Futures Rebound Continues As “Greece Concession” Story Picked Up By European Desks, Oil Rises

The rally that was sparked by yesterday’s late-day FT report had all but fizzled overnight, replaced by more concerns about the state of the global economy when Austrialia’s central bank surprised the world (just 9 of 29 analysts had expected this move) by becoming the 15th in a row to ease in 2015 (the list: Singapore, Europe, Switzerland, Denmark, Canada, India, Turkey, Egypt, Romania, Peru, Albania, Uzbekistan and Pakistan, Russia and now Australia), cutting the cash rate to an all-time low of 2.25%, and sparking more concerns about a global currency war or rather USD war against every other currency, when the USDJPY algos woke up again, and did everything they could to re-defend the critical 117.20 level in the USDJPY which has proven critical in supporting the market in recent weeks, once again using the Greek “softening tone” story as the basis for the ramp as Europe woke up, which in turn sent the DAX promptly to new all time highs, while the Athens stock market surged by 9% at last check.
How long this narrative will sustain today is unclear, especially with Varoufakis explicitly said earlier that he had been misinterpreted once again as we reported earlier. However, it is assured that if not for the Greek “broken telephone”, then some other intervention will step in to keep the S&P above the all important 2000 level.
The second most important news overnight comes from the bond where following a surprisingly weak 10 Year auction in Japan, where the Bid to Cover came in the weakest since 2013, “Germany became Japan“, as the 10 Year Bund yield (0.31%) is now below that of the sliding 10 Year JGB (0.37%) for the first time ever.
The third main overnight story involves commodity complex, and specifically oil where the surge of the last several days continues, and sees both energy and metals trade higher, with energy WTI and Brent crude futures trade higher for the fourth consecutive day, above USD 51 and USD 56 handles respectively. This comes as an extension of gains seen since Friday following the latest Baker Hughes rig count, which fell by over 90 rigs, the most since 1987, to see WTI finish 8.3% higher as a consequence. The ongoing strike by the United Steelworkers Association is also adding to the upside for prices. This comes as WTI crude futures settled higher yesterday by over 1% for the second consecutive trading day for the first time since two weeks prior to OPEC’s November meeting.

This post was published at Zero Hedge on 02/03/2015.