Sluggish commodities demand. Were on tuesday and off to a slightly, what, soft close yesterday for european stocks. Right now were pretty evenlies passed, advancers just about outpacing decliners on the stoxx 600, but not by much, 5 4 if that. So one hour into the trading session, this is where we stand. The ftse 100 just flat, a flat close yesterday. The dax was essentially fairly flat yesterday. Up just ten points. The cac 40 yesterday doing a little bit better, up 0. 2 . First pointing out ftse up 9 out of the last 11. We have seen yields continue to decline in spain. Just 5. 23 , but still capped. Spain requesting financial assistance. Well keep our eye on the uk as we head toward the bank of england meeting this week p. Dollar index has hit a one month low. Youre redollar up to eurodollar up near the high we saw yesterday. Dollaryen moving away from the 7 1 2 month high. Rebounding against the dollar and the euro ir, as well. Priced in a lot in terms of Monetary Policy out of japan. And aussie dollar, 1. 0463, yes, we have cut the cash rate in australia to match the record low of 3 . But we see the aussie dollar rise because its pretty much all priced in. Sterlingdollar also getting a benefit. Back over 1. 61. So thats where we stand in european trade. Lets recap the asian trading session for the first time today, when you not the last. Thank you, ross. Not the last. Thank you, ross. Shanghai composite recovered from its four year low as property financials, rebounded. Shale gas and geothermal plays also rallied as beijing plans to cut its annual coal consumption target by 2015. The hang seng finished m eed marginally in the green. Losses in the Services Sector capped the up side. In japan, down beat manufacturing data spurred profit taking on exporters, but sharp shares gained on a deal with qualcomm. More on that coming up from tokyo. South korea kospi also lost a quarter of a percent today. Heavy weight cost company underperformed as investors fear the possible bid for canadian mine may hurt it balance sheet. Sherry has more details on that later. And in australia, investors shrugged off the rba rate cut which was largely priced in. Well have more on that, as well. Banks, miners and defensive stocks broadly lower. Sensex trading higher by 0. 2 . Back to you. Catch you a little later. Thats the latest from singapore. Lets get the view with daniel morris, jpmorgan. Daniel, good to see you. Whats your view at the moment . I want to put the u. S. Data into context on the ism manufacturing because it didnt tally with markets of smaller companies, as well, so what does it mean . You kind of picked the one that you want or at least tells the story that you want to tell. They kind of balance each other out, one positive, one negative. So if you look at the other trends for the economy, its still the same of steady slow appreciation and that there really i dont believe is any effect from the supposed anxiety about the fiscal cliff. I think people know there will be some type of resolution. We didnt know the details or when. But companies are still investing the way they would normally do and theyre not stopping because of that doesnt make us quake a bit about the jobs report later this will week and what that does for investors nerves . We know it will be worse than it would have been because of super storm sandy. So you didnt know how much it was to do with that and how much was the economy. So it will be a bit of a wash in terms of reading the tea leaves for the u. S. So the growth picture for the u. S. , we sort of 1 , 2 , depending on what happens with the fiscal cliff. What do you think, 2. 5 . Yeah, i think we should be 2. 5 to 3 by the end of next year. Which might be a slightly better outturn. China seems to be back on track. Is there anything in europe whats the tail risk at the moment . I think theres two things that could still go wrong in europe. One, theres always political risk. In italy, you do have elections coming up. Theres a chance getting a higher share than people anticipate. But even then, the financial forces are going to force any government that comes into power to more or less stick to the plan morsi set out. On the other hand, theres always spain, the worries that with 25 unemployment, that you would see the default rate particularly on Residential Mortgages shoot up, its 3 now, which is Pretty Amazing given the struggles within the economy, but we think it will go up somewhat, but really not any more than people have already priced in. And then ten year yields, 5. 24 . At the moment, relatively speaking, pretty comfortable. Maybe a little bit too comfortable and we certainly dont want to get complace complacent. Yields are where they were say in march of this year and then subsequently they shot up to 7. 5 . We know with the draghi put that that wont happen, but we dont want to think that there is only one way yesterday said, look, sort of the idea of the risk on phrase, certainly for he was looking at it from credit markets, but would stay on until the middle i think lite bit more selective. It wont be just everything goes up now. We have to start thinking about companies and sectors again the way we should do as investors. That would be nice. Quite nice if we could actually an sliz stuff on its own merits anden vest accordingly. Do you think we can get away from the general political driven theme . Probably never away, but relatively diminished. That would be nice. Plenty more to come from you. Also we head out to sydney. Australian Central Banks cutting rates to match a three year low. That will be in about ten minutes. And u. S. Companies race to go beat the fiscal cliff, well take a look at the biggest payouts from morning at 10 30 london. In brussels, eurozone finance ministers getting ready to tackle Banking Union proposals. Well have updates throughout the show. And are you going to hit the slopes during the holidays or in the course of the ski season . 