US equity markets are currently trading in negative territory after opening the session higher. All focus was then turned on to the on-going Italian elections after projections showed Berlusconi ahead in key regions.It has been widely viewed that if Berlusconi’s party manages to perform strongly at key areas it would be seen as a negative in near term for the European equity markets. Risk-off sentiment saw European equities sell off which then weighed on US equities with a lack of tier-1 macroeconomic data adding to the weakness. The worst performer in the S&P 500 was Chesapeake Energy falling over 5% after agreeing to sell a stake in an oilfield for less than a third of its estimated value.
T-notes ticked higher in early trade as European equities fell with the uncertainty surrounding Italy and a 2y note auction passes by. T-notes are also benefited from the week’s looming March 1st US sequester deadline to trade at session highs of 132.15 (+18 ticks).
In the FX market, EUR/USD is trading in negative territory after paring gains in the European session as exit polls showed that Berlusconi remains a contender in the Italian elections.
WTI crude futures fluctuated after posting gains of over 1% following comments from Secretary of State John Kerry saying that a diplomatic solution with Iran over their nuclear program is possible. WTI crude future prices were further buoyed by the threat of severe weather forecasted to parts of the Gulf coast and the southern US.
Looking ahead in the session the calendar remains light on key macroeconomic data although US House Speaker Boehner is due to speak later at 1600EST/2100GMT
Print 18:52, 25 Feb 2013 - Market Analysis - Source: RANsquawk
RANsquawk provides audio news and commentary for over 15,000 professional traders and brokers worldwide. Services include: