We can surely start to see the holiday trading theme evident with the start of this week as markets prepare for the end of the year holidays and many traders have taken the sidelines awaiting the start of the year on hope for more clarity in the market.
The start of the day was surely volatile and driven by haven demand and refuge in the dollar after the announced death of North Korea’s leader Kim Jong-il which triggered a wave of panic in Asia this morning on fear over the outlook for the Korean Peninsula and increased risk of economic and political instability.
With the lack of major economic releases the market was rather confined and trading was more to the calm side opposed to what we are accustomed to in the past period. U.S. markets opened with gains as the DJIA is trading higher as of 10:41 EST by 0.37% at 11910.13 and S&P is trading around 1222.37 higher by 0.22%, while the NASDAQ was trading 0.46% higher at 2566.95.
Gains returned after early losses in the session as EU finance ministers are set to discuss the outcome of the EU summit and draw on the pledge to provide the IMF with more funding to contain the crisis and discuss deeper fiscal integration which is still awaited for any comments with caution indeed.
European stocks also turned higher in a very cautious session with the STOXX 50 higher by 0.65% at 2216.99 and the French CAC 40 recovering from the downside pressure of Fitch’s move to downgrade the outlook for France to negative as the conditions for the nation worsen where the index is trading higher by 0.59% at 2989.92. The German DAX also traded higher by 0.37% at 5723.20.
The market remains mixed and fragile with the end of the year while the dollar cut back on its early gains as the fears eased. Where the USDIX is higher slightly at 80.17 from the opening 80.20 down from earlier highs in the session set at 80.49.
We still expect more volatile and choppy trading for the rest of the day yet marginally no major moves or heavy surprises might be seen as it is clear that the market is embracing early for the holiday mode.
Originally posted here
