US equities remain in positive territory at the mid-point of the US session, paring back much of yesterday’s losses. Risk appetite was boosted after Italian t-bill auctions were better than feared and some stellar earnings from Alcoa after-market yesterday, comments from ECB's Coeure that the ECB could restart bond purchases for Spain also tightened the Spanish/Bund spread. Later in the session there were comments from Fitch that banking problems in China could impact the credit supply to the broad economy weighed slightly on stocks, with the basic materials sector faring the worst.
In the energy market WTI Crude futures outperformed, despite the larger build in Crude inventories in the weekly DoE figures. The stand-out was the strong draw-downs in Distillate and Gasoline inventories; this boosted the energy products, with Rbob futures particularly strong post data.
The 10y note auction disappointed slightly, although this is perhaps not unexpected after the turn-around in the bond market over the last week. The yield stopped through the WI by 0.2bps, however it was the below par buy-side and foreign bidding that saw a fast money move of 3 ticks to the down-side in 10y futures.
Investors will now look ahead to the Fed’s Beige book at 1900 BST.
Print 17:14, 11 Apr 2012 - Market Analysis - Source: RANsquawk
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