Via Dave Lutz at JonesTrading, here’s a guide to what traders are talking about:
Good Morning! US Futures shrugging off downbeats forecast from AA and JNPR as Oil rallies. S&P is gaining 35bp, mirroring rallies overseas. The DAX is up 40bp with Miners leading across Europe and London, while Luxury retailers lag on Vuitton #s. Banks are adding to yesterday’s gains as Italy’s bellwethers rally on headline hopes. FTSE is seeing a pullback in discretionary shares. Over in Asia, the Nikkei bounced 1.1%, the biggest gain in nearly a month as the Yen finally weakened – Shanghai lost 30bp as property stocks underperformed and angst built around upcoming IPO funding – Aussie jumped 90bp despite reports of a China crackdown on overseas imports of food and consumer goods as Banks finally saw heavy covering down under and BHP goes out at highs.
Despite JGB’s rallying for a 3rd day, the longest streak in a month, we are seeing selling across the Bund and Treasury complex, pushing the US 10YY up 3bp and back over 1.75%. The DXY had been breaking down earlier, but has been steadily rallying against Euro, pushing the common currency back toward 1.14. The Metals complex is jumping this AM, as Ore in china trades limit up as Rising Mill Margins Spurs Demand — helping Copper finally recover from recent weakness. Oil is up nearly 1%, adding to its 2day gains of nearly 8% as we continue to see heavy covering into the OPEC meeting this weekend with Brent crude bouncing to a five-month high. Natty Gas is bouncing from yesterday’s weakness, adding nearly 2% – and we are seeing strength across the entire grains complex early.
At 8:30, we get the US Import Price Index, followed by the first of 3 FOMC speakers when Fed’s Harker Speaks on Economic Outlook in Philadelphia at 9. AtNoon, the commodities complex gets headlines from the EIA monthly short-term energy outlook and World Agricultural Supply & Demand Estimates. At 1pmthe US Treasury is selling $24B in 3Y notes, ahead of the release of the Monthly Budget Statement at 2. At 3pm, Fed’s Williams Speaks in San Francisco, while at 4pm Fed’s Lacker Speaks in Wilmington, North Carolina. We get API data for Crude after the close at 4:30. Down in Washington, the House meets at 2pm, to consider 4 bills incl. one related to treatments for the Zika virus, and H.R. 2947, which would create a new bankruptcy process specifically for large financial institutions with $50b or more in consolidated assets.