US Market Update: Dow +63 NASDAQ +5 S&P +4

***Economic data***
– (MX) Mexico Feb Industrial Production M/M: -0.4% v +1.4% prior; Y/Y: 5.2% v 5.7%e
– (EU) ECB completed €0.0B (nil) in settlements for its Gov’t bond purchase program; To drain €77.0B in next 7-day Term deposit tender vs €77.0B prior

– US equities are edging higher this morning even with no data releases on the calendar and volume still pretty thin. Plenty of US M&A news is helping to keep sentiment relatively positive. Note that for the first time in seven years, China reported a quarterly trade deficit as imports soared to an all-time high in Q1. Front-month crude has come off earlier highs, moving down a buck to trade around $112.23. Gadhafi had appeared to accept a cease-fire plan with rebel forces earlier, although government forces are still shelling Misrata. Treasury prices are marginally lower while the 10-year yield remains just below 3.6%. Keep in mind that Alcoa kicks off Spring earnings season today after the close.

– Tenet Healthcare launched a lawsuit against Community Health Systems this morning, claiming the rival hospital operator improperly admitted patients to overbill insurers, including Medicare. Shares of CYH plunged more than 30% on the news, triggering three circuit breakers. Shares of THC dropped more than 15%. Level 3 will also assume $1.1 billion debt, bringing the total deal value to about $3 billion. Shares of Shaw Group declined 2% in the premarket after the firm missed earnings and revenue estimates and also cut its FY11 earnings outlook.

– In merger news, Cephalon said it would be open to offers to acquire the company worth more than the $73/shr bid Valeant announced last week. Endo Pharmaceuticals struck a deal to buy medical devices maker American Medical Systems for about $2.6 billion in cash, at $30/shr. The deal is expected to immediately add to Endo’s adj FY11 earnings, and boost FY12 and FY13 earnings. ENDO is up 6% on the deal news. Level 3 Communications said it would buy smaller rival Global Crossing for about $1.9 billion in an all stock deal. Global Crossing shareholders will receive 16 shares of Level 3 common stock for each share of Global Crossing. Shares of Tyco International are up 5% on press reports out overnight that Schneider Electric is mulling a bid for Tyco.

– The price action for the greenback was quiet in the early part of the New York session, primarily driven by moves in other crosses, especially EUR/GBP, which was approaching the key 0.8800 level. EUR/USD was steady at 1.4435, about 40 pips lower from the Asia open.

***Looking Ahead***
– 11:00 (US) Fed to Purchase $6.5-8.5B in Notes/Bonds
– 11:30 (US) Treasury to sell $32B in 3-Month and $30B in 6-Month Bills
– 11:30 (EU) ECB’s Weber Speaks in Bochum, Germany
– 12:15 (US) Fed’s Yellen Speaks to Economic Club of New York

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April 11th, 2011 in Forex News

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