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 are gaining 35bp as the Pre-FOMC “Drift” kicks in and drags equities higher. Mixed bag of trading over in Europe, with the DAX up 70bp as Industrials and Tech catch a bid, but Fins are lagging, with DB off nearly 3% and those Italian Banks seeing some heavy profit-taking, weighing on the IBEX. FTSE is outperforming, gaining 70bp as Headers from RIO CEO has mining stocks hitting a two-month high. Over in Asia, Shanghai lost 10bp – Japan returned from Holiday to drop 20bp, while the broader Topix gained as speculation rises that the BoJ may stop buying NKY225 ETFs – Aussie climbed 20bp despite TPG telecom getting whacked for 20%. Turnover is weak globally, with most exchanges trading 20-30% light to recent trends.
Investors are awaiting decisions in the next 24hours from the Federal Reserve and Bank of Japan — Right now peeps are expecting BOJ to steepen the curve, while Fed Funds showing a 20% chance that the FOMC hikes tomorrow. Thx DXY is stronger, as the Pound hits the lowest level in five weeks — and Dovish Aussie comments propel the greenback higher. China Iron Ore Advances First Time in Six Days — helping Industrial metals like Zinc and Copper shrug off the stronger $. The Energy complex is under pressure, with Oil down nearly 1% and thru y’days lows as Headers circulate OPEC members Nigeria, Libya and Venezuela are gearing to ramp exports. Gasoline is finally retreating for 2days in a row, as traders eyeball the restart of the Colonial Pipe. Softs are showing small gains across the board.
Ahead of us today, we get Housing Starts and permits for August at 8:30 — at 9:50 the Bank of England Bond-Buying Operation Results are posted. 10am brings Wells Fargo CEO Stumpf to testify at Senate Banking Committee. At 2:30 attention turns to the Energy complex, with the expiry of the spot WTI contract, ahead of the API data for Crude, Gasoline and Distillates at 4:30.
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