Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
- The US government shutdown continues into its third day on Monday.
- Most US markets are trading in the red.
- The US dollar is near three-year lows, while 10-year bonds are at 2.65%.
Morning! Equity Futures starting the week of tentatively, with eyeballs on Political Developments on both sides of the Atlantic. DC Still in “Shutdown” while Merkel gets closer to forming a government. S&P off 10bp, but Sanofi for BIIV has the QQQs trading basically unch. All Green in Europe, where the DAX is up small – Banks green despite UBS hit for 3%, but Tech is seeing some decent profit-taking. FTSE unch despite Bookies getting smoked in London, but Consumer acting well behind Dixon’s 5% pop – but Volumes feel light across the board. In Asia, Nikkei up small despite Consumer and Industrials weaker – Smallcap “Mothers” ripped higher in Japan tho, up 2.7% – Hang Seng gained 40bp despite Chinese banks hit for 40bp as Macau Names leapt higher – Shanghai gained 40bp – KOSPI off 70bp as Samsung got hit, and Aussie off 20bp and under ASX 6,000 as Banks were hit
Down in DC, we await Senate voting at Noon to fund thru Feb 8 – The 10YY holding upside 2.65%, basically unch overnight as Bunds catch some selling, but that Dollar nearing 3Y Lows. $/Y drifting under 111 as BOJ meeting begins – While Euro well bid into the ECB later this week. Sterling well bid early. In China, Ore up 65bp but Rebar jumped 2.5% – Copper continues to show a nice bid, up 70bp, while Gold trading lower despite a weaker greenback merits attention. WTI basically unchanged into the February roll today, Saudi saying Oil Cuts may hold beyond 2018 seeming to have little impact on the complex early. Natty is up 90bp, while Softs are bid across the board.