Dell Inc., the world’s second-biggest maker of personal computers, topped profit and revenue estimates yesterday after slashing costs by contracting out production. Dell’s second-quarter profit was 28 cents a share, excluding some expenses. Analysts had predicted 22 cents on average.

Overall, the two key near-term bear arguments for the stock—gross margins and cash flow were counteredby the July quarter results.

We continue to believe the PC market will enjoy a solid corporate refresh cycle in 2010, largely due to the rising maintenance costs of legacy PCs. Dell’s heavy corporate exposure positions it well in this respect.

We are raising our fiscal 2010, increasing our October quarter revenue and EPS estimates to $12.99 billion from $12.55 billion. We’re raising our 12-month target price to $19 from $16. We reiterate our buy rating.

During Friday European session, the euro showed firmness against its U.S. and Japanese counterparts as the Euro-zone economic sentiment rose for the fifth consecutive month in August. At the same time, euro showed weakness against the currencies of U.K. and Switzerland.
European stocks rose early morning in Europe Friday after two days of losses, led higher by commodity and banking stocks.
At 4:37 am ET, the FTSEurofirst 300 .FTEU3 index of top European shares grew by 1.2% at 980.46 points after falling by 0.5% yesterday. It has gained 5% in August and is on track for a second consecutive month of gains.
The euro, that closed yesterday's trading at 134.19 against the yen rose to a 2-day high of 135.04 in early deals on Friday. The next upside target level for EUR/JPY pair is seen at 135.9.
The euro climbed to 1.4378 against the dollar in early Asian deals on Friday. Although the euro weakened in the latter part of the session, it rebounded after hitting a low of 1.4327 at 3:40 am ET. As of now, the euro-dollar pair is worth 1.4367, up from Thursday's close of 1.4346. The near term resistance for the pair is seen around the 1.441 level.
On the other hand the single currency weakened versus its European counterparts, pound and franc.
At 4:30 am ET Friday, the euro touched 0.8788 against the pound, falling from Thursday's close of 0.8817. On the downside, 0.876 is seen as the next target level for the European currency.
The euro dropped against the Swiss franc after hitting a high of 1.5222 at 2:40 am ET Friday. Currently, the euro-franc pair is trading at 1.5182, compared to yesterday's close of 1.5193. If the pair weakens further, it may target the 1.5166 level.

New Zealand’s Trade Balance deficit narrowed to –NZ$2.5 billion in July from –NZ$3.1 billion in the preceding month as imports fell by a whopping -20.9% from a year before, easily overwhelming a -7.3% decline in exports. The reading is likely a reflection of the impact of rising unemployment on domestic demand: the jobless rate has risen to a nine-year high of 6%, trimming incomes and discouraging consumption. The outcome is all the more ominous considering the local currency has gained 20.1% since the beginning of the year, which would be expected to have helped imports higher by boosting New Zealanders’ purchasing power of foreign goods. More of the same is likely ahead, with economists calling for the unemployment rate to continue higher to hit 7.45% next year.
In Australia, Private Capital Expenditure (a measure of business investment) surprised sharply to the upside, adding 3.3% in the second quarter to trump expectations of a -5.0% decline. The improvement likely came as the government spent 4% of GDP in stimulus to boost the sagging economy amid the global downturn. Similar developments have been readily identified across the world as governments stepped in to replace shrinking private demand, with the real question now being whether the recovery has any staying power once fiscal stimulus reaches its inherent limits.
The Euro drifted slightly lower ahead of the opening bell in Europe, shedding 0.1%. The British Pound also trended lower, giving up 0.2% to the greenback. Technical positioning suggests the US Dollar is carving out a bottom against most major currencies.

