Russell 2000

European shares dipped and U.S. equity-index futures (-0.3%) pointed to a lower open as traders questioned the stability of the Italian banking sector ahead of next weekend's referendum as well as the longevity of the Trumpflation rally, pressuring the dollar, sending the USDJPY sliding as low as 111.355 overnight, before rebounding over 112. That was the dollar's biggest fall against its Japanese rival since October 7 and against a basket of top world currencies it was the greenback's worst day since November.

The market moves since the US elections have been both big and surprising, and as JPMorgan notes, fund managers have been either too slow or too reluctant to jump into the Trump trade. However, algo-based Risk-Parity funds suffered the most with their biggest loss since Dec 2015 as market 'fear' tumbles to 9 month lows (and stocks are the most overbought in 13 years).

Some thoughts for tomorrow...

In a quiet overnight session in which Japan was closed, European shares are mixed as financials and auto weigh, Asian stocks rise led by materials while S&P futures little changed against a backdrop of the continuing commodity rally with oil holding near $48 a barrel, up fractionally on the session. Against a basket of currencies, the dollar index was up slightly at 101.12, very close to a 14-year peak. The dollar also kept most of its recent hefty gains on the yen at 111.05 though it has met resistance around 111.35 in the last couple of sessions

• Record highs for Wall Street quartet send other stocks higher (Reuters)
• Oil prices rise to highest this month on hopes of OPEC deal (Reuters)
• OPEC Likely to Reach Output Consensus, Delegate Says (WSJ)
• Trump’s Targets in First 100 Days: Trade, Regulation, Corruption (BBG)
• Trump Poised to Push Nafta Changes, Pressure Mexico on Trade (WSJ)
• China Touts Its Own Trade Pact as U.S.-Backed One Withers (WSJ)
• Trump to kill trade deal on day one (Reuters)
• Overtime Pay Rule to Go Into Effect, but May Not Last (WSJ)