S&P 500 futures limped 3-4 points higher from last night's close helped by a surge in EURUSD (and its correlated-ness). The most liquid FX pair in the world jumped like a penny stock up to a 1.2899 high this morning (up at three-week highs) just shy of its 50DMA. Merkel sprinkling some hope of a somehow favorable EU budget accord, no news is good news for Greece, and a Spanish reacharound auction seemed the catalysts for hope but we note two significant shifts today from the very recent risk-on regime: 1) credit markets in Europe diverged flat to lower from equities today; and 2) US equity futures also did not follow the path of least resistance higher with FX carry. Whether this is simple illiquidity is unclear; but typically on thin days, everything correlates and levitates - today in European corporate and sovereign bonds and US equities, that was not the case... and 2Y Bunds end the day back at 0.00%
GGBs reached a hope-fueled post-PSI high over EUR35 today... good luck...(see this post for some context [6])
As EURUSD retraces its pre-/post-election plunge...to test 1.2900
but... European corporate and financial credit lagged notably today relative to European stocks...
and European Sovereigns were stagnant today after 4 days of rallying...
and S&P 500 futures did not follow through with the EURUSD exuberance...
Gold was stable, Silver up a little, Copper tailed off into the close but oil was the worst performer among commodities back down to around $87.
With Treasuries closed, CONTEXT (our broad risk-asset proxy) is a little off-kilter but S&P futures are clinging pretty well to broad risk assets (as JPY offsets EUR exuberance) and credit/commodities leak...
S&P 500 futures remain right at the lower-end of Support/Resistance from Draghi's 9/5 pronouncements...
Charts: Bloomberg and Capital Context [13]