Better than expected GDP report was released in early US session but markets' reactions are so far mild. Dollar and yen are generally firm while stocks open nearly flat. Some noticeable strength is seen in commodity currencies together with a rebound in treasury yield as well as gold after the GDP report. However, the rebound is brief as gold quickly falls back to below 950 while crude oil resumes recent fall towards 70 level. After all, more upside in dollar and yen are still in favor in near term.
Preliminary GDP report in US was unexpectedly left unrevised at -1.0% contraction. Markets expected a downward revision to -1.4% annualized rate. In addition, the report showed that corporate profits rose by the biggest rate since Q1 2005 by 5.7%. Initial jobless claims fell to 570k, above expectation of 563k. Continuing claims continued to drop to 6.13M.
Germany Gfk consumer sentiment for Sep improved to 15 month high of 3.7 from revised 3.4 but fell short of expectation of 3.8. Germany prelim CPI rose 0.2% mom in Aug, versus expectation of 0%. Eurozone M3 money supply growth slowed for another month and more than expected to 3.0% yoy. Australia leading indicator rose 0.9% in June. New Zealand trade deficit narrowed to -163M in Jul.

The Euro saw support leading up to the German IFO reading and a brief spike following the release, but has since come under pressure. The business sentiment reading rose for a fifth straight month to 90.5 from 87.3, beating forecasts of 89.0. The expectations component soared to 95.0 from 90.4, with the current outlook showing an improvement to 86.1 from 84.4.
Talking Points• Japanese Yen: Finding Support As Risk Appetite Wanes• Pound: Continues To Trade Lower on Growth Concerns• Euro: German IFO Rises For Fifth Month• US Dollar: Durable Goods, New Home Sales on TapEuro Fails To Hold Onto Gains From Fifth Straight Rise in German IFO, U.S. Durable Goods Ahead The Euro saw support leading up to the German IFO reading and a brief spike following the release, but has since come under pressure. The business sentiment reading rose for a fifth straight month to 90.5 from 87.3, beating forecasts of 89.0. The expectations component soared to 95.0 from 90.4, with the current outlook showing an improvement to 86.1 from 84.4. The sentiment reading is a strong leading indicator for GDP and the consistent improvement provides hope that the 0.3% growth in the second quarter is sustainable. Despite the bullish results, markets remain concerned as ECB officials have started to downplay the data and warn of potential pitfalls for future growth. The prevailing concern is that consumers will not readily return to their prior spending habits and that banks will be reluctant to lend. Indeed, we saw committee member Mersch express those concerns yesterday which added to the warning of a “bumpy recovery” from President Trichet on Monday. Nevertheless, the level of risk appetite continues to follow the improving fundamentals and if the outlook continues to brighten then it should remain a supportive factor for the Euro. The British pound continues to remain under pressure and be more reflective of the existing downside risks to economic growth. The BoE has been far more aggressive in its stance as it has continued to add to its asset purchase program. The MPC is concerned that banks trying to rebuild their balance sheets will hoard cash and continue to tighten lending standards. The GBPUSD is forming a clear head & shoulders formation and a break below the neckline at 1.6300 could lead to an extended move lower. Potential support is at 1.600 but beyond that there is The U.S. dollar is finding a bid tone overnight as we are seeing investors become concerned with the scope of a global recovery and the arguments for a double dip recession growing louder. However, we must keep in mind the bullish reaction following the consumer confidence reading yesterday and watch to see if the greenback is beginning to trade on fundamentals. Today will give us a clue as both Durable goods orders and new home sales are expected to have shown improvement in July. The purchase of long lasting items is forecasted to have risen by 3.0% following a unexpected drop of 2.5% the month prior. Meanwhile, purchases of new construction are expected to continue its improvement by 1.6% adding to the 11.0% gain in June. However, the broader theme of risk aversion may continue to drive bullish dollar sentiment throughout the day.

