Morning note, data and earnings 12th October 2012

Morning,

The Euro loves that 200 day moving average, helping it rebound from the mid 1.28's back above the 1.29. Next stop, retest the 1.30. European equity markets had a strong performance overnight, as financial stocks continue to outperform. Volumes were mixed, most inline but easing in Spain after its recent downgrade.

DAX: +1.1% avg volume; O/P financials, cons. services  U/P industrial, health
CAC: +1.4% low volume; O/P financials, cons. goods  U/P industrial, telco
IBEX: +0.9% v.low volume; O/P financials, utilities  U/P health, cons. services
UKX: +0.9% v.low volume; O/P financials, basic mat  U/P health, utilities

European data saw German CPI come through inline at flat/0%, whilst French CPI was slightly weaker, -0.3% vs -0.1%. Spanish CPI 1.0% vs expected 1.1% so little impact from that number.  
Todays data is far more important, with EU and Indian industrial. Worth noting, France industrial productin numbers, out earlier this week, were better than expected and with European trade falling less than expected in the southern region, this number could surprise to the upside as exports improve on the weaker Euro.

US price action last night was weak, opening around the highs and trending easier, despite the fact the S&P is trading at a major technical support. I would have liked to see volumes increase at this support level, especially given the US$ weakened against major currencies, leaving me with some concerns over the strength of the support level.

US data was stronger than expected. Import prices were slightly higher at at 1.1% vs the survey of 0.7%, the trade balance roughly inline at -$44.2b vs expect -$44.0... whats $200m between friends? 
The jobs data was the most talked about, with continued claims of 339k vs expected 370k. With politicians and central banks worried about job creation and the unemployment rate above 8%, this will ease some concerns. Its certainly caught the attention of the press, with every headline and note today making it the top subject. We need to see follow-through.

S&P: flat avg volume; O/P basic material, financials  U/P telco, cons. services

Markets
Asian markets open higher as the US$ remains weaker against the Euro and AU$. Jpy weaker against the greenback which should provide some much needed relief for the exporters, I have started to look at Sony(6758) at these levels.
Expect markets to open around the highs and trend easier throughout the day. After a strong performance in Europe, I expect some profit taking into the weekend, despite the possible upside surprise in the industrial production numbers.
HK was strong into the close, with stocks like Foxconn(2038) seeing heavy buying into the close. Oils also seeing inflows, which I expect to see investors increase shorts over the next week. All this should leave HK weaker by close of business today, I expect down around 50bps.

Data.
09:30 AU credit card balances
13:30 Indian industrial production
14:45 French current a/c
15:30 Dutch trade balance
16:00 Italian CPI
17:00 EU industrial production
20:30 US PPI
21:00 Mexican industrial prodution
21:55 U. of Michigan confidence

Earnings: JPM and w.fargo
Stoddart