Stock futures are up slightly heading into the New York open today. US Treasury futures continued to sell-off overnight. European equities were bolstered today by fresh hopes for more stimulus from the ECB.
European central bankers are set to meet on monetary policy later in the week and some are betting that the ECB will be forced to unveil a new stimulus package. The current sell-off in bonds going into the meeting is troubling for those who expect the ECB to begin a program of bond buying. With markets betting on possible central bank action, expect continued movement from the market that defies traditional logic. Over the last week we have seen stocks and bonds swing to positive correlation which is almost always a sign of heavy government intervention (or the market reacting to the prospect of intervention). The Euro has resumed its decline against the dollar: