The U.S. market is expected to open flat following the sell-off yesterday as solid economic data clashes with a new round of sovereign debt concerns in the Eurozone and continuing Middle East commotion.
Germany is doing all it can to lift the rest of the Eurozone as another report released earlier today shows that factory orders grew 2.9 percent month-on-month in January, beating the 2.5 percent consensus forecast. Axel Weber also provided more fuel for the risk bulls as he delivered a rather upbeat speech in Frankfurt. The former frontrunner for the ECB presidency said "Germany's strong cyclical recovery will continue in 2011, albeit at a somewhat slower pace". He expects the growth drivers not just being limited to capital expenditure, but also sees consumer spending picking up on the back of the strong German labour market.
All is not well in the Eurozone, though, as emphasised by today's development in the Greek 10-year government bond, which is now at the highest rate ever since Greece joined the Eurozone. The 10-year yield is at 12.8 percent, up 47bps alone today, following Moody's downgrade of the country's debt yesterday which sent European indices down. This is killing the EUR in the process with EURUSD down 66 pips.
With economic data, including company announcements, expected to have little influence for the rest of the day we look for stocks to range trade around the current levels.
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