European Confidence To Drop To The Lowest Level In More Than Two Years

Eyes today will be on European confidence data amid mounting speculations the euro area may drag global economies into another recession.

Confidence in the euro region probably will drop to the lowest level in more than two years in December, where economic confidence is predicted to retreat to 93.3 from 93.7 in November, as the indecision among European leaders lowered confidence in their ability to contain the crisis.

Euro area nations are preparing for new auctions as Spain and Italy will sell bonds next week after the rise in French bond yield and drop in demand at a German auction this week.

On January 9, German Chancellor Angela Merkel will meet with French President Nicolas Sarkozy to conduct talks before the EU summit which will take place in Brussels by the end of the current month.
Meanwhile, there is bearishness in the sentiment as the concerns from the euro area are overshadowing the improvement seen in the U.S. data.

Despite the importance of the non-farm payrolls report due later in the day, more focus may be given to European confidence figures as investors main focus is on the latest developments from the euro area.
The U.S. jobs report will show that the world's no.1 economy added the largest number of jobs in three months in December of 155,000 compared with the prior addition of 120,000.

Before the release of the awaited data from the euro area and U.S., the dollar index is hovering around its highest level since January 2011 while the euro is showing weakness as it is trading around 15-month low versus the dollar and 11-year low against the yen.