DAILY MARKET REPORT

‏26.12.2014

INTERNATIONAL MARKETS

Index Last Change DJIA 18,030.21 6.04 S&P 500 2,081.88 0.29 NASDAQ 4773.472 8.05 NIKKEI 17,818.96 10.21 HANG SENG 23,349.34 15.65 DJ EURSTOXX 50 3,184.66 7.81 FTSE 100 6,609.93 11.75 CAC 40 4,295.85 19.12 DAXX 9,922.11 56.35

 US  Dow ends at record after six-day win streak  Encouraging econ data boost weekly mortgage applications  US Markets closed on Dec 25th for Christmas Day

U.S. stocks ended near unchanged on Wednesday, with the Dow furthering its record climb, a day after its first trip above 18,000. Separately, the Mortgage Bankers Association reported more Americans applied for mortgages last week, with refinance activity also rising. Achillion Pharmaceuticals rose after Tuesday's 24 percent drop as biotechnology shares were hit by worries insurers and drug-benefit managers might try to restrict drug costs; Cal-Maine Foods fell after the egg producer reported quarterly earnings short of estimates. The Dow and S&P 500 rose to intraday records, before losing losing steam in the final moments of trading. Dialing back from a 62-point jump, the Dow Jones Industrial Average rose 6.04 points to 18,030.21, another record close. Boeing led blue-chip gains that included 11 of 30 components. Erasing a 5- point gain, the S&P 500 shed a fraction to finish at 2,081.88, with energy leading sector losses that included seven of its 10 major industry groups. Rebounding from Tuesday's decline, the Nasdaq gained 8.05 points, or 0.2 percent, to 4,773.47. Volume was light in Wednesday's shortened session before Thursday's Christmas Day holiday. Decliners pulled just ahead of advancers on the New York , where 349 million shares traded. Composite volume surpassed 1.4 billion. The yield on the 10-year Treasury note used to determine mortgage rates and other consumer loans turned lower, off 1 basis point to 2.2554 percent. The U.S. dollar declined against the currencies of major U.S. trading partners and dollar denominated commodities including oil and gold fell. Crude-oil futures for February delivery dropped $1.28 to $55.84 a barrel, and gold futures for February dropped $4.50 to $1,173.50 an ounce.

 EUROPE & UK

 Smith & Nephew outperforms sluggish European markets  UK's FTSE 100 rises 0.2 pct to 6,609.93 points  U.K. market will remain closed on Friday

Bid speculation drove up the shares of medical devices maker Smith & Nephew on Wednesday, allowing it to outpace sluggish European stock markets in a shortened session ahead of the Christmas break. The 7.7 percent jump in Smith & Nephew, after Bloomberg News reported U.S. rival Stryker was planning a takeover offer for it, allowed Britain's blue-chip FTSE 100 index to end 0.2 percent higher at 6,609.93 points. France’s CAC ended down 0.4 percent as data showing another set of record unemployment figures in France weighed on the Paris market. By contrast, data showed that British workers' productivity had a long-awaited improvement in the third quarter of this year, highlighting how Britain has managed to avoid the worst of the economic slump afflicting the euro zone. Spain’s IBEX equity index was flat, while the cash markets for both Milan and Frankfurt's DAX were closed. The DAX is up 4 percent in 2014, beating a 2 percent dip on the FTSE 100 and a flat performance on France's CAC.

 ASIA  Asian markets mostly higher amid light trade; Tokyo rebounds  Japan data shows Abenomics still struggling

