Up or Down: Cues that will decide today's trade

Moneycontrol Bureau

The US markets squeezed out small gains, adding to the previous week's robust rally, as investors turned their focus to fourth-quarter earnings season and as Merkel and Sarkozy discuss their rescue plan.

On economic data front, consumer credit expanded in November, increasing over USD 20 billion, the biggest gain since 2001

And in key data to watch out for in the US today, wholesale trade data is expected to come in lower at 0.5% for November.

European markets closed down after choppy trade, having bounced earlier in the session from last week's sharp pull-back. Investors cautious ahead of this week's key debt sales by Italy and Spain.

French president Nicolas Sarkozy and German chancellor Angela Merkel met overnight.

They vowed that no new money will go Athens way until it agrees with creditors on the bond swap. Merkel and Sarkozy pushed for fiscal integration to be completed sooner rather than later.

They want EU states to complete their negotiations on a planned new treaty in the coming days so it could be signed on March 1.

Meanwhile, Germany sold 3.9 billion euros worth of six-month bonds at an average yield of negative 0.01%...that's right! It was a first-of-its kind, bond auction with negative yields.

This essentially means that investors are okay donating the money to Germany since they are sure it will at last be paid back.

Investors will be closely watching Italy and Spain's bond auctions later this week.

The euro holds a one-day gain versus the dollar ahead of Germany's chancellor and the international monetary fund's managing director meet. Dollar index below 81.

In commodities, crude prices fell on concerns about the euro zone's economy, but the decline was limited by fears about Iran. Brent currently trading stable around USD 112 levels

From the precious metals space, gold eases slightly on technical selling. However, it is currently firm above USD 1610 levels.

Sagar Salvi
sagar.salvi@network18online.com