MidSession Review: Spanish Dilemma still un-solved.

The introduction of an euro-area banking regulator by the end of next year was not enough to keep equity markets afloat, at least this is what it seems looking to the market: the Stoxx50 fell 0.91% to 2,550.66, the German Dax fell o.54% to 7,397.35 in Southern Europe Spain led losers falling 1.63% to 7,967.90 and the Italian Ftsemib followed the same path trading 1.53% lower to 15,938.12.

Although equity benchmarks were pointing south at midday, benchmark bond yields were lower in Southern Europe respectively 5.319 for the Spanish 10-year or 0.06% lower and 4.768 or flat for the Italian equal maturity benchmark. It's worth to highlight that this week both Spain and Italy have seen their yields coming down around half a percentage point as both countries have seen dramatically stronger bond sales.

But the Spanish Dilemma is still un-resolved, and this is making investors booking their profits in the banking sector after recent gains: in Frankfurt Deutsche Bank AG   lost 2.2%, while Commerzbank AG  slipped 2%, In London, shares of Barclays PLC   gave up 1.4%, while Lloyds Banking Group PLC    dropped 1.8%, after J.P. Morgan Cazenove downgraded its rating to underweight from neutral, and Royal Bank of Scotland Group PLC   lost 0.7%. In Paris, Société Générale SA  fell 1% and Credit Agricole SA  shed 0.6%. Talking about Spain, Bankia led lenders lower falling 6.9%, Banco Popular Espanol fell 3.5 percent. In Milan, Unicredit SPA led the banking sector lower falling 2.85%.

In the currency markets, the common currency traded at $1.3047 or 0.15% lower versus the greenback, while the Dollar lost some ground versus the yen, trading 0.16% lower to 79.15. The Australian dollar was steady at $1.0365, off a three-week high of $1.0415 hit on Thursday.

Gold fell to $1,734.80, heading for its second successive weekly decline. Copper for December delivery  lost 3 cents to settle at $3.71 a pound. December silver  shed 23 cents, or 0.7%, to $32.64 an ounce.

Oil prices held above $112 a barrel, but were set for their third weekly fall in five weeks as Oil and other commodities priced in dollars tend to weaken when the dollar gains, as they become more expensive for holders of other currencies.

In US, the earning season is not over yet, GE reported a third-quarter profit of $3.49 billion, or 33 cents a share, up from $3.22 billion, or 22 cents, earned in the same period a year earlier. Quarterly revenue of $36.35 billion missed Wall Street's consensus expectations, however, and infrastructure orders fell. GE's operating earnings for the latest quarter amounted to 36 cents a share, the results showed.

McDonald will be under the spotlight as the company is projected to announce third-quarter earnings of $1.47 a share, up 2% from a year earlier. Analysts are, for the most part, cautious on McDonald's outlook.

It's now time to get ready for the US opening bell, with the week almost over our first objective should be to preserve what we have done before taking un-necessary risk remember we are traders and we eat only what we hunt.

Originally posted at www.77sigmatrading.com