Overnight Highlights:
*French PMI misses expectations and decelerates m/m to 49.0 vs 53.7 Forecasted and 52.4 previous
*Eurozone PMI misses expectation decelerating m/m to 51.7 vs 52.9 forecasted and 51.8 previous
Global Equities:
*US Futures indicating a lower open led by the Small Cap Russell 2000 Index -0.88%
*Europe lower across the board, led by Germany -1.08%; France -1.09%; Italy -1.25%; and Spain -1.12%
*Asian Equites largely higher across the board with the Shanghai Index +0.50%
Top Market Movers Overnight
Treasuries/Yields
*Following an attempted break to higher levels from the “hawkish” Fed Minutes release, the 10yr yield has slumped back 10bps to 0.62%
*Treasuries catching a bid on a “risk-off” morning in Global Macro Markets
*OPINION: We’ll continue to trade Treasuries with a “Bullish Bias” until our quant signals suggest otherwise – NOT A BUY RECOMMENDATION FOR TODAY
*Our range analysis suggest covering some treasury exposure today as we’re now immediately triggering “overbought”
US Dollar:
*Gaining some fervor overnight off of the weak European PMI data and a flight to safety bid off of a weaker US Equity Open
*We contend there’s a small window for the dollar to rally, however it shouldn’t get too far. Upside to 93.90 in our model
*We remain BEARISH OF THE USD
Gold:
*Trading lower overnight, retesting some immediate-term trend support at 1915.00 in our model with downside to potentially 1895.00
*Held back by a stronger USD, and a general “risk-off” outlook headed into the day
*OPINION: Gold is in the “Buy to Accumulate” Zone in and around the 1915-1895 level
*Gold remains BULLISH trend on all time frames coupled with BULLISH momentum, but momentum appears to be turning “Neutral”*We largely expect a range bound trade between 1874-2010 until bullish fundamentals reassert themselves.
