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Current Futures: Dow +28.00, S&P +4.30, NASDAQ +5.50
European markets headed lower from the opening bell, ignoring positive overnight trade in Asia, as S&P futures failed at the test of the 905.00 area, around the same place where it failed recently.
The S&P futures had a very strong overnight market, surging at one point 8 points (almost 1%) in just a few minutes. However, the S&P futures started retreating once again,, and by the time the European market opened most of the gains seen earlier were completely retraced.
Weakness was widespread across most sectors in the Europe, especially in the financials, as a number of banks were recently downgraded. Earlier in the day, Asian markets closed the trading session in the green.
Struggling to assure financial stability in the Euro-zone, the ECB on Wednesday lent a staggering €442.2bn with a one-year maturity. Moreover, the interest rate on these loans was 1%, which makes the deal a real bargain for banks, since the central bank normally only offers this rate for loans with a one week maturity. The 12 month Euribor rate is 1.57%, with not too many banks would offer to lend such a huge amounts of cash.
The “marketing” behind these open market operations is quite interesting, TheLFB-Forex.com Trade Team notes. Over the last few weeks, the ECB issued different warnings that the Euro-area financial system faces some major problems, and write-downs could reach as much as €200 billion over the next two years. In addition, last week, a number of important members of the ECB’s voting committee said that interest rates will remain low for a long period of time, assuring banks that there will be plenty of liquidity in the European financial system.
Overnight, the U.K. Ftse fell 10.18 points (0.24%) to 4,269.80, while the German Dax declined 26.82 points (0.55%) to 4,809.19
Crude oil for July delivery was recently trading at $68.80 per barrel, higher by $0.10.
Gold for July delivery was recently trading up by $1.00 to $935.40.
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