In news released this morning, the US trade deficit stood at $42B. Analysts expected the deficit to increase $1.9B to $44B.
With no more news set for release today, traders will spend the day watching stocks as they wait for the results of the Treasury auction of $32B of 3-year notes. At the 10:00 am ET price point the Dow was up 52 points. Auction results will be published by 1:15 pm ET.
Overnight trade in Asia and Europe was quiet. Global market participants are mostly sidelined as they wait for two key events to unfold this week. In Germany, a high court ruling on the constitutionality of the European Stability Mechanism is set for Wednesday. Thursday the Federal Reserve will announce any changed to monetary policy when the governing body concludes their two day meeting. It is believed the German court will rule the bailout fund constitutional, however they may place limits or other requirements on the fund. In the US, traders are expecting Ben Bernanke to announce QE3.
The events on Wednesday and Thursday will make history and most likely cause market volatility. It is unlikely the German court is going to give the green light to the ECB without any stipulations. The ruling may lead to more uncertainty for the euro-zone. In the US, traders are hopeful Mr. Bernanke will offer an open ended QE3 and include more mortgage debt in future purchases.
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