World Market Pulse's  Instablog

The heightened risk in Eastern Asia amid the Korean uncertainty is driving a surge in U.S. Treasuries as a safe haven for investors. Most investors in search of safety and putting geopolitical risk alongside Europe's debt crisis are playing it safe to the year-end. As the dollar continued to appreciate on its safe-haven appeal, the euro has continued its fall, as it breached below 1.30 yesterday to a fresh 10-week low at 1.2968 as peripheral bond yields push higher amid strong speculation of other possible bailouts for Portugal and Spain. Adding to the European woes, ratings agency S&P has put Portugal’s credit rating under review overnight for a possible downgrade.

ECB Meeting: For the euro to stabilize, these credit yields need to stabilize which is dependent on the actions from the ECB. The ECB’s meeting on Thursday will be crucial in adding stability to the euro as investors will be looking for comments on how the bank could help address growing hysteria in the credit markets.

Meanwhile the Eurozone’s Unemployment rate come in expectedly and unchanged at 10.1% for October while U.S. Consumer Confidence for November improved to 54.1 (exp. 52.6, prev. 50.2, rev. 49.9) helped the US dollar has continued its recent renaissance. The other major currencies however fell in line with the euro as the pound fell to a fresh 10-week low at 1.5486 while the riskier AUD also eased to a 2-month low at 0.9545. Meanwhile, the CAD also fell to a 1-month low at 1.0286 while the yen recuperated from yesterday’s 2-month lows of 84.40 back to the 83.50’s.

Trends: According to analysts at Societe Generale, Cross Asset Research group, the net short USD positioning of speculators may still have some way to go before it is exhausted, but as solid data dominates, investors should switch back into being keener to extend net longs in the high yield FX rather than continue to chase USD positioning into net long territory.


ETF Investment Options for the U.S. dollar include:

PowerShares DB USD Index (UDN): The index is a rules-based index composed solely of short USDX futures contracts. The USDX futures contract is designed to replicate the performance of being short the U.S. dollar against the following currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

Expense Ratio: 0.40%

PowerShares DB USD Index Bullish (UUP): The index is a rules-based index composed solely of long USDX futures contracts. The USDX futures contract is designed to replicate the performance of being long the U.S. dollar against the following currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

Expense Ratio: 0.50%



Disclosure: No Positions

Shares of Nasdaq listed Amarin Corp. (AMRN) skyrocketed nearly 67 % after its closely watched heart pill AMR101 (the company’s only medicine in late-stage trials) hit targets in a pivotal clinical study, giving the Ireland based pharma company enough ammunition to take on GlaxoSmithKline's popular Lovaza, considered to be the most popular and effective therapy of late For patients with hypertriglyceridemia, a dangerous condition characterized by a triglyceride level over 500 mg/dL.

It was obviously a make-or-break day for Amarin Corp. plc (AMRN) while it was reporting the top-line results of it fat-lowering AMR101, an omega-3 fatty acid-based drug, which is a semi-synthetic, ultra pure (>96%) ethyl ester of eicosapentaenoic acid (ethyl-EPA).

GlaxoSmithKline's (GSK) sales of Lovaza which has witnessed a sales hike of 31 percent to 450 million pounds ($702 million) in 2009 is still a frontrunner and is expected to sell around $1 billion by 2011, but these results of the latest III study, involving 229 patients, on a 4 gram dose of AMR101 experienced a 33 percent decrease in blood triglyceride levels after 12 weeks compared with patients given a placebo, Amarin. Pharams experts feel that the absence of DHA confers distinct advantages to Amarin in the quest to lower high triglycerides that can give the medicine a distinct advantage over its more popular rival.

Amarin Vs Lovaza: According to Amarin, AMR101 is different from GlaxoSmithKline's Lovaza in that Lovaza contains ethyl esters of EPA and DHA while AMR101 contains ethyl ester of only EPA. DHA is known to elevate LDL cholesterol (bad cholesterol) levels. Therefore, AMR101, which is devoid of DHA, may not have the LDL effect. The daily dose of Lovaza is 4 grams (or 4 capsules) per day for patients with severe elevations of triglycerides of 500 mg/dl or above, while the daily dose of AMR101 is likely to be only half that of Lovaza.

