Via Dave Lutz at JonesTrading, here’s what traders are talking about before markets open on Monday.
Good Morning! US Futures are giving back some of last week’s late surge, as headlines say “China + Fed hit global equities”. Certainly true, as Shanghai lost 1% overnight (Shenzen 3%) as FT reiterates Thursday’s report that Beijing has scrapped large-scale share purchases — and that “Policy Sensitive” US 2YY climbs toward 2015 intra-day peaks this AM. The DAX and Euro-Stoxx are off 60bp in extremely weak volumes, as equities pace 60% normal turnover as FTSE is closed for a Bank Holiday in London today. Almost every sector is in the red in Frankfurt, including discretionary despite German retail sales accelerating. Over in Asia, China’s wake left the Nikkei 1% lower, Aussie and India down by 1%+ – but important to note many of those “Emerging” Asian economies outperformed, with Malaysia, Thailand and Indonesia all closing in the green.
The US 10YY continues to drift around 2.15%, while a bid in Bunds has Germany’s 10YY off small. Focus is on FX, where Haven buying pressing up Yen (despite industrial production unexpectedly dropping) and Euro as EU Inflation held steady. Commodity currencies are under pressure, but overall the DXY is giving back some of the Jackson Hole mojo as Fed Funds rest near a 40% chance of a liftoff — but all eyes on the NFP report on Friday. Despite the weaker $US, commodities are under pressure, with Oil giving back 2% of last week’s 19% surge, Industrial metals Copper, Platinum and Silver all firmly in the red, and save cotton, all the softs are opening weaker. Commodity stocks will be under siege early unless this reverses.
The last day of the month is a quiet one as far as scheduled catalysts are concerned – ISM Milwaukee at 9, and at 9:45 Chicago Purchasing Manager (hits at 9:42 for paying subs), ahead of Dallas Fed Manf. Activity at 10:30. We get Agricultural Prices at 3pm. President Obama travels to Alaska to participate in Arctic Conference and meet with residents on climate change agenda (and change Mount McKinley’s name to ‘Denali’) — while the Senate, House remain on summer break.
Ahead of us this week we have ECB, Aussie and Brazil Rate Calls – Beige Book and Several FOMC speakers — but no Janet – G-20 Finance Ministers, Central Bankers Meet – Chinese Manufacturing PMI and Non-Manufacturing PMIs — The US Employment Report, and Macau Aug. gross gaming revenue scheduled for release.
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