Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about on Monday:
Good Morning! US Futures are on overnight lows, adding to their largest daily drop since August losing 70bp as Brexit angst continues to reverberate. Euro markets are getting whacked again, with the DAX nearing off 2% and FTSE drops 1.6%. Travel stocks are getting destroyed. EasyJet off 20%, British Air and RyanAir 10%, AirFrance, Lufthansa and SAS 5% – while Banks under sharp pressure- trading on RBS and Barclays is suspended – RBS down almost 30% in just two days. Seems like every sell-side house is downgrading UK / EU banks this AM. The FTSE is holding above Friday’s lows (for now), as the Miners, Utilities and Staples all rise. Spanish voters gravitated toward the ruling party, initially sparking a 2% rally which has reversed lower quickly — Volumes across the continent are pacing a double from normal turnover. Was quiet in Asia in comparison, with Nikkei rebounding 2% from Friday’s bloodletting despite $/Y nearing 100 as Abe chattered intervention, while Shanghai added 1.5% as the PBoC weakened the Yuan the most since last August. Most EM markets in Asia managed to close in the green.
Havens are on fire as 10-year gilt yields fall below 1% for the first time ever and German 10YY roams around -10bp. This has a bid under Treasuries and Gold, with the yellow metal adding 1%. Sterling continuing its collapse against Euro and $, where it is thru 30Y lows — helping the DXY basket near Friday’s highs. Industrial metals acting well early, with Copper climbing 50bp — but Oil is getting hit for 60bp and just off Friday’s lows. Looks like a full ripper north in the Softs, led by 1%+ pops in Corn and Soybeans.
Risk of “Coordinated Action” headlines is high today, with the leaders of the EU’s three largest remaining countries — Germany’s Angela Merkel, France’s François Hollande and Italy’s Matteo Renzi — meeting in Berlin — while ECB’s Draghi, Fed’s Yellen, BOE’s Carney, and PBOC’s Zhou are together at the ECB Forum in Portugal.
Ahead of us today, we get Advance Goods Trade Balance at 8:30, followed by Markit US Services PMI at 9:45 and Dallas Fed Manf. Activity at 10:30. Later this afternoon around 1:30, we could see headers from ECB’s Draghi, Fed’s Yellen, BOE’s Carney, and PBOC’s Zhou from Portugal around 1:30. The Last day of Supremes’ term brings the biggest abortion ruling in almost 10years — probably around 10am in DC.