After yesterday's US and UK market holidays which resulted in a session of unchanged global stocks, US futures are largely where they left off Friday, up fractionally, and just under 2,100. Bonds fell as the Federal Reserve moves closer to raising interest rates amid signs inflation is picking up. Oil headed for its longest run of monthly gains in five years, while stocks declined in Europe.
With the US closed for Memorial Day and UK markets offline due to a bank holiday, overnight volumes have been weaker than normal on little newsflow. The main story remains the stronger USD following Yellen's hawkish Friday speech, which not only led to the lowest Yuan fixing since February 2011...
... but pushed the USDJPY almost as high as 111.50 overnight before paring gains, however it was enough to send the Nikkei 1.4% higher.
In what has been another quiet overnight session, which unlike the past two days has not seen steep, illiquid gaps higher in US equity futures (the E-mini was up 3 points and accelerating to the upside as of this writing so there is still ample time for the momentum algos to go berserk), the main event was the price of Brent rising above $50 for the first time since November with WTI rising as high as $49.97.
As shown in the chart below, Brent crude surpassed $50 a barrel for the first time since November, lifting commodity companies and buoying currencies where oil is produced.
For today's dose of pre-market entertainment, we go once again to Dennis Gartman, who clearly perturbed by the violent turnaround in global stocks yesterday appeared on CNBC where the "closely followed market-watcher" said the early week's market gains could continue for the next couple of weeks.
"Historically when that happens, we carry through. So I think you're likely to trade better — maybe not today, particularly — but I bet by Friday we're higher and I bet by next week we're higher again," Gartman told CNBC in London.
Yesterday's weak dollar headfake has ended and overnight the USD rallied, while Asian stocks dropped to the lowest level in 7 weeks and crude oil fell as speculation returned that the Federal Reserve will raise interest rates as early as next month. The pound jumped and European stocks gained thanks to a weaker EUR.