Overnight and In to the open

Overnight there was news from the ECB's Italian member, the Bank of Italy's governor, Visco who said  we should expect a more expansive ECB policy over the next few months which includes a "possible" rate cut. It would seem to me though as Draghi himself talked the market higher before the ECB meeting, setting expectations quite high and then failing to deliver on pretty much everything, this Italian member's opinions don't carry a lot of credibility as Draghi himself has seen his credibility and the ECB's diminish. The comments may be good for some short term/intraday volatility and it seems they have if you look at the last post and where ES started heading up, but I doubt much more than that.  They also seemed to cause a little weakness in the EUR/USD as well.

There were some other ECB comments that the ECB "may" step in to buy bonds with "conditionality", but that can (at this point) only happen when the EFSF is activated to buy the bonds as well, which requires a country to request a bailout.

Which brings us to Spain... Which has denied that they will request a bailout for the banking sector for now.

Apparently French President, Hollande has been pressuring Italy to seek a bailout, but as you might expect, this is being denied by Italian officials which would be the case either way.

As for yields in the BIG TWO, there has been a decline in Italian and Spanish 10 year yields, we'll want to keep an eye on those though as that can and does change very fast. I suspect the denial of a banking bailout request from Spain is helping as that means the 10-year and other debt, WOULD NOT be subordinated, at least until they do make such a request. You may recall, subordination was the main subject after the subject of a Spanish banking bailout came up and what sent the Spanish 10-years above 7.5%.

In other Spanish news, the IBEX was down for nearly 5 hours after a "technical glitch", the exchange is back up now.

We'll deal with any other interesting news as we go through the day. I want to keep an eye on the opening trade and indications and I'll be bringing you an update on that front shortly.