Asian bourses largely rose amid thin post-Christmas trading, as markets in Australia, Hong Kong, Indonesia and the Philippines remain shut. With Wall Street closed for the holiday season as well, attention was on a flurry of monthly indicators released by Japan ahead of trade opening. For the month of November, Japan's industrial output posted a surprise drop, while inflation continued to slow, offering fresh signs that efforts to resuscitate the country's stalled economy aren't proceeding smoothly. Manufacturing fell 0.6 percent on-month in November, compared with a Reuters poll forecasting a 0.8 percent rise and October's 0.4 percent rise. Meanwhile, core inflation, which includes energy but not fresh food, rose 2.7 percent on-year in November, in line with expectations from a Reuters poll, but marked the fourth straight month of declines. Japanese shares closed up marginally late Friday, overcoming sluggishness in the morning session after the release of mixed data. However the yen, which traded little moved against the greenback at 120.18, limited gains. For the holiday-shortened week, the benchmark index added 0.8 percent while the broader Topix index gained 0.8 percent. Large-caps and exporters were mixed; Toyota Motor moved up 1.1 percent while Canon and Honda finished 2.5 and 1.1 percent lower. Fast Retailing, owner of clothes brand Uniqlo, lost 0.4 percent while robot maker Fanuc notched up 0.4 percent. Sumitomo Mitsui Financial Group rose 0.7 percent, after one of its units, Sumitomo Mitsui Banking (SMBC), announced that it would be buying Citigroup's Japanese retail banking business for about 40 billion yen ($333 million) on Thursday. South Korea's Kospi index edged up to a two-and-half-week high, after being shut on Thursday for the Christmas holiday, while the junior Kosdaq index lost early gains to slip 0.3 percent. Energy plays threw away early gains despite oil prices moving up in Asian trade after news that a rocket hit a storage tank at Libya's biggest oil port. S-Oil and SK Innovation lost 0.2 and 0.3 percent each. China's Shanghai Composite index jumped nearly 3 percent on Friday, with brokerages leading gains after authorities further eased liquidity conditions for banks. A local media report said that the

Chinese central bank is planning to include inter-bank lending by non-bank financial institutions as a part of the calculated deposit base. Hence, Citic Securities rose the maximum allowable of 10 percent while Haitong Securities and Founder Securities piled on 9.9 percent each. The stock market in Hong Kong is closed for Christmas and will reopen for trade on December 29. In Southeast Asia, Malaysia's benchmark FTSE KLCI index surged to a two-week high on the back of rallying banking shares. Among gainers, Hong Leong Financial Group bolstered 2.2 percent. Underperforming the region, Singapore's eased 0.1 percent while Thailand's SET index fell 0.5 percent ahead of the central bank's latest economic review.

DOMESTIC MARKET

Stocks Last Close Change Volume SOLIDERE A 11.31 11.31 0.00 0 SOLIDERE B 11.38 11.38 0.00 0 SOLIDERE GDR 11.4 11.4 0.00 0 HOLCIM 16.21 16.21 0.00 0 BLOM GDR 9.94 10 0.06 1770 BLOM BANK 8.8 8.8 0.00 34000 AUDI GDR 6.22 6.22 0.00 0 AUDI 6.05 6.05 0.00 0 BYBLOS GDR 76.5 76.5 0.00 0 BYBLOS BANK 1.6 1.6 0.00 0

FOREIGN EXCHANGE

FX Spot NY Closing EUR 1.2208 1.2225 GBP 1.5561 1.5559 AUD 0.8124 0.8119 JPY 120.29 120.10 CHF 0.9848 0.9838 CAD 1.1613 1.1624 AMD 468.0000 467.2500 RUB 51.7505 52.0224 Commodities Spot Closing GOLD 1186.24 1174.01 SILVER 16.0505 15.72 CRUDE OIL 55.92 55.84

Market Summary

Commodities

Brent holds above $60, but heads for 5th weekly drop Brent crude futures held above $60 a barrel as strong U.S. economic data supported the market, but oil prices were track for their fifth straight weekly decline as a building supply glut capped gains. On the supply side, data suggested an increasing glut as U.S. data showed crude inventories unexpectedly rose by 7.3 million barrels last week to their highest December level on record. Front-month Brent crude prices were trading at $60.50 at 0319 GMT, up 26 cents, while U.S. WTI's front-month contract was up 32 cents at $56.16 a barrel in thin trading as many countries were still on Christmas holiday. Uncertainty around whether Brent can hold above $60 or not and lower liquidity toward the end of the year meant that price has risen to levels this month last seen in 2012. Brent is down more than a percent for the week, while U.S. crude was heading for a smaller 0.7 percent drop.

