Euro strength could make Eurozone exports less competitively priced in foreign markets, extending recession. The major European stock indices declined on Wednesday as euro strength began to worry many investors (NYSEARCA:VGK).  A stronger euro makes the region’s exports less competitively priced in foreign markets.  Sluggish export business has been one of the ongoing problems in the Eurozone recession.  Wednesday’s advance in euro valuation underscored the necessity for the European Central Bank to abandon its agenda for strengthening the currency (NYSEARCA:FXE).  Many analysts assumed that after the 278 European banks announced plans for an early repayment of €137.2 billion toward the first tranche of LTRO (Long Term Refinancing Operation) loans, the banks would take advantage of Wednesday’s 3-month loan program offered by the ECB.  (Although the program was part of LTRO, three months hardly qualifies as “long term” – which is what the first two letters of the acronym imply.)   The fact that the banks availed themselves of only €3.7 billion of the amount available in the three-month program dispelled assumptions that the banks had planned on simply rolling their 3-year LTRO debt into 3-month loans.  The banks proved that they were much stronger than many assumed and this helped strengthen the euro. China’s stock market rally continued on Wednesday as the real estate sector led the advance.  The Shanghai Composite Index jumped 1.00 percent to 2,382 (NYSEARCA:FXI).  Hong Kong’s Hang Seng Index surged 0.71 percent to 23,822 (NYSEARCA:EWH). As of 11:16 EST, the Euro STOXX 50 Index fell 0.58 percent to 2,733 – staying well above its 50-day moving average of 2,644.  After breaking above its resistance level of 2,700 on January 21, the STOXX 50 is once again attempting a sustained advance above that level, which has been a barrier since the beginning of the new year.  Its Relative Strength Index is 68.55 (NYSEARCA:FEZ).  The FTSE 100 Index declined 0.25 percent to 6,323 (NYSEARCA:EWU).  The German DAX Index dropped 0.59 percent to 7,802 (NYSEARCA:EWG).  France’s CAC 40 Index dropped 0.53 percent to 3,766 (NYSEARCA:EWQ).  Spain’s IBEX 35 Index fell 0.77 percent to 8,576 (NYSEARCA:EWP).  Italy’s FTSE MIB Index took a 3.32 percent nosedive to 17,299 as it has been overbought all month, continuously advancing, especially on those days when other European stock indices declined (NYSEARCA:EWI). As of 11:35 EST, the euro advanced 0.63 percent against the dollar, trading at $1.3577 (NYSEARCA:FXE). Spain’s ten-year bond yield advanced to 5.19 percent on Wednesday from Tuesday’s closing level of 5.15 percent.  Spain’s two-year bond yield climbed to 2.52 percent on Wednesday from Tuesday’s closing level of 2.45 percent (NYSEARCA:EWP). Italy’s ten-year bond yield jumped to 4.31 percent on Wednesday from Tuesday’s closing level of 4.19 percent (NYSEARCA:EWI). On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced by 28 cents (0.24 percent) to $114.64/bbl. (NYSEARCA:BNO, NYSEARCA:USO).   U.S. Oil Gushing, Oil Stocks Getting Ready to Move February Gold futures advanced by $18.80 (1.13 percent) to $1,679.60 per ounce (NYSEARCA:GLD).   The World According to Doug Casey In Japan, Nikkei 225 Stock Average closed at its highest level since April 30, 2010 as Central Japan Railway Company pulled a train of companies which beat earnings estimates.  The yen was back down to 91 yen per American dollar at noon EST on Wednesday (NYSEARCA:FXY).  The Nikkei 225 Stock Average skyrocketed 2.28 percent to 11,113 (NYSEARCA:EWJ). American stock index futures trading was in negative territory ahead of Wednesday’s opening bell following the report that fourth quarter GDP contracted by 0.10 percent.  The March 13 Dow Jones Industrials future declined 0.10 percent to 13,894 as of 9:12 EST.  The March 13 S&P 500 future fell 0.19 percent to 1,502 (NYSEARCA:SPY).  The March 13 Nasdaq 100 future declined 0.11 percent to 2,739. Bottom line:  European investors were obviously taken aback by the euro’s surge on Wednesday as the major European stock indices retreated on the news. Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.