From Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about early on Thursday:
Good Morning! US Futures are giving back some of yesterday’s afternoon rally — with the E-Minis off 50bp and back into the 1840-1850 range that dominated the final hours of trading. Euro Markets are all in the green, rebounding from losses that far exceeded America’s yesterday. The DAX is up 50bp, led by healthcare and discretionary, but Financials are under sharp pressure on DB #s. In London, the materials sector is staging a rally, helping the FTSE gain 40bp. Volumes in Europe, while not as heavy as yesterday, remain quite elevated to the month’s average. Little sloppy in Asia: Chinese Markets whacked, with Shanghai losing nearly 3% “despite the central bank’s biggest cash injection in three years” – Mining, energy and brokerage firms led the losses. The Nikkei was hit for another 2.4% on Kuroda statements the BOJ wouldn’t consider a negative interest-rate policy — Japan’s market now rests 23% below its 2015 peaks. HK closes on lows, just above that 7800 level where traders say heavy derivative position re-hedging awaits. Only Aussie closed higher, only the 3rd time this year.
No real Haven trade move to start the day, with the 10YY off small (after failing to stay upside 2% in overnight), but Gold’s gains reversing quickly, with the metal breaking downside $1100 again. The DXY is off small, as Euro makes some gains into the ECB — despite wishful chatter to the contrary yesterday, Not much by way of expectations, as FT says “A dovish Draghi and inflation write downs probably all we will get.” Keep an eye on Yen, which remains around that 117 level ahead of BOJ next week, where pressure is mounting quickly on Kuroda to ease further. All eyes remain firmly on the Oil complex though, and the new spot WTI contract is struggling to stay upside $28, losing 1% as API data last night showed a build of 4.6M Barrels (Street expecting 2.75M) — and another huge build of Gasoline and Distillates (6.2M, Street at 2.3M). Watch Natty into inventory data today, the commodity has been building a base above $2 and apparently Annapolis is about to be hit by the “mother of all” winter storms…
We get the ECB Rate Decision at 7:45 today, followed by a presser from Draghi around 8:30 — right when Weekly Jobless Claims and the Philadelphia Fed Business Outlook hits. 10am brings EU Consumer Confidence, followed by Natty data at 10:30. DOE data for Crude, Gasoline and Distillates hits at 11am, and this afternoon at 1 Inflation watchers will focus on the $15B 10-Year TIPS offering. Earnings wise we see BBT, BK, KEY, VZ and LUV pre-open, and my focus will be on SLB, AXP, SBUX tonight. Down in Washington, Senate will try to override Obama’s veto on a bill which would nullify rule from EPA and U.S. Army Corps of Engineers that expands waterways subject to federal regulation. At 9:15 Transportation Sec Anthony Foxx delivers remarks at the U.S. Conference of Mayors, followed by Energy Sec Ernest Moniz at 9:40. At 12:30 API President Jack Gerard and other energy industry leaders speak at U.S. Energy Assn’s “State of the Energy Industry” annual forum.
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