Good morning! US Futures are starting firmly in the red, with names like GE, AAPL, FB, BAC, DIS all off 1%+, but small cap strength has the futures off overnight lows. Our London desk notes the Wild swings in Europe – The DAX opening down 3%, rallying back to unchanged, and now rolling back over. We do have Options expiry shenanigans going on today, but the turnover in German stocks is running 2x normal as every sector is under pressure, notably those exporters into China as manufacturing data from Beijing showed output had fallen to a 77-month low fuelling concerns of further deceleration – hitting Euro shares for their biggest weekly fall this year. Over in Asia, China stocks tumble post-PMI release – China's Shanghai Composite fell 4.3% today but the crucial 3,500 level, widely seen as a floor that triggers support from the authorities, was defended in the final minutes of trading FT reports - Japan’s Nikkei 225 slid 3%, Australia’s S&P/ASX 200 lost 1.4% and South Korea’s Kospi dropped 2% on renewed tensions with Pyongyang as North Korea ordered troops to a “state of war” 

Sharp Asian and European demand drove the yield on the US10Y down below 2.05% in early trade – and continues to feel US and German Equities are moving in sync with their Sovs. The DXY continues to get clubbed against the majors – notable Yen and Euro as massive carry-trades get unwound as books de-lever further. EM currencies that are commodity sensitive, China exposed and currently have political difficulties were getting whacked again this AM, but Gold remains in rally mode and Precious metals miners are the one group really gaining favor on the FTSE. Other “industrial” metals like Copper and Silver are under pressure, and that Energy complex remains nasty – Natty off 1%, Gasoline 1.6% and WTI and Brent showing no bounce as U.S. oil prices headed for their eighth consecutive week of falls on Friday, the longest losing streak since 1986. 

We have Monthly Options Expiry today – and US Economic data is darn quiet. Canada’s Retail Sales and CPI at 8:30 - Markit US Manufacturing PMI at 9:45 - Euro Consumer Confidence at 10 – All energy eyes will be on the Baker Hughes Rig Count at 1 (Rig Count now risen 4 straight weeks, and 6 of the last 7) - ahead of the CFTC “Commitment of Traders” data at 3:30. 

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