We’ve made it to the final day of a shortened trading week. From Dave Lutz at JonesTrading, here’s a quick guide to what traders are talking about this morning:
Good Morning, and TGIF! US Futures are climbing higher, led again by the Smallcaps, with Russell adding 30bp early. That said, Industrials may continue yesterday’s bid, as GE posts better and is marked up 1%. There is sharp strength overseas on the heels of ECB QE, where Germany is up 1.6% and EuroStoxx 1.9%, led by a huge rally in Consumer shares — all in very heavy trading as they catch up to the American performance yesterday. Even Athens is having a strong day ahead of the Greek Vote this weekend, climbing nearly 7%. Over in Asia, Russia’s MICEX is up 2% on headlines that King Abdullah in Saudi passed away, causing a 2% pop in Brent Oil. Shanghai added small as China’s flash PMI comes in slightly better, while Japan was up 1% as the Yen broke down. Aussie was able to add 1.5% on the back of Energy and Consumer shares, with even RIO and BHP climbing despite another breakdown in Ore prices to 5Y lows as GS slashes their target overnight.
The sharp bid for Treasuries has returned as Europe has manned their terminals – Bund yields are crumbling to record lows – German 10’s at 37bp, driving US 10’s down 5bp to 1.8%. US 30’s are testing low yields on Chatter of good buying back-end by Japanese banks, suspect re-allocation given poor performance in JGBs. The € is under sharp pressure, breaking 1.12 as MS says 1.05 coming in 2015, and the DXY has broken above 95 despite early weakness in Yen. Brent is up 2.5%, but the Crude pop may be short-lived. Saudi Arabia’s new King Salman moved quickly to reassure markets — WSJ says unlikely to alter Policy. Natty Gas is up 3% in sympathy. The metals complex is feeling the headwinds from the $US, with Gold back under $US1300, and copper off 1.7%. Scheduled Catalysts today include Chicago Fed at 8:30, Markit US Manufacturing PMI at 9:45, and watch the Builders at 10 with Existing Home Sales. Also at 10 we get LEI, and the Energy Complex will be focused on the Baker Hughes Rig Count at 1. Watch BOX today – Cloud Storage Company BOX is the first tech IPO in 2015 — priced above expectations at $US14.