Despite early indications of a possible retracement from yesterday's brutal sell-off, US equity markets again find themselves in negative territory as we head into the latter part of the US session. Large cap names are weighing on the indices with McDonald's reporting poor October comparable sales numbers and Apple continuing its rather aggressive slide having entered an official bearish correction. The worries over Greece have resurfaced as source comments noted that EU ministers are to delay the Greek aid call for weeks and the Greek aid tranche aid decision is now seen possibly on November 26th.
The stellar 30y note auction has also put additional pressure on the equity markets as the 10y future has rallied 9 ticks post the auction given that the expectations were for a tail on the yield but it actually stopped through the bid-side when issue by 3.5BPS. The ending of supply from the US this week has benefited the treasury bulls.
The strong US auction and consequent interest rate differentials has seen a notable dip in USD/JPY to session lows which has therefore influenced the JPY crosses. The EUR remains weaker across the board given the Greek concerns while the earlier strength in GBP following the Bank of England rate decision has dissipated.
WTI and Brent crude futures are seen flat into the NYMEX close after a dip at the pit open as OPEC downgraded their oil demand forecasts but the upside in precious metals has helped support commodities on the whole.
08 Nov 2012 - 20:53 - Fixed Income - Source: RANsquawk
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