European Closing Thoughts 04/07/12

In a trading day dominated by the slow motion, European Indexes closed slightly lower, Stoxx50 closed at 2,312.41 or -0.35%, German Dax fell -0.20% to 6,564.80, Ftsemib and Ibex suffered the most, with the Italian index close at 14,381.20 or -0.78%, and the Spanish benchmark at 7,168.50 or -0.71%.

The news came from the cross Eur/$, it cleared the 1.2600$ mark  during the Asian session, to plunge to 1.2518$ few hours before the European close, the same path has been followed by the Oil (Wti) closing the session at 1,615.30 or -0,40%.

Strong demand for German debt at a bond auction signaled that investors remain worried on the implementation of the measures agreed at the EU-Summit. Germany sold 3.3 billion euros of 5-year government bonds, with a bid to cover 2.7 times at an average yield of 0.52%. The auction led investors to sell Spanish and Italian peers, 10-year Spanish bond yields rose 14 bps to 6.4%, and the Italian rose 12.5 bps to 5.77%.

At this point all the eyes are on tomorrow ECB decision and Friday Non Farm Payrolls, therefore keep your seat belt fastened throughout the flight.

For what it may concern our game plan: we were in a wait and see mode for all the afternoon. We need to preserve ourself for the next few days, we are going to have a lot of fun.

Have a pleasant evening and Happy 4th of July.

Originally posted at www.77sigmatrading.com