Morning Meeting: Time value of money

Good Morning.

Yesterday's afternoon session in US was centered on Federal Reserve Chairman Ben Bernanke's speech to the Econ Club of New York, whose negative comments on the looming “fiscal cliff” put a damper on gains.

[The Fed] can certainly have a meaningful contribution to supporting recovery, but in the worst case scenario where the economy goes off the broad fiscal cliff, which according to CBO and to our own analysis, the Fed (does not have) tools to  offset that…So it's important for congress to address the fiscal issues soon.

Adding that the so called “fiscal cliff” poses a threat to the economic recovery in way to push the Congress to raise the debt ceiling to avoid a “catastrophic default” on the nation's debt obligations.

Hopes, that Bernanke words will push Congressmen to find a quick solution, were able to keep US markets afloat: the DJIA closed slightly down 0.06% to 12,788.50, the S&P500 rose 0.07% to 1,387.81, the tech Nasdaq printed 2,916.68 up 0.02%.

During the Bernanke speech eyes were also on Europe looking for news coming out from the European finance ministers meeting, where while a senior European official initially signaled that an agreement had been reached, ministers later said this was only to reconvene next week.

With creditor nations led by Germany refusing to put fresh money on the table or offer debt relief, the finance chiefs were unable to scrape together enough funds from other sources to help alleviate Greece's debt burden, set to hit 190 percent of gross domestic product in 2014.

The Euro tumbled 0.51% versus the greenback to 1.2751$ when after more than 11 hours of talks broke up early today in Brussels with praise for the Athens government's economic overhaul and a declaration that a financing accord will wait at least until a hastily arranged meeting of the ministers on Nov. 26.

As a result Japan's Nikkei Stock Average, up more than 1% earlier in the day, pared most of the gains to trade just 0.3% higher although the Japanese gauge is now trading 0.74% higher to 9,213.73, as nation's exports fell for a fifth month increasing pressure on the central bank to add stimulus measures. South Korea's Kospi reversed direction to trade 0.35% lower to 1,883.29. Hong Kong's Hang Seng Index rose 0.30% to 21,292.73, while the Shanghai Composite fell 0.15% to 2,005.56 although early in the day it dropped below the psychologically important 2000 point level.

In the currency market the US dollar rose versus the Japanese Yen to 81.81Y or 0.28%, while the shared currency fell 0.21% versus the Japanese Yen to 104.49Y.

On the commodity side: the yellow metal traded flat to 1,723.40$ while  WTI rose 0.14% to 86.87$ a barrel.

At this point all eyes are for European markets opening bell,  where is worth to highlight that according to us will weight only the delay in the agreement cause as we said in the past we think that soon or later the agreement will be found. The question is how much this delay will cost?

The problem is will this agreement solve the Greek problem or will just “kick the can down the road”?

Have a great day.

Originally posted at www.77sigmatrading.com