Although GSK declined the opportunity to make any public statement, citing company policy not to comment on products that are not yet at market. The positive phase III data could not have come at a better time as in 2009, Dublin-based Amarin's net loss had widened to $59.3 million or $1.40 per share from $20 million or $0.91 per share in 2008. The last time the company reported revenue was in 2006 and it was $500,000 for that year. Meanwhile Shares of Mystic, Conn.-based Amarin (NASDAQ:AMRN) closed at $5.85, a gain of $2.30, or 64.8 percent Monday. The positive news has prompted the company to bring forward plans to file AMR101 for U.S. regulatory approval to 2011 that it had previously indicated to file in 2012.


Global Pharmaceutical Sales 2011: According to an annual forecast by IMS Health, global pharmaceutical sales are expected to increase by 5 to 7 percent to as much as $890 billion in 2011, while the China market is seen growing at a torrid pace.

The U.S. however is likely to remain by far the world's largest market, with sales forecast to reach $320 billion to $330 billion in 2011. But that represents growth of just 3 to 5 percent. The top five European markets of Germany, France, Italy, Spain and Britain will collectively grow at an even more anemic pace of 1 to 3 percent to $135 billion to $145 billion, as government pricing pressures limit growth.


Disclosure: No Positions

In what is seen as a positive development in the Shipping world after month's of stormy weather, Shipping and oil group AP Moeller-Maersk (AMKAF.PK) hiked its 2010 profit forecast to around $5bn as it posted forecast-beating profits for nine months, driven by cost cuts and higher freight rates and oil prices while the company's port operating arm is considering several acquisition opportunities in Asia and emerging nations as the shipping industry finally recovers from its long crisis period.

According to a Bloomberg report , A.P. Moeller-Maersk's container-terminal arm may invest in rail, truck or barge operators in China and India as Asian trade growth outpaces demand in the U.S. and Europe. APM, one of the world's top 4 port operators, has prioritized China, India and Vietnam as the three main countries to expand its business. Last year, APM Terminals handled 12.3 percent of all cargo going through container shipping ports. APM currently the third-largest unit in the Maersk conglomerate after Maresk Line, the world's largest container shipping company, and the petroleum unit Maersk Oil.   

Moller-Maersk Quarter Result Highlights: Net profit at the group, which owns the world’s biggest container shipping company Maersk Line, totaled 23.8bn Danish crowns ($4.4bn) in January-September against losses of 3.9bn in the same period last year. The result beat an average expectation of a profit of 21.4bn crowns in a Reuters poll of analysts whose estimates ranged from 19.9bn to 22.9bn. Average freight rates, including bunker surcharges, were up 34% in the nine months to end-September from the same period last year, and volumes 7% higher, Maersk said.

Earlier, Moller-Maersk, Denmark’s biggest company sold bonds for the first time last year and held the biggest share sale in its 106-year history. The company lifted its 2010 profit forecast last week for the third time in four months as freight rates and trade volumes recover.

Container Growth: Moller-Maersk, the Company that operates more than 50 terminals in 34 countries increased the number of containers it handled in the first nine months of this year by 3 percent to 23.5 million 20- foot boxes. The container industry, a key indicator of world economic growth, was considered in a much healthier state than the oil tanker and dry bulk markets, which were plagued by oversupplies of vessels and limited demand. Demand for container port handling was expected to increase by 7 percent in 2015 in emerging markets, surpassing the 2 percent increase seen in developed countries. 

Asia-U.S. shipping volumes have surged in the past two quarters and may rise from 6 percent to 9 percent next year, the group said, as the economic pick-up stokes U.S. demand for Chinese-made furniture, toys and clothing. The shipping lines plan to seek higher rates after the global recession hammered trade demand, causing industry wide losses.

Testimony of the reviving cargo demand, A.P. Moeller Maersk, the world’s largest container line, and 14 other shipping companies have agreed to seek rate increases of $400 per 40-foot box on Asia-U.S. west coast routes next year as the rebounding global economy revives cargo demand.


Disclosure: No Positions