Overnight and in to the open

Overnight was fairly quiet.

In the UK, Retail Sales missed despite the Queen's Jubilee with bad weather being blamed.

The key event in bond markets was Spain selling 5 and 7 year year debt (trying to break the 3 year LTRO stigma) , it was a very weak auction, yields rose-the 10 year was in 7+% territory which brought some negative sentiment in to the market. Spanish 5 year debt is now yielding an unsustainable 6.46%

In the US...

This morning Morgan Stanley reported horrible Q2 earnings. Not only were the earnings horrible, but we also learned that as a result of the June Credit ratings downgrades, the additional collateral they need to post which comes to about 6.3bn, they only posted 2.9bn thus far, that means they still need to post nearly half of their total revenue (not earnings, total revenue) that was earned in Q2 in additional collateral; not good news. Also interesting, trading revenues were way down this quarter as more and more retail exit the market, a trend that has been going on for well over a year.

The US jobs data is going to be receiving more attention than usual as the perception or rather fact is, the F_E_D is fixated on the labor markets.

As for this week's Initial Claims, a large miss...

Released On 7/19/2012 8:30:00 AM For wk7/14, 2012

	Prior	Consensus	Consensus Range	Actual
New Claims - Level	350 K	365 K	360 K to 375 K	386 K
4-week Moving Average - Level	376.50 K			375.50 K
New Claims - Change	-26 K			34 K

Claims came in at 386k on consensus of 365 after last week's impressively low 350k print that may have been due in part to the 4th of July Holiday, in any case, the one time print last week is shown to likely have been a one time print as Claims jumped this week.

As it seems the F_E_D is more fixated on employment right now and we had this horrible IC print, you can guess what happened to our QE sentiment indicator, GLD...

GLD 1 min chart-gap up.

I'm not sure if the Bulgarian suicide bombing of busses carrying Israeli citizens, which was quickly blamed on Iran, even though video footage of the suspect shows a caucasian supposedly carrying a Michigan driver's license, on its own is responsible for Crude's move up overnight or if this might have something to do with it as well...

From one of my favorite geo-political sites, Stratfor, the weekly Naval Update:

There are generally no more than 2 aircraft carriers in the Iran region or 5th AOR, right now there are the Lincoln, the Enterprise, the Eisenhower is at the Straits of Hormuz headed in that direction and this Saturday, the Stennis which wasn't scheduled to be back in the area for years is going to be making its way to the region in late August. In addition Iwo Jima Big deck Amphibious ship is in the area as well.

The market's hate uncertainty and it seems crude is discounting uncertainty, up 1.75% this a.m.

Updates coming soon....