Overnight Sentiment: Slightly Overcast
Quiet trading so far with some risk off episodes in Europe (Monte Pasci halted after dropping 5%), and total confusion in the Greek bond market, with old bonds, new bonds, and CDS all trading as nobody has a clue just what is eligible for trade and what isn't (one thing is certain - GGB2s continue to trade well wide of Portugal, yielding around 18-20% for the 10 year spot). Here is how BofA sees the trading session so far. Via BofAML:
Asian equity markets finished mixed. In Korea, the Kospi lost 0.8%, while in Japan, the Nikkei sold off 0.4%. The Shanghai Composite fell 0.2%. On the flip side, the Hang Seng gained 0.2% and the Indian Sensex enjoyed a 0.5% rally.
In Europe, equities are trading 0.1% higher in the aggregate. If European shares can hold on to the early gains throughout the day, this will mark the fourth consecutive day in which European equities have finished stronger. Now that the Greek PSI program is complete, Euro area finance ministers will meet this week to sign off on the second bailout package for Greece.
At home, futures are pointing to a slightly lower opening. The S&P 500 is set to open 0.1% lower.
In the bond markets, Treasuries are selling off 1 basis point across the curve. The 10-year yield is currently yielding 2.03%. In Europe, the UK gilt yield is off 4bp, to 2.11%, while the German bund is 1bp lower, at 1.78%. Yields on the Italian and Spanish 10-year notes are both higher, but still are below 5%.
The dollar is weakening marginally against a basket of other major currencies. The DXY index is 0.1% lower. Commodities are selling off modestly. WTI crude oil is 77 cents lower, at $106.61 a barrel, and gold is down $6.43 an ounce, at $1,707.23.
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