MidSession Review: Buying Time

Concerns about futures delay in aid payment to Greece pressured equity markets during the morning session in Europe, but benchmarks were off from daily lows as we wrote, thanks to the following headlines:

*GERMANY FAVORS DISBURSING EU44 BLN IN ONE GO TO GREECE: BILD
*GERMANY PLANS TO BUNDLE THREE EXISTING PAYMENTS TO GREECE: BILD

If headlines are confirmed, this is what Greece wants, given that is the total money it was supposed to get in 2012.

At 12.30 GMT this is the market picture: the Stoxx50 fell 0.10% to 2,471.05, the German Dax traded 0.55% lower to 7,129.05. In Southern Europe the Ftsemib rose 0.43% to 15,186.05 while the Spanish Ibex led gainers rising 0.57% to 7,611.20.

Early in the day a report from the Zew Center for European Economic Research showed that a measure of investor confidence in Germany declined this month, the index fell to minus 15.7  in November from minus 11.5 in October.

As soon as the headlines crushed the tape the euro rose from a two month low against the US dollar, erasing a decline against the yen and paring its drop versus the Swiss franc. The euro climbed 0.1 percent to $1.2718 , after falling to $1.2666, the weakest level since Sept. 7. It climbed 0.1 percent to 101.16 yen. Japan's currency was little changed at 79.55 per dollar. Switzerland's franc was little changed at 1.2049 per euro, after appreciating to 1.2045, the strongest level since Sept. 12.

Commodity wise, the yellow metal fell 0.12% to 1,728$ an ounce as a stronger dollar pressured dollar denominated assets. Among other metals silver extended losses from Monday's session with the December contract  giving up 21 cents, or 0.65%, to $32.31 an ounce.  Platinum for January delivery traded up $13, or 0.83%, to $1,579 an ounce. December palladium  added $3.80, or 0.62%, to near $612 an ounce.

Oil(WTI) fell 0.23% to 85.37$ a barrel as uncertainty linked to the US fiscal cliff and the European debt crisis weighted on future growth prospectus.

At this point the question we need to answer is: Is this enough to solve the Greek problem? I do not think so, but for sure it will buy time.

While all eyes are on Greece, Spain's 10-year yield increased six basis points to 5.95 percent, after reaching 5.96 percent, the highest since Oct. 1. The nation's two year rate climbed six basis points to 3.28 percent, after rising to 3.29 percent, the most since Oct. 12. At this point this divergence between equity benchmark and country's bonds yield need to be studied carefully because as in the past it represents a ring allarm bell.

Originally posted at www.77sigmatrading.com