More better than expected US housing data sent oil and stocks up overnight as the US shows signs of economic recovery, despite European uncertainty reducing demand worldwide and providing a welcome distraction for investors ahead of the start of the European summit in Brussels today.

The National Association of Realtors reported that pending home sales increased 5.9% in May, way above market expectations for a 1% gain and equaling a two-year high reached in March. This came just days after Standard & Poor’s-Case-Shiller home price index fell at an annualized rate of 1.9% in April, better than expectations for a 2.5% drop. It also showed that seasonally-adjusted prices increased 0.7% in April from March giving hope to investors that the US economy is slowly but surely demonstrating it is on the road to recovery.

Also boosting investor confidence in the US was the release of durable goods data which increased by a seasonally adjusted 1.1% in May, outpacing market expectations for a 0.4% gain. Helping send stocks higher across the globe, ahead of the key summit was Japanese retail sales beating market expectations, rising 3.6% in May, well above expectations for a gain of 3.0%. As a result the Nikkei was up 1.58% at time of writing (5.40am GMT) with the Down Jones closing up 0.74%.

Today’s focus will be almost entirely on events in Europe. The meeting between the European leaders today in Belgium has already got investors fearing the summit will not address the continent’s debt woes and will not produce enough concrete policies to finally tackle the crisis and prevent contagion. Talk of the European Central Bank will cut interest rates next week to guide the eurozone economy away from decline sent the euro down against the yen in Asian trading, with the Euro trading at approximately 0% lower against the a safe-haven currency. Expect increased volatility in the Euro today on comments out of the European Union summit whilst Germany is to release unemployment data later today too.

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