• German Chancellor Angela Merkel and French President Sarkozy meet in Paris today to address differences in their views on pushing tighter budgetary integration across the EU. The meeting comes ahead of the EU summit in Brussels Friday. France opposes Germany’s push to force euro nations to surrender budgetary control to a European authority. From Reuters News.
• Italy’s Prime Minister Mario Monti will present a 30B euro austerity package to Parliament today. The plan, approved by his cabinet, will seek changes to pension payouts, resurrects property taxes, raises taxes on luxury goods, and shrinks the size of government. After passing the measures there will be a huge test for Monti, as Italy faces another recession in 2012. From Bloomberg News.
• The relentless rise in Italian and Spanish bond yields reversed as negotiations on tighter fiscal unity in the euro zone continue, and as the market enjoyed coordinated central bank action. Yields on Italian 10 year bonds declined from a high of 7.16% last week to the 6 1/2% area. The respite from waves of selling may persist for a time, but 2012 presents some massive funding pressures across the euro zone, however. From the Wall Street Journal.
• The normal slowdown in currency trading is occurring earlier this year, as investors and speculators suffer headline fatigue and reign in activity. Some currency pairs saw volumes shrink as much as 30% in November compared to previous months according to Citi. Other banks claimed volumes were down 15% in the month. From the Financial Times.