The British Pound is likely to look past much of the economic calendar to fall in with trends in risk sentiment as the primary driver of directional momentum once again in the week ahead. A trade weighted average of sterling’s value is now 88.1% correlated with the MSCI World Stock Index and 90.3% correlated with the Bloomberg/UBS CMCI Commodity Price Index, suggesting the currency trades largely in tandem with the broad direction of risky assets. Judging the near-term direction of risk sentiment has been a tricky endeavor in recent weeks: an increasing number of voices have started to qualify the rally that began in March as “overdone” given the fragile economic environment, but the bears are clearly still too few to form a dominant enough majority to meaningfully overtake momentum; the resulting tug of war has been superimposed on a backdrop of low summertime liquidity, producing a great deal of volatility with seemly little follow-through. The long-term picture seems to offer more clarity, however: global equities are trading at the highest levels relative to earnings since 2003, which seems more than a little overdone considering the kind of revenue potential that is to be expected in a year when the global economy is set to shrink for the first time in the postwar period; the demand for commodities also looks fragile, with the bulls’ stand-by story of steady Chinese growth challenged (at least for the time being) as the East Asian giant prepares to tighten credit access. On balance, this points to a bearish medium-term bias for risky assets and hints that a reversal of the recent rally will invariably bring the British Pound along for the ride.Turning the economic calendar, a second revision of the second-quarter Gross Domestic Product figure headlines the docket of scheduled UK event risk. Expectations call for a validation of the originally reported 0.8% decline, bringing the annual growth rate to -5.6%, the worst in at least 53 years. Barring an unexpected, meaningful revision in the headline figure or any of the components, the outcome seems likely to be priced into the exchange rate already and is unlikely to cause much of a stir in currency markets. The releases of Augusts’ US Consumer Confidence, July’s Durable Goods Orders, and second quarter GDP figures will also be notable given their potency to drive overall market sentiment. Indeed, traders look to US economic data as a proxy for that of the world at large, expecting a rebound in the leading consumer market to yield positive spillover elsewhere. To that effect, these releases will likely prove market-moving across equity and commodity markets and thereby pull the sterling along as well.

The Sensex went up by 387.92 points on Monday, tracking strong Asian markets that mirrored the performance of the U.S. markets. Good U.S. home sales data and positive comments by the U.S. Federal Reserve Chief Ben Bernanke guided the U.S. stocks upward on Friday.

Dollar pares some of its overnight losses and remains in tight range against most major currencies in Asia today. Near term support levels in most pairs are still holding well for the moment and hence, there is generally no change in the anticipation of another round of dollar rally in near term. But the depth of the pull back is dampening the case the bullish a bottom in the greenback in formed and lowered the confidence on this case. Adding to the mix is the yesterday's sharp decline in treasury yield which gave the Japanese yen additional boost. Markets will look into inflation from US today for inspirations on what's next.

Headline CPI in US should have been flat on monthly basis after a sharp +0.7% gain in June. Declines in gasoline and natural gas priced were offset by increase in prices of food core items. On annual basis, the reading probably dropped -2.1% following a -1.4% decline in the previous month. Core inflation is expected to have moderated further to +1.6% yoy from +1.7%. Apparel cost should have plunged after rising sharply in June. Moreover, rent and owners' equivalent rents probably remained soft. Other data to be watched include finalized reading of Eurozone CPI in July, Canadian manufacturing shipments and US industrial production and U of Michigan consumer sentiment.

Aussie was lifted to a new high against dollar by comments from RBA Governor Stevens. In his parliamentary testimony, Stevens said that at some point, the bank will have to make a response to move away from the current "emergency setting" of "extraordinary measures". Stevens did not dismiss the idea that rates are going to be raised before the end of the year and "normal" rates are significantly higher than the current 3.0%. Nevertheless, the strength of Aussie was apparently limited by another day of decline in Shanghai stocks markets.

Looking at the dollar index, while the fall from 79.39 was deep, we're still favoring that it's a correction only and expects downside to be contained by 78.14 support. Above 78.80 minor resistance will flip intraday bias back to the upside for 79.39 next. As noted before, break of 79.66 resistance will solidify the case that whole fall from March high of 89.62 has completed with five waves down to 77.43 already. However decisive break of 78.14 will dampen this view and indicates that the down trend in dollar index is possibly not over yet.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.8349; (P) 0.8401; (R1) 0.8483;

AUD/USD edges to new high of 0.8476 earlier today and further rally might still be seen with 0.8366 minor support intact. Nevertheless, we still believe upside potential is limited and will continue to look for reversal signal as AUD/USD hits 0.8519 key resistance. On the downside, below 0.8366 minor support will flip intraday bias back to the downside for a test of 0.8179 support next. Break there will indicate that whole rise from 0.7702 has completed and will turn short term outlook bearish.

