Dave Lutz of Stifel, Nicolaus passes along the topics about which traders are chatting about today.
US Futures are tracking 30bp higher, following the DAX’s 60bp upside move on the back of stronger EU IP and a surging German ZEW survey (Interesting EU fins remain under pressure despite the sharp tightening of PIIGS yields).
Most of the Equity Euphoria is coming from Japan, as Machinery Orders fell less than expected, and BOJ minutes show expectations the Inflation target will be met — finally reports Abe may trim the corporate tax rate propelled the Nikkei 2.6%.
Global Tech stocks are among the leaders, with Samsung +4%, and HonHai (Foxconn) popping after stronger earnings, and Material stocks continue to jump globally. We remain tuned to the slew of 13F filings over the next 24 hours as the disclosure window closes.The DXY continues to have a short-covering bid to it, especially as the Yen is hit on the dovish tone from the BOJ – Interesting the € not on stronger footing, as the head of Germany’s ZEW said recent data is supportive of Hawkish measures.
The US 10YY is breaking higher, highest in a week at 2.65%, all eyes on the “wall” at 2.75%. The stronger dollar should be a headwind for commodities, but seeing Housing Commodities like Lumber and Copper both jumping 1% – Silver adding 50bp, and Gold is finally taking a breather on the India Duty headlines. The Energy complex will see heavy trading today, as Headlines dominate on Mexico Overhauling it’s Industry — but more short-term focus remains on Libya instability, where strike action has closed export terminals and crimped production, threatening 600,000bpd of supplies.
As we have heavy focus today on Retail Sales, we saw weakness again in the sector yesterday on profit-taking, and overnight Li & Fung Ltd., the world’s largest supplier of clothes and toys to retailers, reported first-half profit that missed analyst estimates amid sluggish demand from U.S. retail customers – Li & Fung, whose customers include U.S. retailers WMT, TGT and KSS, reported a drop in net income last year as an increase in payroll taxes, higher fuel costs and federal spending cuts hurt consumer confidence in the U.S.
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