European shares edged up on Wednesday but the euro was flat, with many investors out of the markets after Germany reiterated its staunch opposition to common bonds to share the euro zone’s debt burden ahead of a European crisis summit.

The dollar eased from earlier highs and safe-haven German bonds were steady, while riskier assets like commodities eased, with all markets reluctant to advance in either direction before the June 28-29 summit in Brussels

“We expect little in terms of major direction ahead of the EU summit beginning tomorrow, with sentiment unlikely to pick up,” Mitul Kotecha, Head of Global FX Strategy at Credit Agricole said.

The euro was barely changed at just under $1.25, though it was above Tuesday’s trough of $1.2441, which was its lowest level since June 8.

Any move toward the issuance of common euro-zone bonds at the summit, seen by many as a potential solution to Europe’s debt crisis, now in its third year, appeared to have been ruled out after German Chancellor Angela Merkel said it would not occur “as long as I live”.

Following gains in U.S. equities and widespread rises across Asia, the MSCI world equity index was up 0.2 percent at 301.53, while the FTSEurofirst 300 index of top European shares opened up 0.2 percent.

In the debt market attention was on Italy’s planned auction of up to 9 billion euros of six-month T-bills later in the day, which comes before an auction of up to 5.5 billion euros of 5- and 10-year bonds on Thursday.

Source: Business Standard

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