December 30th, 2011 Technical Analysis & Market outlook

Currencies          EUR/USD The euro is set for its first back- to-back annual drop versus the dollar since 2001 on concern Europe’s debt crisis will weigh on the region’s economic growth. The euro slid 0.1 percent to $1.2947 as of 6:46 a.m. in London.

USD/CAD The Canadian dollar rose to the highest level since January against the euro on speculation the European Central Bank will need to increase cash injections after Italy failed to sell the maximum amount at debt auctions. The loonie gained 0.3 percent to C$1.3221 against the euro at 5 p.m. Toronto time.

Commodities   Oil rose for a second day, heading for a third yearly increase, on speculation escalating tension in the Middle East may disrupt supplies as a recovery in the U.S. economy bolsters demand. West Texas Intermediate crude for February delivery gained as much as 51 cents, or 0.5 percent, to $100.16 a barrel on the New York Mercantile Exchange.

Gold, poised for an 11th year of advance, rebounded from the lowest level in six months as a slump that threatened to tip the metal into a bear market spurred purchases, tempering the effect of a stronger dollar. February-delivery bullion rose as much as 1.3 percent to $1,561 an ounce.

Equities  Asian stocks (MXAP) edged higher on the last trading day of 2011, with the region’s benchmark index set for its first yearly drop since 2008, as rising U.S. home sales signaled the world’s largest economy is weathering Europe’s debt crisis.

Japan’s Nikkei 225 Stock Average (NKY) gained 0.7 percent.

Hong Kong’s Hang Seng Index rose 0.3 percent.

European (SXXP) stocks advanced for the fourth time in five days as business activity in the U.S. expanded more than forecast.

Germany’s DAX rose 1.3 percent.

France’s CAC 40 added 1.8 percent.

The Stoxx 600 has retreated 12 percent.

U.S. stocks rose, restoring the 2011 gain in the Standard & Poor’s 500 Index, as data signaled the world’s largest economy is weathering Europe’s debt crisis.

The S&P 500 rose 1.1 percent. The Dow Jones Industrial Average climbed 135.63 points.

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