Benzinga Market Primer, Monday July 9

Global financial markets are in risk-off mode this morning on the back of the dismal U.S. employment report for June released last Friday and renewed fears over the mechanics of the Spanish bailout. Spanish 10-year yields haves risen to 7.07 percent as traders worry that the new direct bank recapitalization may take too long to be implemented before more is needed to be done. Also, fears over the future of the Eurozone breaking apart completely have risen, as German lawmakers and justices have questioned Chancellor Angela Merkel's defence of the currency union and reasoning for bailouts. U.S. equity futures are lower this morning, S&P 500 futures fell 5 points and NASDAQ futures fell 5 as well.

In other news:

• EU commissioners are set to grant Spain one additional year, to 2014, to meet the 3 percent budget deficit goals, as deteriorating economic indicators and higher bond yields make deficit cutting difficult.


• The Fed's Charles Evans once again publicly voiced concern over the economy and advocated his stance for further bond purchases, probably through mortgage backed securities.


• Nouriel Roubini, commonly known as Dr. Doom for his dark economic forecasts, predicts a worse collapse in 2013 than the one seen in 2008.


• Germany sold 6-month bills at a yield of negative 0.034 percent, lower than the previous 0.007 percent.


• The OECD measure of Composite Leading Indicators fell to 100.3 in June, lower than the previous 100.4. Forecasts had expected a reading of 100.5 and the previous was revised lower from 100.5 to 100.4.

Asian shares fell sharply overnight, on the back of the weak economic reports globally. The Nikkei fell 1.37 percent on these fears and Chinese stocks fell a whopping 2.37 percent, as Premier Wen Jiabao publicly expressed fears of downside risks to the economy. In Europe, shares are mixed, as German shares traded flat as of writing and Spanish shares traded lower by over 1 percent.

Commodities are reversing Friday's losses this morning, led by strength in energy futures and and grain futures due to the heat wave that has struck much of the U.S. Brent and WTI crude both rose about 0.75 percent and Natural Gas futures traded higher by 1.8 percent. Corn, Soybean, and Wheat futures are also strong this morning, all rising over 2.5 percent as fears over the heat wave hurting crop yields arise. Metals are reflecting the strength seen in other commodities this morning. Copper is higher by 0.6 percent, and gold and silver are higher in tandem.

The EUR/USD has spiked in the last hour after falling earlier on headlines that no sovereign guarantee would be needed to bailout the banks directly from the bailout funds, however this was already agreed upon at the summit in Brussels nearly two weeks ago. The EUR/USD traded at 1.2298 on the news. Overall, the dollar is effectively flat against a basket of currencies, measured by the Dollar Index, falling a mere 0.06 percent

The economic calendar is empty today, so traders will be exposed to headlines and speeches that could move financial markets.

Good trading and good luck. Have a happy Independence Day in the U.S.