Market Update - 10 Dec 2012

• Europe came under pressure as a possibility of German recession weighs on market and the deteriorating Italian economy added to the risk off mood.

• Labor Department figures showed the U.S. added 146,000 jobs in November and the unemployment rate fell to 7.7 percent. Despite this positive data on Friday, market in general reacted little to the US data and shifted their focus quickly to Europe and China data this morning.

• USDMYR opened higher today at 3.0600 as the risk off mode kicks off this quiet Monday morning. Expected range for the week still at 3.0400-3.0800 with light trading volumes expected again.

• The Italian 10-year government bonds posted their first weekly drop in four after former Premier Silvio Berlusconi threatened to withdraw his party’s support for Prime Minister Mario Monti’s coalition government.
  

• Declines yesterday pushed the yield to the most since Nov.28 as Berlusconi’s top political deputy called for an “orderly end” to Monti’s government, saying the administration failed todevelop a strategy to halt the recession.

• Germany’s two-year notes advanced amid speculation the European Central Bank will cut interest rates after a report yesterday showed the country’s industrial production declined in October. Finnish and Dutch two-year yields fell below zero yesterday.

• The equity markets though today seems to have start off on a slightly more neutral to positive note, early hours still. But in general market already feels that we have bottomed out and I wouldn’t be surprised to see 2013 start off with some bulls, the tone 2013 starts would be very important I feel to gauge Q1’s direction. Have a great week ahead!