Via Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about on Friday morning:
Good Morning! Equity markets are on fire right now, as Oil and Draghi tailwinds persist in oversold conditions, and the doves get louder in Tokyo. Right now the S&P is looking good for its first positive Friday close since Early December, with futures indicated 1.4% higher (Nice to see Russell and Nasdaq outperforming early). Over in Europe, all major exchanges are at least 2% higher on a sharp rebound in Europe in Resources and Banking Stocks. Financials have been under sharp selling pressure this week, nice to see a reversal there. The DAX is lagging the move, gaining “only” 2% as the technology sector comes under pressure on SAP #s. The FTSE jumping on the back of Miners and Energy — and we have heavy volume across the entire continent, with most markets trading 1.5x+ their normal averages. Over in Asia, the epicentre for the global rally was Tokyo, there the Nikkei surged almost 6% from 15M lows as BOJ speculation mounted into next week. Shanghai “only” rose 1.1%, while the end of derivative games boosted Hong Kong by almost 3%. Aussie added 1%, and most emerging Asian markets jumped by at least that amount.
We have Haven Trades unwinding, with Gold the only metal in the red and the US 10YY climbing quickly towards 2.08% as heavy selling hits high-quality sovereigns this AM. Commodity Currencies are rallying, including the Ruble which hit record lows yesterday. Aussie, Kiwi and Canadian $s all enjoying tailwinds of higher commodity prices. That said, dovish tenor from ECB and BOJ has the DXY basket higher against Euros and Yens — and while that is normally a headwind for commodities, they are mostly very well bid. No news overnight in Crude, aside from Saudi saying $30 oil was “irrational” but they will keep on pumping — yet heavy short-covering has WTI up 5% early, heading for biggest weekly gain in 3 months. Interesting they are shorting this Blizzard (as am I), with Natty gas off 50bp. All of the grains seem to be bid up on short-covering in the complex.
At 8:30, we get Chicago Fed Nat Activity Index, along with Canadian Retail Sales and CPI. 9:45 brings Markit US Manufacturing PMI, ahead of the 10am releases of the US Leading Index along with Existing Home Sales for December. At 1pm we get the Baker Hughes Rig Count, followed at 3:30 by the “Commitment of Traders” data from the CFTC. Down in Washington, the Senate and House are in recess – Obama has no public events scheduled, and Federal offices to shut at noon as D.C. braces for the Blizzard (Not sure yet how that impacts the CFTC release at 3:30).