Morning Meeting 26/06/12

Asian shares fell today as investors skepticism grows on EU-Summit's measures to solve the regions's protracted debt crisis.

Japan Nikkei falls 0.86% to 8,659.38, Hang Seng trades at 18,923.10 ir 0.14%. Eur/$ holds the $1.25 mark +0.10% to 1.2517$.

Asian losses Monday had spread to the U.S. overnight, as hope faded that a European Union meeting due to start Thursday would produce a blueprint for tackling the region's problems.

After Greece Finance Minister resignation for health reasons, the chances of a successful negotiations between Greece and its Euro partners at the summit diminished Monday. To make things worst: Cyprus became the latest European country to request financial aid, hours after Spain submitted a formal request to bail out its banks and the following Moody's downgrade of 28 of its financial institutions.

The main driver of this pessimistic wave, which is spreading across Europe was Germany's persistent resistance to issue common euro zone bonds to underpin the zone's single currency, the underlying concept has been reinforced on Monday by German Chancellor Angela Merkel,who said sharing liability within the 17-nation euro area would be “economically wrong and counterproductive”. Reuters reports

Investors will be focused on today and Thursday auctions results: Italy plan to sell zero coupon (3 billion euros) and inflation linked bonds (maturing 2016/2026) today and longer-medium term bonds on Thursday, Spain is likely to pay its highest short-term borrowing rates in over six months today as it sells more short-term debt (3-month Letras previous avg yield at 0.846%, 6-month Letras previous avg yield at 1.737%)

On the commodity side: a lack of confidence in Europe keeps the gold steady above $1,580 an ounce. Oil trimmed earlier gain, with US crude falling 0.3% to $78.96 a barrel.

Good news coming from China as Bloomberg news reports: “A spokesman for the Chinese trade ministry said on Tuesday that Beijing's export growth is likely to improve for the rest of the year and the country can meet its 2012 target for 10 percent growth in trade.” Bloomberg news reports.

The Game played by European politicians is reaching its target, to keep expectations as low as possible on the EU-summit outcome.

The headlines coming from Europe will set the path of this trading day, keep in mind that a Game Theory match is on stage in Europe, if a decision will be taken the only place where it can be ratified is at the EU-Summit.

Originally posted at www.77sigmatrading.com