S&P 500 futures traded modestly lower overnight on news that Japanese exports and imports were much lower than expected. Japanese exports to Europe were down 25.1% Y/Y, demonstrating how a slowing European economy is affecting global trade. The news caused the Yen to strengthen as traders shed positions in riskier currencies. The AUD/JPY (Australian Dollar / Japanese Yen), a good barometer of risk appetite, was down significantly overnight. This, along with a bullish breakout in Gold yesterday, strong gains in US treasury bonds, and intraday reversals in market leaders Google and Apple suggest traders may be paring back the amount of risk assets in their portfolios.
The main source of headlines in the US trading session today is likely to be the release of FOMC meeting minutes. These could offer further hints to what Bernanke might say in Jackson Hole on August 31st and the debate ongoing within the FOMC.