Via Dave Lutz at JonesTrading, here’s a super-quick guide to what traders are talking about right now:
Good Morning! Doves are flying this AM ahead of BoE tomorrow and ECB Next week — and seeing a nice flush out of German Bunds — driving US futures back towards yesterday’s all-time highs. European markets are a bit more tentative, with the DAX only up 27bp as Fins and Autos reverse their rally from yesterday. Spanish banks ripped higher on mortgage floors ruling, but offset by losses lead by Italian lenders. Tech issues are outperforming still, while discretionary sees a retreat. FTSE is up 25bp as Miners continue to climb higher — but volumes are down 10-25% across the continent. Over in Asia, Nikkei rose 80bp, taking week’s gains over 7% as the government is planning “bold economic stimulus” — banks and Exporters led the gains – Shanghai ignored trade data to bounce 40bp – Aussie climbs 60bp as Ore continued jumping, while EM markets continued their recent rally.
Germany’s 10YY nearing -3bp. Massive selling as they have a “failed” auction — a massive reversal from -20bp earlier this week. The US 10YY so far is ignoring, with yields off 2bp and back under 1.5%. The DXY is weaker, as Euro jumps on Sov Debt Selling, GBP continues its rally as Theresa May gets sworn in – while $/Y remains higher despite Japan’s Chief Cabinet Secretary Suga dismissing “helicopter money”. Industrial metals are well bid, as Ore jumps 1% to 10week highs in China — dragging copper 1.5% higher — while Gold and Silver rebound from the week’s selling. The Energy complex is under pressure tho, as Heavy builds in Crude stockpiles and distillates / Gas weigh, knocking Gasoline for 2% and WTI for 1.5%. Natty gas is bid higher tho, while the softs and grains are continuing yesterday’s WASDE rally.
Ahead of us today, we get the US Import Price Index at 8:30 — just ahead of Fed’s Kaplan(Neutral, Non-Voter) speaking at 9. We get the Bank of Canada Rate Decision at 10 — and the Energy complex will be watching DoE data at 10:30 after last night’s API data (Crude +2.2M against expectations of a 3mm draw, while Gasoline stockpiles jumped by 1.5mm and distillates 2.6mm) — at 1, the US sells $12B in a 20Y reopening — and at 2 the Treasury releases their Monthly Budget Statement — right when the Fed releases the Beige Book setup for the next meeting. After the close, YUM is the earnings highlight, and Fed’s Harker (Neutral, Non-Voter) Speaks in Philadelphia at 6.