Eyes on Italy Ahead of the Year-End

Amid thin volumes, investors continue to be cautious ahead of Italy’s bond auctions today and tomorrow which renewed worries over the euro zone debt crisis, yet losses seem to be limited due to the positive U.S. data.

Europe, the US and Asia lack the economic data today, however yesterday the U.S. consumers rose in Dec. to the highest in 8-months on the improving job market, rising to 64.5 from 56.0 previous.

While the holiday mood continues to dominate markets, volatility might be seen before Italy’s bond auction, since today it will sell 9 billion euros of 179-day bills and 2.5 billion euros of zero-coupon 2013 bonds.

In Asia Nikkei 225 fell 0.20% and Hang Seng fell 0.59% on concerns over growth in the region, triggered by Japan’s disappointing data yesterday which confirmed the world’s third largest economy is weakening.

Japan’s industrial production and household spending plunged in Nov., deepening the country’s deflation. This could determine companies like Nissan or Panasonic to move their production abroad, especially since the yen also hurts demand.

In Europe stocks were mixed with DAX falling 0.43% and CAC 40 rising 0.48%. Currencies however move in very tight ranges, where the euro is trading around today’s opening at 1.3070 while the pound around 1.5665.

The USD is moving in a tight range with some downside momentum around the 79.78, the yen is strengthening trading around the 77.70, while the  level, while AUD is slightly stronger trading around the 1.0170.

Commodities are weaker today where gold is trading around the $1583.00 level  on global growth concerns, while crude oil is still trading above the $100.00 level on fears from Iran’s threat to halt oil shipment.