Overnight and In to the open

Overnight one of the interesting developments that has been seen recently is short duration sovereign debt like German and Finish 2 year notes being sold at negative yields, in other words, investors are paying the governments of those countries to lend those countries money as the trade is long the stronger Northern countries and short the weaker southern countries.

Once again for the second time in about a week, China's Wen warned about growth again, this time regarding the "severe jobs outlook", even as June Chinese prices saw a rebound.

This I heard yesterday from a member in Italy, but it's also been making the rounds as well, it seems Sicily may default, Monti saying there were "Grave concerns".

There was also overnight news from the Bank of England's minutes on their recent rate decision that suggested the BOE may look to examine a rate cut.

Also unconfirmed report of an Austrian sovereign downgrade sending their 10 year debt near the widest levels vs German Bunds.

All in all, the European economic calendar was light today.

In the US, 8:30 Housing Starts came out
Released On 7/18/2012 8:30:00 AM For Jun, 2012

	Prior	Consensus	Consensus Range	Actual
Starts - Level - SAAR	0.708 M	0.745 M	0.720 M to 0.800 M	0.760 M
Permits - Level - SAAR	0.780 M	0.775 M	0.750 M to 0.850 M	0.755 M

The bottom line, Starts beat expectations, permits missed slightly, completions were ugly. There's a appreciable trend toward multi-family units, obviously to take advantage of increasing number of renters.

Just before the open, new government data from Spain showed that their economy is going from bad to worse as 10 year debt climbs toward the 7% level again.

-Spain's housing and banking sectors continue to deteriorate
- House prices declined at the fastest pace since the start of the crisis in the second quarter
- bad loans increased for a 14th month in a row
-bank deposits saw a record decline shrinking 5.75% from a year earlier


Other than that, Bernie carries on his testimony before Congress today, starting at 10 a.m.


All in all, pretty quiet for ES overnight, only moving about 4 points from yesterday's close to the open.