EUR/USD wave analysis for February 22, 2011

EUR/USD wave analysis for February 22, 2011

Alexander Dneprovskiy

Having declined by slightly more than 50 pips the EUR/USD currency pair is demonstrating uncertainty in its attempt to form another downside section of the estimated inclined triangle. At the same time its d wave looks quite complete which together with overbought Stochastic might indicate forthcoming formation of the e wave of this complicated correction structure. However, we should not exclude the possibility of the wave in the d to become more complex and prolonged, which might result in advance above the 1.3750 level.

Performed by Alexander Dneprovskiy, Analytical expert
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Stock markets fall on Libyan unrest and high oil price

As violence spreads across Libya, fresh concerns have been raised about a fall in global oil supply

European stock markets have fallen sharply after unrest in Libya and the Middle East sent oil prices to a two-and-a-half year high.

The UK's FTSE and France's Cac index lost about 1.5% in early trading, while Germany's Dax was 0.7% lower.
Earlier, Asian stocks fell, in part due to an earthquake in New Zealand.
London Brent oil rose by almost $2 a barrel to $107.7, while US light crude jumped $8 a barrel to $94.2 following a market holiday in the US on Monday.
The price of London Brent crude had risen by more than 3% on Monday.
Brent is now at its highest price since September 2008, while US crude is at its highest point since October of the same year.
On Tuesday, Standard & Poor's (S&P) credit rating agency downgraded Libya from A- to BBB+, and said it could lower the rating further.
"We expect that the violent outbreaks of civil unrest seen in Libya's eastern region, and particularly the city of Benghazi, of the past few days will persist," S&P said.
Fellow agency Fitch downgraded the country on Monday.

Growing tension
 
Libya is the world's 12th-largest exporter of oil, and there are concerns that growing tensions in the country could hit oil production.
Spillover into other big regional producers, such as Saudi Arabia and Kuwait, is another concern that is forcing up the price of oil.
"The market is reacting to violence in the Middle East... and not to fundamentals," said United Arab Emirates Energy Minister Mohammad bin Dhaen al-Hamli.

However, Saudi Arabia's Oil Minister Ali al-Naimi said his country's spare production capacity could help "compensate for any shortage in international supplies".

Global oil companies have been pulling staff out of Libya as unrest continues to spread.
On Tuesday, Royal Dutch Shell said it had successfully relocated all its expat employees.

Very nervous

The rising price of oil, which fuels further rises in already high inflation rates and hits corporate profits, affected stock markets in Asia and Europe.
In France the Cac 40 index lost 1.6%, while the UK's FTSE 100 index fell 1.3%.
The Italian stock exchange, based in Milan, was suspended on Tuesday due to "technical problems". The market fell 3.6% on Monday on concerns about Italian companies' exposure to Libya.
Earlier, Japan's Nikkei index closed down 1.7%, South Korea's Kospi ended the day 1.7% lower and Hong Kong's Hang Seng was down 2.1%.
"The market is very nervous over news of violence in Libya, and that's driving prices," said Yinxi Yu of Barclays Capital.
"It looks like the uncertainty in the region is not going to be resolved anytime soon."
Unrest in the region could spark a wider correction in stock markets, analysts said.
"Given the fact that we have seen massive gains in stock markets over the last few months, investors have been nervous about a possible correction for some time," said Michael Hewson at CMC Markets.
"The tensions in the Middle East with Libya imploding and concerns that the unrest could spread to Saudi Arabia could provide a catalyst for [this] correction."
In Asia, market sentiment was also affected by an earthquake in New Zealand.
New Zealand's NZX 50 stock index fell 0.7% on concerns that the damage caused by the earthquake will add further to the country's growing debt.
The New Zealand dollar also weakened by nearly 2% against the US dollar.

Taking flight

Companies that depend on fuel, such as airlines, were among the biggest fallers on Asia's stock markets.
Fuel represents about 40% of operational costs for airlines, and investors are worried that the higher prices will eat into profits.
Shares in Singapore Airlines, the world's second-biggest carrier by market value, declined 1.7%, while Korea Airlines slumped 9% and Cathay Pacific Airways was down 4.5%.
In Taiwan, China Airlines lost 6%, dropping to its lowest value since 30 July. Shares in Australia's national carrier Qantas slipped 1.2%.
In Europe, Germany's Lufthansa was the biggest faller on the country's Dax index, slipping 2.4%, while in the UK, International Consolidated Airlines, formed from the merger of British Airways and Iberia, fell 3.6%.


