ASIA: Asian markets rose, except for Japan. Shanghai was closed. Yesterday’s FOMC comments, with their increased openness towards more quantitative easing, have sent waves through global markets. China’s tightly-controlled yuan hit a record high against the U.S. dollar Japan’s yen has strengthened past 85 per U.S. dollar again, at 84.85, and Japanese exporters fell on renewed currency competitiveness fears.
People are speculating about another round of currency intervention, which seems likely given that currency intervention historically come in waves.
EUROPE: Dropping, with France hit worst. The spread between U.S. treasury and German bond yields hit just 8 basis points, from 40 two weeks ago. Stock markets initially opened higher, but then reversed. Portugal is trying to sell 1 billion euros today, and result should be out soon. 10-year yields on Portuguese government debt are rising, which is a cautious sign ahead of today’s bond auction. Greece 10-year yields are however easing back, thus bond market uncertainty remains confined to Portugal this morning, rather than the entire Eurozone periphery.
MACRO: The euro just broke $1.33, gold above $1,290. The effects of yesterday’s FOMC comments are clear. On the transport front, The Baltic Dry Index continues to shed points.
U.S. FUTURES: Are falling. Watch for the EIA petroleum report at 10:00 AM ET. General Mills (GIS) will also be reporting earnings before the market open, and Bed Bath & Beyond (BBBY) will be reporting as well.