Market Snapshot: Europe Stable, Asia Down

Despite more ramblings from Juncker this morning, the overnight session in Asia saw comments on downside risks from the BoJ drive risk assets modestly lower. Led by Japan, Asia-Pac equities were down around 0.3%. While EURUSD is higher by 25pips or so from Christmas Eve’s close (and implicitly USD weaker), commodities are broadly underperforming with Copper worst (-1.3%), Gold (under $1600) and Silver in line -0.8%, and Oil just underwater from 12/23 close. European credit markets just started trading and are a smidge tighter – though liquidity is questionable for now – butsovereigns are leaking wider in spread with Italian 10Y worst for now +13bps (and BTP yields now breaking 7% again). US TSYs are 1-2bps lower in yield from the afternoon surge on Christmas Eve’s discorrelated action. Given the markets that are open so far, CONTEXT (a broad risk market proxy for where ES – the e-mini S&P futures contract – should trade) is practically unchanged, which given the late-day surge on 12/23, leaves us looking for modest weakness when it re-opens later today.

Euro is holding up for now – up round 30 pips from 12/23 close.

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