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European shares closed higher Monday, rising for the fifth time in six days. Last week’s action was dominated by hopes for a rescue plan for Greece, which ended in a statement of support from European leaders. The topic is set to be a top item at a meeting of European finance ministers in the early part of this week.
Disgruntled German voters, the European Commission’s new point man on economic and monetary affairs and European Central Bank President Jean-Claude Trichet put added pressure on Greece to further tighten its belt today.
The folks in Germany, in opinion polls, have stated that they would rather see Greece kicked out of the Eurozone to preserve the single currency’s stability.
The Dubai CDS rose above 650 which caused some jitters today.
Australian shares are rising here as I write led by their financial sector, and we’ll have to see if that carries over to us.
This week I will be watching three things: the dollar, the financials and materials.
The XLF is still trading under the 20, 50 and 200 day moving averages and until they can take back the 200 day MA, the market will stay heavy.
The dollar will depend a lot on Europe this week and commodities and materials will play off the dollar.
Based on the above unknowns, and the fact that we are coming off a long weekend, I don’t have any newbies tonight. I am watching the financials very closely as a tell for things to come.