By Rudi Filapek-Vandyck

The S&P500 gained 0.57% overnight to close at 1285.50, up 7.32pts. The Nasdaq advanced 0.66% to 2778.11 and for the Dow Industrials (DJIA) the gain was 26.49, or 0.22%, to close at 12,127.95.

Yesterday was the day when a hastily convened telephone conference by the G7 ended with yet another fizzer (no concrete result - who expected more?) and when the Spanish government made it official: Spain has effectively been shut off from international debt markets. The country can no longer finance its needs through issuing debt via the open market place, which is what governments usually do when they are in need of refinancing expiring debt.

Yet global risk assets enjoyed a day of relief - there's only so many beatings that can be absorbed on an ongoing basis. SPI futures this morning are indicating a mild positive bias for the open (up 7 points).

If one really wanted to find a cliffhanger -something to pin down as the main culprit behind last night's positive moves- there was the release of the non-manufacturing (services) May ISM in the US, which turned out pretty much unchanged from April and in line with economists' expectations prior to the release. This must have come as a relief after the stream of disappointing data releases over recent weeks, were it not that the finer detail revealed further deterioration in future employment trends.

Maybe it was a case of we already know employment trends are disappointing (following Friday's non-farm payrolls disaster), but we're very, very, very happy that the services sector in the US at least did not weaken while all other data seem to be doing just that?

Also, during the weekend it has emerged that 50% of all trading volumes in Australia are now done by algorithms and other robots. In the US, as we all know, the comparable percentage is well above half.

Makes one wonder: should talking heads on Financial TV still use phrases such as "investors are more confident" or "investors see a silver lining on the horizon"? I'll leave the question unanswered, but will resume on this matter at some point.

I had a good laugh this morning (always good to start the day with a loud belting out hyena, unless the neighbours are at home) and the source of my joy was the following Tweet on Twitter (from Zerohedge):

"Obama, British PM Cameron discussed economic situation in Europe.... And congratulated each other on not being in the EUR?"

Now that we're on this path, consider the following newsbytes I picked up this morning:

- Morgan Stanley now lending out Facebook shares to sell short

- Al Qaeda's No. 2 leader, Abu Yahya al-Libi, killed by drone strike in Pakistan, a U.S. official says

- The FBI is investigating leaks about a U.S. cyberattack program aimed at Iran's nuclear facilities. http://on.wsj.com/MakOOU

For what it's worth, technical chartists in general continue to issue warnings about the shaky picture for risk assets, including US equities. Richard Russell, by the way, world famous as the analyst behind Dow Theory Letters yesterday officially called a new Bear Market for US equities. I intend to follow up on this later.

Meanwhile in the local market, and I don't want to jinx any of these stocks, but has anyone else noticed? ASG Group ((ASZ)) shares are still trading at $0.89 (that's up more than 10% since March plus a healthy dividend on top). Ardent Leisure ((AAD)) shares were up more than 3.5% in yesterday's session (still paying an unfranked 9%-plus in dividends) and Thorn Group ((TGA)) shares are holding their ground around the $1.50 mark.

But, of course, you all want to know about miners and energy companies, not about boring dividend payers. Well, in that case, a recent gathering of major clients and Barclays analysts confirmed the general consensus still believes things will pick up in China in the second half of the year and this should have a beneficial impact on those lagging share prices of BHP Billiton ((BHP)) and the likes.

Today, the real focus for markets will be on the ECB policy decision in Europe. On balance, the market expects rates to be left unchanged at 1% but there is a lot of chatter about the potential for the ECB to either (unexpectedly) lower rates and/or announce further LTROs (cheap cash for banks). This makes for an interesting conundrum for traders (and robots) because if the ECB does choose to sit on its hands, markets are likely to express their disappointment and probably not just through a weaker euro.

The calendar for today also comprises of second estimates of Q1 Eurozone GDP, a German 5-yr bond auction and Portuguese 6 and 12 month bill auctions. In the US, the Fed will release the Beige Book. In Australia we'll find out what GDP growth looked like in Q1.

And oh yes, the new game in town? It's called lowering growth estimates for China... (see also illustration that accompanied The Monday Report and Next Week At A Glance on Friday).

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