Another mixed session overnight could keep markets in Asia fairly range bound, unless China's official trade balance figure significantly differs from estimates. If the figure comes in under expectations of $8.8 billion it could be very detrimental for risk assets, especially if we see a large drop in exports stemming from decreased demand from Europe which could ignite concerns about the growth prospects for China.
Themes:
Building house approvals figures are scheduled to be released at 11:30am in Sydney. Following consecutive months of double digit declines, we expect building approvals experienced a bounce back in November of between 4.5-6%. Last month's report was somewhat skewed by the residential housing component which tumbled 7.6%m/m, the largest decline since 2008, coupled with a decline of 16.7%m/m in the high density category, it resulted in an unusually weak number.
The meeting between Merkel and Sarkozy last night failed to produce any major market moving announcements, apart from some comments regarding the possibility of Greece leaving the euro.
SNB Chief Hildebrand resigned overnight amidst the scandal involving his wife's currency trading account; at the same time he announced that the central bank will aggressively defend the 1.20 peg in EURCHF.
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