By FX Empire.com
Demand on higher assets was boosted today following a report suggesting the IMF is preparing a rescue plan for Italy worth 600 billion euros. Although this report was later dismissed by the IMF, some concerns over the outlook of the European debt crisis were eased.
As sentiment was boosted today, the safe haven USD fell below the 79.00 level, trading as of this writing around the 78.80, especially after the strong U.S. retail sales over the Thanksgiving weekend supported confidence, since this could boost demand on commodities and exports worldwide.
Without measures to stabilize conditions in Europe over the short term, Moody’s threatened to downgrade the entire euro region’s sovereign ratings, adding to pressures on policy makers to adopt rapid and concrete solutions to ease the euro zone debt crisis and restore confidence.
Despite today’s rally, markets are believed to remain under pressure ahead of the EU finance ministers meeting on Tuesday and the European Union summit on December 9. Disappointment was felt today after a report indicating the Feds gave secret loans to troubled banks that reached an estimated $13 billion.
Stocks in Asia rose today with the MSCI Asia Pacific Index gaining 2% at 16:02 in Tokyo as demand on higher yielding widened. This helped push the commodities up as well, since the USD was down. Nikkei 225 rose 1.56% while Hans Seng rose by 1.97%.
The European stock markets also opened higher as appetite for risk increased. This helped push the commodities up as well, since the USD was down. FTSE 100 was up as of this writing 2.11%, CAC 40 was up 3.65% while DAX was up 2.99%.
Markets however will keep their cautious as Italy sold today bonds maturing in 2023 at 7.3% yield, while the OECD lowered its economic outlook for global growth for 2011 and 2012, adding that the euro zone is already in a mild recession and the U.S. may follow, which will weaken global trade considerably.
The euro is trading with a bullish momentum around the 1.3380 level despite the disappointing M3 money supply for Oct. release from Europe today. The pound was higher driven by the euro since UK lack the fundamentals for today, trading around 1.5585.
The yen was weaker today as demand on safe haven softened trading around 77.65 as of this writing. The AUD was stronger as well trading around 0.9935. Commodities gained today as the dollar is weaker, where oil is trading around the $99.90 level, while gold is trading around the $1714.60 level.
Germany will release later toady its Gfk consumer confidence for Dec. expected to fall to 5.1 from the previous 5.3, as well as the preliminary reading for November’s CPI. The US will release later today its new home sales for Oct. expected fall to 0.0% from the previous 5.7%.
Originally posted here
