Overnight and in to the open

First take a look at what ES did right on the US open...

Not the big gap up I thought we might see, but enough thus far to take the IWM up to +.70 in minutes.

Overnight we had mixed market news.


Portuguese banks are in trouble with a large bank getting ready to issue a lot of new shares to raise capital, it is scaring the EU market that many, many more EU banks are short on capital and as suspected, short on assets to pledge to the ECB, thus new share creation.

Italy's 3-11 year $5bn auction was weaker then yesterday's LTRO covered (notes of less then 3 years duration) auction as the  3-11 year auction fell outside the LTRO window and fell short of the $5 bn auction target w/ surging yields on today's auction.

Japan's Central bank is to engage in drastic easing to fight deflation.

The World Bank cut China's growth outlook based on exports-no surprise there!

In the US, last night ultra dove, Janet Yellen suggested that ZIRP policy slated to end in 2014 may very well stretch in to 2015, contradicting the string of recent hawkish comments by F_E_D regional Presidents.

This morning, the F_E_D's other dove, Dudley said, "we cannot lose sight of the fact that the economy still faces significant headwinds and that there are some meaningful downside risks... To sum up, the incoming data on the U.S. economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established.  But, while these developments are certainly encouraging, it is far too soon to conclude that we are out of the woods in terms of generating a strong, sustainable recovery.  On the inflation front, the year-over-year rate of consumer price inflation has slowed in recent months, and despite the recent rise of gasoline prices, we expect inflation to moderate further in 2012."

Dudley again, like Yellen is contradicting the recent string of F_E_D speakers taking a more hawkish tone and just like that first surprise bounce in the market led by comments from Bernie himself that hinted at more QE (only to later be said the market misread his statement), the F_E_D is in the right place at the right time to help this market bounce higher. Interesting as I already covered the timing of events between Bernie and other entities that got the market to bounce once already only to see it all sold in to.


Initial Jobless Claims saw last week's "decline" from a revised 363K to 357K revised again and this time  it surged from 357K to a revised 367K.

The current weekly claims number was huge, moving  to 380K, on consensus of 355K - the highest print since January, and the biggest claim miss in a year!

So, off to the races we go!