Consumer Level Inflation, MBA Delinquency Survey, FOMC Minutes

Investors across the globe are selling stocks after Germany announced it was banning naked short selling of credit default swaps, plus certain euro area bonds and 10 key financial companies. 

A flight to quality lifted the U.S. dollar index to 87.28, a 14-month high. Other major currencies flew the other direction, with the euro abruptly falling to a new four-year low against the dollar at $1.2144 and the pound dropping to $1.4239, its lowest level in 14 months.

The ban it expected to be temporary, lasting until March 31, 2011.

“Considering European equities are down over 2% across the board and the euro hit a four-year low (under $1.22), I don’t think their new rule was particularly effective. Talk about unintended consequence,” said Benjamin Reitzes from BMO Capital Markets.

“In any case, the rule has little impact as most CDS are traded in London and New York,” he added.

Ninety minutes before the opening bell, Dow futures are off 56 points to 10,434 and S&P 500 futures down 7.5 points at 1,111.25. The 2 year Treasury note is 2.4bps higher at 0.757% and the benchmark 10 year note is 1.8bps higher at 3.374%

Commodities are also lower, with WTI crude oil down $1.14 to $68.27 per barrel, and Spot Gold lower by $7.60 to $1,207.00

Key Events Today:

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