US Opening Comments
European equities struggled overnight following worse than expected jobless data out of the UK. This kept the European bond market well bid, with the 10yr Gilt yield down 5bps to 4.579%. US equity indices are flat to mixed, with DOW futures down 0.15% to 11,630, following a night of choppy range-bound trade. S&P futures are down 0.25% to 1,288 and Nasdaq futures are marginally higher at 1946.
The bond market is seeing some early interest with the 10yr, up 0.1% to 115-27, currently trading near overnight highs. Extended buying into the long end has helped push the 30yr up 0.25% to yield 4.526%, the 10yr yield is at 3.89% and the 2yr yield is at 2.42%. The short end of the curve is flat with the 4week bill yielding 1.8% and the 3month bill yielding 1.82%.
The USD is well bid vs. most major currencies with Cable down over 1% to 1.8770 after the BOE lower its growth forecast. GBP is taking it on the chin as a result, with GBP/JPY down 1.5% to 204.23, EUR/GBP up 0.8% to 0.79335 and GBP/CHF down 0.9% to 2.0438. EUR/USD is down 0.25% to 1.4888 and could be in for some near-term consolidation following this morning’s data out of the US. USD/JPY is down 0.4% to 108.87 and is trading the middle of its overnight range after slipping below the 200-Day moving average at 109.10.
Energies were well bid overnight; though appear to be headed lower going into the open and ahead of today’s DOE inventory report which is expected to reveal a 300k build in Crude and a 2.15mln drop in unleaded. Crude is up 0.25% to 113.33, after touching 114 briefly overnight, and unleaded is up 0.85% to 286.76. Natural Gas is down 0.8% to 8.265, though continues to consolidate within the range over the past three sessions. Metals are very well bid with Gold, Platinum and Silver each up over 1% despite the stronger USD.