Quote of the Day
We are each of us angels with only one wing, and we can only fly by embracing one another.
Luciano de Crescenzo
In the second day of relatively quiet trading activity most risk asset markets were able to hold onto gains for the day on Tuesday. Europe is slowing moving to the background while most of the macro economic data that hit the media airwaves over the last 24 hours were mostly positive and better than expectations. Oil was firm throughout most of the trading session with WTI making a pass at breaching the triple digit level but was unsuccessful settling a bit below. Oil continued to trade in close sync to the direction of the US dollar as the macro trade remained solidly in play yesterday.
So far today the ECB began to buy Italian and Spanish 10-year bonds and for the first time in three days bonds rose. This is a positive outcome for the markets. In addition, the new Italian Prime Minister is ready to announce his government while the new Greek Prime Minister will face a vote to give him a three month mandate to implement the new austerity budget measures. As it appears at the moment the situation in Europe is quieting down and seemingly on a path to move into the background for now. If so, I remain positive for most risk asset markets and would expect the gains in oil, equity and commodities to hold and a modest risk asset rally to slowly get underway.
The API data was mixed but mostly in sync with most of the projections...including my projections. The API reported a small build in crude oil stocks versus an expectation for a modest draw in crude oil inventories of about 1.3 million barrels as crude oil imports decreased marginally while refinery run rates increased by 1.8%. The API reported a much larger than expected draw in gasoline stocks and a larger than expected decline in distillate fuel inventories.