Via Dave Lutz at JonesTrading, here’s a super-quick guide to what traders are talking about:
Morning! TGIF – BOJ disappointed overnight, leaving policy unch but doubled its ETF purchases — That said, Spoos totally ignoring the action — off only 13bp as earnings season continues to impress. AMZN up 1%, Google 3.4%. Mostly green across Europe, with the DAX up 40bp – Energy worst sector in Europe, Banks outperforming on #s (UBS and Barc) ahead of Stress Tests. Italian Banks on Fire on more Paschi bailout headers, with the index gaining over 5%, helping Italy’s MIB jump over 2%. FTSE is under pressure tho — losing 20bp as Miners and Energy companies lag. Over in Asia, ETF buying had the Nikkei up 50bp as the Banks surged higher – Shanghai lost 50bp as “traders continued to fret about reports of a regulatory clampdown on speculation” — Aussie gained small, while other Asian markets slumped after the BOJ announcement.
The DXY is under pressure, as the Y/$ from 105.50 last night to near 102.50 at worst this AM. Currently 103.78. Full 50dma reject on the charts targeting another 100 test. Euro is ripping as slow GDP growth was anticipated and long dollar bets unwind. Despite the drop, most commodities are under pressure — led by Industrials as Silver and Copper drop 50bp, and WTI smashes under the 200dma to approach a $40 test – Oil is down in eight of the past nine sessions into the Brent and Gasoline expiry at 2:30. Natty holding the bulk of yesterday’s squeeze, off only 1%. Softs are weak across the board.
We get a headline fest at 8:30, when GDP, Core PCE, and the Employment Cost Index hit. Fed’s Williams (Neutral, Non-Voter) Discusses Policy Toolkit at 9:30, just before the 9:45 release of the Chicago Purchasing Manager (9:43 for subscribers). At 10am we get U. of Mich. Sentiment — then attention turns to the 1pm release of the Baker Hughes Rig Count, right when Fed’s Kaplan (Neutral, Non-Voter) Speaks. At 2:30 those Brent and Gasoline Contracts Roll, and at 3:30 we get the CFTC’s “Commitment of Traders” data. 4pm not only brings the closing bell on July — those EU Bank Stress Test Results are Released.