Benzinga Market Primer, Tuesday June 26

U.S. equity futures are higher this morning, reversing yesterday's large losses that were seen on low volume. It may be the case this week that traders do not want to have open positions ahead of the European summit at the end of the week, and so low volume may be the theme of the week. Futures are higher despite the downgrade of 28 Spanish banks by Moody's after the close yesterday, however this was largely expected after the downgrade of Spain's sovereign rating a few weeks ago. S&P 500 futures are higher by about 3.5 points higher and the tech heavy NASDAQ futures are 8.75 points higher.

In other news:

• Spain sold 3-month and 6-month bills this morning, with yields climbing to 2.362% and 3.237% from 0.846% and 3.237%, respectively.


• Italy sold 2-year bonds at 4.712%, higher than the previous 4.037%


• David Rosenberg says on Bloomberg that investors should wait for the "1982 moment" before investing in equities.


• Bank of England Governor King said that easing has worked, England is not in a liquidity trap, and that he is pessimistic on the eurozone.


• Turkey is waiting for a NATO decision before retaliating after Syria shot down a Turkish F4 fighter jet.

Overnight, all major Asian markets closed lower, save for the Hang Seng Index. The notable weak markets were the Korean Kospi, closing down 0.41%, and the Nikkei, closing down 0.81%. European shares are mixed however, with the Spanish Ibex being the notable laggard after the Moody's downgrade.

Spanish 10-year yields are higher this morning after rallying last week. Currently, the benchmark 10-year bond yield is 6.713%, below the dreaded 7% level but still higher. Italian 10-year yields are back above 6% this morning, with the benchmark 10-year bonds now trading at 6.061%, following the news that the world's oldest bank, Monte Dei Paschi di Sienna, is seeking state support to issue €1 billion in bonds to fill a capital shortfall.

Commodities are showing a mixed picture this morning, with energy futures slightly higher and metals slightly lower. WTI crude oil is now trading at $79.30, up 0.11%. Brent crude is much stronger at $91.76, up 0.82%. However, an article in the Financial Times this morning cites that companies are waiting for lower prices to hedge. Copper is down 0.08% this morning to $332.30, continuing its slide on growth fears. Gold is effectively flat and silver is lower by more than 0.6%.

Currencies are mixed this morning, with the dollar index lower to 82.37. The dollar is showing broad based weakness this morning except for against the euro. The EUR/USD rate is lower to 1.2495 but has traded in a 1.2485/1.2535 range for the past 24 hours. But the dollar is weak against most other major currencies. The EUR/CHF is higher this morning, however, after trading as low as 1.2006, just 6 pips above the peg.

The economic data docket is rather full this morning and should create some trading volatility. At 9:00 am, the S&P Case-Schiller Home Price Index was released. At 10:00 am, both consumer confidence and the Richmond Fed Manufacturing Index are to be released. There also treasury auctions of 4-weeks, 1-year, and 2-year maturities.

Good trading and good luck.