Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before markets open on Monday.
Good Morning! US Futures are off small, consolidating last week’s late gains, as we’ve finally had a quiet weekend of headlines. European markets are slightly outperforming, with the DAX up 30bp with Carmakers continuing to rally as PBOC strengthened Yuan slightly overnight. Miners exposure is weighing in London tho — with Supermarkets and Builders under some pressure. Volumes remain light across Europe though, with most markets trading 30%+ under their recent turnover. Over in Asia, Chinese markets were up small, but focus was on Japan’s GDP contracting 1.6% – driving the Yen lower and bidding up the Nikkei. Damage feels like it is accelerating tho in the Emerging Asia markets — Singapore, Malaysia off over 1.5% – Taiwan and South Korea close behind. Aussie closed basically unch, torn between falls in resource stocks and bounces in the miners
The US 10YY is lower this AM, nearing a test of Friday’s 2.16% low as attention firmly turns towards Commodity prices and the release of the Fed’s Minutes later this week. The “Policy Sensitive” 2YY unchanged, and Bunds have a bid as Greek headlines cause angst in Germany — with focus on the German vote on Greece Wednesday. The DXY has a bid across the board — Yen is falling on GDP; Aussie and Loonie on Commodities, and Euro rolling after failing to breach last week’s highs. The stronger Greenback is a headwind for commodities, but we actually have a bid in many metals including Platinum and Gold — but eyes remain on the red metal as it rolls towards a re-test of last week’s 6Y lows. The Oil complex is falling under pressure for a multitude of reasons (Saudi defending production, Rig count increases 4 straight, Asian growth collapse, Mexican Swap, Whiting Refinery) — It’s going to take a miracle for West Texas to hold last week’s lows into Expiry this Thursday
It’s a Summer Monday, with only Empire Manufacturing at 8:30, Quarterly Retail E-Commerce Sales and NAHB Housing Market Index at 10, and Treasury’s Net Long-term TIC Flows at 4pm. We will be getting Credit-card Charge-offs, Delinquencies (AXP JPM BAC C MS COF DFS) during the session. Down in DC, the Senate, House on August recess and President Obama on vacation in Martha’s Vineyard. At 10:30 tho, Former Fed Chair Ben Bernanke is among speakers at Brookings discussion on “The Defence Economy and American Prosperity.”