Where she stops nobody knows. US futures have moved all over the place overnight but are currently pointing to a modestly higher open after Monday’s plunge. Things looked like they would be a whole lot worse shortly after the close yesterday when the US Treasury officially designated China a currency manipulator in what was basically a “surprising-not surprising move.” Surprising in that the timing wasn’t entirely anticipated but not surprising as it’s nothing the President hasn’t been saying incessantly going all the way back to his days on the campaign trail. Well, the initial response from the algos was to sell spoos lower to the tune of 2%, but after the Chinese government fixed the yuan under 7 later on in the night, futures have been grinding higher, erasing all of the initial knee-jerk reaction.
With equity futures rallying, we’re seeing the usual risk-on assets rallying while treasuries and gold ease off their overnight highs. During rudderless times like this, though, it’s important to remember that up futures are as meaningless as down futures in terms of where things will be when we close out the day or even at the open for that matter.
Continue reading in today’s Morning Lineup.