Trader Talk: An Analysis of the Markets this Morning

Good morning,

Markets are called to open flat this morning. This is what's happening today:

• Barclays With Four Ex-Traders Fined $487.9m by U.S. in Energy Probe

• EU Proposing to Cap Transaction Fees on Cards, FT Reports

• Letta Says EU Members Underestimate ‘Huge Risk’ of U.K. Exit

• Banca Carige in Talks With Arca on Asset Management Unit Sale

• Loewe: Siegfried Beck, Joachim Exner Temporary Administrators

• Markerstudy Confirms Preliminary Approach to Brightside

• Lundbeck: Clinical Data Show Improvement for Alzheimer’s Drug

• Santander: Roman Blanco to Head Santander in U.S.

• Invensys Bidding War Seen Yielding Decade-High Price

• Moody’s Sees Potential for Irish Ratings Outlook to Stabilize

• BHP Billiton: 4Q iron ore production gained 17% as the company expands operations in Australia to deliver a 13th annual output record

EARNINGS All times CET, estimates where available:

• Georg Fischer (FI/N SW) 7am, 1H adj. EPS est. CHF17.76 (1 est.)

• Svenska Handelsbanken (SHBA SS) 7am, 2Q adj. EPS est. SK5.44

• SGS (SGSN VX) 7am, 1H adj. EPS est. CHF38.70

• ASML (ASML NA) 7am, 2Q adj. EPS est. EU0.50

• Nordea Bank (NDA SS) 7am, 2Q adj. EPS est. DK0.19

• TeliaSonera (TLSN SS) 7am, 2Q adj. EPS est. SK0.99

• Novartis (NOVN VX) premkt, 7am, 2Q adj. EPS est. $1.31

• JM (JM SS) 7am, 2Q adj. EPS est. SK3.27

• Boliden (BOL SS) 7am, 2Q adj. loss-shr est. SK0.09

• Electrocomponents (ECM LN) 8am, 1Q sales

• Land Securities (LAND LN) 1Q sales, IMS

• Fresnillo (FRES LN) 8am, 2Q production

• Severn Trent (SVT LN) 8am, 1Q sales, IMS

• Intermediate Capital (ICP LN) 8am, 1Q sales, IMS

The dollar rose against most of its main trading partners, while Asian stocks and European equity futures gained before Federal Reserve Chairman Ben S. Bernanke

testifies to Congress. The yen weakened and gasoline fell.

The Bloomberg Dollar Index added 0.3 percent as of 7:11 a.m. in London, after dropping 0.7 percent yesterday. The yen slid 0.3 percent against the greenback. The MSCI Asia Pacific Index of equities advanced 0.1 percent, while Euro Stoxx 50 futures added 0.2 percent and contracts on the Standard & Poor’s 500 Index were little changed. Gasoline futures slipped 1.1 percent and rubber rebounded 4 percent from a two-day drop.

“We are very constructive on the U.S. dollar for very fundamental reasons,” Deutsche Bank AG co-Chief Executive Officer Anshu Jain said in a Bloomberg Television interview, referring to the Fed’s monetary policy. “A combination of a U.S. which is re-industrializing, and a household which is starting to spend again, could presage a long, strong period for the U.S., which of course would be good for the dollar.”

Bernanke will appear before the House Financial Services Committee today and senators tomorrow to present the Fed’s semi-annual monetary policy report. The U.K. will report jobless data and the Bank of England is scheduled to release minutes of its last policy meeting. Germany plans to sell 10-year bonds and bills sales are scheduled in Portugal.

The MSCI All-Country World Index posted the biggest five-day gain since November last week after Bernanke appeared to damp previous comments signaling the prospect of reductions in asset buying by saying very accommodative monetary policy is needed for the “foreseeable future.”

Good day and happy trading!

Kristian Camenzuli