Pre-open eMini SP 500 Morning Report 4.6.10

This is a guest post from Precision Capital Management

The Precise Take – Equity futures backing off highs a bit

Leaders Analysis:  The EuroYen showed signs of weakness early yesterday, but equities did not follow until it sold off sharply overnight.  The US Dollar is up materially and, having bounced off its 20 day moving average, looks as though it will mount a challenge of the March 25 high.  As long term Treasury yields flirt with their June highs, short term rates continue to inch higher.  Combined with the surge in energies, crude having taken out the late 2009 high, there appears to be an inflationary theme working the markets.  For today, the leaders are slightly equities bearish.

Medium Term Analysis:  While Greece CDS spreads have opened up to near record wides overnight, indicating problems with their debt, US equities have been successfully discounting this type of news since the February lows.  The focus here is on interest rates, and with three large Treasury auctions over the next three days, poor demand could push long term rates through resistance.  For the conspiracy minded, a brief respite from…

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