The VIX is up 16.5% at 12.8 and Short-term VIX up 28% to 13.2

Good Morning,

- The yen hit a five-month high versus the euro as investors saw the Japanese currency as a safe haven after the downing of an airliner over Ukraine and the Gaza conflict come hard on the game …

- Malaysian passenger Jet was shot down at 10 KM altitude…

- Boeing 777 Malaysian airlines crashed in Ukraine near the Russian border, Interfax is reporting, citing "a source in the aviation circles." "Boeing Malaysian airlines operate flights to Amsterdam — Kuala Lumpur for 50 miles before entering the airspace of Russia, began to decline, he was subsequently found burning on the ground in Ukraine," the source said, adding that 280 passengers and 15 crew members were onboard.

- Risk assessment: Yen crosses are down on the day, S&P 500 is off over 1%, volatility readings have jumped and Treasury demand swelled.

- The VIX is up 16.5% at 12.8 and Short-term VIX up 28% to 13.2. Short-term FX VIX up 3% to 4.54

- Fed's Bullard says he still favors a first rate hike by the end of Q1 2015. Also, said QE has been "moderately successful". Comments that it has forced some investors into riskier investments. In addition, he said that “says FOMC is closer to its goals now than it has been during most of the past 50 years. Remarks policy is far from normal” and “labor force participation could fall further but says bank may still need to tighten sooner rather than later.”

- US housing starts in June collapsed. The 9.3% decline contrasts with expectations for a 1.9% increase, according to a Bloomberg survey… Permits fell an average of 1.1% per month in Q2, twice the rate of decline seen in Q1. The weakness was led by the South, where housing starts plunged by nearly 30%.

- Goldman cuts its Q2 GDP forecast from 3.3% to 3.2% on "substantial disappointment" in housing data.

- For US traders coming last night saw #Goldman Sachs shifts forecast for #Fed increase to Q3 2015 from Q1 2016

- US Initial Jobless Claims 302K vs 310K expected vs 305K prior (revised higher).

- German FM Schaeuble says Germany needs a strong France.

- ECB will reveal unprecedented amount of data after bank stress tests. The European Central Bank (ECB) on Thursday laid out plans to publish a trove of data on individual banks - ranging from measures of their leverage to a standard level of non-performing loans - on individual banks when it completes a landmark review.

- Israel Prime Minister Netanyahu says ground operations in Gaza have begun according to Bloomberg. Another geopolitical / global mkt concern.

- ECB's Constancio: Strong euro part of improvement in market sentiment

- Major news for today: German Buba President Weidmann Speaks, CAD CPI, USD Consumer Sentiment.

Have a nice Weekend!