11 40, well talk, yes, the ski season. One of the things that make winter great for the guest who for the time being is keeping warm in orlando, florida. We will do that. Unemployment in spain has continued to rise, by 1. 5 in november, pushing the total number to 4. 2 million people. French finance minister says hes confident the buy back plan will go well. Silvia is still there as they work their way towards Banking Union proposals. Silvia, i dont know where i dont know if i want to talk about greece or not, whether i want to dive straight into the Banking Union and what chance have we possibly got of getting agreement. Lets talk about greece, much more fun. No, greece we have to get out of the way. Is the debt by back Program Going to be successful, everyone nds it will. We know thats the one little lynchpin on which Everything Else rests. So if its not, the money will not flow, but everybody insists as when he headed into the Euro Group Meeting yesterday that it will be successful. Thats also what what we hear from the greeks. Theres a bit of arm fwising, but it will probably go through. And then lo and behold ahead of the actual summit in the morning, they can sign up the check for the next greek installment also we hope. Were also closer to a little rescue package for cypress. Spanish aid package for the banks is on track. So that was the working list last night. Another thing on the todo list. The head of the euro group confirmed last night that, no, i will not extend anything now, i will definitely leave as head of the euro group at the end of this year, so there will be another personnel debate. Remember they asked him will to stay on for another half year because they couldnt work out who the successor might be or should be. Nobody wanted the germans or the french and they couldnt agree on anybody else. So how important is his role and therefore who is the right person to replace him . I think the role is important to the extend that the head of the euro group has to have two major qualities. A, he has to have another clout to keep the shall i say flee circus together sometimes, and he alsos have to have enough of a conciliatory nature to balance out between the opposing view. So thats why jean claude was perfect. Hes been a finance minister long enough and hes been there from the start. It wont be easy to replace him. Especially Banking Union, banking supervision, there is so much to put on track yet. Not only inside the euro group, but with the eu as a whole that somebody that has a bit of umpf would be very much needed. But we havent found that person yet. I was about to launch into Banking Unions. But i might i wanted to go into that whole sarcasm who will regulate the german Savings Banks when they fund german business and the rest of the eu would like to do it and germany wont. Seems like a bit of a Sticking Point to me. There are lots of Sticking Points. First of all, who is going to be the supervisor. For the eurozone, it would be the ecb. But if the ecb is the one big gorilla on the block sitting there in all the meetings so to speak for 17 country, then all the others even if they have their own voice will be slightly sidelined because theres one big power and all the others are split up. So there was a discussion should there be a eurozone supervisor, that doesnt quite work. Do we need a some rice or who works for everybody he, where should that sit. Brussels, also lots of question marks. And obviously then we get to the point where all the deposit insurances lie. Every country has a different scheme. So i think were a far cry away from having anything like a european Banking Union. I would tend to agree as ever. Thank you for now. Well catch you a little later. How much of this matters . Investors say if we move toward a Banking Union, you cant have any kind of economic without a bank union. How much does that matter . For investors today, probably not a whole lot. Hes broader long term questions about what the eurozone is going to look like, what is going to be the balance going to be, we have to have vote, treaties, and its difficult doesnt matter in the short term 245 ththat they dont let w up . You think if you hold it for five years do you still get something back. There are a lot of analysts saying european equities will outperform u. S. Equities. When you look at the rapid growth rates, is that just because theyre undervalued . What is it . Do you agree with it . If not, why not . Sure. As a region, its actually not undervalued. Its average right now. There was a discount. There has been times over the last year thats gone. Europe has done reasonably well, u. S. Is off, so now were equal on valuation. But that doesnt mean that within sectors there is not very undervalued regions. Italy for example is still very clean. So it depends. Other news were following, a bomb has exploded in the offices of golden dawn early this morning. Police sources have told reuters there was damage caused to the building in an athens suburb, but no casualties. And in the states the white house and Top Democrats are dismissing the Budget Proposal put forward by republicans saying it doesnt address the president s pledge to hike taxes on the wealthy. The plan includes 800 billion in new tax revenues by cutting loopholes and deductions, but leaves the bush era tax cuts in place for everyone. Thats half of what the president has proposed. It also cut 1. 