In the bigger picture, there is no change in the broader view that price actions from 0.6008 are correction to down trend form 0.9849 only. Rise from 0.6284 is the last leg and should be near to completion. Upside is expected to be limited by 0.8382/8519 resistance zone and finally bring reversal. Break of medium term rising trend line (now at 0.8066) will indicate that such correction has completed and further break of 0.7702 support will confirm. However, note that sustained trading above 0.8519 resistance will argue that whole rise from 0.6008 is possibly developing into a new trend and will open up the prospect of a retest on 0.9849 (08 High).

During yesterday's trading, the Dollar dropped against all the major currencies. The Dollar dropped as much as 100 pips at one point against the EUR on Thursday, and saw bearish trends against the Pound and the Yen as well.

The Dollar weakened yesterday as a result of series of negative economic data releases. The U.S Retails Sales unexpectedly dropped by 0.1% in July, failing to reach expectations to rise by 1.8%. The U.S Core Retails Sales dropped by 0.6% in July too. The difference between the two reports is that the core report measures the change in the total value of sales at the retail level, excluding automobiles, due to the high volatility of automobile sales. The fact that both indices showed negative figures proves that American consumers are still cautious regarding their expenses, lacking the confidence that the worst of the recession is behind us

The other important release that helped push down the Dollar on Thursday was the weekly Unemployment Claims report which showed that 558,000 individuals filed for unemployment insurance for the first time during the past week. Both the negative Retails Sales data and the poor employment figures showed that the U.S economy is yet to pull out of recession, and thus the Dollar weakened as the trading day progressed.

Looking ahead to today, the leading data seems to be the Consumer Price Indices (CPI). The CPI measures the change in price of goods and services purchased by consumers, and thus act as a leading inflation gauge. Traders are advised to focus their attention on the Core CPI report, which excludes food and energy prices, as it tends to deliver a more reliable figure. Current forecasts suggest that prices have stayed quite stable during July. It appears that if the actual result will be similar or slightly better, it may correct some of yesterday's losses for the Dollar. However, in case of a worse-than-expected result, the Dollar is likely to continue tumbling.

On Thursday, the spot rupee ended higher at Rs 48.11 per USD as against its previous close of Rs 48.36 per USD.
According to Manis Thanawala, Greenback Forex, the rupee should open firm on the back of strong global cues and weak dollar. The currency market is seen subdued on account of Janmashtami. The range for the day is seen between Rs 47.80-48.20 per dollar.

The pair is in a short term widening range, with bias currently to the upside. A push above 1.4250 would confirm, with a target of 1.4310. 1.4340 and 1.4380 are resistance levels beyond.

A drop below 1.4200 will like test 1.4180. A drop below 1.4170 will need to move through further support in the 1.4160-1.4140 region and if it succeeds will target 1.4120 then 
1.4080 (if needed).

Trend of risk appetite remains intact, although we are seeing a slight pullback today. Yesterday, the S&P closed above 1000 for the first time since the financial crisis began. As expected, the US GDP on Friday and corporate earnings releases (UK banks) had investors rushing into risk correlated assets. US ISM surprised to the upside yesterday, which sent the USD and JPY lower, as good news for the US is still bad news for the USD. The EURUSD posted new 2009 highs and is on course to test its Dec 09 peak near 1.4715/20. The USDCHF is looking to trade below 1.0590, which will be decidedly USD bearish. However, today we are seeing European equity heading south and US futures are pointing to a lower open. Correspondingly, commodities are also coming off their intraday highs as markets brace for a short term correction. After today's short pause in risk correlated asset buying, we expect to continue upwards, which will keep safe haven currencies like the USD and the JPY under pressure. Today's news from Australia should be mid term supportive for the AUD. First was the RBA holding rates steady at 3.00%, as was universally expected. However, the central bank shifted from an easing bias to a neutral tone in the accompanying statement. At this meeting, the RBA removed the statement, "the outlook for inflation allows some scope for further easing of monetary policy." But they also hinted that rates would stay low for an extended period of time stating "....period of sluggish (growth)" and "and growth is likely to firm into 2010." While the markets 30bp of hikes in 2009 seems slightly over optimistic, we expect the bet is not far off. Second was the Australian Treasurer Swan announced that restrictions on foreign investment into Australia will be reduced. The AUD traded higher in the Asian session, but as the core driver in FX is still risk appetite, waning demand of risky assets send the AUD and commodity currencies lower. Today the important news would be the Personal Income and Spending readings from the US where the Income data is expected to decline by 1% (the most since 2005) and the spending levels to rise for the second straight month by 0.3%, although with consumers saving more, a drop in data cannot be ruled out which could bring in a wave of risk aversion.

