Benzinga Market Primer, Friday June 15
U.S. stock futures are higher this morning, as investors are beginning to believe that a globally coordinated stimulus package is imminent.
At the end of the previous trading session, traders became aware that policy makers stand ready to act in the case of another failed Greek election this Sunday and that the Bank of England, along with other U.K. regulators, said they are going to act to aid the bond market domestically.
S&P futures are slightly higher by three points this morning, but it seems likely that the day will be slow ahead of the Greek elections.
Overnight, these othere news stories broke:
- Moody's downgrades five Dutch banks and says that a Greek exit would prompt more downgrades, which is a negative for the entire financial sector (NYSE: XLF).
- Bank of England Governor Mervyn King said that authorities have done everything "bar throwing the kitchen sink at it" and that policy makers can still do more.
- Draghi once again asks the European politicians to act first.
- The Bank of Japan keeps rates on hold.
- The European Union's Rehn sees downside risks to the economy, cites financial stresses as the cause.
Equity futures are slightly higher this morning, with S&P 500 futures higher by about three points. Overnight, Asian shares closed higher, buoyed by the positive sentiment surrounding hopes for further central bank liquidity. The Hang Seng Index notably outperformed, closing well over 2%. European shares are higher this morning with the Italian MIB up over 2%.
Commodities are largely higher, with WTI crude trading up 0.63% to $84.44 per barrel and Brent crude trading 0.44% higher at $97.60 per barrel. Copper is trading higher by 0.7% to $337.80, potentially signaling that the market is less concerned with growth scares and more concerned with Europe. Gold is higher by 0.39% and silver is up by about 1%.
Moving into crisis watch, Spanish 10-year yields have backed off of the highs but remain at elevated levels, with yields currently trading at 6.86%. Italian 10-year yields have fallen back below 6% and now trade at 5.99%. The ECB intervention may be responsible for the drop in yields, as well as the overall risk-on sentiment that is reigning markets currently.
Currencies are a mixed bag, as the euro short covering that was witnessed yesterday seems to be petering out. The euro is weak against a host of currencies, including the pound, the yen, and the U.S. dollar. The dollar index is lower by about 0.2% as risk currencies including the Aussie dollar and New Zealand dollar rally.
On the economic front, today's releases include Empire State Manufacturing Survey and Industrial Production. The market is expecting a slowdown in the index to 13.0 from 17.1, showing a slowdown in manufacturing growth in the New York Federal Reserve's jurisdiction. The market is also expecting a slowdown in industrial production, with the reading expected at flat, a print of 0.0% month-over-month as compared to the prior 1.1% reading.
Good luck and good trading.
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