Markets Overnight: SPX Futures Hit Hard As Europe Opens

by Enis October 2, 2013 4:40 am • Commentary

After yesterday’s global rally, the second day of October has brought out the sellers.  Asian markets almost all opened green, but SPX futures started moving lower shortly after midnight EDT, and were hit particularly hard when Europe opened.  They’re currently down about 0.75%

  1. Asian Markets Follow U.S. Into Green, But Japan Down 2% – Big intraday reversal in the Nikkei, which was up 0.5% early in the session, but ended the day down more than 2%.  The important USD/JPY cross also reversed, and is now at its lowest level in more than a month.  96.52 is the 200 day moving average for the cross, which has not been touched since November 2012, when the Yen started its massive move lower
  2. European Stocks Move Lower, Euro Stoxx 50 Down 0.75% – European equities gapped about 0.5% lower and saw heavy selling right out of the gate.  Interestingly, the Italian stock market has since reversed higher, but all other major European markets are still down, led by the U.K. and France.
  3. SPX Futures Down 12 Points, Near Yesterday’s Low – The SPX futures drifted lower in the Asian session as Japan reversed, but the bulk of the selling came right as European stocks opened at 3:00 am EDT.  Yesterday’s low of 1675.50 has not yet been breached, though Futures are only 0.5 point above it.  That’s the first level to watch on the downside, with Monday’s low of 1667 of more importance.
  4. Commodities Mostly Lower (Except Gold), Bonds Higher, Dollar Mixed – Gold is up 0.5% after yesterday’s heavy losses, but oil and copper are about 0.5% lower.  The dollar is stronger vs. risk-on currencies (AUD, MXN, TRY), but weaker vs. the Yen, flat vs. the Euro.  10 Year Treasuries are 3 bps lower, at 2.62%.
  5. ECB decision at 7:45 am EDT, Draghi at 8:30 am EDT, U.S. ADP at 8:15 am EDT – The ADP number might have added importance since the Bureau of Labor Statistics might not be open on Friday to release the Payrolls number.  Consensus estimate is for 180k jobs added in September.