Friday, December 31, 2010

Daily Summary 12/31/10

US:  Futures are mostly negative in the early AM with a good portion of the trading world closed or scheduled for a half day.  Yesterday was lackluster in volume and direction as markets were not convinced by the jobless claims numbers (where even seasonally adjusted results exhibit seasonality) or stronger purchasing manager index results.

Europe:  Issuance begins anew next week, but the Italian issuance this week does not paint a good picture of the trends in European yields.  We believe the story will play out to its bitter end in 2011 and involve haircuts on sovereign bonds.

Asia:  With Tokyo closed and Hong Kong on a half day, markets are largely quiet.  The theme for Asia in 2010 will be China attempting to deflate a bubble without popping it and Japan continuing to manage growth at the zero bounds.

from Brian Yelvington of Knight Capital

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