Benzinga Market Primer, Monday February 11

Futures Rise, Eyeing European Politics

U.S. equity futures rose in early Monday trading as the S&P 500 closed last week at its highest level since 2007. Futures rose on hopes that European leaders would agree on new aid for Cyprus and reach new agreements on Greece's bailout. However, fears over Italy's upcoming elections yielding a negative result and Spain's political crisis kept gains tepid.

Top News

In other news around the markets:

• Leaders of the G7 economies are set to issue a joint statement this week about the latest round of currency devaluations, ahead of the upcoming G20 summit. They are set to denounce unilateral interventions to weaken rates and are set to encourage multilateral intervention and cooperation.


• Swiss National Bank Governing Board member Fritz Zurbruegg spoke overnight saying that the franc remains too strong and that the SNB will keep the peg in place against the euro even as the EUR/CHF pair has remained above the peg, fearing a new flare-up of the European debt crisis.


• Spain's bad bank, called Sareb, has rejected investment proposals from Cerberus, Fortress Investment Group FIG, and Centerbridge as the investment funds wanted seniority over other shareholders, a term that Spanish leaders were not willing to include.


• S&P 500 futures rose 2.8 points to 1,515.10.


• The EUR/USD was higher at 1.3387.


• Spanish 10-year government bond yields rose to 5.41 percent.


• Italian 10-year government bond yields rose to 4.59 percent.


• Gold fell 0.17 percent to $1,664.20 per ounce.

Asian Markets

Asian market are mostly closed for the majority of the week in recognition of the Lunar New Year holiday. Australian markets were open and stocks fell 0.24 percent in Australia following home loan data which showed a sharp drop in December of 1.5 percent on expectations of a mere 0.1 percent drop.

European Markets

European shares were mixed after trading lower at the open on hopes that leaders would reach a new consensus on Greece and Cyprus and new aid for struggling French automaker Peugeot; the company has just been given EU approval to issue 1.2 billion euros ($1.61 billion) of intermediate-term bonds backed by the government. The Spanish Ibex Index fell 0.31 percent and the Italian FTSE MIB Index fell 0.19 percent. Meanwhile, the German DAX rose 0.2 percent and the French CAC rose 0.5 percent while U.K. shares rose 0.28 percent.

Commodities

Commodities were lower in overnight trade on low demand due to Asian markets being closed. WTI Crude futures fell 0.14 percent to $95.59 per barrel and Brent Crude futures fell 0.44 percent to $118.38 per barrel. Copper futures were flat at $375.95 despite the weak Australian home loan data. Gold was lower and silver futures fell 0.13 percent to $31.40 per ounce.

Currencies

Currency markets were in flux overnight as the euro gained, the yen continued to weaken, and the pound declined strongly. The EUR/USD was higher at 1.3387, the GBP/USD declined 0.59 percent to 1.5707, the lowest level since August, and the dollar gained against the yen to 93.40. Overall, the Dollar Index rose 0.05 percent on strength against the pound, the yen, the Canadian dollar, and Swiss franc despite the euro strength. Also, the Australian dollar slipped against the greenback below 1.03 on the weak home loan data.

Earnings

Notable companies expected to report earnings Monday include:

• FXCM FXCM is expected to report fourth quarter EPS of $0.15 vs. $0.28 a year ago.


• Lowe's L is expected to report fourth quarter EPS of $0.30 vs. $0.77 a year ago.


• Nexen Inc. NXY is expected to report fourth quarter EPS of $0.30 vs. $0.68 a year ago.


• Spirit Airlines SAVE is expected to report fourth quarter EPS of $0.25 vs. $0.33 a year ago.


• Tesla Motors TSLA is expected to report a fourth quarter loss of $0.53 vs. a loss of $0.69 a year ago.

Economics

On the economics calendar Monday, the Treasury is set to auction 4-week, 3-month, and 6-month bills. Overnight, Spain issues short-term bills and Swiss National Bank Chief Thomas Gordon is set to speak.

Good luck and good trading.