Recovery signs in the Indian economy have lifted confidence among the foreign investors, as the flows of the foreign investments have surged five times in the April-June quarter, reaching $15 billion.

The preceding quarter of January-March recorded nearly $3 billion, as the data released by RBI revealed direct and portfolio investments flow together rose sharply to $15 billion during April-June quarter. 

 Fueled by the tax reform plans announced by the government and the global cues, the Indian equity market surged by 498.33 points from its previous close. The government has proposed to bring down corporate tax to 25 percent and it also plans to abolish Securities Transaction Tax (STT). Removing levy on the securities is likely to lead to higher volumes as the cost of transactions goes down. 

Cochin Shipyard Limited (CSL) has registered a 70.21 per cent increase in net profit at Rs 160 crore for the year 2008-09 as against Rs 94 crore in the previous year.

The company, for the first time, declared a dividend on equity capital. The total amount of dividend at a rate of 10 per cent works out to Rs 11.32 crore, according to a company release. It also declared a 7 per cent dividend on preference share capital amounting to Rs 11.91 crore. The total dividend outgo of the company including dividend tax amounts to Rs 23.01 crore. Gross income for 2008-09 stood at Rs 1,300 crore as against Rs 967 crore in the previous year.

The yard’s achievement last year includes delivery of four platform supply ships and undertaking of major repairs of Sagar Kiran and Sagar Bhushan of ONGC and INS Viraat of the Indian Navy. The total shipbuilding income for the year was up 69.41 per cent to Rs 986 crore as against Rs 582 crore in the previous year. Ship repair turnover was at Rs 270 crore, an increase of 7.14 per cent, compared with Rs 252 crore in the previous year.

The company’s present order book position consists of 15 platform supply vessels and four anchor handling tugs apart from the Indigenous Aircraft Carrier project.

Cashing in on the Indian currency exchange market, foreign exchange provider Alpari Forex India, a 100 per cent subsidiary of Alpari Forex, United Kingdom, today said the company is hoping to achieve 25 per cent business from their operations in South India.

The company, which started Indian operations in June 2009 will set up 50-100 sub-brokers, as part of increasing their network in Tamil Nadu, Alpari Forex India CEO Pramit Brahmbhatt told reporters here.

"In addition to this, we had planned to appoint 500 'introductory brokers' (IB) within one year," he said.     
Stating that the Indian currency exchanges were enjoying a daily turnover of Rs 8,000 crore, Alpari Forex India Head-Sales Praveen Kumar V said the size of the Indian currency exchanges was poised to grow '3-4 times' in future.     

He said around 200 IBs would be appointed in the Southern region while 300 would be appointed in the Western region.     

He said they would target institutions, retailers and 2,000 individual clients across the region for their operations.     

Alpari Forex India, with its presence in 7 countries and 27 offices worldwide, registered a global turnover of $100 billion last year.

Latest commodity prices (ICE, NYMEX, CME)

Oil (Brent) — $72.26
Gold — $943.93
Silver — $14.24
Platinum — $1,245.95
Palladium — $271.50
Copper — $6,035.00
Aluminum — $1,937.00
Nickel — $19,595.00
Zinc — $1,821.00
Cocoa — $2,824.00
Sugar — $21.63
Corn — $326.25
Soybean — $37.39

The dollar surged against the majors on the Friday session, rallying sharply against the euro from 1.4412 to 1.4156 and pushing the sterling to 1.6655. The catalyst for the steep move was the closely anticipated July jobs data. In sharp contrast to recent market behavior, the greenback’s strength coincided with a rally in the US equity markets. The major bourses were all higher by over 1.6%, with the S&P 500 advancing by 1.75% and the Dow Jones up more than 1.64%. 

