Awaiting Draghi's Testimony

European finance ministers hold a conference call; Eurozone current account deficit widened and construction output fell; BoEs Paul Fisher comments weigh in on the GBP. Canadian wholesale sales edge up, NAHB housing market awaited as well as ECB president Mario Draghi's testimony.

USD is mixed in the ongoing US session; weaker against NZD, CAD and CHF and stronger against GBP. The relative strength winner is CAD followed by CHF. Major European equities are higher by about 0.5% to 0.7%.

European finance ministers will hold a conference call today scheduled to begin at 9:30 am ET in which they will discuss EUR 200 bln in bilateral IMF loans and details of the fiscal union, such as stricter budget rules, negotiated at the EU summit on 12/9. Considering that market sentiment deteriorated rapidly after the EU summit, it would be surprising to see any lasting optimism based on the result of today's conference call.

On the data front, Eurozone seasonally adjusted current account deficit widened to EUR -7.5 bln in October from EUR +2.2 bln in September while the non seasonally adjusted deficit widened to EUR -1.7 bln from previous EUR -0.7 bln. Eurozone construction output fell in October -1.4% from previous -1.5% m/m and -2.8% after +0.1% y/y . September was revised lower to -1.5% from -1.3%.

GBP weakened slightly after BOE's policy maker Paul Fisher said that present situation is potentially more dangerous than 2008 and that downside risks from Eurozone are bigger than inflation. He further said that UK banks are not as robust as the BOE would like. GBPUSD oscillates around the 1.55 figure.

Canadian wholesale sales rose 0.9% in October from previous +0.5%. US NAHB housing market index due at 10:00 am ET is seen at 21 in December from 20.

Market volatility could increase at 10:30 am ET when ECB president Mario Draghi testifies before the EU economic and monetary committee. This comes one day after Draghis interview to the FT warning about the consequences of nations leaving the Eurozone as well as the breakup of the single currency area.

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