Case-Shiller HPI, Treasury Auctions 2 Year Notes, FOMC

Equity markets around the globe sank following news that Standard & Poor’s lowered Japan’s long-term credit rating outlook to negative from stable. China’s Shanghai index traded down 2.42%, Japan’s Nikkei was down 1.78%, and England’s FTSE 100 is off 0.18%.

S&P said “the outlook change reflects our view that the Japanese government's diminishing economic policy flexibility may lead to a downgrade unless measures can be taken to stem fiscal and deflationary pressures”.

Investors are also concerned that China is increasing reserve ratios, again, for some of its largest banking institutions.

“The US$ index is stronger, as news that a number of Chinese banks have been ordered to halt lending for the rest of the month and hike reserve ratios has fueled risk aversion,” noted Benjamin Reitzes from BMO Capital Markets. 

In the US, equity futures are mixed. Dow Futures are up 4 points to 10,142 and S&P 500 Futures are 1.40 points lower to 1,091.. Meanwhile, WTI Crude oil is down 66 cents to $74.60 per barrel and Gold is trading $5.50 lower at $1,091

The Day Ahead:

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