Gold inches up in thin trade, eyes 2nd straight weekly drop Gold gained 1 percent in thin post-Christmas trading on Friday as the dollar slipped against a basket of major currencies, but the metal was headed for a second straight weekly drop, underscoring the bearishness in the market. Spot gold gained 1 percent to $1,184.81 an ounce by 0341 GMT, moving away from a three-week low of $1,170.17 hit earlier in the week. Liquidity was thin as key markets in the region such as Australia, Hong Kong and Singapore were closed on Friday. The U.K. market will remain closed, although New York will be open. The dollar index was 0.2 percent lower after climbing to a near nine-year peak earlier this week. Strong data decreases gold's appeal as a safe-haven asset and increases expectations of an interest rate hike in the United States. Higher dollar makes gold more expensive for holders of other currencies. An increase in rates is also seen to dull demand for non-interest-bearing bullion. Among other precious metals, silver was on track for a second straight weekly decline, while palladium and platinum were headed for weekly gains.

FX

Dollar edges back vs yen as markets slowly get back into gear

The dollar edged up against the yen on Friday on light bargain hunting following two sessions of losses, with markets slowly getting into gear after the Christmas holiday. Market participants expected it would still take a bit of time for business to resume in full swing, with key markets in the region such Australia, Hong Kong and Singapore closed on Friday. The U.K. market will remain closed on Friday although New York will be open. After a dip to 120.005 yen, the dollar was up 0.2 percent at 120.350 yen, crawling back towards the week's high of 120.800 hit on Tuesday. A break above that peak would put the greenback in sight of a 7-1/2 year high of 121.860 scaled earlier in the month. The euro dipped 0.1 percent to $1.2209, edging back towards a 28-month trough of $1.2165 reached on Tuesday in light of robust U.S. GDP data that further boosted prospects for the world's largest economy. Recently upbeat U.S. economic data has provided evidence that the economy is steadily recovering, and heightened expectations that the U.S. Federal Reserve is on track to eventually hike interest rates in 2015. That outlook is in sharp contrast to Japan and Europe, where monetary policy is expected to remain loose to stimulate growth and ward off deflation. Data released on Friday highlighted some of the struggle the Bank

of Japan faces. The year-on-year rise in Japan's core consumer prices slowed to 2.7 percent in November from 2.9 percent in October amid the recent decline in crude oil prices.

Technical FX

EURUSD The Euro dropped for a fifth consecutive day against the US Dollar, setting a new 28-month low against the US Dollar. A daily close below the 61.8% Fibonacci expansion at 1.2173 exposes the 76.4% level at 1.2080. GBP/USD The British Pound is attempting to break downward out of a familiar consolidation range to expose a path toward the 1.54 figure. A daily close below channel support at 1.5505 exposes the 38.2% Fibonacci retracement at 1.5409. USD/JPY The US Dollar rose for a fifth consecutive day against the Japanese Yen, with prices on pace to challenge December’s high. A daily close above the 38.2% Fibonacci expansion at 121.91 exposes the 50% level at 123.88. AUD/USD The Australian Dollar may be readying to bounce against its US namesake as negative RSI divergence points to ebbing downside momentum. A daily close above channel top resistance at 0.8126 exposes the December 18 high at 0.8202. USD/CHF The US Dollar looks set to probe above the 0.99 figure after extending to a new 28-month high against the Swiss Franc. A daily close above the 76.4% Fibonacci expansion at 0.9902 exposes the 100% level at 1.0010. USD/CAD The US Dollar is consolidation mode after testing the boundary of the advance played out since late November against its Canadian counterpart. A daily close above the 14.6% Fibonacci retracement at 1.1630 exposes the 23.6% level at 1.1673. EUR/GBP The Euro stalled after mounting a tepid bounce against the British Pound, with the path of least resistance still seemingly favoring the downside. A daily close below the 38.2% Fibonacci expansion at 0.7803 exposes the September 30 low at 0.7765. EUR/JPY The Euro is treading water against the Japanese Yen having found support above the 145.00 figure. Near-term resistance is at 147.23, the 14.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 23.6% level at 148.64.

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