Dave Lutz of JonesTrading has the top topics about which traders are talking today:
Equity Futures are starting this big vacation week well into the green (2000 within reach this AM), propelled by a Dovish Draghi Speech from Jackson Hole, and heavy M&A headlines (Burger King is in talks to buy Tim Hortons / Roche for InterMune for $US8.3B). Volumes are quite light overseas, as the UK is closed and America gears for Labour Day Weekend — The DAX is up 1%, but volume is 50%+ lower than normal. Russia’s MICEX is up small into the Putin/Poroshenko meeting tomorrow as headlines were quiet over the weekend — but news wires should dictate the direction of trade this week, so remain glued to the headlines. In Asia, Nikkei loved the weaker Yen — but Shanghai lost 50bp, and miners dragged Aussie away from 6Y highs.
There was a CME “glitch” halted electronic trading for 4hours overnight — but Credit buyers were waiting, and Yields are in collapse right now, With German 10’s at 93bp, and US 10YY off 2bp early, with August Lows in site — The real weight on the Euro is the diverging 2YY of US and Germany — as US 2YY popped last week as traders brought forward rate projections — while the fear of deflation has driven German 2YY to a -4bp overnight. The DXY overnight took out its 1Y peak, causing a headwind for commodities — that said, we are seeing a bounce in Oil (Dead Cat?) as futures longs collapsed last week — but Libya headlines show ramping exports, so remain wary — Natty gas is continuing last week’s pop, adding 2% this AM as tailwinds blow. Copper nearing 3week highs, while Gold is dancing on last week’s lows. Scheduled Catalysts today include Dudley speaking at 8:30, Markit US Composite PMI at 9:45, New Home Sales at 10, Dallas Fed at 10:30 — there is NO POMO at 11
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