The Euro continues to lose strength against most of its major counterparts before manufacturing data scheduled for release next week is expected to show declines for the Eurozone as a whole. Yesterday, the main story for the region was the Treasury Bond Auction in Italy failed to inspire much interest and this is doing little to prop up equity markets and the EUR/USD, which is now trading below 1.2950 and the EUR/GBP now seen below 0.84.
In the UK, macro data will come in the form of the Nationwide House Price Index but with holiday themes continuing, there will be no major corporate earnings reports released today. In US equities, S&P 500 futures are pointing to a moderately lower open and most of the trading activity will be guided by the NAPM-Milwaukee Business survey, released during the New York session. Corporate releases are mostly second-tier, with Cano Petroleum Company and Ark Restaurants scheduled to report.
US equity markets did see a great deal of volatility in some sectors, with one of the main stories seen with AMR Corp., which dropped nearly 40 percent during the aftermarket session on news that the New York Stock Exchange plans to delist the company in the first week of 2012. Sears Co. was also slightly lower after a long term credit downgrade from Fitch (from B to CCC).
Yesterday’s macro data out o the US was positive, with Pending Home Sales for November reached the highest level since the middle of 2010. This helped home builder stocks (such as Pulte Group and Lennar Corp.) move higher on optimism that the housing market has found its bottom. European stock futures in both the DAX and CAC are pointed to a mostly unchanged open. Regional trading will be guided today by Retail Sales out of Germany and the corporate earnings of Mistral Media.
Overnight, Japanese releases showed that manufacturing productivity, in the form of the PMI report, which rose to 50.2 in the month of December (up from 49.1 previously). A similar report was released in China, with the number showing an unchanged result at 48.2. South Korean CPI showed a rise of 4.2 percent for December, which was higher than the market consensus and well above the target range for the Bank of Korea (which is suggestive of future interest rate increases).
The USD/CHF is trading at a very key resistance turned support level in the 0.9390 region. The initial upward break here pushed prices above 0.9450 but the current strength in the CHF could see prices back into the lower range. This downside break is supported by the MACD crossing over into negative territory, and a close below Fibonacci support will target the lower end of the previous range.
The FTSE is grinding through moving average resistance en route to a test of the upper end of the daily symmetrical triangle. An upside break here would be a very bullish signal but the key resistance comes in at 5630. A break here signals a reversal in the latest downtrend. A failure targets Fibonacci support at 5300.