Morning Meeting 19/07/12

July 19, 2012 1:18 AM

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Good Morning.

The Beige Book was not “Red” enough to sustain an immediate intervention, at least this is the impression that we had reading at Bloomberg headlines:

*FED SAW WEAKER U.S. MANUFACTURING, RETAIL SPENDING LAST MONTH
*FED SAYS LOAN DEMAND `GREW MODESTLY' IN MOST DISTRICTS
*FED SAYS MANUFACTURING EXPANDED `SLOWLY' IN MOST DISTRICTS
*FED: HOUSING MARKET REPORTS `LARGELY POSITIVE'
*FED SAYS DISTRICTS' BUSINESS CONTACTS `CAUTIOUSLY OPTIMISTIC'

Speculation that China will do more to boost growth and Techs advance led Asian benchmarks at three weeks higher.

Nikkei gained 1.03% to 8,816.35, the Hang Seng was up 1.60% to 19,547.33, Chinese CSI 300 was up 1% to 2,438.37.The Chinese swap is signaling a further reduction in banks' reserve ratio requirement, a move that is supporting expectations for more easing ahead. Technology firms advanced following the path of their US peers fueling the rally in Asian benchmarks.

Oil (Wti) was up 0.51% to 90.22$, Gold up 0.42% to 1,577.40$, the Eur/$ cross flat at 1.2288$ up form its overnight low of 1.2216$, which came after German Chancellor Angel Merkel raised fears that a solution to Europe's debt crisis was not yet in sight.

Today, it's the Bonos day in Europe at 10.00 AM GMT all eyes will be on Spanish debt auction, at previous bonds sale the 2-year Bonos average yield was 4.706%, while the 5-year average yield was 6.072%. Meanwhile the French government will auction 3/4 Year BTAN, previous average yields were respectively 0.83% and 1.05%. Many investors are waiting to measure the temperature of the EU Crisis.

They will try to find the answer to the following question looking at the auctions outcome: Will the Spanish Government be forced to ask for a full bailout?

In US, it's Jobless Thursday: Initial Jobless Claims are expected at 365k versus previous 350k, Continuing Jobless claims are expected at 3299k versus previous 3304k.

We need to remember that the “tell” the Fed is waiting for to step in will come from the Job market.

Let's find out what this day will bring to us.

Have a nice one.

Originally posted at www.77sigmatrading.com