TOPIX

Tuesday's session started off on the back foot, with the Euro first sliding on Draghi's dovish comments before Europarliament on Monday where he signaled no imminent change to ECB’s forward guidance coupled with a Bild report late on Monday according to which Greece was prepared to forego its next debt payment if not relief is offered by creditors, pushing European stocks lower as much as -0.6%. However the initial weakness reversed after Greece's Tzanakopoulos denied the Bild report, sending the Euro and European bank stocks higher from session lows.

S&P futures were fractionally lower from yesterday's record high as European stocks declined and Asian stocks were mixed, pressured by yesterday's 5% plunge in crude after OPEC unexpectedly "failed to surprise" markets, and announced the bare minimum supply cut extension that was expected by oil traders, who in turn puked long positions.

Not even last night's Moody's credit downgrade of China - the first since 1989 - could dent the global stock rally which has pushed global stock prices to all time highs. After initially sliding, regional stocks and emerging Asian currencies pared early losses following the unexpected downgrade of China, taking their cue from the "sudden reversal" of the Shanghai Composite Index, which some speculated saw the latest intervention of the "national team."

S&P futures rose alongside European stocks as Asian shares posted modest declines. The euro set a new six-month high and European bourses rose as PMI data from Germany and France signaled that the ECB will have to tighten soon as Europe's recovery remains on track, with the German Ifo business confidence printing at the highest level on record, and hinting at a GDP print in the 5% range. Oil declined after the Trump budget proposal suggested selling half the crude held in the US strategic petroleum reserve.

Global stocks were mixed to start the week, with Asian stocks higher, European stocks initially advancing then fading gains, while S&P futures are little changed after the biggest weekly drop since April (which for those keeping record was -0.4%). European shares, the euro and the pound all stumbled on Monday as rumblings in Spain, Britain and Brussels reminded investors that the region still has plenty of political uncertainty left in the tank.