Overnight Sentiment - Futures Jubilant After Italy Places €11 Billion In Bills

Tyler Durden's picture


If yesterday was risk off on concerns Europe is sinking following last week's disastrous Spanish long-term auction, today is risk on after Italy managed to successfully place 91 and 361-Day bills, in line with expected amounts, if at much higher yields, and lower Bid To Covers. Specifically, Italy sold €3 billion in 91 day bills. The yield soared from 0.492% on March 13 to 1.249%, while the Bid to Cover plunged from 2.23 to 1.81. Same for the 361-Day Bill auction, where €8 billion in Bills (in line with target) were sold at 2.840%, double the yield of 1.405% from a month ago, and a Bid To Cover just modestly better: from 1.38 to 1.52. As usual the market continues to blatantly ignore the thin white line of bond issuance: every Bill and Bond auction that matures within the maturity (3 Years) of the LTRO will succeed: period. It is the ones maturity longer than 3 years - such as Spain's last week - that are the test. Comparing one to another is apples and oranges. But risk on don't care, and as a result futures are surging disproportionately, even as Spanish and Italian bonds are just modestly tighter following the bond results. But we will once again meander whack-a-mole style from auction to auction until the market is reminded of this little nuance. In other news, Iran just announced it is following its cut in Greek and Spanish exports, by halting exports to Germany next, while continuing the theme of 2011 Deja Vu, Indonesia's Aceh was struck two hours ago with a massive 8.7 Earthquake, with an 8.8 aftershock off Sumatra, coupled with a tsunami warning. Luckily, there are no initial reports of casualties or major damage.

For the rest of the overnight summary we go to BofA:

In focus

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Market action

Asian equity markets finished mostly lower as Euro area worries caused the regions investors to go into risk off mode. The Hang Seng fell the most falling 1.1% while the Japanese Nikkei lost 0.8%. On the flip side, the Shanghai Composite finished 0.1% higher while the Indian Sensex finished flat. The Korean Kospi was closed today.

In Europe, equities are rebounding from their two month low as investors dive back into the market to pick up bargains. Leading today's advance are the region's automakers and banks. In the aggregate European shares are 0.6% higher. Blue chips are enjoying a 1.1% lift while German and French listed firms outperform the broader market as well, up 1.0% and 0.8% respectively. Shares trading in London are lagging behind the market aggregate up only 0.3%. At home, futures are pointing to a strong rebound from yesterday's sell off. The S&P 500 is set to open up 0.8% higher.

In bondland, Treasuries are backing up across the curve. The five, ten and thirty years issuances are all 3bps higher with the 10-year yield currently trading at 2.02%. In Europe, peripheral yields are rising. Spain's 10-year note is approaching 6% as the note's yield rose 16bp today to 5.78%. The Italian 10-year is up 21bp to 5.45%.

The dollar is weakening against a basket of other major currencies. The DXY index is 0.4% higher. Commodities are mixed with WTI crude oil up 67 cents to $101.70 while gold is down $3.85 an ounce to $1,656.05 a barrel.

Today's events

It will be a busy day for the US economics team. At 8:30 am, we will be sorting through two economic releases: import prices for March and the trade balance for February. Import prices are expected to rise 0.7% in March, stronger than the 0.4% increase in February for this non-seasonally series. However, as earlier jumps in imported crude oil prices disappear from the annual calculation, the year-on-year growth rate should decelerate to 3.2% from 5.5% in February. We expect little change in the trade balance in February, with a deficit of $52.5bn.

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Wed, 04/11/2012 - 07:22 | 2333951 sampo
sampo's picture

A new earthquake of 8,2 just hit the same area.

Wed, 04/11/2012 - 14:30 | 2335288 PayneNita
PayneNita's picture

my classmate's sister makes $62 hourly on the laptop. She has been unemployed for 5 months but last month her pay check was $13843 just working on the laptop for a few hours. Read more on this web site ....  http://bit.ly/FPPP3j

Wed, 04/11/2012 - 07:23 | 2333953 achmachat
achmachat's picture

The cake is a lie!

Wed, 04/11/2012 - 07:54 | 2333994 HD
HD's picture

This was a triumph.
I'm making a note here: HUGE SUCCESS.
It's hard to overstate my satisfaction.


We do what we must
because we can.
For the good of all of us.
Except the ones who are dead.
But there's no sense crying over every mistake.
You just keep on trying till you run out of cake.

Wed, 04/11/2012 - 07:25 | 2333954 Racer
Racer's picture

Isn't it as it ever was that fake futures are 'jubilant' after a big selloff because it is very thin overnight trading?! And soooo easy to manipulate............

Wed, 04/11/2012 - 08:42 | 2334069 mendigo
mendigo's picture

Maybe also reflecting relief that ponzi continues for at least until next auction - event horizon and faith compressing.

Wed, 04/11/2012 - 07:25 | 2333955 Silverhog
Silverhog's picture

Another fairy dust day. Italy sells 11 Billion rolls of toilet paper.

Wed, 04/11/2012 - 07:32 | 2333971 cossack55
cossack55's picture

Having sampled German army TP on occasion, I would think Italian paper is much softer.  Was probably just electrons tho.  Have never used electrons before. Hmmmmm.....

Wed, 04/11/2012 - 08:11 | 2334026 Koffieshop
Koffieshop's picture

You shouldn't be disrespecting toilet paper like that.
It's an easy to trade commodity on the black market along with canned food, booze and petrol when the the economy crashes.
11 billion rolls of toilet paper would be quite an asset.

Wed, 04/11/2012 - 07:29 | 2333963 wang (not verified)
Wed, 04/11/2012 - 07:32 | 2333972 navy62802
navy62802's picture

Nothing has changed. Europe is still a slow-motion train wreck. But it is still a train wreck nonetheless. And I think it's pretty obvious where this is all headed.

Wed, 04/11/2012 - 07:33 | 2333974 LongSoupLine
LongSoupLine's picture

watching the powers at hand (and can be counted on 1 hand) ramp this broken "market".  total horseshit.

Wed, 04/11/2012 - 07:39 | 2333980 chump666
chump666's picture

Mario the mad Italian is back.  Lets see good for a few hrs?  

Wed, 04/11/2012 - 07:51 | 2333992 schatzi
schatzi's picture

So debt costs doubling and tripling is good news and worthy of a jubilant sentiment. Right?

Wed, 04/11/2012 - 07:54 | 2333997 disabledvet
disabledvet's picture

"breaking a bull" can be as hard as re-creating one. fundamentally (nat gas, solar, cloud) there is massive amounts of money chasing very powerful investment thesis'. (and these are the ultra-high risk areas of the market btw.) with the Fed hammering treasury yields to "at or near zero" the danger has CONSISTENTLY been to short this thing. those that have have paid dearly. HAVING SAID THAT...anyone investing in tech will tell you "it was a long decade after 5000." that's WITH make hundreds of billions of dollars over that time frame i might add. anywho..."don't phuck with muppets, man"...i'm tellin' ya..."those smily faces are just a disguise":

Wed, 04/11/2012 - 08:01 | 2334011 SimpleandConfused
SimpleandConfused's picture

Again proof that the markets will do what the central bankers dictate. ZH has been very informative and educational concerning the transformation of the market from a venue of discovery to a central planning tool. It is complete.

The thing will fall or rise at the whim of the bankers. They're the only ones playing the game anyway, so what's the difference?

Wed, 04/11/2012 - 08:14 | 2334030 TrustWho
TrustWho's picture

...the media is burying the failed German auction today...only provide good news to the muppets on "risk off" days.

Wed, 04/11/2012 - 09:34 | 2334204 Vince Clortho
Vince Clortho's picture

MSM = Obedient little boys and girls who say exactly what they are told to say.

How long before the whole batch of them are replaced with robots?

Wed, 04/11/2012 - 09:40 | 2334218 nugjuice
nugjuice's picture

Ooo! A new product? I wonder how much shiny stuff is in this gold barrel they speak of. I'd like to get my mitts on one

Wed, 04/11/2012 - 09:46 | 2334232 HarryM
HarryM's picture

Yup - Today - All is well again in the world 

Earthquakes and Markets are up

Wed, 04/11/2012 - 19:49 | 2336416 xcehn
xcehn's picture

"REVEALED: BLATANT MANIPULATION OF SPANISH, ITALIAN AND GERMAN BOND YIELDS TODAY: It is very hard not to see the finger of Mario Draghi on the pulse of today’s eurobond market"


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