Global Equity Market Mixed
STOCK INDEX FUTURES
Overnight global equity market action was mixed with a slight tilt in favor of the bear camp. Not surprisingly, Asian shares were weaker than Western markets. While not a major negative, credit issues have surfaced with a Moody’s credit rate reduction for China especially with Chinese credit default swaps jumping following the downgrade.
The bounce in the dollar has gained credibility with the market’s ability to hold most of the gains from the late November low for several sessions. However, positive data is needed to transform the recent technical bounce into a fundamental recovery in the dollar. However, the trade has partially priced in favorable data or has simply seen weak handed shorts exit recently.
While the euro has started to build what could be a consolidation low support zone just above 1.08, economic news from the US is likely to heavily offset what should have been very supportive HCOB services and composite readings from the euro zone, Italy, France, and Germany.
The pound has also constructed consolidation low support around the 1.26 level and is likely waiting for US data to forge a bottom or post a lower low.
The Canadian has negative charts this morning and with the Bank of Canada reportedly fearful and poised to act following an increase in bad loans and a decline in Toronto home prices.
INTEREST RATE MARKET FUTURES
While the treasury markets largely tracked within the Friday range yesterday, failed to make a new high for the move and have displayed a measure of lost momentum, the trend from the charts and fundamentals still favor the bull camp. However, the US monthly job report cycle begins today with a JOLTS report which is expected to show 250,000 less job openings than in the prior month.
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