Sentiment weakened overnight, with Treasuries advancing amid a selloff in Asian stocks that sent the Nikkei into a technical bear market after the World Bank lowered global growth forecasts. S&P 500 futures are down -0.2% in early trading before retail sales figures are released at 8:30am EST and euro-area stocks are down with the Euro-Stoxx 50 declining -0.9%. Across the curve Treasury yields declined, with tens falling -5bps to 2.18% in a traditional risk-off trade. Crude oil, gold, and copper are down -0.55%, -0.6%, and -1% respectively. The dollar index is off by -0.2% and the euro is lower by -0.17%.
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S&P 500 futures are rising this morning, indicating the index may snap a two-day decline, as euro-area stocks rebounded and the yen weakened after gaining the most versus the dollar in three years. Asian equities were lower with the Topix falling -1% yesterday after the BOJ refrained from adding stimulus or expanding its toolkit to reign in volatility in its sovereign debt. More than $2.5 trillion in global equity values have been erased since Ben Bernanke first said on May 22 that the Fed “could” scale back stimulus efforts if the employment outlook shows “sustainable improvement.” Crude oil and gold are nearly unchanged, while front-month copper futures are higher by +0.6%. Wheat futures are nearly +2% higher on U.S. crop concerns, halting the longest slump in four months. Treasuries were steady overnight before the Treasury sells $21B 10yr notes in a reopening; yields on tens are currently trading at 2.17%.
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