Morning Meeting 22/08/12

Good Morning.

Asian stocks retreated from a three month high, after Japan reported a wider than expected trade deficit. The nation's trade deficit was 517.4 billion yen ($6.5 billion) in July as Europe's sovereign-debt crisis and a slowdown in China dragged down exports, data released by the Finance Ministry showed. That compares with a revised 60.3 billion yen surplus in June and the median forecast of a 270 billion yen deficit in a Bloomberg News survey of 28 analysts.

Japan's Nikkei 225 Stock Average fell 0.27% to 9,133.13 knocked down by Japanese exports, reminding investors about the risks the euro zone debt crisis poses to regional economies.  Hong Kong's Hang Seng Index fell 0.78% to  19,948.41, while the Shanghai Composite Index slipped 0.48% to 2,107.92, the drop in Chinese benchmarks, the day after a major Central Bank move, is telling us that the “bomb” is far from being deactivated.

Oil traded in ranges, capped by growth worries but supported by ECB hopes. Brent was up 0.1 percent to $114.77 a barrel and US Crude also inched up 0.1 percent to $96.94.

Spot gold steadied around $1,638.66 an ounce, near a 3-1/2 month high of $1,641.20 touched on Tuesday.

The euro traded at $1.2466, not far from $1.2488 hit on Tuesday, its highest since July 5.

Greece back in the spotlight, almost three years after the European debt crisis came to light in the Hellenic country, it remains at the heart of the turmoil as contagion spreads to Italy and Spain, prompting ECB chief to announce proposals to re-enter the bond market to help lower government borrowing costs.

French President Hollande is due in Berlin tomorrow to discuss the crisis with German Chancellor as the ECB fleshes out its plans. Concessions are possible for Greece if its Prime Minister, Antonis Samaras, shows a willingness to meet the main targets set out in his country's bailout program, a senior lawmaker with Merkel's government said yesterday; how long before we have a public denial?

We don't know if major news will come from the Berlin meeting tomorrow, but what we know for sure is that the FOMC meeting minutes will be carefully read to try to get more hints on what the FED will do and which instruments will it use to spur growth and revitalize the languishing job market.

As the time goes by the delivery time approaches…

Have a pleasant day.

Originally posted at www.77sigmatrading.com