Matching up expectations

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A record 247 million Americans shopped on foot and online during the long Thanksgiving weekend, up 9% from the same period last year according to the National Retail Federation. The news boosted prospects for Asian exporters, which kept regional benchmarks afloat although worries about the Spanish vote and the implications for Madrid's push for fiscal austerity weighted.

On Sunday, separatists in the Spanish region of Catalonia won the election but failed to get the “strong push” they needed to bring forward a referendum on independence.  Catalan President Artur Mas, who called early elections to force a debate on independence, won 50 of the 135 seats in the regional assembly for his Convergencia i Unio party, down from 62, with 99 percent of the vote counted. The separatist Catalan Republican Left, known as the ERC, more than doubled its seats to 21 from 10. Two smaller parties that also back a plebiscite secured 16 seats. The win has the power to sparkle political uncertainty forcing the Spanish Government to delay seeking aid further.

The Spanish vote helped the common currency slip 0.12% versus the greenback to 1.2956$, pulling back from a three week high of $1.2991 reached on Friday.

On the other side, expectations that an agreement will be reached later in the day to disburse aid for Greece have brought the balance of power on the “long” side. Finance chiefs from the 17-member single currency return to Brussels today, less than a week after an all-night meeting failed to yield agreement and days after a European Union summit broke up without a proposed seven-year budget. At stake at the euro meeting is the continuation of a three-year mission to return Greece to financial health.

South Korea's Kospi rose 0.60% to 1,911.02, Hong Kong's Hang Seng rose 0.69% to 21,893.75 while the Shanghai Composite Index inched 0.04% lower to 2,026.85. Still, today's top performer is the Nikkei which rose 0.77% to  9,438.49 although the dollar fell 0.10% versus the Yen to 82.28 after having close the week 1.3% higher against the Japanese currency bringing gains so far in November to 3.3%. The support came from the Bank of Japan which just ahead of the opening bell, released the minutes of its Oct 30 policy meeting, at which it decided to expand its asset buying program, where the language used pointed towards further aggressive monetary easing.

The news had no effect on the commodities market, where Gold traded 0.06% lower at 1,750.40$ an ounce and Oil (WTI) fell 0.25% to 88.06$ a barrel as a cease-fire between Israel and Hamas held steady and Egyptian President Mohamed Mursi prepared to meet with the nation's judiciary after protests against his new powers.

As we said in previous posts, there were any doubt on the ability to reach the agreement, our problem was the “when”.  If it will not be today than when?  How much time investors are willing to grant to European politicians to have the agreement signed up?

Expectations drove the broader Stoxx50 here at 2,557.03, will the meeting outcome match up these market level?

Have a great one.

 

 

Originally posted at www.77sigmatrading.com

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