DJIA +7 S&P 500 -6 Nasdaq -11.6


Economic Data

- (PT) Portugal May Construction Works Index: 61.3 v 56.7 prior

- (PT) Portugal May Trade Balance: -€978M v -€905M prior

- (EU) ECB drains €211.5B vs. €210.5B target in 7-day Term Deposit Tender to offset govt bond purchases

- (US) Jun NFIB Small Business Optimism: 91.4 v 94.4 prior

- (US) Weekly ICSC Chain Store Sales w/e Jul 7th: +2.0% w/w, +3.0% y/y

- (US) Weekly Redbook Retail Sales: +2.2% y/y; Jun MTD: -0.8% m/m

- (US) July IBD/TIPP Economic Optimism: 47.0 v 46.9e

- (US) May JOLTs Job Openings: 3.64M v 3.59Me

- (MX) Mexico Jun Vehicle Production: 268.3K v 228.1K prior; Vehicle Domestic Sales: 78.5K v 80.3K prior

- (MX) Mexico April Gross Fixed Investment: 8.5% v 8.0%e

- (UK) Jun NIESR GDP Estimate: -0.2% v +0.1% prior

- US trading volumes are surprisingly light this morning. European shares traded higher after a flat start overnight after some slightly better-looking May industrial production data and rumors circulating about a RRR cut by China's PBoC (recall that the PBoC held the RRR steady while cutting rates last week). Peripheral yields contracted after European officials suggested loans to Spain for its banking sector would be in the €30B area, much lower than the €100B total authorized for the bailout. Despite the slightly better tone overnight, there has been a great deal of nervousness about the initial arguments before the German Constitutional Court today, which stated that it would take months to rule on the constitutionality of the ESM fund under German law, rather than the weeks anticipated. The court may also hand down an injunction against German participation until it rules on the case, further delaying the start of the fund. After opening up approximately 0.5% a piece this morning, US equity indices have dropped into negative territory. The euro is sliding lower, dropping below the 1.2250 level for the first time since the summer of 2010. Crude is down a few cents, dropping below the $85 handle again.


Looking Ahead

- 11:30 (US) Treasury to sell $30B in 4-Week Bills

- 13:00 (US) Treasury to sell $32B in 3-Year Notes

- 16:30 (US) Weekly API US Crude Oil Inventories