A look at some of the changes in stock futures:

  • S&P 500 futures +0.4%
  • Nasdaq futures +0.6%
  • Dow futures +0.2%
  • German DAX futures +0.8%
  • Eurostoxx futures +0.7%
  • UK FTSE futures +0.7%

The gains have moderated a little from earlier in the day but it still beats out the more cautious and subdued tone from yesterday at least. Overall, it hints at more of a push and pull feel on the week as the selling pressure since April meets a bit of a pause.

As mentioned yesterday:

"As much as there was some optimism late last week (into the closing stages at least) and early this week, it is best to be reminded about the challenging backdrop that has contributed to the drag in risk trades since April.

"Yes, we may be overdue a correction. I mean seven straight weeks of declines for US stocks is definitely up there in terms of the selling being rather stretched. But we certainly are getting a reminder today of all the major themes at play in markets.

"Inflation pressures are still running rampant as evident by European PMI readings today. Recession risks are continuing to grow by the day and that is evident by the extremely poor UK PMI readings today. And central banks are continuing to look towards tightening policy as evident by Lagarde's commitment in her remarks earlier today as well."

So, while there is scope for some breathing room, let's not forget that the key themes that got us here are still very much at play.