One outcome is certain once the ‘crucial’ meeting is over on December 9th, there’ll be no tangible solution that “the market”, commentators, analysts, or the general public can draw comfort from, neither will they be left with a sense of belief that a solution to the various crises has finally been reached, church bells will not ring in celebration that the crisis is over. The result will be a nil nil draw and given the time of year most institutional level investors and speculators would accept that result as unwinding from positions now at a yearly loss would see their bonuses in peril.
There is a sub text to the meetings and events this week; creeping superstate powers are being promoted as the ultimate solution. The rhetoric has now moved past discussions on enlarging the EFSF, or the ECB being the banker of last resort, to the member countries surrendering all powers to a new revised higher European authority which would have “austerity powers”.
The crisis has been caused by the banking elite and a ‘secretive’ fraternity, it’s no accident that the autocratic technocrats unceremoniously placed in ultimate positions of power in Italy and Greece are bankers. You could call them “ex bankers” but to believe they’re retired would be stretching naivety to breaking point. There is a quiet ‘land grab’ being orchestrated by the banking elite, as it’s efficiently and silently unwound throughout Europe it’s not only sovereignty that’s being surrendered but democracy is now being swept aside as an irrelevance. On bended knee citizens are being forced to bow to the ‘power and might’ the market.
The harsh austerity measures being proposed and unleashed do not protect the way of life for circa 730 million Europeans, the measures proposed simply ring fence the asset wealth and positions for the few. To accept both direct and indirect taxation, in order to protect the wealth of the creators of the crisis, could prove be a bitter pill to swallow if the general populous within Europe manage to cut through the jingoism and discover that the unnecessary austerity measures are now being used as a cloak in order to usher in increased authoritarian powers. To have to surrender all citizen rights to a higher authority, a ‘Protestant’ austerity clique, is truly medieval in concept..
The Stoxx Europe 600 Index jumped 1 percent at 9 a.m. in London. Standard & Poor’s 500 Index futures increased 0.9 percent. The euro strengthened 0.3 percent to $1.3443. The yield on the German five-year note rose one basis point to 1.12 percent. Oil climbed 0.6 percent, copper advanced 1.5 percent and palladium gained to a two-month high.
Germany plans to sell 5 billion euros ($6.7 billion) of five-year notes today in the first test of demand since Standard & Poor’s said Dec. 5 the nation’s credit rating was at risk. Officials are negotiating a bigger rescue effort to discuss at the European summit, including running two separate bailout funds simultaneously, the Financial Times reported yesterday.
Oil in New York advanced to $101.90 a barrel on speculation global supplies of crude will shrink after the European Union signalled it may ban imports from Iran and U.S. stockpiles declined. Palladium rose as much as 2.7 percent to $688.50 an ounce, the highest since Sept. 22.
Market snapshot at 10:20 am GMT (UK time)
In overnight and early morning trade the Asian session proved to be bullish. The Nikkei advanced by 137 points to close up 1.71%, the Hang Seng closed up 1.58% and the CSI closed up 0.47%. The main Aussie index the ASX200 closed up 0.72%. European bourses have been bullish ahead of the ECB interest rate decision tomorrow and next crisis meeting to be held on December 9th. The STOXX50 is currently up 1.08%, the UK FTSE is up 0.55%, the CAC is up 1.25% and the DAX is up 0.95%. ICE Brent crude is currently down 0.08% and gold (Comex) is down 0.02%.
Economic calendar data releases that may affect the sentiment of the afternoon session include the following:
12:00 US – MBA Mortgage Applications
15:00 UK – NIESR GDP Estimate November
20:00 US – Consumer Credit October
The number of mortgage applications acts as a leading indicator for home sales. Consequently the report from the USA can be used as a guide of housing demand and thereby economic momentum. A high reading is seen as positive for the economy as a whole, as it implies increased household income and spending.
An expanding GDP indicates a growing economy, which is generally beneficial for the financial markets. Growth that is too rapid will promote inflationary worries, however, that may influence the MPC to raise interest rates.
A Bloomberg survey of analysts yielded a median estimate of $7.000B, compared with the figure reported previously which was $7.386B for consumer credit in the USA.