The July labor report unexpectedly improved for the first time in 15-months with the unemployment rate defying estimates for an increase to 9.7%, instead declining to 9.4% from 9.5% in June. Non-farm payrolls posted a drastic improvement, revealing a loss of 247k jobs, besting calls for a reading of -320k jobs, versus an upwardly revised June reading of 443k jobs lost. 

The market action today challenges recent trade correlations, rewarding the greenback on improving sentiment that the US economy will be the first to recovery from the global economic recession. Nonetheless, the economic reports remain inconsistent but reinforce the prospects that the deterioration in fundamentals is slowing. The focus will now be on the two-day FOMC monetary policy meeting next week, with traders closely scrutinizing the Fed’s outlook for the economy. 

The rupee today touched a two-month high of 47.44 against the US dollar in early trade on increased capital inflows amid expectations that the local bourses would open on a strong note.

The dollar fell to multi-month lows on Monday on Monday after a handful or reports showed manufacturing overseas was recovering, and a similar report in the U.S. is expected to show the sector is the best it has been since August.

The news, as well as some better earnings reports from banks, has supported equity markets, which has lately spelled trouble for the U.S. currency because investors no longer desire its safe-haven status.

The dollar index (DXY), which tracks the U.S. unit against a trade-weighted basket of six major currencies, was at 77.986, down from 78.329 in late North American trading on Friday.

Earlier, it fell to the lowest in 2009.

The British pound (CUR_GBPUSD) rose more than 2% to buy $1.6828, after touching a nine-month high.

The euro (CUR_EURUSD) changed hands at $1.4314, up from $1.4257 late Friday.

A report at 10 a.m. Eastern time is expected to show the manufacturing sector of the U.S. economy is as good as it has been since August. The Institute for Supply Management's diffusion index is expected to rise to 46.2% in July from 44.8% in June, according to a survey of economists by MarketWatch. Readings under 50 still indicate contraction.

The U.K. manufacturing-purchasing-managers' index unexpectedly grew above the 50 line in July indicating economic expansion for the first time in 15 months, data released on Monday showed.

Euro-zone manufacturing PMI data also showed an improvement, though it still remained below the 50 mark.

Separately, the China CLSA PMI rose to a 12-month high.

"Economic data this morning are adding legs to the perception that the worst of the global downturn is over," said Jane Foley, research director at Forex.com.

One dollar bought 95.02 Japanese yen, up from 94.80 yen on Friday.

Risk aversion propped the dollar higher against the majors in Wednesday trading amid a retreat in the global equity markets – with Shanghai’s Composite Index plummeting by 5% overnight. Commodities also slumped with gold falling to its lowest level in 2-weeks just above the $927 per ounce level and crude oil sliding to below $64 per barrel. The greenback pushed the euro toward the 1.40-figure and the Swiss franc around the 1.09-handle.

US economic reports released this morning saw durable goods orders decline sharply in June, posting a monthly decline of 2.5% versus a downwardly revised increase of 1.3% from May. The excluding transports durable goods orders improved to 1.1% compared with a downwardly revised 0.8% increase a month prior. The Fed’s Beige Book revealed the pace of economic decline had moderated or stabilized at a low level in most districts adding that the manufacturing sector remained subdued but slightly more positive than in the past. The Fed said there was still slack in the labor markets, with most sectors reducing jobs or holding steady and net employment falling.

Meanwhile, NY Fed President Dudley expressed optimism over the economy, saying he expects moderate growth in the second half of this year, albeit considerably slower than in past recoveries. Dudley said “the balance of risks is still tilted toward weakness in growth and employment and not toward higher inflation”, suggesting that the Fed will likely maintain low interest rates for some time to come. Lastly, he said that “if the recovery does, in fact, turn out to be lackluster, the unemployment rate is likely to remain elevated and capacity utilization rates unusually low” in the near-term.