European Closing Thoughts: Our thoughts Go to Our US followers.

First of all let me say few words for all our US followers:

We all hope that you and your families are safe and you will be able to return to normal as soon as possible. 77SigmaTrading is with you and your families.

Back to our business: US data were unable to send market back into the green but at least they were off from the lows. The reason is that recent run of disappointing corporate reports cast a shadow over the economic outlook although buoyant macroeconomic data.

US index futures were down around 0.3 to 0.6 percent in line with their European counterparts as renewed political risks weighted over Italy and Spain.

The Stoxx50 closed the session 0.69% lower to 2,478.85, the German Dax fell 0.40% to 7,203.16, in Souther Europe the Spanish Ibex traded  0.60% lower to 7,728.60 while the Italian Ftsemib led losers falling 1.51% to 15,349.12.

The common currency slipped versus the greenback trading 0.34% lower to 1.2895$ as international lenders are refusing to make any further concession to the Greek government over new labor lows, putting the deal to release the bailout funds on the sideline. Although all eyes today were for Mr Berlusconi who threatened to bring down Mr Monti government,  putting Italy and its unstable political situation under the spotlight.

Reason why Italian 10-year government bond yields rose 11.2 bps to 5.015, underperforming their  Spanish counterparts, where yields were 6.4 bps higher to 5.656 percent.

The dollar move sent Gold lower, the yellow metal traded 0.13% lower to 1,709.60$ an ounce while the Oil (WTI) suffered from the closure of big refineries along the east cost of the US due to the Hurricane Sandy, losing 1.13% to 85.26$ a barrel.

While we are writing the following note came from the NYSE Euronext: U.S. stock exchanges will remain closed on Tuesday while Hurricane Sandy hits the East Coast. The closure will be in coordination with all U.S. equities, bonds, options and derivatives markets, the company said in a release. The intention is to reopen on Wednesday, conditions permitting.

Without the American lighthouse, will European markets be able to find any support?

The reason is that if you look through markets you will see that in the past few weeks European upside moves were all sparkled from the outside ie. Asia or US. The only support can now come from the Bank of Japan, expected to ease on Tuesday; by the way it will be the first time the central bank will act for two consecutive months since 2003, if it does so. Hopes for further easing have kept the Nikkei afloat the past few weeks, therefore it will be really important to study the market reaction tonight, we know already where the odds are.

It will be a long night for us.

Have a great evening.

Originally posted at www.77sigmatrading.com