EU Morning Report - Merkel supports ECB’s OMT

The euro (EUR) slightly weakened against most of its major counterparts, as investors worldwide anticipate the ruling of Germany's top court on the viability of the European Stability Mechanism (ESM) and the fiscal pact on Wednesday. Meanwhile, German Chancellor Merkel is reported to have made clear to lawmakers that the bond-buying program of the European Central Bank (ECB) is with its mandate. This program, called Outright Monetary Transactions (OMT), will buy government bonds with a maturity of 1 to 3 years in the secondary market.

§ The Australian dollar (AUD) got a boost versus the US dollar (USD) overnight as new bank lending in China came out above expectations.

§ OIL appears strapped in a 4-dollar range, from 94.10 to 98.30, and market participants are positioning themselves accordingly, keeping in mind that OIL was strengthening for weeks before entering this tight band.

§ The GER 30 (DAX) resurfaced above 7000 units last week and the court ruling on ESM tomorrow could push the index higher.

§ The US Tech (NDQ) index lost some momentum after it produced a spectacular surge over the past weeks, rising to 2830 – a 12-year record high.

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