Investors turned cautious yesterday ahead of important events in the Eurozone on Wednesday and the FOMC meeting on Thursday. As the market awaited German Constitutional Court's ruling on the legality of the ESM bailout fund and fiscal treaty, the Dutch elections and the European Commission's plans for a Eurozone banking union, Greece failed to secure support from his coalition for the required Troika austerity measures. Wall Street slipped with the DJIA and the S&P 500 losing -0.39% and -0.61% respectively. In the commodity sector, crude oil prices fluctuated up and down but ended the day large flat. Saudi Arabia's comments that high oil prices were a risk also capped the black gold's rise. Comex gold dropped on profit taking. Yet the slip was limited as weak Chinese economic data raised hopes for monetary easing.

In Greece, Prime Minister Antonis Samaras said that he failed to secure agreement from his coalition partners on 11.5B euro of fiscal reduction required by the EU/ IMF/ECB. The condition is for securing the next tranche of financial assistance from the troika. Finance Minister Yannis Stournaras said that the meeting with the troika "is a difficult discussion" although the government has been "trying to convince them on the soundness of our positions". Talks regarding bailout conditions raised concerns about the situation in Spain. Prime Minister Mariano Rajoy stated that he believes that bailout conditions would be reasonable and he would request for funding if he deems suitable for the country. Yet, Rajoy said that he "could not accept that they tell us which are the concrete policies in which we have to cut or not cut". For instance, Rajoy stated that pensions are the area cannot be reduced because "the pensioner is the most fragile person".

Crude oil prices have been in consolidation over the past few weeks following the rally started in mid-June. Saudi Arabia stated that it's worried about high oil prices which have been staying at 4-month highs. Saudi's oil minister Ali al-Naimi stated that the kingdom "is concerned about rising oil prices in the international oil market. The current high price of oil is simply not supported by market fundamentals". He affirmed that the kingdom would "take all necessary steps to ensure the market is well supplied and to help moderate prices - and we will meet any additional demand from our customers".

On the dataflow, Eurozone's Sentix Investor Confidence improved to -23.2 in September from -30.3 a month ago. The market had anticipated a further decline to -30.5. Some trade data will be released today. UK's trade deficit probably widened to 8.9B pound in July from 10.1B pound in the prior month. The US deficit might have also widened to $44.2B pound in July from $42.9B in June.