The sarcastic highlight of the overnight session was the Chinese stock market, where just one month after injecting a record amount of new loans into the financial system, the PBOC lamented the danger posed by China’s tremendous debt load: “Lending as a share of GDP, especially corporate lending as a share of GDP, is too high” People’s Bank of China Governor Zhou Xiaochuan told China Development Forum yesterday.

At the same time he warned about dangers from a stock market bubble, and perhaps just to assure the bubble gets even bigger, at the same time China eased on margin debt limits, in the process sending Chinese stocks soaring higher by 2.2%, and pushing the Shanghai Composite over 3000 for the first time in months as China now appears set to attempt another housing bubble “soft landing” while at the same time restarting its housing bubble.

Aside from China, another key market followed by traders was crude which in early trading fell for a second day after the first increase in U.S. drilling rigs this year, sparking losses in currencies of commodity-producing nations and shares of miners and energy companies. West Texas Intermediate oil fell further below the three-month high reached last week, pulling down the Bloomberg Commodity Index. The South African rand and Norwegian krone were among the biggest casualties in currencies as the dollar extended its rebound into a second day after slumping to a five-month low last week. The Stoxx Europe 600 Index erased earlier losses.

“A lot of the movement in oil recently has been dollar-driven,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “The oil market needs a stronger economic performance in order to spur demand and absorb all that oil supply.” WTI futures fell 0.8% to $39.14 as of this moment, after sliding 1.9 percent on Friday to trim their fifth straight weekly advance to 2.4 percent. The Stoxx Europe 600 Index rose 0.3 percent after earlier falling as much as 0.9 percent.

Elsewhere, on the back of China’s margin debt-driven euphoria, European stocks and US equity futures have continued to levitate. “Investors are catching their breath after such big gains,” Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, told Bloomberg. “Stocks will probably move sideways in the next few days as the market gets more news from economic figures — from job markets, from companies — because the data we have been getting so far hasn’t been that great.”

As reported before, the S&P 500 has staged one of the biggest turnarounds in history, rebounding 12 percent from a Feb. 11 low amid rising crude prices and a weaker dollar. Energy and commodity producers have led recent gains, rising to three-month highs last week after the dollar tumbled.

Policy makers’ tempered outlook for rate increases has knocked down traders’ expectations as reflected in futures prices. Odds for a June boost are at 39 percent, compared with about 54 percent before the Fed’s statement on Wednesday. A report today on existing home sales, and releases later this week on jobless claims and durable-goods orders, may provide further indications about the health of the U.S. economy.

Among stocks active in premarket trading, Valspar Corp. surged 31 percent after Sherwin-Williams Co. agreed to buy the company for about $9.3 billion to become the world’s biggest coatings maker. Sherwin-Williams climbed 2.2 percent.

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