Market Overview

Benzinga Market Primer, Tuesday July 3

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U.S. equity futures are mixed this morning heading into the holiday break. S&P 500 futures fell 1 point to 1365.51 and Dow Jones futures fell about 10 points. Futures have traded in a narrow band, signaling that there is not a lot of conviction in price moves, probably due to low volume ahead of the half day of trading. Markets are seeing success of the new bailout scheme in Europe this morning. Ireland has announced its first bill sale since September 2010, as yields have fallen on hopes that the bank bailout would be transferred to the European Stability Mechanism and off of the country's balance sheet. Ireland plans to sell 500 million euros of 3-month bills on July 5.

In other news:

  • The Royal Bank of Australia leaves the benchmark rate unchanged at 3.5 percent as expected. The bank had cut rates at the previous two meetings by 0.75 percent total from 4.25 percent to 3.5 percent.
  • Barclays (NYSE: BCS) CEO Bob Diamond has resigned amid the Libor scandal, in which the bank is accused of lying in the reporting of its borrowing costs.
  • Spanish unemployment plummets in June as lots of unemployed workers found temporary jobs in tourism-based industries ahead of the summer travel season.
  • Bloomberg reports that new research shows that the ESM only needs 85 percent of the fund's shares to agree on the bailout, not 100 percent as initially thought.

Asian shares rose overnight, with the Nikkei rising 0.7 percent and the Hang Seng rising 1.5 percent. Australian shares, as measured by the ASX Index, fell 0.14 percent as the Royal Bank of Australia decided to keep rates on hold. European shares are higher this morning, with Italian and German shares leading. The Italian MIB Index rose 0.48 percent and the German DAX rose 0.56 percent in afternoon European trading.

The benchmark Spanish 10-year yield has fallen for a third morning in a row, yielding 6.33 percent. Spanish 2-year bonds yield 4.22 percent, down more than 120 basis points from the pre-summit highs. Italian 10-year yields have fallen in tandem, having fallen to 6.69 percent.

Commodities are higher this morning, as WT crude rose 0.62 percent in early New York trade to $84.27 per barrel. Brent crude rose as well by 0.6 percent to $97.92 per barrel. Metal futures also rose as well, with copper futures rising over 1 percent to $352.55 per pound. Gold rose 0.71 percent to $1,609.10 per ounce and silver rose as well.

The dollar is marginally stronger this morning, as the dollar index rose 0.02 percent to 81.89. The dollar was weak against the euro, the Aussie dollar, and the Swiss Franc and rose against the yen and the pound. The EUR/USD rate rose to 1.2587 as of writing. The EUR/JPY cross rose back above 100 to 100.46.

The economic calendar is rather bleak, with the Redbook, motor vehicle sales, and factory orders on the agenda for today.

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

Posted-In: News Markets Trading Ideas Best of Benzinga


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