MidSession Review: Waiting for the American lighthouse

European shares were negative during the morning session as traders worry about the negotiations outcome between the US president and Congressional leaders due to begin later in the day.

The Stoxx50 traded 0.13% lower to 2,458.56, the German Dax fell 0.19% to 7,029.78, in Southern Europe the Spanish Ibex fell 0.33% to 7,670 while the Italian Ftsemib fell 0.99% to 15,012.27.

European benchmarks were pressured by concerns about  a “row” between the Euro zone politicians and the IMF over how to cut Greece's giant debt pile. Anxiety sent the common currency 0.31% lower versus the greenback to 1.2738$, elsewhere in the currency markets, the Japanese yen steadied at around 81$ as investors are getting ready to the money rain that will flood the country after the elections.

As we said in our Morning Meeting the attention today is on Washington and the progress in talks to resolve the so called “fiscal cliff” facing the US government at year end.

Worries about the growth and the fiscal cliff dominated the commodity markets where WTI fell 0.13% to 85.34. The yellow metal was pressured by the rising dollar falling 0.27% to 1,709.20$ an ounce, as safe heaven seekers favor the dollar and the US treasuries although our question is: with the fiscal cliff and debt ceiling pending does the US still merit the “safe haven” status?

Later in the day the Federal Reserve may show U.S. industrial production cooled in October. Output at manufacturers, mines and utilities rose 0.2 percent after a 0.4 percent increase in September, according to the median economist forecast in a Bloomberg survey. The Fed releases the report at 2:15 PM GMT today.

Originally posted at www.77sigmatrading.com