Overnight and in to this morning futures have declined, a certain risk-offness perhaps due to the Bank of Japan standing pat and deciding there will be no additional asset purchases at this time and CPI will return to 2% sometime this year or next as soon as the low oil move ends.
Of course it could be from your pick of disappointing economic data such as the German ZEW survey or new housing starts, and while it does look like the ZEW may have played a role in the overnight decline...
ES overnight with a negative divegrence about an hour after the European open.
I think it's far more likely this has to do with the high cross asset correlation and the EUR/USD in particular.
But wait a minute, the EUR/USD is higher this morning! What gives?
TRemember yesterday I pointed out ES futures in purple had run past the EUR/USD correlation, well overnight they simply ran down to it as it pushed up to ES, right now they are nearly perfectly in line with a slight edge to EUR/USD, I suspect on the open we'll see a pop higher, this market isn't out of gas quite yet except maybe the R2K.
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