A slight wave of optimism was seen across the broad markets, as Italy’s Prime Minister Mario Monti will unveil today a 30 billion euro package of austerity measures to parliament, boosting confidence ahead of the European Summit later this week.
Investors targeted higher yielding assets as European leaders extend their efforts to solve the debt crisis that threatens the euro unity, where French President Nicolas Sarkozy and German Chancellor Angela Merkel will meet today in Paris to overcome their differences till Friday’s summit.
Confidence is also boosted by the improved outlook for the U.S .economy after the jobs report last week showed unemployment dropped unexpectedly to 8.6%, while the ECB is expected to cut rates this week to help ease the mounting tensions from the debt crisis.
Investors will continue to focus on the new developments from Europe this week, since strong resolutions that would end the debt crisis are more than welcomed. Italy’s austerity program brought gains in Asia and Europe today, where Nikkei 225 ended higher by 0.60%, while DAX rose 0.87% as of this writing.
Today’s’ economic data however was not that cheerful, since in China the services PMI fell to 52.5 in Nov., the weakest growth in three months, confirming that the economy is slowing quickly. In Germany and EU the services PMI also fell below expectations, while in the US the ISM services may rise to 53.8 in Nov.
The euro is trading with bullish momentum around the 1.3444 level as of this writing. The pound gained today after UK reported a better than expected PMI services report, where the currency is trading around 1.5630. The AUD is trading with some bullish momentum too around the 1.0254 level.
As investors felt some appetite for risk, the safe haven USD is weakening, trading around the 78.40 level as of this writing. The Yen is trading around the 77.95 level, while the commodities are almost unchanged, where oil is trading around $101.75 per barrel, while gold is trading around $1744.50 per ounce.