Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- North Korea tensions are no longer in the headlines, and stocks are moving higher around the world.
- Safe haven investments, like gold, are slipping.
- Bitcoin popped 17% over the weekend.
Morning! First time in a bit that Futures are well bid coming in. Russell is up 75bp, propelling it off the 200d. SPY up 60bp and back upside 50d. As rhetoric with North Korea wanes, we have flows into Havens reversing. The Swissie is off almost 1%, $/Y is approaching 110 — Gold is down 75bp, and German and US Yields are both on the upswing. Sea of green, with the DAX popping 1% and back over 12,000 as Financials jump. London is only up 60bp, as a pop in miners and Fins are offset by a drop in Industrials — but volumes pacing 30% light. In Asia, KOSPI regains 60bp of last week’s 3.2% slide – Hang Seng up 1.4% as China Unicom leapt almost 6% on #s and Chinese Carmakers surged on sales data – Shenzhen up 2% – Nifty up 90bp, while Nikkei was the loser, dropping 1% in heavy volume as they play catch-up from the 3day weekend in Japan.
The 10YY has popped back upside 2.2% as Bund Yields climb nearly 5bp. Fed Funds at a 37% chance of another Hike by December, down from 54% in July — we’ll see how that changes throughout the session. The DXY bouncing from 4month lows, as Euro falls on Weaker Eurozone industrial production — Sterling falls downside $US1.3 — but eyes on Korea’s Won which is climbing small, and the Talking heads are in love with Bitcoin’s 17% weekend surge. China data has metals under pressure as Steel and Rebar hit for 2% as Shanghai Futures Exchange gears to hike margins. Copper, Nickel and Platinum all off nearly 1%. Keep an eye on the Oil complex, where WTI is down 60bp and approaching another test of 100d support. Corn and Wheat continue to reel from the USDA presser Thursday, each losing 1%+ early.
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