Germany Demonstrates Vulnerability of Eurozone Core

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European stock indices advance despite disappointing Economic Sentiment Index from Germany.

The major European stock indices made solid advances on Tuesday, despite a disappointing report from the ZEW Institute, which revealed that economic sentiment in Germany declined more than expected this month earth image Germany Demonstrates Vulnerability of Eurozone Core (NYSEARCA:EWG).  The ZEW Economic Sentiment Index for November dropped 4.2 points to negative 15.7.  Economists had been expecting the index to make a less-significant decline to negative 10.  The lower result followed a series of reports demonstrating an industrial slowdown in Germany, underscoring how the European debt crisis is now affecting the Eurozone Core, as recently discussed by ECB President Mario Draghi.  Draghi’s Warning about Germany Rings True

Greece was granted a two-year extension by European Union finance ministers to comply with the deadline to meet its targeted primary budget surplus of 4.5 percent of GDP. Nevertheless, the finance ministers have not yet determined how to fund the next tranche of €31.5 billion in loans to the troubled country, which will run out of money on November 16.  As of 10:19 EST, the Greek ASE Index advanced 0.37 percent to 775 and the Global X FTSE Greece 20 ETF (NYSEARCA:GREK) advanced 0.20 percent to 15.14.  Although the resilience of the Greek stock market has resulted in a loyal following for the GREK ETF, its share price remains just below the 50-day moving average of 15.80 and a “head and shoulders” pattern on the GREK chart remains unbroken.  Shareholders should be mindful of the maxim, “failed breaks make fast moves” and remain on the alert for a rapid decline.  Dollar Steady Amid Greece Aid Uncertainty

As of 11:20 EST, the Euro STOXX 50 Index advanced 0.85 percent to 2,494 (NYSEARCA:VGK).  Nevertheless, the Euro STOXX 50 Index remains below its 50-day moving average of 2,515.  The FTSE 100 Index crept upward by 0.17 percent to 5,777 (NYSEARCA:EWU).  The German DAX Index advanced 0.07 percent to 7,168 (NYSEARCA:EWG).  France’s CAC 40 Index climbed 0.52 percent to 3,429 (NYSEARCA:EWQ).  Spain’s IBEX 35 Index surged 1.83 percent to 7,706 (NYSEARCA:EWP).  Italy’s FTSE MIB Index jumped 1.20 percent to 15,303 (NYSEARCA:EWI).

As of 11:28 EST, the euro advanced 0.05 percent against the dollar, trading at $1.2716 (NYSEARCA:FXE).

Spain’s ten-year bond yield dipped to 5.79 percent on Tuesday from Monday’s closing level of 5.80 percent.  Spain’s two-year bond yield remained at 3.09 percent on Tuesday from Monday’s closing level of the same amount (NYSEARCA:EWP).

Italy’s ten-year bond yield slipped to 4.97 percent on Tuesday from Monday’s closing level of 4.99 percent (NYSEARCA:EWI).  ECB Bond-Buying: The Rape of Europe Continues

On London’s ICE Futures Europe Exchange, January futures for Brent crude oil declined by $1.15 (1.06 percent) to $107.00/bbl. (NYSEARCA:BNO, NYSEARCA:USO).

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