With so little on the economic calendar and few markets open yesterday any ones that were drifted sideways. 

Despite tremendous US consumer confidence data which came in much higher than expected, this was not enough to lift US markets even on the thin volumes.  What was encouraging to see was that the level it got to is almost as good as it was a year ago so it would seem that the US consumer has got over the budget battle and resultant credit rating
downgrade of a few months ago.

The theme of this week is one of low volumes and certainly in the case of today no economic data.  This gives time for those that are in the office to look back and reflect on the year that's been and nearly gone.  2011 will be remembered for many things, but as far as the markets are concerned it's the escalation of the European sovereign debt crisis that has dominated throughout.  From the bailout of Portugal to the sights being set on Spain
and Italy, unfortunately for them the focus will remain on these bigger European nations who have so much in the way of debt to refinance in 2012.

The FTSE is bang on the 5500 level at the time of writing, so a little to the downside with mining stocks dragging somewhat.  The Asian session overnight has done little to inspire the bulls and with two trading sessions left after this one, the battle is on for this December to record a gain for the month, let alone attempt to push the FTSE a little higher ahead of the year end in a bid to lessen the poor performance of the index this year.

FX markets have been subject to low volumes as the main London session has not seen a return of traders in their numbers yet so as a result trading ranges were narrow yesterday and could remain so for the remainder of the year.  Gains are hard to come by for the single currency as bond yields on the government debt of the peripherals remains stubbornly high.  Italian 10 years saw their yield head back above 7% yesterday and going forward there's
no question that these will continue to be the focus at the start of 2012. At the time of writing EUR/USD is at 1.3070 so half way through the festive season the single currency has still held onto the 1.3000 level.  Support and resistance are seen around 1.3020, 1.2980 and 1.3130/95 respectively.

Gold lost a little bit of its shine yesterday as it dipped below 1600 again. December is turning out to be a poor month for the precious metal as its on course for an almost double digit percentage decline.  Over the longer term gold remains underneath its 200 day moving average which is proving a nervy sign for the bulls.  A close back above 1628 will give them more confidence but for as long as it remains below this technical barrier then gold's
multi-year bull market will be called into question.  The last time gold went below the 200 day moving average was in 2008 and we all remember what happened then.  This morning the yellow brick is softer again at 1585.

Crude bulls enjoyed continued threat by Iran that they will close the Straits of Hormuz and prevent the transportation of oil through this vital part of the Middle East.  Brent jumped above $109 a barrel and a one point looked like it might test $110 before retreating from its highs. This morning black gold is a little lower at 108.50. Support and resistance over the near term are seen at 107.35, 106.15 and 109.45, 110.25 respectively.