Trader Talk: An Analysis of the Markets this Morning

Good morning,

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

• U.S. and Europe said poised to announce agreement on swap rules

• Telecom Italia is said to face ~6% cut for grid-access fees

• Praktiker weighs insolvency filings after financing talks fail

• EasyJet investors mull $13b jet order as founder seethes

• Portugal’s Cavaco says early election could lead to new aid plan

• Pharmstandard sees Bever deal, OTC spinoff complete by yr end

• Cajatres sells 4.86m new shrs to fund burden sharing measures

EARNINGS All times CET, estimates where available:

• Suedzucker (SZU GR) 7am, 1Q adj. EPS est. EUR0.59

• DNB (DNB NO) 7:30am, 2Q adj. EPS est. NOK2.18

• Getinge (GETIB SS) 8:30am, 2Q adj. EPS est. SEK1.85

• Partners Group (PGHN SW) TBD, 2Q sales, trading

• Babcock (BAB LN) 8am, 1Q sales, IMS

• Assoc. British Foods (ABF LN) 8am, 3Q sales, IMS

• Balfour Beatty (BBY LN) 8am, 2Q sales, trading

• Hays (HAS LN) 8am, 4Q sales, trading

• Premier Oil (PMO LN) 8am, 2Q sales, trading

• Flughafen Zuerich (FHZN SW) TBD, June traffic

• Ashmore (ASHM LN) 8am, 4Q sales, trading

Stocks, Treasuries and commodities rose, while the dollar retreated after Federal Reserve Chairman Ben S. Bernanke said the world’s biggest economy will continue

to need stimulus. The yen strengthened against the greenback as the Bank of Japan kept its bond-buying program unchanged.

Euro Stoxx 50 Index contracts increased 1.8 percent at 7:15 a.m. in London, and Asian shares climbed. Standard & Poor’s 500 Index futures rose 1.1 percent after the gauge climbed to within 1 percent of its record yesterday. Treasury 10-year futures contracts gained the most in 15 months. The S&P GSCI gauge of commodities advanced for an eighth day, led by metals. The Dollar Index sank 1.5 percent, while South Korea’s won rose to a one-month high and the yen strengthened 0.8 percent to 98.88.

Bernanke backed sustained stimulus in a speech yesterday, after minutes of the Fed’s June meeting showed officials want to see more signs of job growth before starting to scale back the $85 billion-a-month bond purchases. The BOJ said it would retain its plan for monetary stimulus at the end of its two-day meeting today and the Bank of Korea kept interest rates unchanged. Bank Negara Malaysia is expected to hold its benchmark at 3 percent while Indonesia’s central bank may raise rates.

“It’s a shot in the arm, so to speak,” Natalie Trunow, the Bethesda, Maryland-based chief investment officer of equities for Calvert Investments Inc., which oversees more than $12 billion, said in a phone interview. “Anything that helps the economy and makes money cheap is an accommodative stance.”

Good day and happy trading!

Kristian Camenzuli