Trade The News Market Internals Update at 14:00ET

Dow +148 S&P +19.5 NASDAQ +40

– (CL) Chile Oct Economic Activity Y/Y: +3.4% v +4.5%e

– (RU) Russia Oct Consumer Prices M/M: +0.4% v +0.6%; Y/Y: +6.8% v 7.0%e; CPI Core M/M: +0.5% v +0.5%e – (SI) Singapore Nov Purchasing Managers Index: 48.7 v 49.7e; Electronics Sector Index: 50.9 v 51.5e 

– (MX) Mexico Nov Consumer Confidence: 89.5 v 90.6 prior

– (US) Nov ISM Non-Manufacturing Composite: 52.0 v 53.5e

– (US) Oct Factory Orders: -0.4% v -0.3%e

– US equities are taking their cue from gains in the Asian and European session, heading higher despite a number of poor economic data numbers. Optimism about developments in Europe ahead of the key summit later this week is apparently driving risk-on trades, with yields on both Italian and Spanish 10-year debt below 6% for the first time in weeks. After Italy rolled out even harsher austerity measures, including an additional €10B in savings, French President Sarkozy and German Chancellor Merkel provided an outline of their proposals for the European summit. Merkozy’s announcement was short on concrete details, although both took pains to highlight that they would demand changes to euro zone treaties (and possibly overall European Union treaties). 

-On the data front, there were plenty of reasons for concern: European Nov PMI data was uniformly in contraction territory, the amount of money parked overnight at the ECB continues to increase, hitting €333B, while in the US the Nov ISM non-manufacturing index had its lowest reading since January of 2010. WTI crude is around two-week highs at $102, while spot gold is holding up so far at $1,740. The US 10-year is higher by 6 basis points inching back towards 2.1%.- With the December quarter earnings season fast approaching, US names have begun offering pre-earnings guidance calls. Metlife warned its Q4 profits would be lower than expected and gave a soft preliminary view of its FY12 outlook. Yum Brands’ FY11 guidance out this morning was right in line with consensus estimates, however its initial FY12 outlook fell short of expectations. ITC Holdings offered an in-line view on FY12 earnings. In deal news, SAP America struck a deal to acquire human resources solutions developer SuccessFactors for $40/share cash, in a deal valued at $3.4B. SAP expects to close deal in January, with no go-shop period. 

– The euro has made up the steep losses seen during Friday’s session so far this morning, as overall risk appetite funnels money into the single currency. Earlier in the European session, newly installed Italian PM Monti rolled out harsh new austerity measures, including an additional €10B in cuts. Then just before the US open, Sarkozy and Merkel rolled out their proposals. With the dollar index trending lower, commodity currencies are gaining in strength, with AUD/USD testing resistance at 1.0300. After closing below 1.3370, EUR/USD has marched higher to find some resistance around 1.3480. 

– 13:00 (MX) Mexico Nov IMEF Manufacturing Index: No est v 51.4 prior; Non-Manufacturing Index: No est v 53.0 prior

– 19:00 (CO) Colombia Nov Consumer Price Index M/M: 0.2%e v 0.2% prior; Y/Y: 4.0%e v 4.0% prior

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