Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about ahead of the Fed statement:
Good Morning! US Futures are rebounding slightly as some “Brexit” angst subsides, with the S&P up 20bp early. It’s a sea of green over in Europe, with the DAX up 90bp – Banks rebounding across Europe after a 10% smack in the last 3 sessions, while those “Bond Proxies” of Utilities, Staples and Telecom outperform. Miners leading FTSE higher with Angle and Glencore up 2%+. Volumes are strong across Europe, with most exchanges trading 30-40% above normal averages. Over in Asia, Chinese stocks rebound despite MSCI’s decision to deny, with Shanghai reversing a 1% loss to close 1.6% higher — chatter the “national team” was behind the buying – Nikkei breaks a 4-day losing streak, bouncing 40bp, while Aussie was hit for 1% to a 2month low in heavy volume as materials sank.
Ahead of the Fed today (Non-event, focus on “dot Plot” and Yellen Presser), German 10’s are back above the zero bound for now, helping the US 10YY rebound slightly, despite JGBs hitting another record low yield overnight. Sterling is showing a rebound as unemployment came in low — and all commodity currencies are showing a bid, led by Aussie. With the weaker $, Metals acting well, led by a bounce back in Copper, gaining over 2% despite another pullback of rebar in China, while Gold is seeing a reversal of recent haven buying. Oil slides to two-week lows as API showed big builds across the board, hitting gasoline for 2%. WTI is having its 5thdown day in a row, the longest streak since February. Softs are showing a slight bid.
Catalysts ahead of us today start with PPI and Empire Manufacturing at 8:30, just before Industrial Production hits at 9:15. ECB’s Weidmann Speaks at 10, and we get DoE data at 10:30 for Crude (API last night showed a 1.1M build overall, with 660k in Cushing — Big builds also in Gasoline of 2.2M and Distillates 3.7M). The “main event” hits at 2 with the FOMC Rate Decision and “Dot Plot”, followed by the Yellen presser at 2:30. VIX contracts roll at 2:30, and at 4pm we get the Net Long-term TIC Flows. Throughout the day we get Master Trust Data from the Credit Cards — and the BOJ decision is overnight.
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