5 Things You Need to Know Before Trading Today

*Stocks were bid throughout Asia. Australia and the Hang Seng both gained more than two and a half percent, the Nikkei added 1.6% and Shanghai was up 0.4%. European stocks are SHARPLY higher. The Dax and Footsie are both up by about five percent, but Spain is trading twelve percent higher, Italy is up by ten percent and so too is Greece. The debt from all the Euro peripherals are flying higher as well. US stocks are also ramping higher; as I write the SP future is up fifty points, the Dow future is almost four hundred better on the session and the NASDAQ is about eighty higher.

*The April reading of China’s Trade Surplus shrank 87 percent from a year earlier as Imports grew 49.7%, much faster than Exports, +30.5%, on a year over year basis. The sharp decline in the surplus is said to support Premier Wen Jiabao’s argument the their currency is not undervalued. The stimulus driven imports also suggests that more policy tightening is on the way.

*The European Union agreed to a massive EU720 billion support package over the weekend, in a move to stop the bleeding in the bonds of their heavily indebted members and save their currency. The Eurozone will put up EU440 billion in bilateral loans that requires Parliamentary approval, there is a EU60 billion emergency fund which does not need a vote and the IMF adds it largest ever loan of EU220 billion to the pot. Additionally the euro area central banks, operating under the umbrella of the ECB, will begin to buy euro area public and private debt securities, the so called “nuclear option”, something ECB boss Trichet previously said they did not even consider at last week’s policy meeting. Also the Bank of Canada, Bank of England, the ECB, the Fed and the Swiss National Bank have reopened the US dollar liquidity swap facility.

*Chancellor Merkel’s Christian Democrats suffered its worst result in the post war era in the election in North-Rhine Westphalia on Sunday. As a result Merkel’s party loses the majority in the upper house of Parliament, the Bundesrat. The CDU took 34.6% of the vote, down ten percent from the last vote in 2005, the smallest amount in that state since the first post war election in 1947. The Social Democrats took 34.5% and their ally the Green Party grabbed 12.1%.

*The negotiating for a coalition between the Tories and the Liberal Democrats continues in the aftermath of the UK election in which no party took a majority. There is not yet a deal.

*The Bank of England met earlier today; they kept their benchmark interest rate steady at 0.50% and held their asset purchase plan at BP200 billion.

*The hoped for solution to the BP oil spill, a giant box to cap and control the gusher, has apparently failed and the oil continues to flow into the Gulf of Mexico. They are now thinking of deploying a smaller containment box, one that is less likely to clog as the bigger first attempt did, but this would only be in place by mid-week at the earliest.

*Minneapolis Fed boss Kocherlakota is scheduled to speak at 12:30pm CDT.