Overnight we saw another pimp during the lighter volume overnight session, this time not led by the AUD/JPY which lost its correlation...
The USD/JPY and/or the EUR/JPY led ES higher overnight.
It seems the AUD is reacting to another default out of China overnight, the full name is insane, let's just call it the New Board Co. which is a Building Materials company that was offered in a private placement just about a year ago is what was the newly emerging Chinese High Yield market, they misses a 10% coupon interest payment on the $29 mn offering giving China's credit market ANOTHER default , at this point HY/credit investors in China have figured out that they just aren't going to see government assistance anymore, a free market! What a novel idea. In any case, between that and Chinese / Markit HSBC PMI coming in at contraction again at 48 for March (vs 48.5 Feb.) it seems the AUD took it on the chin and... the USD/JPY or EUR/JPY took over.
In other news Russia has been withdrawing troops from Ukraine's eastern border, why use troops when Gazprom just hiked gas prices 44% as Kiev failed to make their payments that got them the discount, they now pay $400 for 1000 cubic meters of nat. gas, that should sink Kiev without any Russian tanks on the ground.
As mentioned last night, I'm very interested to see which way this whole HFT thing is going to go, you have to wonder why nothing was done about HFT when there was the Flash Crash, but suddenly Goldman has decided its bad and the FBI is all over it... it's not like Goldman hasn't used their own HFT systems and they are the lead underwriter for Virtu, the company (HFT) that lost 1 trading day of 1230-something!
Correlations and volume should give us some answers, but I have a feeling it will be an interesting new market and someone (HFT) deserved or not, is being scapegoated for F_E_D policy which is on the verge of massive market failure.
Lets see what opening trade looks like.
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