Enis’s Macro Wrap – Super Mario Once Again

by Enis September 6, 2012 7:02 am • Commentary

Realized volatility in the SPX has remained very low despite the start of September, as both trading sessions have closed near unchanged.  Overnight price action has actually been more active than intraday price action the past few days, and today is no exception, as risk-on assets caught a bid in the Asian session for the first time this week, and have sustained their momentum into the European session.  

All eyes will be on Mr. Draghi as he releases details of the bond buying plan before the open.  Gold and silver are making new 6 month highs this morning, on expectations that both Draghi and Bernanke will deliver in the next week.  The market is in a classic push-pull between macro expectations induced by central bankers, and micro expectations of earnings coming down, such as FDX’s pre-announcement yesterday.

Overnight Price Action:

  • Asia closed broadly in the green, though tepid price action compared to Europe and the U.S. again.  Europe is up around 1%, and SPX futures are up 0.6% ahead of Draghi’s comments
  • The most notable movers overnight are gold and silver, both breaking higher to new 6 month highs, up by 1-2%.  Crude oil is also higher after selling off yesterday, with Citigroup speculating that the U.S. government might release oil from the Strategic Petroleum Reserve if oil stays elevated
  • The dollar and Treasury bonds are both slightly lower this morning.
  • In addition to Draghi’s comments, the ADP employment report and ISM non-manufacturing are 2 economic releases worth watching this morning