2 trillion in mandatory and discretionary spending. The republican plan includes 600 billion in entitlement savings and raising the eligibility age for medicare and changing how cost of living increases are calculated for social security. White house Officials Say the two sides will continue to negotiate ways to avoid the year end fiscal cliff. And president obama is meeting with a group u. S. Governors today around 10 00 a. M. Eastern. It includes jack markell, mary fallon, scott walker. The governors will discuss how the fiscal cliff will impact their states and possible solutions. Its also expected to meet with House Republicans, as well, this week. And oracle is amongst the latest of speeding up their dividend pay outs to avoid possible tax hikes because of the fiscal cliff. They will pay dividends a total of 18 cents a share for the next three quarters. Larry ellison didnt take part in the decision, but he will benefit. He own as 23 stake in the company, so hell receive around 198 million. Yes, you heard it right. Oracle stock down 0. 8 despite that in frankfurt. Still to come, Interest Rates in australia are moving down. Down under. Find out what central bank is worried about when we come back. Australia Central Bank Held its rate setting meeting. Matthew taylor has the details. The market had been pricing in a 25 basis point rate cut and the reserve bank delivered with an early christmas present. Central bank lowering the cash rate to 3 , this is the lowest level since the height of the Global Financial crisis back in 2009. The rba says while its still waiting to seat impact of its previous 150 basis points of rate cuts work its way through the economy, the Global Outlook is still seen to the down side and judge policy easing was appropriate right now. It does point to some signs of strength, though, particularly in china saying growth there appears to have stabilized and says the european economy remains a problem. Domestically it says a return to strong consumption in australia is unlikely and that the rate cut is designed to foster growth in the local economy. The attention here in australia is now turning to wednesdays gdp figures with the treasurer wayne swan saying he wouldnt be surprised to see a slight moderation in those growth numbers. Thats the latest from sydney. Back to you. Despite that, aussie dollar actually edging higher against the u. S. Dollar 1. 05. Aussie dollar moving higher after a rate cut suggests very much priced in. Where do we go from here . That was very much priced in. I think probably what surprised people today was just how neutral the statement was that we got from the rba, in effect how similar it was to the november statement where they held rates unchanged. From here, i think really the focus turns to whats happening globally, particularly negotiations around the u. S. Fiscal cliff. Now, we think those negotiations will continue and that the deadlock between politics will continue, as well. That and he unlikely to be supportive of risky assets and we think the Australian Dollar will probably suffer because of that. The rba i guess trying to stimulate other sectors of the economy. What hope do they have of doing that . They have a high hope. What they want is a smooth transition, the Mining Sector of the company starts to wind down and provide less of an impetus to growth, they want to see the household sector play a larger role and the only way really in which they have to do that is to loosen policy and it will pass through to lower Mortgage Rates for those households. Are rates going to go lower . Some futures are predicting it 2. 5 . Ive seen some economists talk about a floor of 2 . Is that feasible . I think its feasible, but not our view. I think todays statement supports the view weve had for a while now which is once we have this cut which we had today, that rates will probably remain unchanged. At least we see a deterioration in either the Global Environment or at least we see domestic growth really fall off from here. As the rba made the point and one that we agree with is that theres still time for these rate cuts which weve had delivered to pass through to the economy itself. We know Monetary Policy takes between one and two years to have an effect. What if on the contrary we get better growth out of china and we see Commodity Prices go up again and now when weve already had all these rate cuts, is there a risk then to inflation for the country . I think there is. That was one thing that the rba pointed to in the november statement, then worried that underlying inflation had ticked up towards the middle of the 2 to 3 target. I think from here, if we do get a scenario like that where the u. S. Fiscal issues are resolved, i think the statement the rb after the has given us today probably puts them in a good position to be able to move policy higher if they have to next year in response to higher inflation. So what happens to the aussie dollar now . Well, as i said, i think that the issue that we have going into year end is the fiscal cliff. We think that it wont be resolved quickly, and we think that it will weigh on Financial Market confidence. It also will see peoples expectations of u. S. Growth for the First Quarter of next year be revised lower. I think overall that environment is one where the u. S. Dollar strengthens and where risky assets dont did well. So we think the Australian Dollar will fall from here into year end. All right. Good to see you. Thanks for that. Shares in singapore olam moved higher. Olam is trying to counter the muddy waters report which has accused of firm of improper accounting. While the issue was meant to shore up confidence, short severals told cnbc it signals just the opposite. Actually, we view this Debt Offering as a clear victory for muddy waters. Less than a week ago, we came out with a report warning that olam might collapse and we now have what appears to be effectively a stop gap sovereign bailout of the company. And south korea posco has won a right to get a stake in the mining operator. But investors werent thrilled. Hi, cheri. Hi, ross. Thats right, posco shares ended the session down, but along with other steel maker s listed on te bourse with slow u. S. Manufacturing data overnight, plus the industry has been struggling with falling profits this year with a slowing demand. Especially markets like china. And the ideal way to ride out these difficult times and to reduce costs would