Just when it seemed that the ever deteriorating situation in the Crimean, the unexpected plunge in Chinese exports which has sent the Yuan reeling again, the Copper slam which is down some 10% in two days, and the outright collapse in Japan’s capital flows, not to mention the worst GDP print under Abe, may not be quite “priced in” by a market that is now expecting well beyond perfection in perpetuity, further shown by Goldman over the weekend which reported that revenue multiples have never been greater
, and futures may finally dip, here came – right on schedule – the USDJPY levitation liftathon, which boosted futures from down 10 to barely unchanged, and which should be green by the second USDJPY ramp some time just after 8 am.
While the risk averse sentiment which was evident overnight in Asia as a result on weaker than expected trade data carried over into the European session and resulted in stocks opening lower, the cautious sentiment gradually reversed as market participants sought to capitalise on the sell-off. The sharp slide in Chinese exports and data overall was in part attributed to China clamping down on fake invoicing, as well as copper financing, also coincided with iron ore entering bear market territory, which in turn meant that basic material related stocks underperformed this morning. However the flight to quality was short lived and stocks have gradually moved off lows, with USD/JPY also recovering overnight losses, since it is widely expected that China will hit its growth targets which the state announced only last week. At the same time, Bunds were able to close the opening gap higher and USTs moved back to flat. There was little in terms of tier 1 macroeconomic releases this morning and going forward, market participants will get to digest comments by Draghi and Coeure, while the BoE will conduct its first APF op this week (part of Gilt reinvestment programme)
Bulletin overnight summary from Bloomberg and RanSquawk:
