European equities have fluctuated in the morning session, following on from yesterday’s sell off as investors await a U.S. report that may show retail sales in the world’s largest economy increased. U.S. index futures have gained marginally, the SPX is up 0.5% as Asian shares fell during the early morning session.
The Stoxx Europe 600 Index added less than 0.1 percent at 9:30 a.m. in London. The index has gyrated between gains and losses during the morning session. The gauge has fallen 14 percent this year amid concerns that a simple solution to the euro area’s debt crisis will not be found. Standard & Poor’s 500 Index futures expiring in March have climbed 0.5 percent, the MSCI Asia Pacific Index fell 1.1 percent. Reports published citing that Chinese housing sales have slumped sent the Asian Pacific markets down.
Oil has traded near a two-week low as the risk of debt downgrades in Europe and reduced worldwide demand next year has countered speculation that crude stockpiles dropped in the U.S. last week. Crude for January delivery was at $97.69 a barrel down 8 cents on the New York Mercantile Exchange at 9:13 a.m. London time. Yesterday, the contract slid $1.64 to $97.77, the lowest settlement since Nov. 25. Prices are 7 percent higher this year after rising 15 percent in 2010.
Brent oil for January settlement on the London-based ICE Futures Europe exchange was up 13 cents at $107.39 a barrel. The European benchmark contract was at a premium of $9.70 to New York-traded West Texas Intermediate grade. The spread was a record $27.88 on Oct. 14.
Gold could see a fall for a second day after dropping to a seven-week low in London as a stronger dollar cuts demand as an alternative safe haven investment. The dollar climbed to a two-month high today versus the euro after Fitch Ratings and Moody’s Investors Service stated yesterday that the European Union summit of last week offered little comfort to end the region’s debt crisis. Holdings in gold-backed exchange-traded products have climbed to a record.
Immediate-delivery bullion dropped as much as $15.65, or 0.9 percent, to $1,650.93 an ounce, the lowest price since Oct. 25, and was at $1,662.46 by 8:39 a.m. in London. The precious metal for February delivery was down 0.2 percent at $1,665.50 on the Comex in New York.
Spanish bonds have fallen this morning as its government prepared to sell bills. Yields on Spanish 10-year notes rose nine basis points to 5.88 percent at 9:25 a.m. in London, the equivalent Italian yield rising 13 basis points. The yen strengthened against all but two of its 16 most-traded peers. Spain will auction 12- and 18-month securities and the European Financial Stability Facility, the region’s temporary bailout fund, plans to sell as much as 2 billion euros ($2.63 billion) of 91-day bills today. The European Central Bank might have to buy more government debt, Benoit Coeure, France’s candidate for a seat on the ECB’s executive board, told a European Parliament hearing yesterday.
Market snapshot at 10:30 am GMT (UK time)
Asian Pacific markets suffered mixed fortunes in overnight and early morning trading. The Nikkei closed down 1.17%, the Hang Seng closed down 0.69% and the CSI closed down 2.25%. The ASX 200 closed down 1.40%. European markets are up, the STOXX 50 is up 0.41%, the UK FTSE is up 0.36%, the CAC is up 0.17%, the DAX is up 0.47%.
Economic calendar releases that may affect the sentiment of the afternoon session
13:30 US – Retail Sales November
15:00 US – Business Inventories Business Inventories
19:15 US – FOMC Rate Announcement December
Economists surveyed by Bloomberg gave a median consensus of 0.5%, unchanged from last month’s figure. Retail sales less autos was expected to be 0.4% from 0.6% previously. The figure excluding autos and gas was predicted at 0.5% from 0.7% previously.
The median consensus of economists surveyed by Bloomberg was for interest rates to stay unchanged at 0.25%.