Via Dave Lutz at JonesTrading, here’s a super quick guide to what traders are talking about before the market open:
Good Morning! US Futures are shrugging off broad weakness in Asia, instead looking toward the Oil complex as WTI holds the bulk of yesterday’s gasoline induced surge. The S&P is adding 20bp early, and nearing levels around 1950 where heavy stop-loss covering awaits. European Markets are all sharply higher, with the DAX gaining 1.4% as Energy and financial issues lead gains. Banks jumping in London on back of Lloyds special divvy, helping the FTSE gain 2.2% in very heavy turnover. Over in Asia, China whacked for 6.4% as tighter money market rates were seen draining liquidity from the financial system, sparking profit-taking in heavy turnover. 1400 stocks were limit down 10%. The China hit weighed on Hong Kong, where they lost 1.6%, and the release of the rail budget failed in impress Indian investors, with the Sensex losing 70bp. There were some green skies tho, as the Nikkei gained 1.4% as the Yen weakened and Aussie closed up small.
As the G20 meeting of finance ministers and central bankers in Shanghai, focus is tuning once again to some coordinated “magic bullet” as the IMF urges ‘bold’ action in the form of coordinated stimulus. Haven trades are retreating, with Gold dropping 50bp and the US 10YY resting by yesterday’s highs. The DXY is weaker, as Pound Sterling recovers from 7Y lows, and the Euro recovering a touch of ground after a 3day selloff against the $ on more optimistic German Biz Sentiment. In Metals, Lead and Nickel are recovering from the recent weakness, while Copper continues to retreat and Iron Ore saw heavy profit-taking despite Vale headers. WTI is resting near yesterday’s peaks as Whiting takes heavy shale production offline, but that Natty Gas complex is getting smoked, dropping nearly 3% into inventory #s and expiry later this morning.
Heavy slate ahead of us today, as Fed’s Lockhart speaks at 8:15, followed by US Durable Goods Orders and Weekly Jobless Claims at 8:30. At 9 we get the FHFA House Price Purchase Index, followed by Natty gas Inventory data at 10:30. Kansas City Fed Index hits at 11, then attention turns to NYC where Fed’s Williams Speaks at 12. The US Treasury is auctioning off $28B in 7Y notes at 1, and at 2:30 Natty Contracts expire on the NYMEX. Attention then shifts to Shanghai, where PBOC Governor Zhou Xiaochuan speaks at 7:45 ET from G20 in Shanghai. Sure he gonna have some thoughts on defending the Yuan and Fiscal Stimulus. Down in Washington, House Financial Services subcmte holds hearing on impact of Puerto Rico’s financial crisis on bond markets at 10am, and at 2pm House Homeland Security subcmte holds hearing on “Emerging Cyber Threats to the United States”.
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