European morning wrap: Houston we have a disconnect…….

Italy PM Monti: Country has overcome financial crisis, sees economic recovery at end 2013, beginning 2014.  Next govt should have broad enough majority to overhaul institutional system Eurozone December final manufacturing PMI 46.1, down from flash 46.3 UK December manufacturing PMI up at 51.4, better than median forecast of 49.1 July election to keep Hawk Abe in cage - Japan Times European stocks and periphery bonds have rallied to beat the band this morning, but the euro has given ground albeit marginally. Eurostoxx up some 2.72%, best performing European market Italy's FTSE MIB which is up a hefty 3.34%.  Elsewhere Spain's 10 year govt bond has reached its' lowest yield level since March 20th 2011,  Italy's 10 year govt bond its' lowest yield level since December 2010. None of the above helped the euro. EUR/USD down at 1.3245 from early 1.3270, EUR/JPY down at 115.35 from early 115.65. Talk of sell orders clustered up at 1.3300/20, buy stops above there before more sell orders clustered just ahead of 1.3350 barrier option interest. Buy orders clustered down at 1.3180/00.