What Are Traders Chatting About This Morning? Japan And The ECB ...

Shinzo abe japanREUTERS/Toru HanaiJapan’s Prime Minister Shinzo Abe speaks to the media at his official residence in Tokyo October 20, 2014.

We’re now just one day away from the big ECB meeting. From Dave Lutz at JonesTrading, here’s a quick guide to what traders are chatting about this morning:

Good Morning! US Futures are under some slight pressure this AM, following some profit-taking from 7Y highs over in Europe ahead of the ECB tomorrow. Germany’s DAX is off 30bp, with Materials shares among the worst performers, while the FTSE is up 70bp, led by a rally in Energy and Consumer shares — Volumes are quite light tho, with most markets in Europe trading 30% lighter than normal. Over in Asia, despite the Ruble nearing fresh lows against the $US as Ukraine heats up, MICEX is adding 1.5%. Shanghai continues to rebound from Monday’s smackdown — gaining 4.7% overnight, while Aussie was up1.6%, led by Banks and Miners (Strong BHP production #s). The Nikkei lost 50bp as the Yen is higher after the Bank of Japan decided not to deliver any further significant easing.

The 10YY is slightly higher and back over 1.8% early, and while German yields remain elevated, let’s see if we get heavy EU buying of Treasuries again into their close. Swiss franc is broadly flat against the euro, but Swiss Yields continue to break down, 1Y at a -1.4% now. Despite the British Pound under pressure as BoE minutes came out more dovish than expected, The DXY is firmly red as Euro higher as positions are trimmed ahead of ECB tomorrow, and Yen is being covered. The Energy complex was sharply higher this AM, but have retreated from 2% gains as Iraq is talking increasing production, While Natty Gas is surging 7%, reversing the heavy losses it sustained yesterday. Gold is trying to stay upside $US1300, while Silver is adding over 1%. Copper remains firmly in the red, off 2% and nearing a test of last week’s lows.

Watch the Builders — Mortgage Refis came in at 18mo highs this AM, and at 9, HUD Secretary Julian Castro speaks on his agency’s housing initiatives, FHA’s recent premium reduction at Zillow’s ”Housing Roadmap to 2016 Kick-Off” just after we get Housing Starts and Building Permits at 8:30. We get the Bank of Canada decision at 10am. We have Expiry of the Spot VIX contract today, and after the close we get API data for Crude. Credit Cards in focus post-close as well — AXP and DFS earnings will hit. In DC today, the House, Senate panels hold hearings on Internet regulation — Senate moves to consider Keystone

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