China reported that the trade balance was $31.6 billion in December, well ahead of consensus forecasts of a $20.0 billion trade balance. Also, exports grew at a 14.1% annualized rate, well faster than consensus expectations of a 5.0% rise. The report also showed strong signs of credit growth.
In other news, Spain sold 5.7 billion euros of two-, five-, and 13-year bonds with yields falling across the curve and on strong demand.
Italy sold 8.5 billion euros of one-year notes with yields falling and demand remaining strong as well. The yield was the lowest since January 2010 at the auction.
The Greek unemployment rate rose to 26.8% in October from an upwardly revised 26.2% in September showing that the Greek tragedy that is the debt crisis is not anywhere near over yet.
- S&P 500 futures rose 4.2 points to 1,460.00.
- The EUR/USD was higher at 1.3102.
- Spanish 10-year government bond yields fell to 4.99%. This is the first time that 10-year yields fell below 5% since March of 2012.
- Italian 10-year government bond yields fell to 4.192%.
- Gold rose 0.42% to $1,662.50 per ounce.
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Asian shares were higher overnight following the strong Chinese trade data as investors' fears over a collapse in global trade receded following the report. The Japanese Nikkei Index rose 0.7% in Tokyo while the Shanghai Composite Index rose 0.37% and the Hang Seng Index rose 0.59%. Also, the Korean Kospi jumped 0.75% and Australian shares rose 0.31%.
European shares were mostly higher in early trade and were rising following the strong auctions from Spain and Italy. The Spanish Ibex Index rose 0.15% overnight and the Italian MIB Index rose 0.63% following the strong auctions. Meanwhile, the German DAX rose 0.24% and the French CAC slipped 0.1% while U.K. shares rose 0.12% in early trade.
Commodities were higher overnight led by energy futures on the back of the Chinese trade data. WTI crude futures rose 1.58% to $94.56 per barrel and Brent crude futures rose 1.23% to $113.15 per barrel. Copper futures rose 1.14% to $371.25 per pound as a stronger Chinese economy points to higher copper demand. Gold was higher and silver futures rose 0.95% to $30.54 per ounce.
Currency markets were in risk-on mode on the back of the Chinese trade data and the strong European auctions. The EUR/USD was higher at 1.3102 and the dollar gained against the yen to 88.08. Overall, the Dollar Index fell 0.23% on weakness against the euro, the Canadian dollar, the Swiss franc and the Swedish krone. Also, the AUD/USD was demonstrably stronger overnight after the Chinese trade data and AUD/JPY was the best gainer, rising 0.82%.
Stocks moving in the premarket included:
- Corning (GLW) shares rose 2.02% premarket after the company announced at CES that it is working with TV manufacturers to create large panels of Gorilla Glass for large appliances.
- Microsoft (MSFT) shares fell 0.75% premarket after the company announced a new partnership with Sprint (S) to launch Windows smartphones on Sprint's network. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
- Newmont Mining (NEM) shares rose 0.42% premarket as gold prices rallied sharply.
- Caterpillar (CAT) shares rose 0.38% premarket following the strong Chinese data.
Companies expected to report Thursday:
- MSC Industrial Direct (MSM) is projected to report its Q1 earnings at $1.01 per share on revenue of $582.26 million.
- Supervalue (SVU) is expected to report its Q3 earnings at $0.06 per share on revenue of $7.90 billion.
- Ceres (CERE) is estimated to post a Q1 loss at $0.32 per share on revenue of $1.33 million.
- Xyratex (XRTX) is projected to post a Q4 loss at $0.32 per share on revenue of $255.18 million.
On the economics calendar Thursday, initial jobless claims and wholesale trade are due out. In addition, the Treasury is set to auction 30-year bonds. Esther George of the Kansas City Fed, James Bullard of the St. Louis Fed and Narayana Kocherlakota of the Minneapolis Fed are set to speak during the day.
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