Trade the News Market Internals Update at 12:00ET

Dow +18 S&P -2 NASDAQ -7.8

***Economic Data***

– (GE) Germany Sept Preliminary Consumer Price Index M/M: +0.1% v -0.1%e; Y/Y: 2.6% v 2.4%e
– (GE) Germany Sept Preliminary CPI EU Harmonized M/M: +0.1% v -0.1%e; Y/Y: 2.8% v 2.4%e
– (US) MBA Mortgage Applications w/e Sept 23rd: 9.3% v 0.6% prior
– (GE) Germany Sept CPI Baden Wuerttemberg M/M: 0.0% v 0.2% prior; Y/Y: 2.5% v 2.5% prior
– (US) Aug Durable Goods Orders: -0.1% v -0.2%e; Durables Ex Transportation: -0.1% v -0.2%e
– (CA) Canada July Teranet/National Bank House Price Index M/M: 1.3% v 1.7% prior; Y/Y: 5.3% v 4.5% prior; HPI: 146.51 v 144.67 prior
– (MX) Mexico July Global Economic Indicator: 3.7% v 3.7%e
– (US) Weekly DOE Energy Inventories: Crude: M v +1Me; Gasoline: M v +1Me; Distillate: K v 0e; Utilization: % v 84.4% w/w

– Indices in Europe and the US have been volatile this morning as conflicting headlines roil trading. European lows followed the release of details about the financial transaction tax, followed by a run into positive territory after the EU Commission said the Troika would return to Greece. US stocks ran higher right after the open and then dropped into the red following the tepid headline August Durable Goods number. Note that the non-defense, ex-aircraft durables numbers were in fact very positive, with the three-month rolling average in this sub index hit its highest rate since the spring of 2010. Energy and metal futures have calmed down after a few days of volatility, although the VIX is back above 38 again after yesterday’s declines. S Treasury markets remain under some pressure ahead of today’s 5-year auction. The benchmark 10-year yields has backed up above 2% and the 3-year had climbed to 3.12%.

– Reports circulated before the open that Bank of America’s shareholders plans to sue the bank for up to $50B over its troubled Merrill Lynch acquisition. The lawsuit claims that BoA failed to disclose what would be a $15B loss at Merrill in the days before and after the acquisition to ensure that shareholders would not vote against the transaction. The plaintiffs include the Ohio pension system and a Netherlands pension plan; they allege that BoA’s senior management began to learn of large losses at Merrill months before the deal closed.

– In earnings, tech consultancy Accenture beat expectations in its Q4 report and offered a very strong outlook for its FY12. Accenture said though the global economy has turned more uncertain, increased regulations and the need to adapt to globalization will drive spending for its services. ACN is up 2%. Casual dining name Darden only just met expectations and maintained its profit forecast, as profits declined on a y/y basis as Olive Garden continues to struggle. DRI is down 4%. Contract tech manufacturer Jabil Circuit’s Q4 profits beat expectations and the firm’s earnings guidance for Q1 were well ahead of estimates. JBL is up 8%. Payroll processor Paychex Inc posted a quarterly profit that topped analysts’ estimates on strong growth at both its human resource services and payroll businesses, but said it expects checks per client to moderate through FY12.

– Headline roulette continued throughout the European session as dealers coped with numerous rumors, leaks, trial balloons, conjectures and conflicting comments concerning Greece. Specifically, Finland approved the proposed changes to the EFSF facility and the key German vote is on track for tomorrow. The EU/IMF/ECB Troika will return to Greece on Thursday to complete their mission and pave the way for the approval of the sixth tranche of the bailout package. Dealers believe the Troika return was never in doubt or even conditional and would likely place a favorable ‘spin’ of its findings. The EUR/USD continued to find fresh sellers on the late September trend highs over the last three sessions

***Looking Ahead***

– 11:30 (BR) Brazil Central Bank Posts Currency Flows’ Data for Prev. Week
– 12:15 (SZ) SNB Jordan
– 13:00 (EU) ECB Praet
– 13:00 (US) Treasury to sell 5-Year Notes
– 15:00 (AR) Argentina Aug Shop Center Sales Y/Y: No est v 15.0% prior; Supermarket Sales Y/Y: No est v 16.7% prior

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