Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about on Monday monring:
Good Morning! Equities continue hovering around 2016 highs, with the S&P looking to add 30bp early. This follows a strong session in Europe, which sees the DAX up 1% in a very broad based rally, with Staples, Industrials and Tech leading to the upside. Euro banks are showing a small bounce, a fist in a week, but the FTSE is underperforming slightly, gaining only 70bp as the miners come under some pressure. Overall volumes are on the lighter side, with most exchanges trading 10-20% below trend. Overall a quiet session in Asia with China and Hong Kong closed for holiday – Nikkei couldn’t hold a bid following Friday’s 3.5% smackdown, loosing 25bp led by the autos, while Aussie lost small ahead of their Central Bank Decision (No change expected) as energy stocks were hit. Most of EM Asia continued last week’s rally.
The US 10YY is up small, after testing 1.75% in the overnight as German Bund yields a hit 5-week low and that “Policy Sensitive” US2YY remains near 1M lows. The DXY is bouncing from 5M lows, making gains against Euro as Industrial prices in the eurozone fell more than expected in February and sterling/dollar implied volatility is holding near six-year highs on “Brexit” concerns. The Yen is finally breaking down a bit as well after testing 111.30 several times. With the stronger $, we have a headwind for commodities — Metals are mostly red, with Gold off 40bp and Copper resting near 1M lows. We do have a slight rebound in Energy, with Brent bouncing small from Friday’s Saudi headers, which smacked it for 4%+, but Natty gas is popping 2% and getting back upside $2. Softs are mixed early.
We kick off the week with FedSpeak – Fed’s Rosengren Speaks at Cybersecurity Conference at 9:30, followed by ISM New York at 9:45. At 10am, we get Factory Orders and Durable Goods Orders. Keep an eye on the big banks today, as Fed’s Kashkari Holds Town Hall on Too Big to Fail at 7pm tonight. Down in Washington, The House is out of session until next week, and at 11:10 President Obama holds bilateral meeting with NATO Secretary-General Jens Stoltenberg. Tonight brings the Aussie Central Bank Decision, and later this week, we get Multiple Fed Speakers, including Yellen with Greenspan, Bernanke and Volcker — along with FOMC and ECB Minutes.
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