Even with Citi reporting a miss [11]on the top line of $18.6 billion (Exp. $19 billion), but a bottom line beat courtesy of more loan loss reserve releases amounting to $984 million, or 35% of the entire pretax net income number, sentiment has been very quiet this morning, with hardly any sharp moves, aside from the now usual leak in Spanish sovereign bonds, following Bloomberg's confirmation of the WSJ story that the ECB is willing to impair Senior bondholders, while Swiss nominal bonds continue to trade below 0.4% and the EURUSD drifts lower. Today's lethargy may be interrupted at 8:30 am when the Empire Manufacturing and Advance Retail Sales data are released, but unless we get another massive, and very convenient, EUR repatriation out of Europe at just the moment when the US market opens, we doubt much will happen today ahead of Bernanke's semi-annual congressional testimony tomorrow.
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Market action
Asian equity markets finished mixed after Chinese Premier Wen Jiabao said that China will increase measures to support growth. Offsetting that positive news was concern that profits would decline for Asian companies in this reporting season. The best performer was the Korean Kospi up 0.3% followed by the Hang Seng up 0.2%. On the flip side, the Shanghai Composite fell 1.7% and the Indian Sensex lost 0.6%. The Japanese Nikkei was closed today for a public holiday.
In Europe, equities are up a marginal 0.1% in the aggregate. At home, futures are pointing to a lower opening later today. The S&P 500 is set to open 0.2% lower. That follows the solid 1.7% rally recorded on Friday.
Treasuries are marginally bid in the longer end of the curve. The five year yield is flat, while the ten and long bond are down 1bp. The 10-year yield is currently 1.48%. In Europe, Spain's 10-year yield is up 9bp to 6.66% and Italy's yield is 2bp higher at 6.05%.
The dollar is strengthening with the DXY index up 0.3%. Commodities are selling off on the back of the weaker dollar. WTI crude oil is down 32 cents to $86.77 a barrel and gold is down $5.55 an ounce to $1,584.12.
Overseas data wrap-up
Euro area inflation held steady at 2.4% yoy in June. Looking ahead the weak economic environment and ongoing sovereign debt crisis will put downward pressure on prices in the region.