The Chicago Fed National Activity Index fell from -0.25 to -0.46 in November. Employment, consumption and housing were marginally weaker.

European shares rose to 27-month highs on Monday. Mining stocks recorded healthy gains on buoyant metals prices with BHP gaining 0.5pct in London. Investors sold off retail stocks as the freezing weather hurt store traffic. Utility stocks which have been amongst the weakest performing sector in 2010 rose sharply as the cold weather boosted the demand for electricity and gas. The FTSEurofirst index rose by 0.7pct, with the UK FTSE rose 0.3pct and the German Dax was higher by 0.5pct.

US sharemarkets were marginally higher on Monday, lifted by energy and financial shares. The financial sector which has lagged the broader market rose 0.4pct. On the downside American Express lost a further 4pct, taking its losses to almost 10pct since the Federal Reserve proposed limiting debit interchange fees last Thursday. The CBOE volatility index fell 0.7pct to the lowest level in nine months. At the close of trade, the Dow Jones was lower by 14pts pr 0.1pct with the S&P 500 up 0.3pct and the Nasdaq stronger by 7pts or 0.3pct

US long-dated treasuries fell (yields higher) on Monday. The US Fed bought nearly $8 billion in longer-term treasuries in early trade before sellers moved in. US 2yr yields fell by 1pt to 0.60pct while US 10yr yields rose by 1pt to 3.34pct.

The US dollar rallied against the Euro following comments from ratings agency Moody´s that it may cut ratings on Spanish banks. Speculation that France and Belgium may also face possible cuts added further to the slide in the Euro. The Euro fell from highs near US$1.3180 to US$1.3095, ending US trade near US$1.3120. The Aussie dollar rallied from lows near US98.60c to US99.45, and was near US99.35c in late US trade. And the Japanese yen traded between 83.90 yen per US dollar and JPY83.65, and was around JPY83.75 in late US trade.

US crude oil prices rose on Monday in a volatile trading session. The cold weather in Europe and the US provided a degree of support. Similarly Chevron said it had suspended production from an oil pipeline in Nigeria´s Delta state due to militant activity. The Nymex crude oil contract rose by US79c or 0.9pct to US$88.81 a barrel.

Base metal prices were mostly higher on the London Metal Exchange. Aluminium and Copper led the gains, rising 1.9pct and 1.4pct respectively. The laggard was Nickel which lost 1.8pct. The gold price rallied as the US dollar weakened. Comex gold futures added US$7.30 an ounce to US$1,386.10.

Ahead: In Australia population growth statistics and the Reserve Bank Board minutes are released. In the US no economic data is released.

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