From Dave Lutz, head of ETFs at JonesTrading, here’s a quick guide to what traders are talking about right now:
Good Morning! US Futures under some pressure, with the S&P off 20bp as traders start to eyeball 2160 support again. Most angst coming from Europe, where it is a big sea of red — DAX off 1.5% as Euro Stoxx Banks Index lost another 3% on Commerzbank #s. DB and CS hit after being booted from EuroStoxx50, while those Italian Banks whacked again, Unicredit lost 5%+ more following yesterday’s 10% drop. FTSE is just off a 2week low, but well outperforming the bulk of Europe as UK banks remain resilient, and a bid materialises in Staples and Healthcare. Over in Asia, Aussie lost 80bp as Miners fell, Hong Kong was closed as a Typhoon approached, while Shanghai recovered 60bp from its recent weakness. The Bulk of EM Asia closed solidly in the red.
Very heavy focus on heavy selling in JGB’s — a Huge Spike in Japanese Yields drove their 10YY towards positive territory — a first since March as focus moves from “Monetary” to “Fiscal” stimulus. This has Yields in Germany popping 6bp, and providing some decent weakness in Treasuries to start today. The DXY is under pressure with the $/Y dropping fast as Abe’s stimulus package disappoints, and some decent Sterling covering into Bank of England’s meeting on Thursday. Aussie $ is ripping despite Australia cutting rates to record low 1.5%. With the weaker $, Gold is jumping thru yesterday’s highs, Silver is squeezing another 1% – and Oil is rebounding from $40. Natty is hanging near unchanged, while most softs are in the green.
Ahead of us today, we get ACT Prelim truck orders and Auto Sales Data for July — at 8:30 Personal Income and Spending — as well as PCE hits in the States. 9:45 brings ISM New York, then attention turns to API data for Crude, Gasoline and Distillates at 4:30. KBW throwing a Community Bank Investor Conference, and Earnings continues to roll….