February 27, 2012
U.S. equity futures are pointing to a lower open this morning, amid declining stock indices in Europe after a meeting between G20 finance ministers and central bankers saw no agreement on boosting funding for the IMF. The officials indicated there would be no such agreement until European leaders take action to boost the size of the rescue funds aiming to provide a firewall against contagion. “The world’s leaders won’t help Europe out until, as U.K. Chancellor George Osborne said, it shows the color of its own money,” said Kathleen Brooks, a research director at Forex.com. European events are likely to be a major driver for the markets this week, wrote strategists at KBC Bank in Brussels. This week’s calendar features a number of debt auctions by nations within the euro-zone, a parliamentary vote regarding Greece’s second round of bailout funds, and Wednesday’s three-year long-term refinancing operation by the ECB. Many equity markets find themselves trading near critical levels after the strong rally over the past 2 and a half months; this is an indication that risks on a profit-taking move have increased, and may be triggered by a disappointment in any one of these events. “Europe still has work to do in terms of the great bailout and there seems to be some things various parties can’t agree upon, so that’s winding down on the market at the moment,” said Matt Riordan, who helps manage $6.8 billion in Sydney at Paradice Investment Management Pty.
The yen is gaining and the U.S. Dollar is up +.199 points as sentiment continues to sour on the morning. Brent crude has retreated from its nine-month high, and U.S. treasuries have decreased -3bps to 1.95% in early morning trading.
Today’s Economic Data Lineup (EST)
10am, Pending Home Sales, Jan., est. 1.0% from -3.5%
10:30am, Dallas Fed, est. 15.5 from 15.3
11:00am, Fed buying $4.25b-$5b notes in 2/28/2018-2/15/2020 range
11:30am, U.S. selling $33b 3-month bills, $31b 6-month bills
~12:00pm, Germany’s Bundestag votes on Greek bailout package
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