US mkts close higher led by banks; commodities rebound

European Central Bank (ECB) eased collateral norms for Eurozone banks that was a move to cool off periphery yields 

ECB says, it will accepts mortgage and asset backed securities to provide funds primarily aiding Spanish banks

Spanish 10-year yields fell below 6.3% from the high of 7.3%; Italy's 10-year bond yield was steady at 5.7%

Leaders discussed a euro 130 billion growth revival package for Eurozone at the Rome summit (Between Germany, France, Italy, Spain)

Stimulus package would be 1% of Eurozone GDP, which comprised of unspent regional funds and co-financing of investment programmes

Italian PM says, issue will be discussed further at the EU summit; Germany has been backing the proposal

But Germany chancellor Angela Merkel refused to relent on euro bonds, flexibility on use of EFSF / ESM despite pressure from Hollande

Concerns have been rising that there will be no material outcome at the EU summit

Germany was an underperformer on Friday on weak IFO survey; business climate index came in at 105.3 - Weakest since May 2010

Moody’s downgrade effect faded away; Wall Street ended in the green on Friday led by banks

US banking index was up 1.5%; Borrowing costs of downgraded banks turned back to levels before downgrade 

US markets at close on Friday: Dow Jones rose 0.5% to 12,640.8; S&P 500 Index was up 0.7% to 1,335. Nasdaq Composite was up 1.2%

US last week: Dow Jones fell 0.9% and S&P slipped 0.6% whereas Nasdaq Composite gained 0.7%  

European markets at close: DAX was down 1.3%, FTSE dropped 1% and CAC was down 0.75%

Spain is going to make a formal request for bailout funds today; Last week’s audit showed a need for euro 62 billion

Asia Today

Kospi plummeted 1.6%

Taiwan Weighted was down 0.8% and Shanghai slipped 0.5%

Hang Seng and Straits Times were down 0.4%

Nikkei declined 0.1%

SGX Nifty was down 0.75% or 39 points at 5,117

Currencies

It was a mild recovery for Euro on ECB action

Euro closed at at 1.257 to the US dollar on Friday as against 1.252 levels on Thursday

But euro gave away gains today on concerns that EU summit will not yield much

Euro was trading at 1.253 to the dollar today morning

Dollar index closed at 82.2 on Friday versus 82.5 in previous session

Dollar Index is currently at 82.4

Commodities

Crude bounced back from oversold levels on Friday

Storm in Gulf of Mexico (20% of US production) supported crude oil prices

Brent crude ended at around USD 91 a barrel on Friday, rising 2% after hitting a session low of USD 88.5 a barrel

WTI crude closed up 2% at USD 79.7 a barrel as against low of USD 77.5 a barrel

But Brent crude is still down 6.8% as compared to last week and WTI crude down 5.1%

EIA chief says EM demand remains strong; oil will find support

LME Copper was down 0.4% on Friday at USD 7310 per tonne

Gold was largely unchanged on Friday at USD 1566 an ounce

Crude was flat today morning while Copper gained 0.4% and gold rose 0.5%

What to watch out for

German Consumer Confidence, Import Price Index

Chicago Fed National Activity Index

New Home Sales

Dallas Fed Manufacturing Activity