THE SETUP: Here's What's Happening Right Now In Markets As The World Braces For The Jobs Report

new york stock exchange empty nyseAn empty trading floor during Superstorm Sandy.

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The jobs report comes out at 8:30 AM.Dave Lutz of Stifel, Nicolaus presents the “setup” in markets right now:

Futures are up 30bp (Bear in mind new SPX contract trading) – following a 70bp jump in the DAX.  EU Spreads are all considerably tighter, with Italy and Spain 10bp+ tighter to Bunds, driving the 10YY upside 2% this AM.  Japan surged another 2%+ on the weaker Yen, and Miners in Aussie jumping on a solid China trade report.  EU’s VIX has dropped 6% overnight, and 20% this week – Eyes will be on the US VIX nearing the downside of 14 

Aussie-Yen jumping hard as Yen weakness continues to point to risk-on.  The Pound is continuing it’s rally against the Dollar – and €is mixed, but the Yen whack has DXY higher – causing a natural headwind for commodities.  Zinc, Plat, Lumber and Gold are all higher, but seeing weakness in Copper and Oil. 

Focus in the states will be on 2 main items – reaction from the Fed’s Stress Tests released last night (C and BAC marked higher – JPM and GS marked lower) – and NFP today at 8:30 – Is bad news good, or is good news bad?  Consensus add for 160k, but after ADP and Claims this week, “whispers” have headed higher towards 180k jobs added.

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