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Asos Sets Up Shop on Facebook

Fashion Retailer Asos Sets Up Shop on Facebook

The U.K. clothing site is the first European fashion retailer to open an e-tailing outpost inside the social network

By Sarah Shannon

Sarah Townsend will no longer have to leave her 507 Facebook friends behind to buy the £35 ($55) baggy sweater she's been eyeing from Asos. On Jan. 27, the hip, London-based online clothing site became the first European fashion retailer to open an e-tailing outpost inside Facebook. Competitors such as Gap (GPS) and Inditex's Zara use the networking site largely to communicate with fans. Visitors to Asos's store on Facebook can shop the company's entire stock of 150,000 products without leaving the site. They also can post photos of items to their wall so friends can comment on potential purchases. "It's something I want to do more of," says Townsend, a 25-year-old marketing professional in London.
Asos and other retailers are going after consumers that marketing pros call "moppers"—as in mobile shoppers. Britain's No. 2 online retailer, whose name stands for "as seen on screen" (it has no physical stores), logged a 54 percent revenue increase, to $371 million, in the nine months ended Dec. 31. Analysts estimate pretax profit will reach $44.5 million this year. "Asos is leading the way," says Andrew Wade, a retail analyst at Numis Securities in London, who recommends clients buy Asos shares. "I'd expect to see other people do the same thing."
Moppers already use mobile devices to browse online stores, comparison shop, and get recommendations from friends. Making a purchase on their Android phones or Apple (AAPL) iPads is a natural next step. In the U.K. alone, mobile commerce is forecast to more than double by 2013, to $440 million, according to market researchers Verdict Research and Ovum.
Facebook says about 200 million of its 500 million members worldwide access the site via mobile devices. And these users are twice as active as those who use their home or work computers. The Palo Alto (Calif.)-based company is ramping up efforts in the U.S. to entice companies to sell their wares on its pages. Two that have already worked with developers to set up shop are J.C. Penney (JCP) and Delta Air Lines (DAL). In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through social networking sites such as Facebook, says Mike Fauscette, an analyst at research firm IDC in Framingham, Mass. "There's money in this for all of the players involved," he says.
At Asos, which also caters to shoppers in the U.S., Germany, and France, purchases from mobile devices amounted to just $1.5 million in December, or about 3 percent of its sales. The company expects that figure to start ticking up with the opening of its Facebook store last month. "Our [customers] are on Facebook all day, every day," says Chief Executive Officer Nick Robertson. For now the Asos store inside Facebook can only be accessed via a PC or an iPad. The company, which has close to 465,000 "likes" on Facebook, is at work on an app that will allow smartphone users to shop its site.
The owner of the world's largest e-commerce marketplace, EBay (EBAY) forecasts global mobile sales will double this year, to $4 billion. "Fashion is the biggest category for growth, and the U.K. is the fastest-growing market in Europe," says Patrick Munden, head of seller communications at eBay UK. British grocers are also seeing a rise in mobile transactions. Ocado reported that about 6 percent of orders in the first half of last year came through its "Ocado on the Go" smartphone app. Tesco, Britain's top retailer, upgraded its app in October to include a feature that allows shoppers to add products to their virtual shopping basket simply by photographing a product's barcode. Enjoying a good bottle of Chianti at a restaurant? Scan the label and it's yours.
Not all U.K. retailers are rushing headlong into mobile commerce. Jonathon Brown, head of online at department store chain John Lewis, says the retailer uses social network sites such as Facebook and Twitter as more of a "listening and protective tool" to respond to customer complaints and comments. Launching a transactional site on Facebook is something the company would consider, he added. Smartphones and iPads already generate about 5 percent of the traffic on its online store. A smartphone application that will offer fashion advice and buying guides are due to launch sometime in the first half of 2011.
For tech-savvy shoppers such as Townsend, who admits to a $160-a-month Asos habit, the new Facebook store could make it difficult to keep addictions in check. "I look at Asos probably every fortnight," she says. "It's the first place I go."

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World's biggest miner BHP posts record $10.5bn profits

 The world's biggest mining firm BHP Billiton has made record half-year profits thanks to strong demand and high prices.

Net profit jumped 72% to $10.52bn (£6.5bn) in the six months to the end of December, BHP said.

It also unveiled plans to spend $80bn on new projects worldwide, and buy back $10bn of shares from investors.

BHP said it saw demand growth slowing in 2011, but added that economic conditions should help earnings.

"While we expect a slowdown in the growth rate of global commodity demand in calendar year 2011, the economic environment still underpins a robust near-term outlook for our products," the company's chief executive Marius Kloppers said.

Global demand for metals is being driven by China and other emerging economies

'Biggest surprise'

The company said it plans to spend the $80bn over the next five years as it looks to develop new projects.
Mining and commodity companies are having mixed results when it comes to identifying and accessing new deposits.
Analysts said that the supply constraints are one of the reasons commodity prices have climbed so high.
BHP said that it would use the money to develop projects in Australia, Chile and Canada.
"The biggest surprise is the commitment to spend $80bn over the next five years," said Mes Bruce, a portfolio manager at Perpetual Investments.
"We think that this demonstrates the challenges that the industry is having satisfying rising demand, while replacing declining production from mature operations."

No friends?

BHP was recently forced to call off a merger with Canada's giant Potash Corp, and it was the company's latest significant takeover attempt to run into trouble in the past three years.
With virtually no debt, and with no obvious target for a tie-up the company has a large cash pile and decided to accelerate a share buy-back scheme.
Such a move reduces the number of shares in issue, meaning there are fewer pieces of the company, which then attract a bigger share of any profits.
A similar move has been announced by BHP's rival, Rio Tinto.
BHP shares fell by 1% on the earnings news, with analysts saying it was in line with market expectations.

bbc